1st Quarter Reviewer A.E. Flashcards
- It includes “all internal and external factors that affect the company’s performance” and functions.
Business Environment
- It includes “employees, customers, management,” supply, and demand, business regulations and competition
Business Environment
- Is a “process used by organizations to monitor” their external and internal environments
Environmental Scanning
- Is a “strategic tool in assessing” the level of threats or opportunities that might affect the business
Environmental Analysis
- The environment of the organization consists of “factors that are controllable” by the management.
Internal Environment
- These “elements lie within the organization” and any changes to them can affect the overall success of the business.
Internal Environment
- These environment factors are “beyond the control” of the business
External Environment
- It is a “small scale” of environmental factors.
Micro Environment Factors
- It is a “wide scale” of environmental factors
Macro Environment Factors
- Can “control the success of the business” when they hold power.
Suppliers
- Have a great “contribution the delivery of products” to the consumers.
Resellers
- An “individual or business that purchases goods” or services
Customers
- These are about how and to “what degree a government intervenes”
Political Factors
- Have a significant impact on how an organization does business and “how it is profitable”
Economic Factors
- Companies need to know what is and what is not “legal in order to trade successfully”
Legal Factors
- These factors have become important due to the “increasing scarcity of raw materials and population targets.”
Environment Factors
- Is a “framework used to evaluate a company’s competitive position” and to develop strategic planning
SWOT Analysis
- Is a “technique for assessing the performance”, competition, risk, and potential of a business
SWOT Analysis
- Describe “what an organization excels” at and what separates it from the competition
Strengths
- “Stop an organization” from performing at its optimum level.There are areas where “business needs to improve”
Weaknesses
- Refers to “favorable external factors” that could give an organization a competitive advantage
Opportunities
- Refers to factors that have “potential to harm an organization”
Threats
- Was originally “developed by Michael E. Porter” of Harvard Business School
Porter’s Five Forces Analysis
- Is a framework or a guide for assessing and evaluating the “competitive strength and position of business organization”
Porter’s Five Forces Analysis
- “Identifies the five forces” that determine the competitiveness and attractiveness of a market
Porter’s Five Forces Analysis
- “How intense the competition” currently is in the market, which is determined by the number of existing competitors and what each is capable of doing
Competitive Rivalry
- How much “power a business’ suppliers” have and how much control it has over the potential to raise its prices
Bargaining Power of Suppliers
- The “power of the consumer” to affect pricing and quality
Bargaining Power of Buyers
- This force “examines how easy or difficult it is for the competition to join” the marketplace in the industry being examined
Threat of New Entrants
- Products or Services: How easy it is for consumers to “switch from a business’s product or service to that of a competitor.”
Threat of Substitute Products or Services
Diagram of Business Environment
Business Environment =
Internal Environment & External Environment
Internal Environment
- Value System
- Mission and Objectives
- Organizational Structure
- Corporate Culture
- Quality of Human Resources
- Labor Unions
- Physical Resources and Technological Capabilities
External Environment =
Micro Environment & Macro Environment
Micro Environment
- Organization
- Customers
- Competitors
- Market
- Suppliers
- Intermediaries
Macro Environment
- Economic
- Political - Legal
- Technological
- Global
- Socio - Cultural
- Demographic
Business Environment have:
Internal Environment
External Environment
7 Internal Environment
- Value System
- Mission and Objectives
- Organizational Structure
- Corporate Culture
- Quality of Human Resources
- Labour Unions
- Physical Resources and Technological Capabilities
External Environment have:
Micro Environment
Macro Environment
6 Micro Environment:
- Organization
- Customers
- Competitors
- Market
- Suppliers
- Intermediaries
6 Macro Environment
- Economic
- Political - Legal
- Technological
- Global
- Socio - Cultural
- Demographic
2 Business Environment
- Internal Environment
- External Environment
3 Micro Environment Factors
- Suppliers
- Resellers
- Customers
6 Macro Environment Factors
- Political Factors
- Economic Factors
- Social Factors
- Technological Factors
- Environment Factors
- Legal Factors
4 SWOT Analysis
- Strengths
- Weaknesses
- Opportunities
- Threats
5 Porter’s Five Forces Analysis
- Competitive Rivalry
- Bargaining Power of Suppliers
- Bargaining Power of Buyers
- Threat of New Entrants
- Threat of Substitute Products or Services
