The business environment has been defined as "the totality of physical and social factors that are taken directly into consideration in the decision-making behaviour of individuals in the organisation.
For example, research and development have input as to the features a product can perform and accounting approves the financial side of marketing plans and budget in customer dissatisfaction.
The external environment "consists of those relevant physical and social factors outside the boundaries of the organization or specific decision unit that are taken directly into consideration.
Physical distribution firms are places such as warehouses that store and transport the company's product from its origin to its destination.
[citation needed] Competitors are also a factor in the micro-environment and include companies with similar offerings for goods and services.
The final aspect of the microenvironment is public, which is any group that has an interest in or effect on the organization's ability to meet its goals.
Media public include newspapers and magazines that can publish articles of interest regarding the company and editorials that may influence customers' opinions.
Factors affecting organization in Macro environment are known as PESTEL, that is: Political, Economical, Social, Technological, Environmental and Legal.
Demography refers to studying human populations in terms of size, density, location, age, gender, race, and occupation.
Demography covers many aspects that are important to marketers including family dynamics, geographic shifts, workforce changes, and levels of diversity in any given area.
The last concern, government intervention can make it increasingly harder for a company to fulfill their goals as requirements get more stringent.
They must stay informed of trends so they can be part of the next big thing, rather than becoming outdated and suffering the consequences financially.
[8] The political environment includes all laws, government agencies, and groups that influence or limit other organizations and individuals within a society.
As laws and regulations change often, they create barriers that can hugely influence the way in which companies can market their business across the digital community in particular.
[10] The final aspect of the macro-environment is the social environment, which consists of institutions and basic values and beliefs of a group of people.
With entering into an age where technology has a key role in the forming of social beliefs and values, cultural diversity has developed within the world of digital communities.
These digital communities consist of many groups of demographics that involve different levels of Internet usage and versatile behaviour with online purchasing.
By doing so, they can create the kind of environment that they will prosper in and can become more efficient by marketing in areas with the greatest customer potential.
[13] There are a number of common approaches how the external factors, which are mentioned in the definition of Kroon and which describe the macro environment, can be identified and examined.
In addition, the design of the trade policy and systems of rules (for example: environmental norms and technical safety standards), which contributes to the development of national advantages of competition, is relevant.
"The design of locations becomes like that a continuous process on the basis of the efforts of enterprises, science and state as well as of the determined cooperation of private and public agents".
Suppliers, customers and competitors representing the micro environment of a company are analyzed within the industry analysis.
[16] Environmental scanning can be defined as 'the study and interpretation of the political, economic, social and technological events and trends which influence a business, an industry or even a total market'.
[17] The factors which need to be considered for environmental scanning are events, trends, issues and expectations of the different interest groups.
Environmental scanning reinforces productive strategic plans and policies that can be implemented to make the organization get the maximum use of the business environment they are in.
[23] Other examples of external information sources include personal contacts, customers, and commercial databases.
The reason is that market scanning frameworks often suggest to observe a broad range of categories without offering detailed guidelines for what aspects to emphasize or ignore.