Business environment Business environment consists of all those factors that have a bearing on the business.

The survival and success of a firm this depend on two sets of factors viz. the internal the internal factors the internal environment and external environment. However the term business environment offer refers to the external factors. Formulation of strategy is sometimes defined as establishing a profer firm environment fit. Indeed the mission/ob ectives or goals themselves should be based on an assesment of the external environment and the organisational fcators. The external environment has broadly two components viz. business opportunities ! threats to business. "imilarly the organisational environment has two components strengths and wea#ness of the organisations. "ome of the external fcators have the different direct and intimate impact on the firm. These factors are classified as micro environment also #nown as tas# environment. There are other external factors are classified as external factors which affect an industry very generally. They constitute what is called macro environment. $e may therefore consider the business environment at three level. % Internal environment % &icro environment/operating environment/tas# environment % &acro environment/general environment/'emote environment (lthough business environment consists of both the internal ! external environments many people often combine the firm to the external environment of business. In this boo# too) in the subse*uent chapters the term refers mostly to external environment of business.