BUSINESS NOTES
GRADE 12
CHAPTER 1: BUSINESS ENVIRONMENTS
1. THE MACRO ENVIRONMENT
The macro environment, along with the market environment,
is part of the external environment.
The business has no control over external events but must
consider them and adapt strategies accordingly.
Events in the internal environment (micro environment) may
influence the macro environment.
Examples:
o Strikes may affect the economy.
o Business employment decisions contribute to national
employment/unemployment rates.
o Business operations may impact the physical
environment.
Tools to analyse the macro environment (to eliminate threats
& capitalise on opportunities):
o Environmental scan
o SWOT analysis (opportunities and threats only)
o PE (2) STLE analysis
1
,Key Terminology
Competitive Advantage: When a business has an edge over
competitors, allowing it to sell more, attract more customers,
or reduce costs to generate more profit.
1.1 Environmental Scan
An environmental scan identifies factors impacting the
business and helps in adjusting or developing new plans.
Can be used for both external (macro, market) and internal
(micro) environments.
In the macro environment, it identifies issues to address.
SWOT analysis in the macro environment focuses on
Opportunities (O) and Threats (T) only.
PE (2) STLE analysis helps identify specific opportunities and
threats.
1.2 SWOT-Analysis (Opportunities and Threats)
SWOT analysis evaluates both internal and external factors,
but in the macro environment, only Opportunities and
Threats are considered.
Example: A deteriorating exchange rate could threaten
profitability, especially if raw materials are imported.
1.3 PE (2) STLE-Analysis
Political, Economic, Social, Technological, Legal, and Ethical
factors that may affect a business.
2
, Factors to consider under each letter:
o Political: Local and international politics, laws, and
political stability.
o Economic: Growth rates, inflation, interest rates,
exchange rates, unemployment, and taxes.
o Social: Social trends, lifestyles, health awareness,
education levels, unemployment, crime, etc.
o Technological: Advances in technology such as social
media, automation, online banking, e-commerce, and
product innovation.
o Legal: Laws affecting businesses such as labour laws,
consumer protection, environmental protection, and tax
regulations.
o Ethical: Principles guiding decision-making, corporate
social responsibility (CSR), fair trade, and privacy issues.
1.3.1 Political Factors
Political factors include local, national, and international
politics.
Government interference in the economy, political stability,
and ties with other countries can impact businesses.
For example, political changes in South Africa after 1994 led
to new laws, including the Constitution and BBBEE (Broad
Based Black Economic Empowerment).
Considerations include the likelihood of government
interference, the degree of political stability, political ties
with other countries, and the degree of media freedom.
3
GRADE 12
CHAPTER 1: BUSINESS ENVIRONMENTS
1. THE MACRO ENVIRONMENT
The macro environment, along with the market environment,
is part of the external environment.
The business has no control over external events but must
consider them and adapt strategies accordingly.
Events in the internal environment (micro environment) may
influence the macro environment.
Examples:
o Strikes may affect the economy.
o Business employment decisions contribute to national
employment/unemployment rates.
o Business operations may impact the physical
environment.
Tools to analyse the macro environment (to eliminate threats
& capitalise on opportunities):
o Environmental scan
o SWOT analysis (opportunities and threats only)
o PE (2) STLE analysis
1
,Key Terminology
Competitive Advantage: When a business has an edge over
competitors, allowing it to sell more, attract more customers,
or reduce costs to generate more profit.
1.1 Environmental Scan
An environmental scan identifies factors impacting the
business and helps in adjusting or developing new plans.
Can be used for both external (macro, market) and internal
(micro) environments.
In the macro environment, it identifies issues to address.
SWOT analysis in the macro environment focuses on
Opportunities (O) and Threats (T) only.
PE (2) STLE analysis helps identify specific opportunities and
threats.
1.2 SWOT-Analysis (Opportunities and Threats)
SWOT analysis evaluates both internal and external factors,
but in the macro environment, only Opportunities and
Threats are considered.
Example: A deteriorating exchange rate could threaten
profitability, especially if raw materials are imported.
1.3 PE (2) STLE-Analysis
Political, Economic, Social, Technological, Legal, and Ethical
factors that may affect a business.
2
, Factors to consider under each letter:
o Political: Local and international politics, laws, and
political stability.
o Economic: Growth rates, inflation, interest rates,
exchange rates, unemployment, and taxes.
o Social: Social trends, lifestyles, health awareness,
education levels, unemployment, crime, etc.
o Technological: Advances in technology such as social
media, automation, online banking, e-commerce, and
product innovation.
o Legal: Laws affecting businesses such as labour laws,
consumer protection, environmental protection, and tax
regulations.
o Ethical: Principles guiding decision-making, corporate
social responsibility (CSR), fair trade, and privacy issues.
1.3.1 Political Factors
Political factors include local, national, and international
politics.
Government interference in the economy, political stability,
and ties with other countries can impact businesses.
For example, political changes in South Africa after 1994 led
to new laws, including the Constitution and BBBEE (Broad
Based Black Economic Empowerment).
Considerations include the likelihood of government
interference, the degree of political stability, political ties
with other countries, and the degree of media freedom.
3
