1. Totality of external forces: Business environment is the sum total of all
the forces/factors external to a business firm.
2. Specific and general forces: Business environment includes both specific
and general forces. Specific forces influence business firm directly while
general forces affect a business firm indirectly.
Components of Business Environment:
Internal/Specific Environment
* Customers
* Owners and investors
* Suppliers
* Creditors
* Employees and trade union Competitors
External/General Environment
* Economic Environment
* Social Environment
* Political Environment
* Technological Environment
* Legal Environment
3. Inter-relatedness: All the forces/factors of a business environment are
closely interrelated. For example, increased awareness of health care has
raised the demand for organic food and roasted snacks.
4. Dynamic: Business environment is dynamic in nature which keeps on
changing with the change in technology, consumer’s fashion and tastes etc.
5. Uncertainty: Business environment is uncertain as it is difficult to predict
the future environmental changes and their impact with full accuracy

6. Complexity: Business environment is complex which is easy to understand
in parts separately but it is difficult to understand in totality.
7. Relativity: Business environment is a relative concept whose impact differs
from country to country, region to region and firm to firm. For example, a shift
of preference from soft drinks to juices will be welcomed as an opportunity
by juice making companies while a threat to soft drink manufacturers.