Elements of Small Business Environment

THE ELEMENT OF THE SMALL BUSINESS environment Entrepreneurship Individual Assignment THE ELEMENT OF THE SMALL BUSINESS purlieu Entrepreneurship Individual Assignment NGUYEN THAI HA B0074 BA505 ETR401 LECTURER MR. NGHIAHT NGUYEN THAI HA B0074 BA505 ETR401 LECTURER MR. NGHIAHT CONTENTS I. INTRODUCTION of ENVIRONMENT II. INTERNAL ENVIRONMENT III. external ENVIRONMENT 1. Task environs 2. General environment IV. CONCLUSION V. PREFERENCES I. INTRODUCTIONIn order to start up or become effective, each new and current companies have to drop a number of elements within the environment to gauge the path by which they ought to steer. So what is environment? Environment is the sum total of forces outside of the entrepreneur and the trustworthy According to BRIE, the entrepreneur have to create a Boundary within the environment, setting libertine apart from the rest of the environment. The Resources, says, knowledge, money atomic number 18 pull together from the environment. It is a lso at the core of Exchange because Exchange is the firm/entrepreneur dealing with the atmosphere buying, selling, trading, and so forthSimilar article KFC Macro EnvironmentIn short, a firms operation activities always involves with environment or environmental factors. Its divided into 2 elements Internal and External Environment. The Task & the General Environment are subset of External Environment. II. INTERNAL ENVIRONMENT In accordance with the definition of Internal environment in the text book, Internal environment are the people & groups within the boundary of firm, including the owners, managers, employees, and board members of the firm. Understanding the Internal context is essential to confirm that the risk assessment approach meets the needs of the firm and of its owner.It is the environment in which the firm lock aways to pass on its objectives and which can be influenced by the firm to manage risk. The internal context is ensureed having more factors than just all me mbers involved * Internal stakeholders owners, managers, etc. * The policies, vision, mission and strategic plan in place to achieve them Vision and mission are vitally important to a bank line because of the direction, guidance and purposes, flush inspiration they give to both employees and entrepreneurs. * Perceptions, value and finis Culture factor inside the firm can make or break the bloodline.At best, the corporate nuance can be a competitive advantage at worst, it can be a significant drag on business results. Companies with an adaptive culture that is aligned to their business goals routinely outperform their competitors. Some studies report the difference at 200% or more. Mostly, it is the owner, entrepreneur who shape business culture. The leadership who are able to shape their culture have a strong understanding that creating thriving, high-performance culture aligned with their companys mission, vision and set is vital dodging for success.HP (Hewlett Packard) cop ed with some problems few years ago and was forced to change its culture. Each staff has to point out their own personalized and professional objectives for a year and are encouraged, supported to meet the goals. After the change, HP no longer loss in productivity despite shorter workings while and increase in staff retention rate. * The capabilities in term of resources & knowledge people, physical assets, technologies, etc. * Standards and reference models in system, enterprise, software engineering * Structures governance, roles, etc.III. EXTERNAL ENVIRONMENT A business has to interact to what happen outside internal environment to fulfill Exchange in BRIE model. It is External environment surrounding the business operations and the internal environment of business. External environment may include Task Environment which can be called Micro Environment and General Environment or Macro Environment. 1. Task Environment Micro Environment a. Element of Task Environment The microe nvironment is made from components that are close to the company and directly partake the business.For examples * Publics group can have anactual or potential interest in or impact on anorganizations ability to achieve its objectives. Publics canbe * Media publics carry news, features, and editorial opinion * Local publics neighborhood residents and community organizations. * Customers Company must study its customer food markets closely since each markethas its own special characteristics. Customers can be B2C, B2B or B2G * Suppliers Provide the resources or input needed for the business to produce goods and services that play key roles in value delivery system for customers.Suppliers can leave huge impact on business due to supply shortage or the bargaining great power of suppliers * Competitors A company has to face with wide range of competitors and secures its strategic competitive advantages over competitors by technologies or selling point of the products or wipes out the marketplace. .. Walmart effort will serve as an example. Walmarts Micro environment would be very much focused on immediate local issues, local public. It would consider how to recruit, retain and extend products and services to customers.Walmart should pay close attention to the actions and reactions of direct competitors local markets, etc. Walmart would build and nurture close relationships with key suppliers for pricing factors and time of delivery. b. Porter five forces Task environment elements also appear in Porter five forces which is a framework for industry analysis and business strategy development. It derives five important forces that determine the competitive intensity and therefore, the attractiveness of a market. 5 typical factors have direct impact on the business. . General Environment Macro Environment The General Environment can be described by PESTEL model. It refers to all forces that are part of society, affect business and micro environment. * government al factors include * Governments stability * Social policies welfare, etc. * Trade regulation EU & WTO, etc. * The Government set the laws, regulations and policies that can promote or limit the individuals and organizations in a society * Economic factors * Economic growth * Unemployment rate * Interest rate Economic factor can effect acquire power and spending patterns. Element like interest rates affect a firms cost of capital and therefore a business grows and expands. Exchange rates affect the export and import goods in an economy. * Social factors * Demographics Demographics studies population patterns sizes, age, sex, occupation, ethnicity, etc. Those patterns are investigated for companies to change various strategies to adapt to these kindly trends, much(prenominal) as recruiting staff or design suitable products for each segmentLet take an example of age changing structure in US * Generation Y born 1980 1995 - technology wise, optimistic, confident, sociable, flexible and changing in its fashion, style consciousness * Generation Z born after 1995 - life with internet, phones, communicate through social media rather than personally meeting * Technological factors R&D, automation, etc. This factor can affect cost, quality and lead to innovation of a business. * Environmental Eco factors Climate, sinew consumption, waste disposal, etc.Awareness of the potential impacts of climate change affects how companies operate and the products/services they offer. There is a strong connection between a healthy economy and a healthy environment. Business should build environmental sustainable strategies for a life-long span. * Legal factors Antitrust law, consumer law, employment law, etc. Legal factors can shape the way companies operate and interact with employees, customers, etc. IV. CONCLUSION In summary, elements from environment have undeniable vital impacts on the business.Therefore, entrepreneur should be prepared carefully with full examine informa tion from those elements to help their business be able to survive and develop. V. REFERENCE Jerome A. Katz, Richard P. Green II. Ed. 2011. Entrepreneurial Small Business. 3rd Edition. China The McGraw Hill. Jerome A. Katz, Richard P. Green II. 2011. The element of the undersized business environment. China The McGraw Hill. Ch. 2. numeral 1. Jerome A. Katz, Richard P. Green II, 2011. Four elements needed to get your business started. Entrepreneurial Small Business Figure 2. Jerome A. 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