Chapter 1:
Business environment: MACRO, MARKET AND MICRO
MARKET ENVIROMENT:
1) EXTERNAL to the business, management has NO CONTROL
2) Needs to find OPPORTUNITIES and THREATS and develop strategies
3) How? – environmental scanning, SWOT, Porters SIX forces (L T A P3) = level of
rivalry, threat of new enfant, availability of substitute product, the power of the
suppliers, the power of the buyers, the power of the complementary product.
4) Why? Minimize impact of threats and build opportunities.
MACRO:
1) EXTERNAL management has NO CONTROL
2) Needs to find OPPORTUNITIES AND THREATS
3) How? – environmental scanning, SWOT, PE2STLE = political, economic, ethical,
social, technological, legal, environmental.
4) Why? Minimize impact of threats and build opportunities.
MICRO:
1) INTERNAL and the management HAS CONTROL
2) Need to identify STRENGTHS and WEAKNESSES and develop strategies
3) How? – environment scanning = looking at the internal departments/functions of the
business, SWOT = look at the strengths and weakness only internally, resource-based
analysis = consider both tangible and intangible resources.
4) Why? – to minimize the impact of weaknesses and increase the strengths to create
advantages and to manage risks.
5) Focus on business functions
6) INCLUDE 8 BUSINESS FUNCTION as business functions are internal
8 business functions: (P2 F H M Pr A G)
1) Purchasing: the goods needed for all the services in the different departments of the
business.
E.g.: pickNpay will buy a fridge to keep the food cool, they will buy pens for
administration and cashiers.
- Goods and services will be purchased from different suppliers
- Good bought need to be bought correctly so that the business is making profit =
ROI (return on investment) / negotiate discounts etc.
- Most IMPORTANT is that stock is controlled and never runs out for customers
Business environment: MACRO, MARKET AND MICRO
MARKET ENVIROMENT:
1) EXTERNAL to the business, management has NO CONTROL
2) Needs to find OPPORTUNITIES and THREATS and develop strategies
3) How? – environmental scanning, SWOT, Porters SIX forces (L T A P3) = level of
rivalry, threat of new enfant, availability of substitute product, the power of the
suppliers, the power of the buyers, the power of the complementary product.
4) Why? Minimize impact of threats and build opportunities.
MACRO:
1) EXTERNAL management has NO CONTROL
2) Needs to find OPPORTUNITIES AND THREATS
3) How? – environmental scanning, SWOT, PE2STLE = political, economic, ethical,
social, technological, legal, environmental.
4) Why? Minimize impact of threats and build opportunities.
MICRO:
1) INTERNAL and the management HAS CONTROL
2) Need to identify STRENGTHS and WEAKNESSES and develop strategies
3) How? – environment scanning = looking at the internal departments/functions of the
business, SWOT = look at the strengths and weakness only internally, resource-based
analysis = consider both tangible and intangible resources.
4) Why? – to minimize the impact of weaknesses and increase the strengths to create
advantages and to manage risks.
5) Focus on business functions
6) INCLUDE 8 BUSINESS FUNCTION as business functions are internal
8 business functions: (P2 F H M Pr A G)
1) Purchasing: the goods needed for all the services in the different departments of the
business.
E.g.: pickNpay will buy a fridge to keep the food cool, they will buy pens for
administration and cashiers.
- Goods and services will be purchased from different suppliers
- Good bought need to be bought correctly so that the business is making profit =
ROI (return on investment) / negotiate discounts etc.
- Most IMPORTANT is that stock is controlled and never runs out for customers
