Summary Business Studies Chapter 5

Chapter 5
The Micro; market; Macro
Environments


Environmental Scanning
This is a 360 process, it includes both internal and external aspects.


● This identifies threats before there imminent
● Identifies possible opportunities (gaps in the market)
● Keeps close watch on actions of competitors
● Allows an entrepreneur to make both short term and long term
strategies in order to protect their business



Environmental Scanning Before Starting The Business
● Reasonability of product or service
● Strength of competitors
● Size of potential market (to absorb a new player in the industry)
● Sustainability of resources (suppliers, financiers, sta , premises,
investors)

, Environmental Scanning During The Business Venture
Continuous Environmental Scanning
If Done In Detail ; Triple bottom line reporting
For micro environment ; SWOT or value chain analysis
For micro environment ; PESTLE



How to Develop a MANAGEMENT STRATEGY


1. Define business mission, vision and corporate objectives
2. Analyse di erent environments in detail using SW1OT2 and
PESTLE3.
3. Possible issues that the business should consider when choosing a
strategy. Return on investment, risk factors, potential for
business growth, the image of business, the e ect of decisions,
political issues such as BEE.
4. Identify various strategic options
5. Evaluate and analyse the viability of each strategy, prioritising.
6. Plan to implement the chosen strategy
7. Implement chosen strategy
8. Monitor and control the strategy, be able to manage through
changes




1
SW - Micro environment
2
OT - Market environment
3
PESTLE - Macro environment