a) The inputs in the form of human, physical, financial and other related resources are drawn from the environment, i.e., suppliers.
b) The business converts these resources through various processes into outputs of products and/or services.
c) The outputs are exchanged with the environment, i.e., customers.
d) The exchange with the environment brings in some surplus and goodwill, etc., to the business, which is essential for survival and growth.
e) Environment provides both opportunities and threats hence a successful business has to identify, appraise, and respond to the various opportunities and threats in its environment.
f) Further, a business must continuously monitor and adapt to the environment if it is to survive and prosper.