Lesson 1:
Understanding the Business Environment
and the Market
The law of supply and demand is the most fundamental
concept in business economics. It is a symbiotic and mutually
beneficial relationship between the supplier and the consumer,
where one is dependent on each other for survival, sustenance,
and growth.
Lesson Objectives:
At the end of lesson, you should be able to:
1.describe the concept of business environment and market;
2. cite the importance business environment and market;
3. explain the factors affecting business environment and
market; and
4. recognize hoe environment and market affect businesses .
Concept and importance of business environment and market
The Business Environment Importance of Business Environment
The Market
The Business Environment
is integral for a business to exist and continue, operate, survive, and flourish
within its surroundings.
The Market
is a physical or virtual setup where
transactions are initiated and
consummated between the seller and the
buyer
Hedging an advanced risk management strategy that
involves buying or selling an investment to
potentially help reduce the risk of loss of an
existing position
Importance of Business Environment
Provides the direction where new opportunities for growth and
expansion are to sustain the existence of humanity
The breakthrough and advancement in technology will help
business develop new and efficient ways of doing or conducting
their business processes.
Helps promote competition, forcing businesses to develop
strategies to outdo each other.
Creates extreme awareness on ways to
preserve the ecological balance existing
in the planet. It helps businesses promote
social responsibility
Helps identify weaknesses, prompting
corrective action to improve business
processes.
Factors affecting business environment
Demographic Factor
Economic Factor
Geographic, Ecological and
Environment Factors
Sociocultural Factor
Legal and Political Factor
Technological Factor
The key driver for change that
contributes to the magnitude of
Demographic Factor business today is population
Economic Factor This refers to a business enterprise that is
the only company selling or offering a
particular good or service
Geographic, Ecological and
This refers to
Environment Factors
climate ,
Sociocultural Factor
This refer to social norms, practices,
attitudes and behaviors of people in a
society that influences the way business
organization are run or operated.
Legal Factor
This refers to the environment prevailing in the
government that determines the kind of
regulations and governance it will exert on the
business environment.
Political Factor This refers to a complex system that sets the
controls and regulations of how a business
should function.
A. Identification. Identify what is being referred to
in the following statements. Write the correct answer
on the blank before each number.
1. It is the key driver for change that contributes to
________
the magnitude of business today.
________2. It is the environment of businesses that is
integral to human's existence and continuity, operation,
survival, and flourishing within its surroundings.
_______3. It is the physical or virtual setup where transactions
are initiated and consummated between the seller and the
buyer.
_________4. This refers to the business environment that
already existed at the beginning of civilization
_________5.It is the discovery of new ways of
doing things, efficiency, new products, and solutions
to problems that benefit the business enterprise.
___________6. This refers to a business enterprise
that is the only company selling or offering a
particular good or service.
7.This refers to the social norms,
______________.
practices, attitudes, and behaviors of people in a
society that influence the way business
organizations are run or operated.
__________8. This refers to the environment prevailing in
the government that determines the kind of regulations and
governance it will exert on the business environment
__________9. This refers to a complex system that
sets the controls and regulations of how a business
should function.
10. ____ environmental is integral for a
business to exist and continue, operate
survive, and flourish within its surroundings
Give atleast 5 Factors affecting
business environment
