CHAPTER 1
BUSINESS ENVIROMENTS
Macro - external & no control
Market – external & no control however can try influence it
Micro – internal & full control
THE MACRO ENVIROMENT
External environment
No control
Needs to consider these events and design strategies (plans of action) to
adapt to situations in the external environment
For example – shops sanitize, take details and minimize numbers
allowed in store during Covid
Consider that the events that take place in the micro environment may
impact the events in the macro environment, for example;
o Strike – individual business group may have an effect on the
economy
o Business employing or retrenching workers contributes to
employment/unemployment rate of the country
o The way the business operates may directly influence the physical
environment in which it operates
Various tools may be used to analyze the events in the macro
environment in order to:
1) Determine how the business should react to eliminate threats
2) Capitalize on opportunities to achieve a competitive advantage
Some of the tools that can be used:
1) Environmental scan
2) SWOT- analysis (OT)
3) PESTLE analysis
,ENVIROMENTAL SCAN
NB to do environmental scan to identify factors that may impact the
business and then adjust existing plans to develop new ones to deal with
these factors/ events
Environmental scan can be used for all environments
When used in the macro environment the following process is applied:
1) Business will scan the macro environments in order to identify issues
that need to be addressed:
2) SWOT is also used however in macro environment only opportunities
and threats are considered
3) PESTLE is a useful tool to identify specific opportunities and threats in
the macro environment
SWOT – ANALYSIS ( ONLY O AND T )
The O and T refer to issues in the macro and/or market environment
In the macro environment the exchange rate may deteriorate and if raw
materials are imported, it may threaten the profitability of the business.
PESTLE – ANALYSIS
Each letter in the pestle analysis represents a factor in the macro
environment that could threaten the business or that the business may
use as an opportunity to create or strengthen the competitive
advantage.
, Political factors
- This factor is important in relation to:
The local political situation of the country in which the business operates
The political situation of other countries in which the business may
operate
World politics in general
- Political factors and legal factors are closely related, as the political party
running the country, will make the laws (legislation) the determine what
is acceptable and what is not, for example:
- The political changes in SA that occurred after 1994 (first democratic
election) resulted in new constitution that prohibits previous political
policy such as apartheid. The new party introduced laws such as (BBBEE
– broad based black economic empowerment)
BUSINESS ENVIROMENTS
Macro - external & no control
Market – external & no control however can try influence it
Micro – internal & full control
THE MACRO ENVIROMENT
External environment
No control
Needs to consider these events and design strategies (plans of action) to
adapt to situations in the external environment
For example – shops sanitize, take details and minimize numbers
allowed in store during Covid
Consider that the events that take place in the micro environment may
impact the events in the macro environment, for example;
o Strike – individual business group may have an effect on the
economy
o Business employing or retrenching workers contributes to
employment/unemployment rate of the country
o The way the business operates may directly influence the physical
environment in which it operates
Various tools may be used to analyze the events in the macro
environment in order to:
1) Determine how the business should react to eliminate threats
2) Capitalize on opportunities to achieve a competitive advantage
Some of the tools that can be used:
1) Environmental scan
2) SWOT- analysis (OT)
3) PESTLE analysis
,ENVIROMENTAL SCAN
NB to do environmental scan to identify factors that may impact the
business and then adjust existing plans to develop new ones to deal with
these factors/ events
Environmental scan can be used for all environments
When used in the macro environment the following process is applied:
1) Business will scan the macro environments in order to identify issues
that need to be addressed:
2) SWOT is also used however in macro environment only opportunities
and threats are considered
3) PESTLE is a useful tool to identify specific opportunities and threats in
the macro environment
SWOT – ANALYSIS ( ONLY O AND T )
The O and T refer to issues in the macro and/or market environment
In the macro environment the exchange rate may deteriorate and if raw
materials are imported, it may threaten the profitability of the business.
PESTLE – ANALYSIS
Each letter in the pestle analysis represents a factor in the macro
environment that could threaten the business or that the business may
use as an opportunity to create or strengthen the competitive
advantage.
, Political factors
- This factor is important in relation to:
The local political situation of the country in which the business operates
The political situation of other countries in which the business may
operate
World politics in general
- Political factors and legal factors are closely related, as the political party
running the country, will make the laws (legislation) the determine what
is acceptable and what is not, for example:
- The political changes in SA that occurred after 1994 (first democratic
election) resulted in new constitution that prohibits previous political
policy such as apartheid. The new party introduced laws such as (BBBEE
– broad based black economic empowerment)
