Copyright © Skool Notas Business Studies Grade 12 Page 0 of 21
, Chapter 01: Business environments
The macro, market, and micro environment
What do you learn here?
• Businesses operate within three main environments: macro, market, and micro.
• The macro environment includes factors beyond the business's control - such as politics and economics.
• Environmental investigation and PE²STLE analysis help identify threats and opportunities.
• The market environment focuses on competitors, suppliers, buyers, etc.
• The microenvironment refers to internal functions such as purchasing, production, and finance.
• Value chain and resource-based analyses show how businesses can create value.
Glossary
Word Meaning
Macro environment External factors beyond the business's control.
Microenvironment Internal functional areas of the business.
PESTLE Politics, economics, ethics, social, technology, law, environment.
Porter's Six Forces Analyze competition in the market.
Environmental scanning Continuous monitoring of external influences.
SSGB Strong, weak, opportunities, threats (SWOT without "S" and "S").
Value chain Processes that add value to products/services.
Macro environment and PE²STLE analysis
• Politics: Stability, legislation, international relations.
• Economy: Inflation, growth, taxes, unemployment, exchange rates.
• Ethics: Fair trade, privacy, social responsibility.
• Social: Demographics, health, technology consumption, crime.
• Technology: Automation, innovation, online sales.
• Law: Consumer, labor and environmental laws.
• Environment: Durability, recycling, environmental conservation.
Market environment: Porter's Six Forces
• Competitors: Quality, price, loyalty, location.
• New entrants: Obstacle strategies protect market share.
• Substitute products: Alternative products with the same utility.
• Suppliers: Important for inventory, cost, and reliability.
• Buyers: Determine demand, value for money, and loyalty.
• Complementary products: Coffee + milk, glasses + liquid.
Microenvironment: Internal functions
Purchase function
• Focus on cost, quality, timeliness, supply chain.
• Risks: Child labor, exchange rate, technology, inventory levels.
Production function
• Purpose: Create value, control costs, ensure quality.
• Automation:
o Advantages - cost, quality, production time.
o Disadvantages - capital costs, job loss.
Human capital function
• Purpose: Satisfaction, right appointment, unions, legislation.
• Happy employees = higher productivity and profits.
Copyright © Skool Notas Business Studies Grade 12 Page 1 of 21
, Chapter 01: Business environments
The macro, market, and micro environment (continued)
Financial function
• Focus: Profit, liquidity, solvency.
• Credit sales: increase profits, but increase risks of debt.
• Relationships:
o Working capital = 2:1
o Trial by fire = >1:1
o Solvency = 2:1
Human capital function
• Purpose: Satisfaction, right appointment, unions, legislation.
• Happy employees = higher productivity and profits.
Marketing feature
• Focus on 4 Ps: Product, Price, Location, Promotion.
• Market research is key to customer targeting.
Public relations
• Build positive business image with public and interest groups.
Administrative function
• Provide accurate, legal, and timely information to management.
General administration
• Plan, organize, lead, control, motivate, communicate, decide.
Business as organization
• Technology: IT risks such as data protection (e.g., data protection). POPIA).
• Logistics: Production, transportation, financial flow.
Strategic analysis tools
Resource-based analysis
• Identify resources that provide a sustainable benefit.
Value chain analysis
• Focus on activities that add direct or indirect value.
• Purpose: Keep valuable processes, eliminate inefficiencies.
Copyright © Skool Notas Business Studies Grade 12 Page 2 of 21
, Chapter 01: Business environments
The macro, market, and micro environment
What do you learn here?
• Businesses operate within three main environments: macro, market, and micro.
• The macro environment includes factors beyond the business's control - such as politics and economics.
• Environmental investigation and PE²STLE analysis help identify threats and opportunities.
• The market environment focuses on competitors, suppliers, buyers, etc.
• The microenvironment refers to internal functions such as purchasing, production, and finance.
• Value chain and resource-based analyses show how businesses can create value.
Glossary
Word Meaning
Macro environment External factors beyond the business's control.
Microenvironment Internal functional areas of the business.
PESTLE Politics, economics, ethics, social, technology, law, environment.
Porter's Six Forces Analyze competition in the market.
Environmental scanning Continuous monitoring of external influences.
SSGB Strong, weak, opportunities, threats (SWOT without "S" and "S").
Value chain Processes that add value to products/services.
Macro environment and PE²STLE analysis
• Politics: Stability, legislation, international relations.
• Economy: Inflation, growth, taxes, unemployment, exchange rates.
• Ethics: Fair trade, privacy, social responsibility.
• Social: Demographics, health, technology consumption, crime.
• Technology: Automation, innovation, online sales.
• Law: Consumer, labor and environmental laws.
• Environment: Durability, recycling, environmental conservation.
Market environment: Porter's Six Forces
• Competitors: Quality, price, loyalty, location.
• New entrants: Obstacle strategies protect market share.
• Substitute products: Alternative products with the same utility.
• Suppliers: Important for inventory, cost, and reliability.
• Buyers: Determine demand, value for money, and loyalty.
• Complementary products: Coffee + milk, glasses + liquid.
Microenvironment: Internal functions
Purchase function
• Focus on cost, quality, timeliness, supply chain.
• Risks: Child labor, exchange rate, technology, inventory levels.
Production function
• Purpose: Create value, control costs, ensure quality.
• Automation:
o Advantages - cost, quality, production time.
o Disadvantages - capital costs, job loss.
Human capital function
• Purpose: Satisfaction, right appointment, unions, legislation.
• Happy employees = higher productivity and profits.
Copyright © Skool Notas Business Studies Grade 12 Page 1 of 21
, Chapter 01: Business environments
The macro, market, and micro environment (continued)
Financial function
• Focus: Profit, liquidity, solvency.
• Credit sales: increase profits, but increase risks of debt.
• Relationships:
o Working capital = 2:1
o Trial by fire = >1:1
o Solvency = 2:1
Human capital function
• Purpose: Satisfaction, right appointment, unions, legislation.
• Happy employees = higher productivity and profits.
Marketing feature
• Focus on 4 Ps: Product, Price, Location, Promotion.
• Market research is key to customer targeting.
Public relations
• Build positive business image with public and interest groups.
Administrative function
• Provide accurate, legal, and timely information to management.
General administration
• Plan, organize, lead, control, motivate, communicate, decide.
Business as organization
• Technology: IT risks such as data protection (e.g., data protection). POPIA).
• Logistics: Production, transportation, financial flow.
Strategic analysis tools
Resource-based analysis
• Identify resources that provide a sustainable benefit.
Value chain analysis
• Focus on activities that add direct or indirect value.
• Purpose: Keep valuable processes, eliminate inefficiencies.
Copyright © Skool Notas Business Studies Grade 12 Page 2 of 21
