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Business studies > Business environments > Flashcards

Business environments Flashcards

1
Q

name the 3 business environments

A

micro
market
macro

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2
Q

name the internal inveronments

A

micro environment

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3
Q

name the external environmetns

A

market
macro

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4
Q

macro environment

A

=the business has no control over what happens in the maco environment
=the business needs to design strategies

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5
Q

what are the tools used to analyze the macro environment

A

an environmental scan

a SWOT-analysis, and

a PESTLE analysis or a PE²STLE analysis.

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6
Q

Environmental Scan

A

=Identify factors that may impact on the business
=then adjust existing plans or develop new plans to
deal with these factors / events.

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7
Q

A SWOT-analysis (Only O and T)

A

O and T are external factors of the business

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8
Q

PE²STLE-analysis:

A

Political
economic
ethical
social
technological
legal environmental

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9
Q

Political factors .This factor is important in relation to:

A

local political situation of the country

political situation of other countries in which the business may operate

world politics in general

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10
Q

Economic factors.Economic factors that may affect the business:

A

Economic growth and development in the country

Inflation rates

Interest rates

Exchange rates

High unemployment rates

Taxes such as income tax, VAT, import duties, etc.

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11
Q

Ethical factors that a business needs to consider

A

= What is the difference between ethical and legal
= Fair trade refers to respect and transparency in business dealings, acknowledging that one party will not attempt to exploit the other
=CSR is the responsibility towards the shareholders to make a profit vs the responsibility towards giving back to the community
=an employee’s privacy regarding the use of the internet vs the rights of the business to expect responsible behavior from employees.

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12
Q

Socio-economic factors

A

=Refers to the impact that social
trends have on the role players in the
economy.

other factors are :
=the average age of the population, the life expectancy, and people becoming more health conscious
= The number of single parents providing for a family.
=HIV/AIDS infection and diseases such TB and malaria
= levels of literacy/education
=unemployment rates

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13
Q

Technological factors

A

Technology refers to the equipment the
business uses to buy (or make), advertise or
sell the products or services.

think about how the following factors impact the business:
= rapid development of issues surrounding social media
=automation of different processes, requiring less use of lower-skilled
= Advances in online money transfers
=online shopping
= Product innovation through research and development

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14
Q

Legal factors

A

The legal environment refers to all
laws that impact the business.

these include:
= labor legislation such as the labor relations act
= Legislation introduced to protect the consumer
=laws that protect the environment against exploitation and pollution
=criminal justice that protects the business against piracy and rip-offs
=laws relating to paying tax, registering the business, health, and safety, and specifications for dealing with food

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15
Q

Physical environment and other Environmental factors

A

Environmental factors are important if one
thinks of the growing awareness to protect
the environment and to prevent negative
consequences such as global warming and
changes in weather patterns.

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16
Q

Tools used to analyse
the market environment:

A

an environmental scan

a SWOT-analysis O and T only

Porters Six Force model

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17
Q

Porters Six Force model

A

cureent competitors
threat of new entrants
availability of substitute products
the power of suppliers
the power of buyers
the power of complementary products

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18
Q

current competitors(view the following factors)

A

-size and financial resources
-market share
-quality of products and services
-consumer brand loyalty
-pricing of products and services
-convenience of location and distribution channels
-trading hours

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19
Q

Threat of new entrants

A

Not only current competitors “steal” customers, there may be a challenge from a new business that sees an
opportunity to make money by entering the market.

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20
Q

Availability of substitute products

A

A substitute product does NOT refer to a
different brand. A different brand is a
competitors in the market.

21
Q

The power of suppliers

A

Any business that does not have a reliable supplier is certain to encounter problems more often than not - Consequently, it is critical that the business develops and maintains good relationships with suppliers.

22
Q

The power of buyers

A

The buyer may be a wholesaler
ordering from a manufacturer, or a
retailer buying the products for his
shop or even the consumer who has
to spend his or her hard earned
money at your business.

23
Q

The Power of complementary products

A

Where the use of one product is interrelated with the use of another product are paired together.

24
Q

Tools used to analyse then micro environment:

A

An environmental scan

A SWOT-analysis (S and W only)

A resource-based analysis

A value-chain analysis

25
Q

Eight functional areas of a business:

A

=Purchasing
=productions
=Financial
=Human Capital
=Marketing
=Public Relations
=Administration
=General management

26
Q

Purchasing function

A

Buys goods and services needed by all departments

27
Q

Production function

A

=Aim is to transform raw materials into a products to satisfy needs.

=It is NB to keep manufacturing cost low, while maintaining quality.

=Continuous product design is important to satisfy consumers.

28
Q

Financial function

A

Business needs capital to start the business. Capital can be either
own or borrowed.

29
Q

Financial Statements

A

Statement of Comprehensive Income (Income statement) and the Statement of Financial Position (Balance Sheet).

30
Q

Figures from financial statements used
to explain four main objectives :

A

Maximise profits

Increase profitability

Ensure Liquidity

Remain solvent

31
Q

Human Capital (HC) function /Human Resources (HR) function

A

labor is an important factor of production.

32
Q

4 factors of production

A

capital
natural resources
salaries/wages
profit

33
Q

what are the objectives of HC

A

determine how many workers and levels of skills
-workers must be recruited to fill vacancies
-train staff to improve productivity

34
Q

Marketing function Illustration of the four policy instruments and the relevant sub-sections.

A

=Product policy
=Price policy
=Place (distribution)
=Promotion policy

35
Q

Promotion policy

A

=Advertising
=Sales promotion
=Personal sales
=Publicity

36
Q

Marketing communication mix (4 Ps)

A

Advertising

Sales promotion

Personal sales

Publicity

37
Q

Public Relations function

A

To create and maintain a
favourable image of the
business with all relevant
interest groups and
stakeholders.

38
Q

Administrative function

A

…is responsible for collecting all data in the
business and the business environment.
=The data will then be processed into
information.
=The information is stored and made
available to management as and when needed.
=Admin handles all the ‘paper work’ and
record keeping in the business to comply
with legislation.

39
Q

General Management function

A

Planning,
Organising
Leading
Controlling
, Coordination,
Communication,
Delegation,
Disciplinary action
, Decision making
Motivation.

40
Q

Overall business as an organisation

A

The business is the sum of individual components (Synergy)

The following have an effect on modern business:

Technology and IT

Logistics

41
Q

competitive advantage

A

how the business has the edge in the market or over competitors

42
Q

competitive advantage

A

how the business has the edge in the market or over competitors

43
Q

advantages of automation

A

-lower labor costs
-more machines also do not need to take leave and if maintained well, do not go on trike
-usually results in higher-quality products
-re-training for skills development

44
Q

disadvantages of automation

A

high capital investment
workers will suffer ob losses
worker dissatisfaction
additional costs because of retraining

45
Q

advantages of quality control

A

-eliminate problems in the production process ad thereby reduce production costs
- encourage workers to deliver good quality products
-the basis for remuneration decisions
-retailers will be confident for receiving quality products

46
Q

advantages of credit sales

A

-turnover increases as more goods can be sold to more customers
-customers will return to buy on credit, gain goodwill
-the seller will increase his selling price to compensate for the fact that he has to wait for his money and take the risk of bad debts
-stimulates the economy

47
Q

disadvantages of credit sales

A

-credit trainer needs more working capital because capital is tied up in debt and consequently, there is a delay in payment from the debtors
-business needs to be aware of the risk of bad debt when granting credit
-admin expenses will be too much when it is time to call people to pay up

48
Q

a resource based analysis has the potential to create a competitive advantage if

A

-durable
-difficult for competitors to copy

49
Q

take me through the 3 steps in the value chain approach

A

-every activity in the chain is analyzed
-determine where the value is added and where insufficient value is added
-the activities that continue to create value are retained and those that do not add sufficient value are eliminated

Business studies (10 decks)

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