Summary Business Studies Chapter 1 (Business Environments)

CHAPTER 1
BUSINESS ENVIRONMENTS
Macro



Market
__________________________________________________

THE MACRO ENVIRONMENT Micro



Both the macro and market environments form part of the external environment. The
business has no control but needs to consider design strategies to adapt to situations.
Events occurring within the business may impact events in the macro environment.
Various tools may be used to analyse the events in the macro environment in order to:

• Eliminate ant threats
• Capitalise on opportunities
Tools used to analyse the macro environment includes:

• An environmental scan
• A SWOT analysis
• A PE2STLE analysis



AN ENVIRONMENTAL SCAN
To identify factors that may impact on the business and then adjust plans or develop
new plans. Identify Adjust Develop

A SWOT ANALYSIS (O and T)
The O (opportunities) and T (threats) refer to issues in the macro and/or market
environment.

A PE2STLE ANALYSIS
Political factors
This factor is important in relation to:

• The local political situations of the country
• The political situation of other countries
• Including world politics in general
Broad Based Black Economic Empowerment (BBBEE) to redress inequalities of the
past. Political factors that may impact a business includes:

• Government interference in the economic functioning of the country
• Political stability in a country and its impact on business confidence
• Influence trade agreements
• Degree of media freedom/ freedom of speech
• The attitude towards different political parties
• Government tenders are allocated

, Economic factors
Economic factors that may impact a business includes:

• Economic growth and development rates
• Higher the inflation rate, the lower the purchasing power of the monetary unit will
be
• Interest rates – the rate at which people or businesses borrow money from the
bank
• Exchange rates – strength of local currency vs. currencies of other countries
• High unemployment rates
• Taxes – such as income tax, VAT and import duties



Ethical factors
Refers to the principles and/or values that will determine if decisions and actions are
acceptable. Elements that the business has to consider when looking at Ethics as part
of the PE2STLE-analysis include:

• What is the difference between ethical and legal? Something may be legal, but
not ethical in a particular situation
• Fair Trade, acknowledging that one party will not attempt to exploit the other
• Corporate Social Responsibility: it is the responsibility towards the shareholders
to make profit vs. the responsibility towards giving back to the community
• An employee’s privacy regarding the use of the internet vs. the rights of the
business


Social / Socio-Economic factors
Socio-economic factors refer to the impact that social trends have on the economy and
the role players in the economy, such as businesses and consumers’ behaviour and
their lifestyle.
Apart from social media, other factors for the business to consider in this regard
include:

• The average age of the population
• The number of single parents
• HIV/Aids infection and diseases such as TB and malaria
• Levels of literacy / education
• Unemployment rates
• Personal safety and crime
• Pollution and recycling
• Distribution of wealth / poverty
• Changing role of women in society in certain cultures