Unit 1 The Environment in Which Businesses Operate Notes

The Environment in Which Businesses Operate



Retail -> Sale of goods to the consumer.
PESTLE -> Political, economic, social, technology, legal and environmental.
Fiscal Policy -> The raising and lowering of taxes.
Inflation -> The general increase in prices and fall in purchasing value of money.
SWOT -> Strengths, weaknesses, opportunities, and threats.


External Environment
-> It impacts the business in many ways.
-> Businesses often use the situational tool as a method of analyzing if they could be successful
or not.


Swot Analysis
-> This involves analyzing a product/service and noting its strengths, weaknesses, opportunities,
and threats.


PESTLE
-> Used as a way of analyzing the market.


Ethics
-> Businesses must make ethical decisions to protect their prutation as well as complying with
law.


Situational Analysis
-> An investigation into what potentially could affect an organization.
-> PESTLE
-> SWOT
-> Porter's fiver forces and 5c’s.


Porters Five Forces and 5c’s
-> Helps to understand the competitiveness of your business environment, and for identifying
your strategies potential profitability.
-> Helpful because when you understand the forces in your industry that can affect your
profitability, you will be able to adjust your strategy accordingly.