In principle of business management, critically discuss the three different environment a business person has to consider before embarking on business?

Before embarking on a business venture, a business person must consider three different environments: the internal environment, the external environment, and the competitive environment.

1. Internal Environment:
The internal environment of a business includes factors such as the company's resources, capabilities, and culture. It is important for a business person to assess the internal environment to understand the strengths and weaknesses of the organization. This includes analyzing the company's financial resources, human resources, technology, and infrastructure. By understanding the internal environment, a business person can identify areas where the company excels and areas that need improvement. This information can help in developing strategies to leverage strengths and address weaknesses.

2. External Environment:
The external environment of a business includes factors such as the economy, market trends, regulatory environment, and social and cultural factors. It is important for a business person to analyze the external environment to identify opportunities and threats that may impact the business. For example, changes in consumer preferences, technological advancements, or shifts in government regulations can have a significant impact on a business. By understanding the external environment, a business person can anticipate changes and develop strategies to adapt to them.

3. Competitive Environment:
The competitive environment of a business includes factors such as competitors, suppliers, customers, and industry trends. It is important for a business person to analyze the competitive environment to understand the competitive landscape and identify key players in the industry. By understanding the competitive environment, a business person can identify opportunities for differentiation and develop strategies to gain a competitive advantage. This may involve conducting a competitive analysis, identifying key competitors' strengths and weaknesses, and developing strategies to position the business effectively in the market.

In conclusion, before embarking on a business venture, a business person must critically analyze the internal, external, and competitive environments to understand the factors that may impact the success of the business. By considering these three environments, a business person can develop strategies to leverage strengths, address weaknesses, capitalize on opportunities, and mitigate threats.

External Environment

- Macro Environment: Encompasses factors that affect the business secara keseluruhan, including:
- Economic conditions (e.g., interest rates, inflation)
- Technological advancements
- Political environment
- Socio-cultural trends
- Ecological dynamics

Businesses must continuously monitor and adapt to these broad factors to stay competitive.

Industry Environment

- Competitive Landscape: Consists of direct and indirect competitors, as well as potential substitutes.
- Competitive rivalry
- Market share
- Barriers to entry
- Industry Structure: Describes the characteristics of the industry, such as:
- Industry lifecycle
- Number of competitors
- Degree of product differentiation
- Regulatory Framework: Includes laws, regulations, and policies that govern business operations.

Understanding the industry environment helps businesses identify opportunities and threats, and formulate effective strategies.

Internal Environment

- Mission and Values: Provide a foundation for business decisions and actions.
- Resources: Encompasses all the tangible and intangible assets that the business possesses, including:
- Human capital
- Financial capital
- Physical capital
- Capabilities: Skills, processes, and systems that enable the business to create value.
- Culture: Shared beliefs, norms, and behaviors that shape the organization's environment.

The internal environment serves as a source of both strengths and weaknesses, and must be carefully managed to support business objectives.

Critically Evaluating the Three Environments

- Interdependence: The external, industry, and internal environments are interconnected and interdependent. Changes in one can have ripple effects on the others.
- Uncertainty: All three environments are subject to uncertainty, creating challenges for business planning and decision-making.
- Scanning and Monitoring: Businesses must constantly scan and monitor these environments to identify potential opportunities and threats.
- Strategic Implications: An understanding of these environments enables businesses to formulate appropriate strategies to navigate the complexities of the business landscape.

By critically considering these three environments, businesses can gain a comprehensive understanding of their operating context and make informed decisions to achieve their goals.