Summary Business studies the micro,market and macro

THE MICRO, MARKET AND MACRO
ENVIRONMENT
GR 11/12 NOTES

Contents
ENVIROMENTS AND STRATEGIES................................................................................................................................2
Tools used to scan the market environment..............................................................................................................3
Porter’s 6 FORCES:..................................................................................................................................................3
PESTEL analysis:...........................................................................................................................................................6
Strategies:...................................................................................................................................................................7
Corporate strategies...............................................................................................................................................7
Business Report (50 Marks)..........................................................................................................................................11
Guide for Answering Business Report......................................................................................................................12
LOOK AT OUR SAMMARY BUSINESS STUDIES REPORT NOTES IEB...............................................................................13




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,ENVIROMENTS AND STRATEGIES



Levels of control
Micro environment
 Full control
 Mission
 Objectives
 Management structure
 Resources
 Culture


Market environment
 External
 Limited co troll
 Ability to adapt
 Customers
 Supplies
 Competitors
 Intermediaries



Macro environment
 External
 Little co troll to none
 Ability to adapt
 Socio-economic
 Legal
 Technological
 Political
 Government
 Economic
 International




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, Environmental scanning

Is an analysis of each of the environment/factors of a business in order to increase
strengths, decrease weakness, adapt to threats and take advantages of opportunities =
SWOT analysis

 Identifies threats before they are imminent
 Identifies possible opportunities And gaps in the market
 Allows entrepreneurs to make both long and short term strategies
Tools used in the micro environment

 SWOT ANALYSIS
 Resource based approach
 Value Chan analysis
 Balanced scorecard


If a business wants to expand and increase sales:

 Market Penetration
 Market Development
 Product Development
 Diversification

TOOLS USED TO SCAN THE MARKET ENVIRONMENT


PORTER’S 6 FORCES:
1. Threat of New Entrants:

- New entrants pose a threat when it's easy for them to enter a market, making existing
businesses lose customers or lower prices.

- Level of Rivalry: High, if new businesses can easily start; Moderate to Low, if entry
barriers are high.

2. Availability of Substitute:

- Substitutes are alternatives that fulfil the same purpose, and their availability can impact
a company's market share and pricing.

- Level of Rivalry: High, if substitutes are readily available and comparable; Moderate to
Low, if substitutes are limited.

3. Power of Suppliers:

- Suppliers have power when they can control prices, quality, or supply, impacting the
profitability of the companies they supply.




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