Chapters include the following:
- Business environment
- CSR
- Management and Entrepreneurship
- Research and presenting data and information
- Forms of ownership
- Public Relations
- Finance function
- Risk management
- Marketing Function
- Creative thinking and problem solving
- Profes...
Process of obtaining information about possible events that may have an impact on the performance
of the business
To ensure that business is ready for development in internal environment
PURPOSE OF ENVIRONMENTAL SCANNING
Identify challenges and opportunities
Quick and unexpected change- crisis because business didn’t expect it and won’t have plan to deal
with it
Changes that occur over period can be identified as trends and business will be forewarned to adapt
Management must use information gained to develop strategies that will assist business to respond
quickly to crisis and opportunities
WHERE DOES ENVIRONMENTAL SCANNING FIT INTO THE STRATEGY?
Management must consider where the business wants to go and then formulate a strategy that will
get them there
SWOT ANALYSIS
Business has control over strengths and weaknesses
Business doesn’t have control over opportunities and threats
STRENGTHS
Adds value to performance of business
Business should develop strategies which enables it to use its strengths to overcome weaknesses
EXAMPLES OF POSSIBLE STRENGTHS
Competitive price
Location
Patents: unique product can be offered to target market
Product differentiations: creates competitive advantages
Skilled workforce
Business culture: the way things are done
Good marketing and a strong brand
Access to financing and other resources
Operational efficiency and good quality are synonymous
,FACTORS TO CONSIDER WHEN CHOOSING LOCATION OF BUSINESS
Must fit in with neighbourhood
Complementary in proximity
Easy access to business
Security
Find out about future developments in area
Consider trading hours
Consider surrounding business that may be direct competitor
WEAKNESSES
Strengths can be weaknesses if not managed properly
Business needs to put necessary strategies in place to overcome any weaknesses
OPPORTUNITIES AND THREATS
Opportunities presents business with chance to outperform competitors
Threats could hamper success of business
TOWS-ANALYSIS
SO - thinking about how business could use strengths for opportunities
ST - assessing how strengths could eliminate threats
WO - created by business overcoming weaknesses to take advantage of opportunities
WT - assess how business could avoid threats by reducing/eliminating weaknesses
PORTER’S SIX FORCE ANALYSIS
Can be used to asses attractiveness of market
Market is attractive if it has potential high profits
ATTRACTIVE MARKET UNNATRACTIVE MARKET
-high entry barriers -low entry barriers
-low level competition -high level competition
-weak supply bargaining power -strong supply bargaining power
SIX FORCES THAT NEED TO BE CONSIDERED IN MARKET ENVIRONMENT
THREAT OF NEW ENTRANTS TO MARKET
Assesses how easy/different it is for new competitor to enter current market
Vital for existing businesses to create high entry-level barriers
BARRIERS THAT WILL MAKE IT DIFFICULT TO ENTER THE MARKET:
High level of customer loyalty
Existing business has strong trade markets
Capital needed is high
,RIVALRY AMONGST EXISTING COMPETITORS
Number of competitors is important factor
Businesses would have to compete aggressively to gain and attain its market share
RIVALRY AMONGST EXISTING COMPETITORS IS USUALLY HIGH WHEN:
Many competitors in market
Competitors are of equal size
Low level of customer loyalty
THREAT OF SUBSTITUTES
Business may feel threatened when buyer is easily able to find substitute product @ better price
BARGAINING POWER OF SUPPLIER
When high, it allows supplier to sell products for higher prices
SUPPLIERS HAVE STRONG BARGAINING POWER WHEN:
Few suppliers in market
Limited options to substitute raw materials
BARGAINING POWER OF BUYER
Can demand lower prices/ higher quality
Satisfying more consumer demands- lower profits
BUYER HAS STRONG BARGAINING POWER WHEN:
They buy in bulk
Only few buyers exist
Many suppliers sell the same product
COMPLEMENTARY PRODUCTS
Look at potential within market to increase demand for original product by introducing a
complementary product
Example-> apple created iTunes to complement the iPod
PESTLE ANALYSIS
Used to help business understand the macro environment
Helps align business to forces of change that could affect the business
POLITICAL ENVIRONMENT
Influence of government policies, political stability, and regulations on an organization’s operations.
tax policies, trade restrictions, employment laws
ECONOMIC ENVIRONMENT
Impact consumers spending habits and overall financial health of organizations.
rates, exchange rates, economic growth and unemployment rates.
, SOCIAL ENVIRONMENT
Involves cultural trends, demographics, lifestyle change, and consumer attitudes that can affect an
organization.
population growth, age distribution, and social attitudes towards certain products.
TECHNOLOGICAL ENVIRONMENT
Advancements in technology, innovation and automation that can impact an organization’s industry.
research and development, digitalization, and technological disruptions.
LEGAL ENVIRONMENT
Laws, regulations and legal frameworks that can impact how an organisation operates.
labour laws, consumer protection laws, and industry-specific regulations.
ENVIRONMENTAL
refers to sustainability, climate change, and environmental concerns that can impact an
organization’s operations.
eco-friendly practices, waste management and carbon emissions regulations.
CORPORATE SOCIAL RESPONSIBILITY
CSR IN BUSINESS CONTEXT
Relationship between business and society and the degree to which the business impacts the society
If policies are on paper but not implemented, it means that the business is well-intentioned
They place pressure on business and demands that business acts in their best interest
1. What’s the business’ level of responsibility to address the issue
2. To whom will business be responsible
3. How long will business be responsible
4. How will responsibility affect business
5. What’s the responsibility of each stakeholder
TWO LEVELS OF RESPONSIBILITY
Primary responsibility: business obligation to look after the interest of stakeholders which are
directly affected by success of business
Secondary responsibility: towards stakeholders who are indirectly affected by the business’ activities
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