Respected All, I am going to appear for my IPCC-May’ 2011 exams. As I am running short of time due to my job, so I have decided to do it through online as well. Here, I am following Dinesh Madaan notes for SM, so I’ll cover the topics from it and will try to share it with you in my own language on day to day basis.
It is only the begining................
Chapter -1 (Dinesh Madaan Notes)
What is business?
1) Business means busy in some activities.
2) Business means conducting of some activities like sales, purchase, after sale service & customer management etc. to achieve the company growth & profitability.
3) In general we can refer it to some company, enterprise & corporation.
Objectives of Business?
1) Profitability: Does it means by hook & crook, No it should earn by employees prosperity & customer satisfaction.
2) Growth: it is related to growth in company employees satisfaction, customer satisfaction and revenue & profits growth.
3) Survival: There should be a separate competitive strategy to survive in the market.
4) Efficiency: it means efficiency in productivity & cost control etc.
5) Stability: Company motive should be to earn long term profits and for just short term, so they can only get it by stability in the market.
All the surroundings around the human being like friends, peers, family etc & even man made structures like roads, buildings etc is called environment.
Similarly, a business is surrounded by the following factors:
Demand, Supply, Laws and competitions & Techology. These factors can influence the business on day to day basis.
A) A Business environment takes the inputs from the environment and give it back to the environment.
B) These factors are largely not under the control of the business
C) The business environment factors can be differing from industry to industry.
Is it necessary to analyze the b. environment?
Yes, it is very necessary to analyze the impact of business environment/factors on the business on regular basis otherwise company will be lost. Because, supply & demand and technical changes and competitive moves influence the business most. Moreover, there should be a separate competitive strategy to gain competitive advantage in the market.
Legal Framework or Steps to analyze the impact?
A) First step is to analyze the b. environment that how uncertain it is? How complex it is?
B) Second step is to consider the impact of such factors on the business that at what extent they will influence the business?
C) In final step, we should have a separate competitive strategy to compete with.