Challenges of Macro Enviroment

• Challenges in Micro

  • Change in income levels
  • Political Changes
  • Contemporary Legal Legislation
  • Labour restrictions
  • Micro-Lending
  • Globalisation/ International Trade
  • Social Values
  • Demographics
  • Socio-Economic Issues
• Change in income levels

  • Goods/service purchased depends on income levels
  • Net Income= gross income- all deductions (tax, etc)
  • Reduce spending> lower profit
• Political Changes

  • Business must adapt to new changed and policies
  • Political instability> scare investors, tourists
  • Civil War
• Contemporary Legal Legislation

  • Laws check business operations
  • fail to obey= fine or prison time
  • Must comply with legislating in place
• Labour Restrictions

  • Protect employees from exploitation> can restrict employer
  • protect right, ensure workplace democracy
• Micro-Lending

  • Granting small loans to those who can't secure from banks
  • higher interest rates, shorter repayment period
  • Little protection for debtor
  • Not regulated by the South African Banking Act
  • Not subscribed to Code of Banking Practice of SA
• Globalisation/ International Trade

  • exchange of products, services, capitals, labour across national borders
  • Compete with international businesses
  • Cheap Labour
  • Dumping
  • Migration of skilled labour> skill shortage
  • Faster and easier transfer of knowledge
• Social Values

  • Beliefs, norms, values
  • influence buying habits
  • Savings/ brand loyalty
• Demographics

  • Characteristics of population
  • Age, gender, race
• Socio-Economic Issues

  • Crime, poverty, HIV/Aids, corruption> Business suffer losses
  • Insurance costs, HIV/Aids> death of employees< decrease labour force and consumer market