,business
Chapter 1: Business Environments
Environmental Scanning
The process where a bus gathers, analyses and interprets info from env to identify ext O+T
Methods include:
• SWOT and PESTLE Analysis
e.g To monitor changes in consumer behaviour due to economic downturns
SWOT analysis/TOWS matrix
Strengths: internal factors that provide an advantage
Weaknesses: internal factors that provide a disadvantage
Opportunities: external facotrs that the business can exploit to its advantage
Threats: external factors that could harm the business
TOWS Matrix: Links strengths and weaknesses to opportunities and threats to develop
strategies that exploits opportunities, overcome and avoid threats (S), reduce weaknesses.
Micro-environment
Internal factors within a bus that impacts its ability to serve consumers
• compnay culture, management structure, internal resources
Value-chain Analysis
Strategy tool used to analyse internal act. to understand which creates the most value for
consumers, breaking down the business processes into primary and support activities
• primary: inbound logistics, operations, outbound logistics, marketing + sales, service
• support: procurement, tech dev, HR management, infrastructure
Resource-based View
Management tool used to identify strategic resources available to bus, creating a CA
• tangible: physical and financial resources
• intangible: non-physical such as reputation, patents, proprietary technology
Supply-chain Management (Purchasing)
Managing the flow of goods and services, including all processes that transform raw materials
into final product, works with production
Financial Function
Financial rations are mathematical comparisons of financial statement accounts, which are
used to evalutae performance
, Current Capital Ratio
CA : CL (2 :
1)
inv + trade and receivables + cash : trade + payables + bank overdraft
Acid Test Ratio
(1 : 1)
CA-inventory : CL
trade and receivables + cash : trade and payablest bank overdraft
Solvency
tA : +L (2 : 1)
Business Functions
1. General Management: oversees overall business operations
2. Marketing: promotes p/s to attract customers
3. Finance: manages money, investments and financial planning
4. Production: creating products or services
5. Human Resources: managing employee-related functions
6. Purchasing: aquiring goods and services needed for production
7. Administration: managing info and communication
8. Public Relations: managing the business’s public image
Porters Forces Analysis
Helps bus analyse competitive forces to understand competition and profitability levels
• Threat of New Entrants
• Bargaining Power of Suppliers
• Bargaining Power of Buyers
• Threat of Substiture Products/Services
• Threat of Existing Competitors
• Complementary Products
22
P E STLE Analysis
olitical: Government policies,stability
hysical: Environmental and infrastructural factora
conomic: Economic conditions, inflation rates
Chapter 1: Business Environments
Environmental Scanning
The process where a bus gathers, analyses and interprets info from env to identify ext O+T
Methods include:
• SWOT and PESTLE Analysis
e.g To monitor changes in consumer behaviour due to economic downturns
SWOT analysis/TOWS matrix
Strengths: internal factors that provide an advantage
Weaknesses: internal factors that provide a disadvantage
Opportunities: external facotrs that the business can exploit to its advantage
Threats: external factors that could harm the business
TOWS Matrix: Links strengths and weaknesses to opportunities and threats to develop
strategies that exploits opportunities, overcome and avoid threats (S), reduce weaknesses.
Micro-environment
Internal factors within a bus that impacts its ability to serve consumers
• compnay culture, management structure, internal resources
Value-chain Analysis
Strategy tool used to analyse internal act. to understand which creates the most value for
consumers, breaking down the business processes into primary and support activities
• primary: inbound logistics, operations, outbound logistics, marketing + sales, service
• support: procurement, tech dev, HR management, infrastructure
Resource-based View
Management tool used to identify strategic resources available to bus, creating a CA
• tangible: physical and financial resources
• intangible: non-physical such as reputation, patents, proprietary technology
Supply-chain Management (Purchasing)
Managing the flow of goods and services, including all processes that transform raw materials
into final product, works with production
Financial Function
Financial rations are mathematical comparisons of financial statement accounts, which are
used to evalutae performance
, Current Capital Ratio
CA : CL (2 :
1)
inv + trade and receivables + cash : trade + payables + bank overdraft
Acid Test Ratio
(1 : 1)
CA-inventory : CL
trade and receivables + cash : trade and payablest bank overdraft
Solvency
tA : +L (2 : 1)
Business Functions
1. General Management: oversees overall business operations
2. Marketing: promotes p/s to attract customers
3. Finance: manages money, investments and financial planning
4. Production: creating products or services
5. Human Resources: managing employee-related functions
6. Purchasing: aquiring goods and services needed for production
7. Administration: managing info and communication
8. Public Relations: managing the business’s public image
Porters Forces Analysis
Helps bus analyse competitive forces to understand competition and profitability levels
• Threat of New Entrants
• Bargaining Power of Suppliers
• Bargaining Power of Buyers
• Threat of Substiture Products/Services
• Threat of Existing Competitors
• Complementary Products
22
P E STLE Analysis
olitical: Government policies,stability
hysical: Environmental and infrastructural factora
conomic: Economic conditions, inflation rates
