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13TH September, 2010 Monday

BUSINESS ENVIRONMENT

Assignment 1

News affecting the various aspects of Business Environment.

SCHOOL OF MANAGEMENT STUDIES


PUNJABI UNIVERSITY, PATIALA

Submitted to By Deepinder S.
Rana
Ms. Shavina Goyal R.No: 5607
MBA 1st Section-
A

NEWS 1: “WIPRO MAY PASS ON VISA HIKE”


New Delhi: The country’s third largest software firm Wipro may raise billing rates o
f clients to mitigate the extra cost incurred due to the visa hike by the US, “We will t
alk to customers and seek price adjustments for the extra cost. We will work with th
em to see how to mitigate it.” said, Suresh Senapaty, chief financial officer, Wipro.
REUTERS

Business Environment Factors Involved

• Political Environment.(External Macro Environment)

• Global Environment. (External Macro Environment)

• Economical Environment. (Internal Business Environment)

IMPLICATIONS: “Due to recent protectionist policies of Obama Govt., in The


US , for safeguarding of local employment & minimising outsourcing, the global sce
nario has recently started moving towards sense of protectionism and it has lead to k
een increase in search of new open economies to counter such harsh political decisio
ns, which effect the global business environment. He decision taken by Wipro is a
counter result desires by the US, this increase in fee will force the US based IT
clients to look for cheaper alternatives in home, and will force the outsourcing IT
firms to look for other free markets”

NEWS 2: “India’s rural web users to grow 30% in 2010”.


The number of internet users in rural India is forecasted to rise 30% to 5.4 millionin
2010, according to a joint study conducted by the internet and mobile association of
India(IAMAI) and market research firm, IMRB. Email is the dominant purpose of
internet access in rural India, the organization said, adding that about 85% of the
total users in 2009 accessed the internet for e-mails. About 13% of the total rural
users in 2009 scouted for latest farming techniques over web, while 18% used it find
out more about fertilizers & pesticides, the organization said.
Business Environment Factors Involved

• Socio cultural environment.(External Micro Environment)


• Technological environment(External Macro Environment)

• Political Environment(External Macro Environment)

• Economical Environment(Internal business Decision )

IMPLICATIONS: “The above news brings forth the change in social needs, with
need of web services in rural India, there more chances of technological
development in field of agriculture as there is also an increase need for it. This news
also lightens up the efforts of central govt. with support by various local level govts.
like in HP the BSNL data one has special scheme for villages, with minimal rentals,
in Punjab govt. has made the easy availability of basic hardware for internet usage.
These changes have opened a new explorable market for computer related firms in
hardware, software and service sector.”

NEWS 3: “August Foreign tourist arrivals3,82,000 up by 9% this


year.”
India’s August foreign tourist arrivals stood at 3,82,000, up by 9% from a year ago,
agovt data showed on Wednesday January August 2010 foreign tourist arrivals
stood at 3.47 Millions as compared with 3.16 Million in the year ago up by 9.7%.
The countries august foreign exchange earnings from tourism was 4620 crores,
up12.3%froma year ago the ministry of tourism secretary said.

Business Environment Factors Involved

• Economical Environment.(External Macro Environment)

• Social Environment (External Micro Environment)

• Political Environment (External Macro Environment)

IMPLICATIONS: “The above news implicates that the political business


environment is suitable for tourist and the social cultural environment of society also
supports the same. The overall revenues drawn through the tourism is a major
support for indigenous tourist sites. The news shows the chances of accessing and
profitability in this tourism industry. The over all GDP is also being directly effected
by the same.”

NEWS 4:“India moots easing norms for existing foreign joint


ventures”
“New Delhi, Sep 11: India's commerce and industry ministry has favored the easing
of norms for foreign companies that already have tie-ups with a domestic firm but
want to expand their operations independently.
In a bid to protect Indian industry, the government had required all foreign
companies to get a go-ahead from their domestic joint venture or technology
partners if they wished to expand their business independently.
While this policy was reviewed and the norm done away with in 2005, it still
applied to those ventures that were in operation before the cut-off date of Jan 12 that
year.
"An element of government oversight was necessary so that future collaborations
were subjected to the test of jeopardy and existing domestic joint-venture partners
and technology collaborators were not placed in a position wherein their survival
was threatened," the industry ministry said.
"With more than five years having elapsed, it can be argued that the issue of
jeopardy is no longer relevant, as the Indian partners could have recovered their
investments substantially during this period of time," the ministry added.
"The Indian industry today is in a much stronger position than it was in the 1990s,
when the condition was first introduced. It, therefore, needs to be seen whether there
is a need to continue with the elements of such a regime even today."
The ministry, accordingly, has released a discussion paper, inviting suggestions and
recommendations from all stakeholders before making any change in the existing
policy. Comments on the issue are invited before Oct 15.
The ministry also argued in favors of doing away with the permission clause in the
wake of a number of free trade agreements and economic pacts signed with other
countries and regions.
"In such a scenario, if an industry is discouraged from being set up in India, it could
be set up in a neighboring country, with whom a trade agreement exists or is being
negotiated," the ministry said.
"Competition today, is not only between domestic players inter se but also between
international and domestic players. Dumping of goods from some of countries has
posed serious threats to the survival of domestic industries."
The ministry has asked whether the policy should be totally abolished, if it should
continue for some more time, or should it be relaxed in a calibrated manner?
For example, it could be exempt for existing ventures that are beyond 10 years old,
or on occasions when the activity of the new venture is demonstrably different from
the activity of the existing venture. (IANS)”
The Business-Standard
India
Business Environment Factors Involved

• Global Environment. (External Macro Environment)


• Political Environment (External Macro Environment)

• Economical Environment.(External Macro Environment)

IMPICATIONS: “The news reminds of 1990 when there were very strict rules
for any type of investment in India, but the passing of time the things have changed
on political and social level, the multinational are now welcomed in India. The
reason behind this open environment is Globalization on an international level, i.e. if
a company will not be allowed to set up its business in India it will target Indian
economy from neighboring state and it will also lead to loosing of substantial
Foreign investment. The increase in foreign investment will further boost the
economy. But the present day restrictions must continue for a substantial and safe
growth”

NEWS 5: Coca-Cola: Down the milky way

Coca-Cola is stepping into the tricky segment of dairy products that would put it at loggerheads with
the likes of Amul and Danone. It is testing waters with a mango pulp-based milk drink called Milky
Delite, which is an extension of its popular mango drink, Mazza. At present, Milky Delite is being sol
d in packs of 200 ml for Rs 15 in Kolkata. After two months of testing, Coca-Cola would take the dri
nk to the rest of the country. The company is said to have slotted Rs 65 crore in the production of frui
t beverages.

To extend its portfolio into milk products, Coca-Cola is sprucing up its supply chain — milk-based
drinks need cold storage both in transit and at stores. Milk solids, one of the key ingredients in the
product, will be sourced from Karnal in Haryana. Mango pulp is being sourced from Maharashtra.
Milky Delite will be processed in one of the company’s bottling plants in Kolkata. It has trained sales
teams and retailers on product handling — storing the product below 30 degree Celsius and so on.

Over the next two months, Maaza Milky Delite would be retailed across 3,000 ou
tlets in Kolkata. Once it reaches about 1,000 outlets, Coca-Cola will launch its pr
omotion campaign. The test phase will see a TV and outdoor ad campaign, besid
es consumer activation on the retail front. There will be road shows for sampling,
while the TV ad will be aired on the leading channels in the city. Kolkata with its
distinct vernacular preferences in TV channels will let Coca-Cola gauge audience
conversions through advertising in regional channels without it spending heavily
on media. The campaign, with its tagline “Sharing not possible”, has been create
d by Leo Burnett. .

Danone, the French dairy major, offers Choco Plus, a chocolate smoothie, at a price range similar to
that of Milky Delite. Most players in the category have offerings priced between Rs 13 and Rs 18 for
175-200 ml packs. While Britannia scalded its fingers with Zip Sip a few years ago, it has re-entered
the market with Actimind. It has upped the stakes by adopting HDPE packaging which is more
convenient than cartons and has a longer shelf life.
Coca-Cola is not leaving Milky Delite’s success to chance. It was developed at the company’s R&D
centre in Gurgaon after extensive consumer research and stability tests to match the taste of Indian
consumers. The packs can survive for four months of Indian climate. Globally, Coca-Cola is not new
to dairy products: It has products such as SuperMilky in China, Nutriboost in Vietnam, Fanta Lactic
in Honk Kong, Macau, Taiwan and the US, and Minute Maid Duofrutas in Spain. In India, there are
not many branded mango-milk drinks, with most players banking on coffee, chocolate and thandai-
based milk drinks. This gives Coca-Cola a headstart. Can Maaza Milky Delite pass the slurp test?

The Business-Standard India

Business Environment Factors Involved

• Competitor in External Micro Environment.

• Internal Business Decisions.

• Society in Micro Business Environment.


IMPLICATIONS: “The Company has started giving a challenge to the
indigenous Milk processing industry by new product. It’s also a way of creaming
Indian social attributes of milk based products. The marketing and distribution
strategies of the well experienced beverage based company will have to face a new
challenge while dealing with a product having lesser shelf life than usual product
range.”

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