The dimensions of business environ-ment as discussed in above case are:
(i) Economic environment: "A recent cut in the interest on loans announced by the bank".
Economic environment comprises of the economic variables such as interest rates, income, stock markets indices, etc. that affect the functioning of the enterprise. For example, an increase in the income of the consumers increases the demand for goods and services of the enterprises. Similarly, a fall in the interest rates of the loans for consumer durables increases the spending capacity and thereby increases the demand for such products.
(ii) Technological environment: "Develop cars to be powered by fuel produced from garbage".
Technological environment comprises the technological changes and improvements. Continuous innovations and improvements in the technology used in the production improves the quality of production. While on one hand, improvement in technology provides new business opportunities for the enterprises, on the other hand, it is a threat for the enterprises using obsolete technology.