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Student's Book Form Five
Chapter One
Business environment
FOR ONLINE READING ONLY
Introduction
Understanding the business environment provides relevant insights into
the opportunities and challenges in the marketplace. These insights enable
businesses to adapt their strategies and operations accordingly. It is therefore
critical for businesses of all sizes and sectors to understand the business
environment in which they operate. In this chapter, you will learn about the
concept of business environment, business start-ups, and stakeholders in the
business. The competences developed will enable you to collaborate with key
business stakeholders to establish and operate businesses effectively.
Think
A business operating in a vacuum.
The concept of the business environment
Business environment refers to all the factors influencing business operations and well-
being. It helps in recognising business opportunities, identification of required business
resources, and organisation of the resources that facilitate business operations as well as
performance. This is because the environment in which businesses operate is dynamic
and multifaceted. It encompasses a wide array of factors which influence operations and
decisions. Principally, several internal and external factors create a dynamic context in
which businesses operate. Thus, understanding these factors helps businesses to seize
opportunities, anticipate and adapt to changes, and overcome challenges.
Imagine an environment where a trader operates a small fruits stall in a busy market.
This kind of business is not just about selling fruits but also will have to consider other
things which affect its operation such as the prices of fruits, the weather, the number of
customers around, the types of fruits, and even the regulations governing trading in the
market place. All these factors that impact the fruits selling business constitute what is
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