business

Created by

cannned_cream

Cards (36)

Macro Environment 
Factors that can influence the success or failure of a business, cannot be controlled and are difficult to predict or avoid
Macro Environment 
The economic recession
Government regulations and laws
Climate change
The impact of HIV/Aids
Political changes
Changes in consumer tastes
Macro Environment 
Developments in the macro environment can have a positive or negative impact on the business
Business has little control over this environment
PESTLE 
A framework used to analyse the Macro environment factors that can impact a business
Political Factors: The dire political instability in our neighbouring countries has had negative implication on a lot of businesses. Some were forced to shutdown.
Economic Factors: Factors such as inflation, exchange rate and taxes has a direct impact on the costs of products and businesses are forced to keep up with all these economic factors. Inflation rate currently: 5.6%
Social Factors: Approximately 55.5 percent (30.3 million people) of the population is living in poverty at the national upper poverty line (~ZAR 992) while a total of 13.8 million people (25 percent) are experiencing food poverty.
Technological Factors: Rapid advancement of technology can either be good or bad for businesses. Technology could affect the revenue of the business. Businesses would need to invest a lot of money in technological updates so that they can remain competitive and relevant.
Legal Factors: The laws we have in South Africa regulate how companies conduct their business practices.
Environmental Analysis 
It is crucial for businesses to analyse the impact of the different business environments on business operations
SWOT Analysis 
A tool used to analyse the Micro environment, focusing on Strengths and Weaknesses
PESTLE Analysis 
A tool used to analyse the Macro environment, focusing on the Opportunities and Threats and the PESTLE elements
PESTLE Analysis 
1. Assess and understand the impact each Macro environment factor could have on the business
2. Remember that an impact can be positive or negative!
Characteristics of the business environment: Complex, Dynamic, Multi-faceted
Elements found in the market environment 
Suppliers
Intermediaries
Consumers
Competitors
NGOs
Industry regulators
Strategic alliance
Suppliers 
Businesses depend on suppliers for material they will use in order to satisfy the needs and wants of customers
The business must develop a strong relationship with suppliers to avoid any disruption in supply
If the supplier does not deliver the material on time, then the business will not meet its objectives which may result to a loss of revenue
Importance of material from suppliers 
Right quantity
Correct quality
Fair price
Right time
Correct place
Consumers 
Are the people who buy and/or use the business's product or services
Businesses must follow consumer trends to make sure that the business is consistently meeting the demand of its customer base
When the demand of the target market changes, the business has to adapt the product or redevelop the product to maintain a good customer base
Competitors 
Companies selling similar or a substitute product
The business must ensure that it creates and maintain a competitive edge in the market for them to maintain or increase a market share
Intermediaries 
Are links between businesses and its consumers in the distribution channels
Businesses make use of Intermediaries to gain easy access to the market
Intermediaries 
Levi's products can be bought at any Edgers store
Non-Governmental Organisations (NGOs) 
Nonprofit businesses focusing on community upliftment and addressing social ills
NGOs would demand businesses to act in an ethical manner and that the business plays an active role as a corporate citizen when it comes to social responsibility
Macro Environment 
Factors that can influence the success or failure of a business, cannot be controlled and are difficult to predict or avoid
Macro Environment 
The economic recession
Government regulations and laws
Climate change
The impact of HIV/Aids
Political changes
Changes in consumer tastes
Macro Environment 
Developments in the macro environment can have a positive or negative impact on the business
Business has little control over this environment
PESTLE 
A framework used to analyse the Macro environment factors that can impact a business
Political Factors: The dire political instability in our neighbouring countries has had negative implication on a lot of businesses. Some were forced to shutdown.
Economic Factors: Factors such as inflation, exchange rate and taxes has a direct impact on the costs of products and businesses are forced to keep up with all these economic factors. Inflation rate currently: 5.6%
Social Factors: Approximately 55.5 percent (30.3 million people) of the population is living in poverty at the national upper poverty line (~ZAR 992) while a total of 13.8 million people (25 percent) are experiencing food poverty.
Technological Factors: Rapid advancement of technology can either be good or bad for businesses. Technology could affect the revenue of the business. Businesses would need to invest a lot of money in technological updates so that they can remain competitive and relevant.
Legal Factors: The laws we have in South Africa regulate how companies conduct their business practices.
Environmental Analysis 
It is crucial for businesses to analyse the impact of the different business environments on business operations
SWOT Analysis 
A tool used to analyse the Micro environment, focusing on Strengths and Weaknesses
PESTLE Analysis 
A tool used to analyse the Macro environment, focusing on the Opportunities and Threats and the PESTLE elements
PESTLE Analysis 
1. Assess and understand the impact each Macro environment factor could have on the business
2. Remember that an impact can be positive or negative!
Characteristics of the business environment: Complex, Dynamic, Multi-faceted