កលវ ិ
ាល័យតិរ
ប់រង
National University of Management
Master Degree of Business Management
Lecturer: Yi Samphy
Subject: International Business Management
Name: Sok Linda
No: 38
Batch: 22/09
Room: 20F
Year 1, Semester 2
Academic Year: 2019-2020
Mid-Term Assignment
2
Topic: Business Environment of Sri Lanka
Submit date: July 31, 2020
Contents: Page
Chapter 1: Introduction _____________________________3
1.1. Background of Study
1.2. Problem Statement
1.3. Research Questions
1.4. Objectives of Study
Chapter 2: Literature Review _________________________4
2.1. Importance of Studying the Business Environment
2.2. Classifying the Business Environment
2.3. Internal Environment’s Influence
2.4. External Environment’s Influence
Chapter 3: Sri Lanka Country ________________________9
4.1. History
4.2. Geography
4.3. The Facts about Sri Lanka
4.4. Nature of the Sri Lankan Economy
4.5. Major Business Sectors of the Sri Lankan Economy
4.6. Abundant Resources in Sri Lanka
4.7. Environmental Trends
4.8. SWOT Analysis of Sri Lanka
Chapter 4: Conclusion and Recommendation ___________15
5.1. Conclusion
5.2. Recommendation
References
3
Chapter 1: Introduction
1.1. Background of Studying
A business can be established, but to successfully sustain a business, the business needs
resources like finance, for which it has to depend on financial institutions. Acceptance of
social norms, for which it has to depend on society. Proper market conditions, for which it
has to depend on the market. The sale of products/services, for which it has to depend on the
customers. The labor, for which it has to depend on society.
Then there are natural resources and raw material, for which it has to depend on Nature. Also,
the legal support of the government, for which it has to depend on the government. There are
many factors and dimensions that affect Business Environment. These factors are many
different components of a single concept called Business Environment.
These factors which business depends upon aren’t standstill, they are very dynamic and ever–
changing. For example, trends, the trend of fidget spinners gave the biggest big push the
silicone mold industry has ever received.
The changing needs of customers and new innovations in the market are a part of the business
environment. The challenge for businesses in this technological era is not to enter the market
but to survive in the market. To survive in the market means to adapt to the changes as fast as
possible. To adapt to the changes means to be aware of the business environment.
1.2. Problem Statement
We live in rapidly changing times where everything is dynamic and change is the only
constant. New technologies become obsolete in days, new business trends emerge every day,
new issues and rules regarding labor laws, new managerial and HR policies, the uncertainty
regarding the future, the management of resources and power etc. keep taking place. The
business environment is challenging and the business needs to take governance and risk
issues seriously to adapt and prepare itself for these challenges.
Some of the various challenges that businesses have to face are as follows:
• The challenge of Globalization
• The challenge of Diversity
• The challenge of Ethics and Governance
1.3. Research Question
4
• Where is Sri Lanka?
• What is the fact about Sri Lanka?
• How is their business environment?
1.4. Objectives of Studying
Following are main objectives of business environment:
1. Knowledge of Information
By studying the business environment, we can know the changes of business. This
information is very useful for our business. Every businessman should aware current
environment of business. With this, he can think the future of his business in such
environment.
2. Basis of Decisions
One of main objective of the study of business environment that it can provide all the
information which is needed for taking good decisions. Suppose, you completed your internal
business environment study. With this study, you can take decision relating to purchase, sale,
salary and price because you know your competitor, you know your suppliers and you know
your customers.
3. Helpful in making of Policies
For making good business policies, we need to know and scan business through business
environment.
4. Technological Planning
Today, technology is changing very fast. 3 years ago, I have to search software for
downloading business software but today I can use all business software online free of cost.
This has become possible due to changes of web technology. So, you have to study
technological environment. With this, you can make better technological planning of your
business.
5. Survive in the Business
Sometime industry may face recession. Production may be unlimited but sales will be
limited. Only that business will survive who estimate all these situations in advance through
business environment study.
Chapter 2: Literature Review
2.1. Importance of Studying the Business Environment
Business environment keeps on changing. If one identifies these changes and responds
appropriately to them, he/she can run a business easily. In addition, this provides important
business-related benefits for an entrepreneur. At present, Sri Lanka has a market-oriented
economy. By studying the changes in the Sri Lankan business environment, many creative
business ideas or opportunities can be generated in the different sections of the environment.
Examples: –
• Tendency towards using computer technology, communication technology and e-
commerce.
• Environmental tourism and the increased number of tourists (both local and foreign)
• Opportunities in the construction sector
While entrepreneurs contribute to create a business culture of quality, business environment
provides a good foundation to ensure the survival of entrepreneurs. In order to attain business
objectives, it is necessary to study the business environment with care.
Identifying the favorable and unfavorable influences of the business environment is useful to
achieve the business goals and objectives. The opportunities and strengths arising through the
environmental factors are advantageous to the business, while the weaknesses and threats are
disadvantageous.
The entrepreneur should identify the favorable influences and use them to strengthen the
business further. Similarly, he should also identify unfavorable influences and take steps to
minimize them. It is the factors of the business environment that pave the way for the
entrepreneur to make correct decisions.
The following table demonstrates how the modern business environment differs
greatly from the business environment of the past.
Table 2.1 – Differences between the business environments in the past and in the present
