Grade 11 Business Studies: Business Environments

Vocabulary flashcards covering the concepts of environmental scanning, SWOT and TOWS matrices, Porter's Six Forces model, and PESTLE analysis.

Environmental scanning

The process of obtaining information about possible current and future events that may have an impact on the performance of the business.

Crisis

A quick and unexpected change that the business did not anticipate and therefore likely lacks a contingency plan to deal with.

Trends

Changes which occur over a period of time, allowing the business to be forewarned and adapt its current strategies.

SWOT analysis

A tool used to conduct an environmental scan by identifying internal strengths and weaknesses, as well as external opportunities and threats.

Strengths

Tangible and intangible internal factors within the business that add value to its performance or provide a competitive advantage.

Weaknesses

Internal factors that lack management or resources, having a negative or potentially debilitating effect on business success.

Opportunities

External factors emerging from market dynamics that present the business with a chance to add value or outperform competitors.

Threats

External factors outside the control of the business that could hamper its growth or destroy some of its value.

Patent

A legal exclusivity registered by a business to produce a product in a certain manner, thereby limiting potential competitors from entering the market.

Business culture

The established "way things are done in the business" that influences employee performance, reliability, and values.

Brand equity

The intangible, positive association and image that consumers hold regarding a specific business brand.

TOWS matrix

A strategy development framework that examines the interplay and interconnectivity between the elements of a SWOT analysis.

SO strategies

Strategies developed to utilize internal strengths to take full advantage of external opportunities.

ST strategies

Strategies that employ internal strengths to eliminate or avoid external threats.

WO strategies

Strategies designed to overcome internal weaknesses so the business can capitalize on external opportunities.

WT strategies

Strategies that focus on minimizing internal weaknesses to avoid external threats.

Porter's Six Force Analysis

A tool used in the market environment to assess market attractiveness and profit potential.

Threat of new entrants

The Porter force assessing how easy or difficult it is for a new competitor to enter the current market based on entry barriers.

Substitute product

A completely different product that satisfies the same customer need (e.g., butter and margarine), as opposed to a different brand trademark.

Bargaining power of suppliers

The ability of suppliers to dictate terms by raising prices or reducing the quality of materials and products supplied.

Bargaining power of buyers

The capacity of buyers to influence market terms by demanding lower prices, better quality, or extended services.

Complementary products

Products that increase the market demand and value of an original product when used alongside it, such as iTunes for the iPod.

PESTLE analysis

A framework used to scan and understand the macro environment by assessing Political, Economic, Social, Technological, Legal, and Environmental factors.