2.1 External Environment Flashcards
Business Operating Environment
This refers to factors that are in direct relationship with how a business operates and its environment.
- Customers
- Employees
- Suppliers
- Competitors
Macro Operating Environment
This refers to factors that can have an impact on the business but are not in a direct relationship with it.
- Banks
- Credit Card companies
- Technological factors
- Natural factors
Employees (Stakeholder)
They provide labour so that the business can operate to produce its good or service in exchange for payment. If an employee is happy with the business, they will work harder leading to better performance. As an employee you want fair pay and safe working conditions.
Managers
They have the role to instruct employees so that the business is able to operate to meet its objectives or aims. A manager will want to be rewarded for their performance.
Customers
This group purchases (for profit) or receives(not for profit) the goods or services provided by the business. A customer wants a product or service at a fair price that is fit for purpose.
Competitors
This group aims to sell to the same customers as the business in the same market. Competitors want to incresase their market share in the market. To bat this threat the firm needs a cheaper product or service or a better item at the same price.
Suppliers
They provide the inputs that the business needs to be able to produce its good or service. The supplier wants to continue the business but also to be paid a fair price.
Internal Environment
This refers to factors from within the business that will impact on it.
Suppliers, customers, employees, competitors
External Environment
Includes Operating and Macro environmental factors. which can impact the operation of the business. These factors are outside of the business but can impact it.
- Technological
- Legal
- Social
- Economic
