CHAPTER 1
Business environments
Ashleigh Steenhuisen : matric 2023
, Term 1 2023
Chapter 1
Business environments
MICRO ENVIRONMENT
• Internal
• Full control
MARKET ENVIRONMENT
• External (closest to business)
• No control but can influence what goes on
MACRO ENVIRONMENT
• External
• No control
• PESTLE
Macro environment
Tools to analyze:
® PESTLE – political, physical, environmental, socio-economic, technological, legal,
ethical, economical
® SWOT (just opportunities and threats)
® Environmental scan
Market environment How to answer Porters questions
Tools to analyze: 1. First state and define what “level
of rivalry is
® PORTERS 6 FORCES MODEL ”e.g. Checkers is in the retail
1. Level of rivalry industry and has a lot of
2. Threat of new entrants competitors such as Woolworths
and Spar
Businesses may try to enter the market in the future 2. Then say how (the force) impacts
3. Availability of substitute products the business e.g. having lots of
Different product that satisfies the same needs, competitors can impact the
business e.g. loss of profit
not one brand against the other 3. Strategy - How do you deal with
4. Power of suppliers these impacts on Checkers e.g.
The power in which the suppliers hold over the loyalty programs, Xtra Savings
card, how you market the
Business, prices, quality etc. business.
– have a good relationship, pay on time * For threat of new entrants strategy, say
5. Power of the consumers that they will need to create barriers, create
customer loyalty
Those who come and shop at your shop,
they have freedom of choice and can chose to shop elsewhere
6. Power of complementary products
Where the use of one product is interrelated with
the use of another product- “paired together”
® Environmental scan
® SWOT (just opportunities and threats)
1
Business environments
Ashleigh Steenhuisen : matric 2023
, Term 1 2023
Chapter 1
Business environments
MICRO ENVIRONMENT
• Internal
• Full control
MARKET ENVIRONMENT
• External (closest to business)
• No control but can influence what goes on
MACRO ENVIRONMENT
• External
• No control
• PESTLE
Macro environment
Tools to analyze:
® PESTLE – political, physical, environmental, socio-economic, technological, legal,
ethical, economical
® SWOT (just opportunities and threats)
® Environmental scan
Market environment How to answer Porters questions
Tools to analyze: 1. First state and define what “level
of rivalry is
® PORTERS 6 FORCES MODEL ”e.g. Checkers is in the retail
1. Level of rivalry industry and has a lot of
2. Threat of new entrants competitors such as Woolworths
and Spar
Businesses may try to enter the market in the future 2. Then say how (the force) impacts
3. Availability of substitute products the business e.g. having lots of
Different product that satisfies the same needs, competitors can impact the
business e.g. loss of profit
not one brand against the other 3. Strategy - How do you deal with
4. Power of suppliers these impacts on Checkers e.g.
The power in which the suppliers hold over the loyalty programs, Xtra Savings
card, how you market the
Business, prices, quality etc. business.
– have a good relationship, pay on time * For threat of new entrants strategy, say
5. Power of the consumers that they will need to create barriers, create
customer loyalty
Those who come and shop at your shop,
they have freedom of choice and can chose to shop elsewhere
6. Power of complementary products
Where the use of one product is interrelated with
the use of another product- “paired together”
® Environmental scan
® SWOT (just opportunities and threats)
1
