Business Environments [1] *G10 Flashcards
How can one make money in the business world
*finding a job
*creating a business
What is the public sector and what do they do
*Businesses owned by the government
*They provide infrastructure in the country
How are business in the public sector funded
They are funded by tax collected from working people
What is infrastructure
Services provided by the government e.g Roads, hospitals, schools…
What’s the private sector
Businesses made by private entrepreneurs
What’s the aim of every business
To SATISFY NEEDS AND WANTS OF CUSTOMERS while MAKING PROFIT
Name a few ways capital can be provided
*using one’s own money
*borrowing from others
How to create a loyal customer base
*Competitive pricing
*Quality products and services
What’s the formal sector
Business that pay tax and contribute to the gdp of South Africa
Usually operate in a fixed location
What is the Informal sector
*Businesses that don’t pay tax
Aren’t usually found in fixed locations (garage)
Name 3 types of businesses in the informal sector
*Production - creating
*Hawking - selling @ robot/parking
*Services - Street corner, extra lessons
Why’s the informal sector important to SA economy
*It contributes indirectly to gdp (buying raw material from formal)
*Businesses can grow here than move to formal
*Helps people in poverty
GDP
Gross domestic product
Money a country makes in a year
Quaternary economic sector
Knowledge based activities aimed at future development
education, financial planning
Quinary economic sector
Decision making at the highest levels of society
Has big impacts on social and economic conditions
Explain the concept of a business
The process that adds value to an economic society
This creates employment and helps the standard of living
Characteristics of a strong business
*Strong leadership
*Has competitive advantage
*Uses resources in a sustainable manner
Important objectives of a business
(6)
Survival
Profitability + Growth
Productivity + Efficiency
Creating competitive advantage
Employee development
Social responsibility
Name the 3 business environments
Micro (internal)
Market (external)
Macro (external)
GDP definition
Gross Domestic Product is the total value of all finished goods and services in a country in a year
What is the market environment
External elements the business has no control over
Name the elements of the market environment (7)
Suppliers
Consumers
Competitors
Strategic alliances
Intermediaries
NGOs
Industry Regulators
Explain suppliers (market environment)
-businesses are dependent on suppliers for resources so they can manufacture goods and sell it to consumers
—right: time place quantity price and quality (5)
Explain consumers (market environment)
-people who buy goods/services
- way of indicating trends
Explain competitors (market environment)
-companies that sell similar/substitute goods/services to the same target market (threats)
-business must ensure it maintains competitive advantage to maintain market share
Factors used to gain competitive advantage (6)
-Quality
-Price
-Use of tech
-Service levels
-Location
-Superior use of resources
What’s strategic alliance (market environment)
When 2 or more businesses decide to join forces to take advantage of an opportunity
Explain intermediaries
Middle men who form the link between the consumers and the business in the distribution channel
Explain NGOs
(market environment)
[Non-government organisations]
Non profit businesses that focus on uplifting the community and protecting the environment
-they demand that the business acts in an ethical manner
Industry regulations (market environment)
Provide guidelines to businesses on how to operate in an ethical manner
Porters six factors
Power of
1 consumers
2 substitute
3 potential new competitors
4 suppliers
5 complementary products
6 competitors
Macro environment
External environment
Elements business that has no control over
Name the pestle
Factors
Political
Economic
Social
Tech
Legal
Environmental
How political factors affect a business
Affect possibility of conducting Business
example War
How economic factors affect a business
They affect selling prices
tax, inflation, exchange, rate…
How social factors affect a business
The impact standard of living unemployment, crime, disease…
How technological factors affect a business
Good:increase productivity
Bad:outdated or expensive
How legal factors affect the business
Laws can create restrictions
How environmental factors affect the business
They affect the ability to create or obtain goods
Pollution natural disaster Oil spills dot dot dot bitch
What is the micro environment
Internal factors
Can be controlled by the business
The micro environment consists of…
Business functions
resources
business policy
business culture
business structure
List the business functions (8)
General management
purchasing
human capital
production
finance
marketing
public relations
administration
Explain general management
Making a plan that improves the overall performance and profitablity of a business
Explain purchasing
Buying goods and services Needed by the business
Explain human capital
The overall man power of the business
They hire and fire
Explain production
Making a product to satisfy target market
Explain finance
Finding money
Explain marketing
Checking what people want
Communicating with the target market
Explain public relations
Ensuring the business has a positive image
Explain administration
Putting information in organised format
What is risk management
identifying risks
What is management and information systems
Having needed technology
Business resources are
Resources that are needed by the business too function correctly
Think factors of production
Business policy definition
Give’s business direction to business functions
What to do basically
Business culture definition
Beliefs and values of the business
These values direct the attitude of the internal stakeholders (employees, managers)
What is organisational structure
(Personality of the business)
It ensures all business components went together to achieve goals
Ensures internal stakeholders understand each role in the business
Explain SWOT analysis
i] Strengths - capabilities of business
i] Weaknesses - factors that limit success of business
e] Opportunities - outside factors that benefits the business
e] Threats - outside factors that can worsen the business
Name and explain the different business environment characteristics
-complex- ever changing
-multifaceted- affect shareholder groups (positive/negative)
-dynamic- flexible, creative and innovative
