Principles of management

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                        BA210 principles of management                 

Ernaline Go                                                                           0523-001019

 Business environment refers to the forces which diversely affect the activities of a firm.  An idea put forth in the Thames study guide is and I quote “a firm does not exist in isolation.  It works within the overall environment and must keep up with the changes in this environment”.  This so called business environment is divided into two general classifications, the “External” and the “internal” environments.  Factors in the environment are variable; they change over time, knowing this; the environment must be monitored closely and the company must adjust the way they do business according to the changes in the environment.  If it fails to do so, the company will most likely suffer a loss in revenue.  In discussing the different factors involved I’d like to use as an example the McDonald’s food corporation.  A firm, known the world over which in its success is an example of diversity and change.  Being an MNC which spans the globe it has to adjust to almost anything, and everything in each different environment that it finds itself in.

The business environment is split into two divisions, the first of which is the “internal environment”.  Factors in the internal environment are the forces which have a direct effect on the daily activities of the company, the absence of any of these individual dynamics would mean the failure of the company in question.  There are a total of six factors in the internal environment, each of which affects the firm directly and adversely.  This is the environment found inside the company itself.  

The first of the internal factors that must be taken into consideration are the customers.  Customers by definition are the people who buy the products or the services of the company’s today.  Customers both loyal and first time are probably the most important factor in a firm’s existence.  Without the customers a business fails to exist.  Customers at present are in general demanding and have high expectations, because of the fear of losing customers to other competitors a company must; study the views and the attitudes that could change customer’s purchasing habits or even factors which affect these habits.  As long as a firm can keep up with its consumers thinking, it can keep them coming back to buy more.  In the case of my model corporation McDonald’s handled the varying tastes of customers all over the world by introducing special menus.  For example in the Philippines fried chicken and spaghetti are offered to cater to the Filipino tastes, in France they have the Arche de Luxe to cater to more sophisticated French taste, and in the US they have the double quarter cheese for those big American appetites.  In doing this McDonald’s has figured out a way to appeal to the different tastes the world over.  In comparison fast foods like Carl’s Junior and even Burger King have come but failed to attract our local tastes this is proof that failure to adjust to any part of the environment will hamper a firm’s effectiveness in a given market.  

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The second factor in the internal environment is the firms’ competitors.  In any business venture, a firm must be ready for its competitors.  Competitors are basically the other companies which are vying for a piece of the same pie that the business is aiming for.  A firm planning to enter any market must always check out the competition, and know specifically just on what level they are planning to compete and how.  Though it’s fierce at times it is the catalyst for advances and improvements in products and services.  More companies means more choices, more choices means companies compete by ...

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