Contents
1. Introduction 2
2. Objectives 2
3. Business Environment 2
3.1. Demographic environment 2
3.2. Economic environment 2
3.3. Geographical and ecological environment 3
3.4. Legal environment 3
3.5. Technological environment 3
3.6. Social environment 3
3.7. Educational and cultural environment 3
3.8. Political environment 3
4. About Mahindra & Mahindra 4
5. Task 1. 5
6. Task 2. 6
6.1. Market Penetration 6
6.2. Market Development 7
6.3. Product development 7
7. Conclusion 7
8. Recommendation 8
9. References 8

1. Introduction
The term business is understood and explained in different ways by different people. For some, business is an activity, for some it is a method of transacting, for sonic others, it is a method of money making and some people argue that business is an organized activity to achieve certain predetermined goals and objectives. Based on all these meaning of justness, we may define business as gainful activity through which various elements of society conduct exchanges of the desirable things.
2. Objectives
 To understand what the business environment is and why this is important for a company
 Management student to understand its fundamental concept on business activity
 To develop a right perspective about business environment
3. Business Environment
Business involves activities, which links an organization with outside world. Within an organization, a business is governed by the behavior of its employees, management or decision makers. But externally a business is influenced by a score of factors, which range from customers to competitors and government. Therefore, a business cannot be independent of the influence of these external factors. It should also be noted that a business has absolute control over all the internal factors; it has no control over the external factors. So often it becomes necessary for business houses to modify their internal decisions and policies on the basis of the pressure from external factors. This highlights the need to be ever-cognizant of changes and influences of external factors so as to conduct business on healthy lines. Business environment refers to the influences and pressures exerted by external factors on the business. The following Figure would help to understand the various factors which constitute the business.
3.1. Demographic environment
This refers to the size, density, location, age, gender, race, occupation and other statistics. Analysis of demographic environment raises a number of important issues that organization has monitored the growth of human needs of growing groups.
3.2. Economic environment
Economic environment refers to the overall economic factors like economic philosophy of the country, economic structure, planning, economic policies, controls and regulations, etc.
3.3. Geographical and ecological environment
Geographical environment refers to climatic conditions and natural resources, which determines flu manufacturing scope and the natural of the products that could be marketed.
3.4. Legal environment
It is well known that every country has a number of legal regulations to ensure that the interests of business organizations do not run counter to national interests. Right from the stage of incorporation of organizations, their listing in stock exchange, reprisal of customer complaints, payment of tax to government, manufacturing practices, human resources development to pricing of products and services, a number of legal regulations have to be fulfilled.
3.5. Technological environment
The technological environment includes forces that create new technologies and creating new products and market opportunities. The advancement of technology has released wonders such as antibiotics, organ transplants, computers and the internet. The technological environment changes rapidly. New technologies create new markets and opportunities.
3.6. Social environment
Social environment today has brought today has brought compulsions on business organizations to adhere to certain business ethics and morals. Social responsibility of business is an important force that modern business organizations cannot wriggle out of their duties and responsibilities towards the society.
3.7. Educational and cultural environment
Educational environment in a country determines the quality of population. A country with very high illiterate population would always experience political and economic instability. Similarly, lack of education may also give scope for the existence of superstitious beliefs, fatalistic attitude, etc.
3.8. Political environment
Political stability is one important factor which determines the business growth or downfall. A country with relative political stability would witness inflow of foreign capital and collaboration. By political stability we mean that the policies of government remaining consistent. As the business decisions are based on government policies, frequent changes in these policies would force business organizations to change their policies too which makes functioning very difficult. Sometimes, when the policies determined by a party in power are reversed by the succeeding part forming the government, there would be far reaching changes in business environment.

Constituents of Business Environment

4. About Mahindra & Mahindra
Mahindra & Mahindra Limited (M&M) is an Indian multinational automobile manufacturing corporation headquartered in Mumbai, Maharashtra, India. It is one of the largest vehicle manufacturers by production in the Republic of India. It is a part of Mahindra Group, an Indian conglomerate. The company was founded in 1945 in Ludhiana as Mahindra & Mohammed by brothers K.C. Mahindra and J.C Mahindra and Malik Ghulam Mohammed. After India gained independence and Pakistan was formed, Mohammed immigrated to Pakistan. The company changed its name to Mahindra & Mahindra in 1948. It is ranked 21 in the list of top companies of India in Fortune India 500 in 2011.

5. Task 1.In the case dissed above which are the different environment factors that lead to opportunities and threats to Mahindra & Mahindra?
Some external environmental activities events that are beyond the immediate environment nevertheless affect the organization and can be described as a macro-environment. The following factors (Social environment and Geographical & ecological environment) are the facts that lead to opportunities to Mahindra & Mahindra.
Social Environment
Employees of Mahindra group are help for on-site relief activities for those affected in Bihar floods in India, sept15, 2008; they distribute food, clothes and other necessary items for flood affected people.
Mahindra having corporate social responsibility towards an integral part of the vision of Mahindra group and the deviated as a corner stone of our core value and good corporate citizenship. Its corporate social responsibility (CSR) focuses mainly on health and education for society. Also they started Nanhi Kali program for girl child to her education and supports of thousands of girl’s across the India. Mahindra having CSR activities that include the K.C. Mahindra education trust, Mahindra education society, Mahindra united World College and Mahindra foundation. The Mahindra NBA (National Basketball Association) started for youth ages 14-17 and adult 18+ is collaboration with Basketball Federation of India (BFI).
Mahindra and Mahindra Limited celebrated its 60th anniversary in 2005 and they donate 1% of its annual profit after tax to social activities every year. Also they started employee stock options (DSOPS) in 2005 is a set of social work volunteering options. That implies looking beyond on self that means sharing ones skill to make the society healthier, cleaner, greener and more literate and sustainable.
Geographical and ecological environment
Geographical and ecological environment is the part of everybody who is joined to Mahindra group. Mahindra produce their vehicle by considering the international standards of safety and emission. All Mahindra manufacturing plant across the India by setting new policy in efficient water management and natural resource conservation with most recent Green IT. Under the Mahindra Hariyali initiative, the group has rowed to plant a one million trees across the nation by October, 2008 and this is the mess tree plantation is undertaken by every Mahindra location. Shrmdaan initiatives by Mahindra employees and dealers with strong and important partnership with various shareholders in the civil society like school, college and Government (Forest department etc.). Mahindra group also help Government to drive “Green Bombay” Movement by maintaining and developing the municipal gardens.
And the factors Political environment is lead to threats to Mahindra & Mahindra.
Political environment
Mahindra and Mahindra limited conduct their business under legal framework of the country and its employees also follow the principle, also they spread our business in multiple locations and they follow the common approach in all locations. During the business, the exchange of consideration in operation and implementation, they must follow the legalization procedure to avoid the difficulties.
Repeatedly delays because of environmental protection agency (EPA) not certified norms according U.S government standard and its distributor Global Vehicles, USA that scheduled to launch the vehicle are postponed.
A business organization has to continuously monitor the environment so as to identify the business opportunities and threats. By exploring its strength and minimizing its weaknesses, if the organization can capitalize these opportunities and effectively thwart the threats, then it would be able to grow. 6. Task 2.Describe the three growth strategies and recommend a Growth strategy that Mahindra & Mahindra can use in expanding its business.
The following strategies are the useful methods to identify growth opportunities.
1. Market penetration
2. Market development
3. Product development
6.1. Market Penetration
Market penetration is a strategy for company growth by increasing sales of current products to current market segment without changing the product.
6.2. Market Development
Market development is a strategy for company growth by identifying and developing new market segments for current company products.
6.3. Product development
Product development is a strategy for company growth by offering modified or new products to current market segments. Realizing the need to grow fast, the company formulated export policy. It paid off well. They formulated plans to develop and grow in foreign market. The first step was participation in trade fairs abroad, particularly in Hanover (Germany) and Paris (France). This has helped popularize its vehicle in those countries.
Mahindra jeeps started selling in France and jeep export became an important marketing activity of the company. The company started manufacturing diesel engines in collaboration with Peugeot of France.
As soon as the company came to know that Australia, Denmark, Italy, Norway, and Sweden could prove to be potential markets, plans began to be made accordingly. The company estimated that it would be able to export about 2,500 jeeps annually to Australia. In order to cater to the lower segment of the market, the Mahindra jeeps in Australia faced competition from Japanese companies. Stringent design rules and requirements also needed to be met in Australia.
Accordingly to the scenario, Mahindra & Mahindra tried to expand its market by using “Market Development” (new markets for current products).
For example, I want to report a strategy that Mahindra used for expand market in China. A team and jeeps were sent to China from India to test the market opportunity. The team targeted a single province having large land holdings suitable for company’s 25-75 hp of jeeps. And sold jeeps at a price 20% higher than the rivals, sending strong message of, “Superior Quality & Performance”. Finally, tie up with a local partner.
7. Conclusion
To summarize this PESTEL analysis of Mahindra and Mahindra Limited had faced the main challenges is as follows:-
Mahindra has been working several years towards the goal of selling its compact pickup trucks in the U.S. Although the company repeatedly pushed back the project delivery dates for the pickups because it faced the problem of emission and safety testing norms that should require certification from Environmental protection agency (EPA) under U.S. Government. Mahindra distributing his vehicle under Global Vehicle (GV) U.S.A. Inc. and GV spent close to $35 million for launch of Mahindra vehicles in the U.S. and has signed up more than 300 dealers and they have spent more than $60 million in franchise fees for the right to sell Mahindra pickup truck.
Mahindra and Reva Corporations having joint venture and they are planning to manufacture new electric vehicle in global market that new concept help Mahindra’s to growth company profit and market share price and will try to get a good position between its main competitors.
8. Recommendation
I recommend to Mahindra and Mahindra Limited follows U.S. emission and safety standard according to EPA and start production as early as possible and it assembled in U.S. with the help of Navistar Corporation based in USA. So Mahindra avoid 25% U.S. tax on foreign made pickups. Global vehicle USA is the distributor partner of Mahindra it also get the benefit, if his dealer sold the pickup trucks in the market. Also Mahindra gain market value globally if they started production of diesel trucks and electric vehicle with the help of Reva Corporation.
Mahindra also concentrate the latest technological and legal environmental changes in the world, so they avoid that related problems. It is also important for management students, how to understand the business environment and to play an important role for the companies and make new strategically policy for organizations future growth.