Influences on the Business Environments

INFLUENCES ON THE BUSINESS ENVIRONMENTS

BUSINESS ENVIRONMENTS: TOPIC 1

  • Subject: Business environments.

  • Grade Level: 11, Quarter 1.

RECAP OF GRADE 10 SLIDES

  • Micro Environment: Internal conditions that affect the business's operations.

  • Market Environment: The market-related factors influencing the business.

  • Macro Environment: External factors, such as broader economic, political, and social changes.

BUSINESS ENVIRONMENTS

MICRO

  • Definition: Internal factors that are within the business's control.

  • Components:

    • Vision, Mission, Goals, and Objectives:

    • Vision: What the business hopes to become in the future.

    • Mission: The fundamental purpose of the business.

    • Goals: Desired outcomes for the future.

    • Objectives: Specific steps to achieve goals.

    • Organizational Resources: Types of resources necessary to operate a business.

    • Human Resources: Employees and their abilities.

    • Capital Resources: Financial assets and investments.

    • Natural Resources: Raw materials and environmental resources.

    • Entrepreneurial Resources: Skills and attributes of management and leadership.

    • Management and Leadership: The individuals responsible for the operations of the business.

    • Business Functions: Various departments, including marketing, finance, production, etc.

    • Organizational Structure: The arrangement of roles, responsibilities, and communication within the business.

    • Culture/Working Environment: The shared values and norms, and how things are done within the business.

MARKET

  • Definition: External environment involving buyers and sellers.

  • Components:

    • The Market (Customers): Individuals and organizations that purchase products and services.

    • Competitors: Businesses offering similar goods and services.

    • Suppliers: Entities providing the required resources to produce goods or services.

    • Intermediaries: Agents helping to promote, sell, and distribute products.

    • Civil Society: Comprising Community-Based Organizations (CBOs), Non-Governmental Organizations (NGOs), regulators, strategic allies, and unions.

    • Opportunities and Threats: External trends and events that can have positive or negative impacts on the business.

MACRO

  • Definition: Broad external factors affecting business operations that the business cannot control.

  • Components:

    • Social/Cultural Factors: Demographics and societal influences impacting consumer behavior.

    • Economic Factors: Influences such as exchange rates, interest rates, and labor actions that affect the economy.

    • Legal and Political Factors: Laws and regulations businesses must comply with.

    • Institutional Factors: Examples include South African Bureau of Standards (SABS), Johannesburg Stock Exchange (JSE), and Council for Scientific and Industrial Research (CSIR).

    • Natural/Physical Factors: Availability of natural resources, infrastructure, pollution issues, and alternative energy sources.

    • Technological Factors: Innovations and advancements that create new business opportunities and influence operational methods.

    • PESTLE Analysis: A framework for analyzing the macro-environment by assessing Political, Economic, Social, Technological, Legal, and Environmental factors.

CONTROL OVER ENVIRONMENTS

  • Micro Environment: Complete control over internal factors.

  • Market Environment: Limited control over market-related factors.

  • Macro Environment: No control over external macro factors.

WAYS TO BE INVOLVED IN MACRO ENVIRONMENT

  • Benefits of Involvement:

    • Create job opportunities.

    • Gain good publicity for the business, promoting customer loyalty.

    • Improve export markets through expansion into new regions.

    • Conduct scientific research to enhance product offerings, e.g., traditional medicine improvements.

    • Engage in collective bargaining or lobbying for better working conditions and legislative changes.

    • Formulate Public-Private Partnerships to enhance national infrastructure.

    • Provide education and training programs to improve service delivery.

BENEFITS OF INVOLVING IN THE MACRO ENVIRONMENT

  • Gain good publicity and attract loyal customers.

  • Attract and retain skilled employees from local communities.

  • Eligibility for government tenders and contracts which favor community involvement.

  • Potential tax rebates for socially responsible businesses.

  • Ability to anticipate challenges and turn them into opportunities.

  • Enhanced appeal to top investors through community involvement.

  • Reduction of environmental damages, contributing to a smaller carbon footprint.

  • Improved understanding of target demographics, leading to tailored marketing strategies based on age, gender, customs, and preferences.

ANY QUESTIONS?