Environment of Firms Essay

Environment of FirmsIntroductionBusiness surroundings consist of all those factors that have a bearing on the telephone line. The term business surround implies those immaterial forces, factors and institutions that be beyond the control of individualist business systems and their management and affect the business enterprise. These forces be customer, creditors, competitors, organization, socio-cultural placements, policy-making parties national and international organizations etc. some of those forces affect the business directly which some early(a)(a)s have confirmative effect on the business.Types of Environment1Internal EnvironmentThe internal environment is the environment that has a direct mend on the business. Here there are some internal factors which are generally controllable because the participation has control over these factors. It can alter or modify such(prenominal) factors as its personnel, physical facilities, and organization and functional means, like marketing, to suit the environment. A) VALUE SYSTEMThe value system of the founders and those at the helm of personal business has important bearing on the choice of business, the mission and the objectives of the organization, business policies and practices. B) MISSION,VISION AND OBJECTIVESVision means the ability to look at about the future with imagination and wisdom. Vision is an important factor in achieving the objectives of the organization. The mission is the medium through with(predicate) which the objectives are achieved. C) Organizational StructureIt takes the values and expectations of your firms stakeholders its mission, goals and objectives and its resources. These factors combineddetermine what your organization is assay to accomplish and how conquestful it is likely to be. 5 basic parts of organization Operating core, Strategic Apex, pump line, Techno social organisation, and Support fermentg basic organization structurea) Functionalb) Divisionalc) Hie rarchicald) Line and ply Structuree) Task ForceThe Need for Organizational Structure Organizations needs structuring so that lines of authority along with individual duties and responsibilities can be unders in like mannerd by every company member.f) Matrix StructureTRENDS IN organisational STRUCTURESThe growth in sell, both on-site and off-site, has required merchants to readdress their tables of organization so that they will better manage the needs of their customers and make their companies more profitable. Some of todays styles in organizational structuring for the fashion-retailing arena are described in this section. Restructuring to Accommodate Multichannel ExpansionWhen subdivision stores in particular hyperbolizeed their catalog operations, many initially opted to make this division part of their brick-and-mortar operations. Similarly, when retailers saw that the Internet had the potential to increase revenues, they changed their organizational structure to reflect this and to make the overall operation function more efficiently. Today, the trend is for the major multichannel retailers to adjust and expand their tables of organization and separate the three functions into separate channels. Macys, for example, is one of the giants in the industrythat has changed to that format.Consolidation of DivisionsThe acquisition of department stores by major retail groups has become a dominant trend. May plane section Stores and Federated Department Stores, for example, are two companies that have expanded their operations by purchasing former(a) retail companies. In their pursuit of maximizing profits, these groups have, in many cases, decided to merge the new acquisitions into some of their own stores. May, for example, purchased xvi Wanamakers stores and three Woodward & Lothrop stores and merged some into their Hechts division and some into the Lord & Taylor group.Through this practice, few buyers and merchandisers were needed as were other execut ives who previously worked exclusively for one store. As this acquisition trend continues, this staff consolidation is likely to continue as well.DecentralizationMuch of the growth in large-scale retailing has come about by expansion into new trading areas. Although centralization was once the forte of the cosmic string organization, this expansion has necessitated some decentralization of functions. Merchandise distribution, for example, has now been decentralized to imply regional operations. When stores were so remote control from the single distribution center, the time it took for merchandise to reach many of the units was both inefficient and costly.SMALL investment trust APPLICATIONSThe manner in which small stores are organized is unlikely to change, because these operations require few employees to run them. The key roles are usually performed by the owner or partners with the remainder of the functions such as change and stock keeping left to the sales associates. Whe n there isnt a store manager on site, as is often the case, a particular salesperson should be designated to take charge and assign tasks such as handling temporary changes in sales associates hours. When outside tasks, such as advertising and opthalmic merchandising, are required, outside agencies should be hired to take care of them. The need for in-house specialists to perform these tasks is limited and is too costly for small businesses toafford.Strengths and WeaknessesStrength is any attribute or ability of the organization that may benefactor it in accomplishing its mission and in fulfilling its vision Weakness is any attribute or ability of the organization that may hinder it in accomplishing its mission and in fulfilling its visionFor example factors relating to products, pricing, cost, profitability, performance, select, people, skills, adaptability, brands, services, reputation, cropes, infrastructures, etc Factors tend to be in the acquaintStarbucks SWOT analysis 201 3Strengths1.Sound pecuniary records2.No. 1 brand in coffeehouse segment valued at $4 billion3.Starbucks experience4.Largest coffeehouse chain in the world5.Employee managementWeaknesses1.Coffee beans monetary value is the major influence over firms profits 2.Product pricing3.Negative publicityOpportunities1.Extend supplier incline2.Expansion to emerging economies3.Increase product offerings4.Expansion of retail operationsThreats1.Rising prices of coffee beans and dairy products2.Trademark infringements3.Increased competition from local cafes and specialization of other coffeehouse chains 4.Saturated markets in the developed economies5.Supply disruptions2External EnvironmentIt refers to the environment that has an indirect influence on the business. The factors are uncontrollable by the business. Two types of external environmentMicro EnvironmentThe micro environment is alike known as the task environment and operating environment because the micro environmental forces have a dir ect bearing on the operations of the firm.a) SuppliersAn important force in the micro environment of a company is the suppliers, i.e., those who tack on the inputs like raw materials and components to the company.b) CustomerThe major task of a business is to name and sustain customers. A business exists only because of its customers. c) Marketing IntermediariesThe marketing intermediaries embroil middlemen such as agents and merchants that booster the company find customers or close sales with them. d) FinancersThe financers are also important factors of internal environment. e) habitualPublic can be said as any group that has an actual or potential interest in or on an organizations ability to achieve its interest. Public include media and citizens. Macro EnvironmentMacro environment is also known as General environment and remote environment. Macro factors are generally more uncontrollable than micro environment factors. When the macro factors become uncontrollable, the succe ss of company depends upon its adaptability to the environment.a) Economic EnvironmentEconomic environment refers to the aggregate of the nature of economic system of the country, business cycles, the socio-economic infrastructure etc. b) Social EnvironmentThe social dimension or environment of a nation determines the value system of the society which, in turn affects the functioning of the business. Sociological factors such as costs structure, customs and conventions, mobility of labor etc. have far-reaching impact on the business. c) Political EnvironmentThe political environment of a country is influenced by the political organizations such as philosophy of political parties, ideology of administration or party in power, nature and extent of bureaucracy influence of primary groups etc. d) wakeless EnvironmentLegal environment includes flexibility and adaptability of law and other legal rules governing the business. It may include the exact rulings and decision of the courts.e) Technical EnvironmentThe business in a country is greatly influenced by the technological development. The technology adopted by the industries determines the type and quality of goods and services to be produced and the type and quality of plant and equipment to be used. financial System of the Country and Selected Items of pecuniary & financial Policies The structure of the Philippine Financial system is dominated by a banking system. Bangko Sentral is the official central bank in the Philippines. The structure of the financial system allows the option to take debts and buy bonds or stocks. There are many private banks present for this purpose. Financial Institutions are the intermediaries that mobilize savings and facilitate the allocations of funds in an efficient manner Fiscal policy refers to the measures employed by governments to stabilize the economy, specifically by manipulating the levels and allocations of taxes and government expenditures.Fiscal measures are oftenti mes used in tandem with monetary policy to achieve certain goals. In the Philippines, this is characterized by uninterrupted and increasing levels of debt and budget deficits, though there have been improvements in the last few years. The Philippine governments main sources of revenue are taxes, with some non-tax revenue also being collected. To finance monetary deficit and debt, the Philippines rely on both domestic andexternal sources. External Sources of Financing are1 Program and Project Loans the government offers project loans to external bodies and uses the proceeds to fund domestic projects like infrastructure, agriculture, and other government projects. 2 Credit Facility Loans3 Zero-coupon Treasury Bills4 Global Bonds5 alien CurrenciesDomestic Sources of Financing are1 Treasury Bonds2 Facility loans3 Treasury Bills4 Bond Exchanges5 Promissory Notes6 Term DepositsIn 2010, the total outstanding debt of the Philippines reached Php4.718 one thousand thousand Php2.718 trilli on from outstanding domestic sources and Php2 trillion from foreign sources. According to the Department of Finance, the country has recently reduced dependence on external sources to minimize the risks caused by changes in the global exchange rates. Efforts to reduce national debt include increasing tax efforts and decreasing government spending. Monetary policy is the monitoring and control of money supply by a central bank, such as the Federal Reserve Board in the joined States of America, and the Bangko Sentral ng Pilipinas in the Philippines.This is used by the government to be able to control inflation, and stabilize currency. Monetary Policy is considered to be one of the two ways that the government can influence the economy the other one being Fiscal Policy (which makes use of government spending, and taxes). Monetary Policy is generally the process by which the central bank, or government controls the supply and availability of money, the cost of money, and the rate of in terest. The Philippines inflation identify is measured through the Consumer Price Index (CPI). For 2009, inflation target has been set to be 3.5 percent, having a 1% tolerance level, and 4.5 percent for 2010, also having1% tolerance. Also, the Monetary Board of the Philippines announced a target of round 41 percent from 2012 to 2014. Opportunities and ThreatsOpportunities are any issue, event or trend that may military service the organization in accomplishing its mission and in fulfilling its vision Threats are any issue, event or trend that may hinder the organization in accomplishing its mission and in fulfilling its vision for example, factors relating to markets, audience, fashion, seasonality, trends, competition, economics, politics, society, culture, technology, environmental, media, law etc factors tend to be in the future