The environment
is everything that directly or indirectly effect a company's operation.
As you can imagine, a company's surrounding enviornment is so large
that it is extremely expensive for a company to have it completly
controlled. Therefore, a company should carry out a study of its environment
and distinguish what is "simply" important and what is completely
necessary for its survival.
Any conditioning
factors, for example political factors, economic, social,... can generate
business opportunities for the company. It is interesting to know
how these global environment factors (macro environement) effect the
company's sectorial environmetn (micro environment) as you can see
in the following graph. A sectorial environment composes of clients,
suppliers and competition.