Business Studies
Macro environment: Business strategies
The strategic management process and industrial
analysis tools
Successful businesses conduct the strategic management process in order
to identify suitable business strategies that will enable them to remain
profitable and sustainable.
It is conducted by management to implement specific strategies that are
aimed at improving/retaining/enhancing the competitive advantage of the
business and to address various challenges of the business environments.
It allows the business to stay ahead of competitors and to increase its
market share.
Strategy (Definition/Description)
It is defined as a long-term plan of action to achieve a specific goal.
A strategy is a specific plan of action to solve a problem/address an
opportunity.
It enhances the ability of the business to achieve its mission/vision.
A strategy integrates/allocates/manages organisational
activities/resources to meet present/future goals/objectives/aims.
The strategic management process
Review/Analyse/Re-examine their vision/mission statement.
Implement a strategy, using a template such as an action plan.
Control/Evaluate/Monitor the implemented strategy to identify gaps/
deviations/differences in implementation.
Take corrective action to ensure goals/objectives/aims are met.
Industrial analysis tools
SWOT analysis
A SWOT analysis is an industrial analysis tool/environmental
scanning technique that enables a business to study the internal
(micro) and external (market and macro) environments of a
business
, Porter’s Five Forces Model
The Porter’s Five Forces Model is an industrial analysis tool that was
developed by Michael E.
Porter to analyse the position of the business in the market
environment. This model is based on the rationale that five forces
determine/ influence the competitive strength/position of the
business within the market/ industry.
It is used by businesses around the world to measure amongst
others, profitability/competitive intensity/ competitive
environment/competitive position/attractiveness within the
market/industry.
Porter’s Five Forces Model enables businesses to develop suitable
strategies to address challenges posed by the business.
Application of Porter’s Five Forces Model by businesses
Bargaining power of suppliers/ Power of suppliers
Suppliers that deliver high quality products may have power
over the business
Bargaining power of buyers/ Power of buyers
A few powerful buyers are often able to dictate their terms/
prices to the business
Threat/ Barriers of new entrants to the market
If the barriers to enter the market are low, then it is easy for
new businesses to enter the market/industry
Competitive rivalry/ Power of competitors
Competitors selling the same/similar products/services may
have a greater impact on the market of the business
Threat of substitution/ substitutes
Establish/Determine whether the sellers of substitute products
have improved/enhanced their product/sell lower quality
goods at lower prices.
Macro environment: Business strategies
The strategic management process and industrial
analysis tools
Successful businesses conduct the strategic management process in order
to identify suitable business strategies that will enable them to remain
profitable and sustainable.
It is conducted by management to implement specific strategies that are
aimed at improving/retaining/enhancing the competitive advantage of the
business and to address various challenges of the business environments.
It allows the business to stay ahead of competitors and to increase its
market share.
Strategy (Definition/Description)
It is defined as a long-term plan of action to achieve a specific goal.
A strategy is a specific plan of action to solve a problem/address an
opportunity.
It enhances the ability of the business to achieve its mission/vision.
A strategy integrates/allocates/manages organisational
activities/resources to meet present/future goals/objectives/aims.
The strategic management process
Review/Analyse/Re-examine their vision/mission statement.
Implement a strategy, using a template such as an action plan.
Control/Evaluate/Monitor the implemented strategy to identify gaps/
deviations/differences in implementation.
Take corrective action to ensure goals/objectives/aims are met.
Industrial analysis tools
SWOT analysis
A SWOT analysis is an industrial analysis tool/environmental
scanning technique that enables a business to study the internal
(micro) and external (market and macro) environments of a
business
, Porter’s Five Forces Model
The Porter’s Five Forces Model is an industrial analysis tool that was
developed by Michael E.
Porter to analyse the position of the business in the market
environment. This model is based on the rationale that five forces
determine/ influence the competitive strength/position of the
business within the market/ industry.
It is used by businesses around the world to measure amongst
others, profitability/competitive intensity/ competitive
environment/competitive position/attractiveness within the
market/industry.
Porter’s Five Forces Model enables businesses to develop suitable
strategies to address challenges posed by the business.
Application of Porter’s Five Forces Model by businesses
Bargaining power of suppliers/ Power of suppliers
Suppliers that deliver high quality products may have power
over the business
Bargaining power of buyers/ Power of buyers
A few powerful buyers are often able to dictate their terms/
prices to the business
Threat/ Barriers of new entrants to the market
If the barriers to enter the market are low, then it is easy for
new businesses to enter the market/industry
Competitive rivalry/ Power of competitors
Competitors selling the same/similar products/services may
have a greater impact on the market of the business
Threat of substitution/ substitutes
Establish/Determine whether the sellers of substitute products
have improved/enhanced their product/sell lower quality
goods at lower prices.
