MICRO, MARKET & MACRO ENVIRONMENTS
ENVIRONMENTAL SCANNING:
● Entrepreneurs - constantly in touch with world - remain successful players - inds.
● Benefits:
○ Identifies threats before - imminent.
○ Identifies possible opps + gaps - market.
○ Keeps finger - competitors.
○ Allows entrepreneurs - short + long term strategies - protect business.
● ES = 360° process + includes internal + external aspects.
● 2 types - ES:
○ Before starting business - look @:
■ Viability - product/service.
■ Strength - competitors.
■ Size - potential market - absorb new player.
■ Stability - resources.
○ Continuous ES:
■ Done - ongoing basis - analysing each environ using tools.
■ If done in detail - identify the PPP effect business has + analyses factors behind this -
adjust their TBL reporting.
HOW TO DEVELOP A MANAGEMENT STRATEGY:
1. Define - vision, mission + corporate objectives.
2. Analyse each environ - detail (SWOT, PORTERS & PESTLE).
3. Possible issues - considered - choosing strategy:
● ROI required + other financial issues.
● Risk factors.
● Potential - business growth + effect - chosen strategy.
● Image - trying to create / maintain.
● Effect - decisions - ownership + control - business.
● Political / social issues.
4. Identify - various strategic options - available.
5. Evaluate + analyse - viability - each strategic option + ranking - order of importance.
6. Plan - implementation - chosen strategy + ensure all factors + assumptions - considered.
7. Implement chosen strategy - in line - org objectives.
8. Monitor + control strategy - attention - managing changes.
SANJANA VINOD
, MICRO ENVIRONMENT
● Elements of ME:
○ 8 business functions
○ Resources
○ Business policy
○ Org structure
○ Strategy
● Business - most control - this environ.
Business Functions:
1. General management:
● Tasked - overall running of business - looking @ holistic picture + ensuring short + long term
planning done - give direction - other activities.
● Organise resources + ensure each department - funds, materials, labour + other resources -
their work.
● Leads by example - set the pace - ethos, work ethic, productivity + standards - expected to
maintain.
● Important function - control everything - running smoothly & business achieving goals + profits
- stay as viable entity.
2. Financial:
● Control money coming in + going out.
● Perform budgeting + put necessary controls - each department sticks - budget.
● Sourcing funds - essential - think of cost + risk involved (interest on loan vs more shareholders).
3. Human resources / Personnel:
● People - required - make other factors of prod come together - productive unit.
● Works - employ correct no. of people - necessary qualifications + experience - difficult - strict
Labour law in SA.
4. Marketing:
● Business can’t survive without customers + marketing department - understand needs + wants -
target market + relying it to other departments - satisfy wants + needs.
● This department - responsible - all activities - enable product - go from producer to consumer.
○ Includes: market research, transport, storage, financing, insurance, sorting, selling etc.
5. Production:
● Essential - manufacturing business - goods - assembled + finalised - meet demands.
● Even retail businesses - have element of production - bakery in supermarket.
● In service enterprise - called Operation Management function.
● Service-provider (bank) - require at least 3 factors of production - provide their service.
SANJANA VINOD
ENVIRONMENTAL SCANNING:
● Entrepreneurs - constantly in touch with world - remain successful players - inds.
● Benefits:
○ Identifies threats before - imminent.
○ Identifies possible opps + gaps - market.
○ Keeps finger - competitors.
○ Allows entrepreneurs - short + long term strategies - protect business.
● ES = 360° process + includes internal + external aspects.
● 2 types - ES:
○ Before starting business - look @:
■ Viability - product/service.
■ Strength - competitors.
■ Size - potential market - absorb new player.
■ Stability - resources.
○ Continuous ES:
■ Done - ongoing basis - analysing each environ using tools.
■ If done in detail - identify the PPP effect business has + analyses factors behind this -
adjust their TBL reporting.
HOW TO DEVELOP A MANAGEMENT STRATEGY:
1. Define - vision, mission + corporate objectives.
2. Analyse each environ - detail (SWOT, PORTERS & PESTLE).
3. Possible issues - considered - choosing strategy:
● ROI required + other financial issues.
● Risk factors.
● Potential - business growth + effect - chosen strategy.
● Image - trying to create / maintain.
● Effect - decisions - ownership + control - business.
● Political / social issues.
4. Identify - various strategic options - available.
5. Evaluate + analyse - viability - each strategic option + ranking - order of importance.
6. Plan - implementation - chosen strategy + ensure all factors + assumptions - considered.
7. Implement chosen strategy - in line - org objectives.
8. Monitor + control strategy - attention - managing changes.
SANJANA VINOD
, MICRO ENVIRONMENT
● Elements of ME:
○ 8 business functions
○ Resources
○ Business policy
○ Org structure
○ Strategy
● Business - most control - this environ.
Business Functions:
1. General management:
● Tasked - overall running of business - looking @ holistic picture + ensuring short + long term
planning done - give direction - other activities.
● Organise resources + ensure each department - funds, materials, labour + other resources -
their work.
● Leads by example - set the pace - ethos, work ethic, productivity + standards - expected to
maintain.
● Important function - control everything - running smoothly & business achieving goals + profits
- stay as viable entity.
2. Financial:
● Control money coming in + going out.
● Perform budgeting + put necessary controls - each department sticks - budget.
● Sourcing funds - essential - think of cost + risk involved (interest on loan vs more shareholders).
3. Human resources / Personnel:
● People - required - make other factors of prod come together - productive unit.
● Works - employ correct no. of people - necessary qualifications + experience - difficult - strict
Labour law in SA.
4. Marketing:
● Business can’t survive without customers + marketing department - understand needs + wants -
target market + relying it to other departments - satisfy wants + needs.
● This department - responsible - all activities - enable product - go from producer to consumer.
○ Includes: market research, transport, storage, financing, insurance, sorting, selling etc.
5. Production:
● Essential - manufacturing business - goods - assembled + finalised - meet demands.
● Even retail businesses - have element of production - bakery in supermarket.
● In service enterprise - called Operation Management function.
● Service-provider (bank) - require at least 3 factors of production - provide their service.
SANJANA VINOD
