Business environment is a set of political, economic, social and technological (PEST) forces that are largely outside the control and influence of a business, and that can potentially have both a positive and a negative impact on the business
Business Environment means surrounding situations which is directly or indirectly effect on business. The Environment is of two types, it is Internal Environment and External environment.
Internal Environment: It includes 5 Ms i.e. man, material, money, machinery and management, usually within the control of business. Business can make changes in these factors according to the change in the functioning of enterprise.
External Environment: Those factors which are beyond the control of business enterprise are included in external environment. These factors are: Government and Legal factors, Geo-Physical Factors, Political Factors, Social-Cultural Factors.
McDonald’s is the world’s leading food service organization. It generates more than $40 billion in System wide sales. It operate over 30,000 restaurants in more than 100 countries on six continents. This company has the benefits that come with scale and a strong financial position.
The company started its operations in India in 1996. In India, it is a 50-50 joint venture partnership between McDonald’s Corporation (US) and two Indian businessmen Amit Jatia and Vikram Bakshi. The company has evolved special menu in the vegetarian category to suit Indian tastes and preferences. Taking in consideration the Indian culture, it doesn’t offer any beef or pork items in India.
The company has many branches in India that are Mumbai, Delhi, Pune, Ahmadabad, Vadodara, Ludhiana, Jaipur, Noida, Faridabad, Doraha, Manesar and Gurgaon.
Causes for failing McDonalds: —–
McDonald’s used beef in making burgers in India that is the main source for failing McDonalds in India. McDonalds ignore business environment in India because the Indians do not eat beef but the company not identify it and it becomes the cause for failing the company.
There was one Research on McDonalds, a person eat McDonalds product regularly for one week and the calorie of this person become more than previous. McDonald’s also had to increasingly battle its public image as a purveyor of fatty, unhealthful food.
In 1970s competition from other hamburger chains such as Burger King and Wendy’s began to intensify. Then there was a believed that the McDonalds had gotten as big as it ever would, so the company began to battle fiercely for market share.
Decisions taken by the Company: —–
After that McDonalds have to take some decisions to survival in India that may occur due to ignorance of business environment.
In mid-2002 it reached a settlement in the litigation, agreeing to donate $10 million to Hindu, vegetarian, and other affected groups. Also in 2001, further embarrassment came when 51 people were charged with conspiring to rig McDonald’s game promotions over the course of several years.
They decided that they would not use beef in burgers in India. They make separate product of McDonalds Vegetarian and non vegetarian. It was revealed that $24 million of winning McDonald’s game tickets had been stolen as part of the scam. McDonald’s was not implicated in the scheme, which centered on a worker at an outside company that had administered the promotions.
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Kodak is a leading producer of cameras and silver halide paper used for printing from film and digital images. Minilabs located in retail stores and larger central photo lab operations (CLOs) use silver halide paper for photo printing. Kodak is also a manufacturer of photo kiosks which produce “prints in minutes” from digital sources.The company has placed some 80,000 Picture Kiosks in retail locations worldwide.
In addition, Kodak markets Picture CDs and other photo products such as calendars, photo books and photo enlargements through retail partners such as CVS, Walmart and Target and through its Kodak Gallery online service, formerly known as Ofoto. In 2005 Kodak announced they would stop producing black and white photo paper.
Causes for failing: —–
Kodak Company fails due to ignorance of business environment. It failed when digital cameras come in the market. It may fail because of the change of technology. It ignore that thing and fail, but the company take some decisions also for survival.
Decisions taken by the company: —-
Kodak first launched the Kodak Smart Picture Frame on the QVC shopping channel in the fourth quarter of 2000, at a time when the majority of consumers didn’t know about or understand this new category. Kodak’s Smart Frame was designed by Weave Innovations and licensed to Kodak with an exclusive relationship with Weave’s Story Box online photo network.
After losing a patent battle with Polaroid Corporation, Kodak left the instant camera business on January 9, 1986. The Kodak instant camera included models known as the Kodamatic and the Colorburst.The invention of the company is that Kodak’s earlier compact digital cameras were designed and built by Chinon Industries, a Japanese camera manufacturer. In 2004 Kodak Japan acquired Chinon and many of its engineers and designers joined Kodak Japan. In July 2006 Kodak announced that Flextronics would manufacture and help design its digital cameras.
(3) LML Scooter company
In the first phase of 1999, LML India has started with 120 people and hopes to build up a base of 20,000 trained mechanics over time. Alongside, its 300-dealer strength is to be over 500 soon. LML Limited is the company that changed the face of scootering in India in collaboration with Piaggio.
Causes for failing:—-
-LML scooters had to leave Indian market because they didn’t not realize the market shift from scooters to Motor bikes easily. This company is also affected by the environment. It is affected by the technology and demand of public. The public started buying bikes and the market of the scooters has go down.
Decision taken by the company: —–
For survival the company takes some decisions. The companies firstly failed because they do not launch motorcycles but now they have entered the motorcycle market in collaboration with Daelim of Korea. Although LML’s scooters are no longer badged as Vespa they continue to provide the same high quality scooters under the LML name.
The new LML is loaded with new features such as a bigger taillight, cushioned backrest, new handle bar design, new speedometer, utility box and a larger glove compartment.
LML has just introduced a whole new line of motorcycles to augment its Freedom. The Freedom Prima now has a 125cc version with an option of a 4 or 5 speed gearbox and disc brakes. It also enters the power segment with the all new LML Graptor which is set directly against the Bajaj Pulsar in the power segment.
(4) Campa Cola Company
Campa Cola is a soft drink brand in India. Campa Cola was a drink created by the Pure Drinks Group in the 1970s. Campa Cola is a popular soft drink brand in India. Prior to the re-emergence of international competitors like Pepsi and Coca-Cola into the Indian soft drink market, Campa Cola enjoyed a large share of the Indian soft drink market.
Causes for failing: —-
Now, as a result of increased competition, the beverage brand has seen its market share reduced – forcing the company to develop new and innovative ways in order to retain its current customer base and its share of the billion dollar soft drink market.
Campa cola got shut because they were not able broden their portfolio of more flavored drinks and juices compared to coca-cola and Pepsi despite having a huge brand value in India.
Decisions taken by the company: —-
The Campa cola company makes similar taste with Thumbs-up for survival. After being out of the market for many years, the Campa Cola brand was again launched in the Indian market in 2003 by Satya Beverages and Distilleries Ltd who took over the franchise. Though now there are international players like coca cola and pepsi, Campa Cola still has an appeal among the consumers.
(5) Denver clock Company
It is an alarm clock company which shows time and used for alarms. It is also failed because of environment of the business. The reasons for failing Denver clock company is companies got wiped off the market because of the evolution of mobile phone alarms.
Steps that the company is taking:—
The company mskes that watches that shows the times of every country and they change the style of the watches.
(6) Compact disk India Ltd. Company
Compact Disc India Ltd. (CDI) is an India-based animation film company. It is an integrated media and entertainment company focusing on animation outsourcing and production. The Company’s principal products and services include animation films and outsourcing. CDI is engaged in multimedia and entertainment production in India. During the fiscal year ended March 31, 2010 (fiscal 2010), its two animated feature films included Eternal Love and Futebol. The Company has operations in India, Malaysia and Singapore. Its associate companies include Premier Brands Pvt. Ltd., Golden Games Pte. Ltd and Global Internet Ltd. The Company’s subsidiary is Seengal Animation Pvt. Ltd. Seengal Animation Pvt. Ltd. is engaged in animation
Cause for failing:—
Compact disks (C.D’s) are almost out of business because of they could not compete with blue ray disks and pen drive storage devices.
Steps that company is taking:—
The is changing the shape and the storage capacity of the CD;s that may be change the future of the company which is fail due to ignorance of advance technology. It failed due to ignorance of business environment. Until 2003 CDI gained extensive expertise in creation, distribution and management of contents for Media & Entertainment sector. The product range covered all the segments of entertainment i.e. big screen (theatres), small screen (home videos & television) and personal screen (personal computers). CDI offered one stop service from concept to screen.
(7) Xerox Company
Xerox was founded in 1906 in Rochester as “The Haloid Photographic Company”, which originally manufactured photographic paper and equipment. The company subsequently changed its name to “Haloid Xerox” in 1958 and then simply “Xerox” in 1961.
Cause for failing: —-
Xerox lost huge market because of entry of reasonably priced printers and the size of Xerox was bigger than printer.
Steps taken by the company: —
Xerox today manufactures and sells a wide variety of office and production equipment including LCD Monitors, photo copiers, Xerox Phaser printers, multifunction printers, large-volume digital printers as well as workflow software under the brand strategy of free flow. The impact of Xerox free flow products on the graphic arts market and the print industry in general has grown exponentially since May 2006, largely as a result of the Xerox presence at IPEX 2006. Xerox also sells scanners and digital presses. On 29 May 2008, Xerox launched the Xerox iGen4 Press.
Xerox sells both color and black and white printers under the Xerox Phaser brand, with the color consumer model starting at US$299; the most expensive color model costs US$6,799.
Xerox also produces fax machines, professional printers, black and white copiers, and several other products.
In addition, Xerox produces many printing and office supplies such as paper, in many forms; and markets software such as Xerox DocuShare, Xerox Market port and flowport, offers consulting services, ECM Digital Repository Services and printing outsourcing.
Xerox launches so many products under the business environment currently which changes the future of the company.
Pagers are that from which only text messages can sent. From salesmen on the road to traveling executives, pagers are a handy device with which to keep in touch with employees, co-workers and clients. The many pagers types and styles have an assortment of features and capabilities to choose from.
It is failed because pagers could not survive in the market because of the evolution of the mobile phones. It is also failed because of technology. Through pagers we can sent only text messages but with mobile phones we can do anything. So it is affected by the technology.
Steps taken by the company: —-
Numeric pagers were the earliest type of pagers and are still in use today. Numeric pagers display a phone number and vibrate or beep to alert you to call the number on the pager. Modern styles of numeric pagers include a wide selection of colors and styles that come in sizes as thin as credit cards.
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It launches Alphanumeric pagers display both numerals and text. You can still receive a phone number to call, or get brief text messages displayed on the screen of the pager. These pagers can display up to 500 characters and save a number of messages. Pagers comes in handy for a variety of industries. Now that business moves at such a fast pace, pager companies are constantly coming up with new and better designs for their business pagers.
(9) Hummer Car Company
Hummer was a brand of trucks marketed since 1992 by AM General when it began selling the civilian version of the M998 High Mobility Multipurpose Wheeled Vehicle. The business viability of the Hummer brand was under review by General Motors management since 2008. The brand was not transferred to Motors Liquidation Company as part of the General Motors bankruptcy in 2009; instead, it was retained by General Motors in order to investigate selling the brand.
Causes for failing: —
Hummer car got discontinued despite its popular design and demand because the company could not change it from a gas guzzler to fuel efficient car.
Steps taken by the company:–
GM had been active in licensing the Hummer. Various companies licensed the Hummer trademarks for use on colognes, flashlights, bicycles, shoes, coats, hats, laptops, clothing, CD players, and other items. It comes with new models of hummer i.e. Hummer H1, Hummer H2, and Hummer H3.
(10) Cassettes manufacturing Company
Cassettes companies were also affected by the environment of business. There are many companies which may fail because of change in technology. It is failed because cassette manufacturing got out of business after the evolution of cd’s and online music availability.
Steps taken by the company: —-
The companies i.e. sony, Phillips are now started manufacturing CDs which helps this companies to survive. They start making other products also. Blue-Ray, yet again primarily developed by Philips and Sony, utilizes blue-violet colored diodes to create an even shorter wavelength beam than CD or DVD. Because of this, the capacity is much more than that of CD or DVD, being 25 GB single-layered or 50 GB dual-layered.
Every company should analysis the business environment before starting the business. If it is not done by the companies than it could be fail. The company should analysis the political, social, economic and technological environment of the country in which the business is going to started. The companies should also analysis the national culture of the country. As it happen in case of McDonalds that the company not analysis the culture India and the company was suffered loss for it.
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