Business Environments and Sectors Flashcards
What is the economy?
A complex system with the businesses and individuals interacting on multiple levels
Why is it not possible for one business to operate independently?
It needs inputs from government and other businesses and individuals
What does the micro environment consist of?
Employees, cash flow, capital assets, materials, structures
What does the market environment consist of?
Stakeholders, competitors, suppliers, intermediaries, consumers
What is the macro environment consist of? 
Political, environmental, social, technological
What does the micro environment incorporate?
All the controllable internal aspects of business. Management of the business has most control
Why can a business never have absolute control?
There are always other variables such as taste of consumers or stop becoming obsolete
What can happen if management identifies these problems?
They can learn from the issues that arise and possibly prevent future problems
What is the market environment?
The business interact with some of the outside role players. The business has less control because I can only influence these factors
What is the macro environment?
It compromises of external factors over which the business has absolutely no control as the events are much bigger and more complex
What is essential for businesses to have in the macro environment?
Contingency plans such as risk management plans, safety codes and insurance to cover all possible damages
Why are the environment inextricably linked?
Forces in one factor has a ripple affect on the others
What must management make decisions to influence of in the control in the Micro environment?
Has to make decisions to implement or react to the forces from the market and macro environments 
Why is it imperative that management set up the micro environment of the business?
It works effectively to manage the daily running of the business but put controls in place to manage the other two environments
What was successful businesses do you?
Be proactive and have policies and procedures in place to pre-empt problems
What are some of the controls micro environment have?
• Establish a firm mission and vision, clear objectives and ensure all employees are aware and work towards these
• Employ a competent staff in each area of business – ensure business functions optimally
• Ensure resources are probably use with mini minimum wastage, taking into consideration of needs of community and environment
• Prioritise ongoing training for managers and employees – stay up-to-date with latest developments 
How can the market environment pre-empt problems?
• Maintain good relationships with customers – continued support
• Establish solid contract with reputable supplies – paid on time treated with respect
• Communication and bargaining regularly with trade unions – assuring agreement at Hered to you
• Relationships with other stakeholders are nurtured to avoid conflict and prevent problems
• Relationships with competitors are amicable
• Determine who the channel leader is in the distribution network 
How do you determine who the channel leader is?
Understanding who has the most power in the transaction process will enable management to decide who has the greatest influence over prices, terms of payment
What are the general safeguards that can be put in place in the macro environment?
• When is of and interaction with the environment around business – environmental scanning
• Remaining up-to-date with changes in technology, information management, political changes, legislation
• Networking allows individuals and businesses to develop new contacts
• Power relationships drinking strategic alliances and influence agreed by aligning with Industry leaders, influential managers or government representative. Harnessing the power of collective-bargaining 
What does AHI mean?
Afrikaans Handels Institute
What does BBF mean?
Black Business Forum
Define environmental scanning
When is of an interaction with your environment around the business – local community, country and global situation
Defined networking
And important to which allows both individuals and businesses to develop new contacts. May open doors to new discoveries, new strategic alliances or sharing of resources to solve problems
What are safeguard specific to the individual?
PESTLE factors
What is physical in pestle?
Being aware of potential dangers – fires, floods infrastructure shortcomings
What is political?
Keeping up-to-date with current news and political threats. Not only in business is home country but also in countries where there are branches, suppliers and customers
What is ethical?
Know to what the login code and general business practice in similar businesses support.
Cognizance of issues such as religious and other beliefs 
What is economic?
State of the economy and factors such as inflation, exchange rates, recession and interest rates very volatile and management needs to keep the shop I’ll list
What is social?
Issues or differ depending on the demographics of its surrounding community, employees and customers. Management will identify the needs that are most prominent and said policies in place
What is technological?
Management has to ensure that they have the expertise, training and budget in order to keep up-to-date with competitors
What is legal?
Businesses that you know have a full-time lawyer legal department need to have someone on standby who knows them and is able to keep up-to-date with changes and help in crisis
What are environmental issues?
Ethical considerations of saving the planet and the degree to which customers and suppliers are influenced by environmental policies of the business
Why will management to use various tools?
To analyse and understand the environment of their particular business
Name the most common business tools
- SWOT Analysis
- Porters six forces model
- PESTLE Analysis 
What does strength stand for in swot analysis?
The advantages capabilities and resources. Marketing that reaches, distribute and awareness
What is weaknesses in swot?
Lack of competitive strength, financials, vulnerability, timescales, deadlines, pressures, continuously, supply chain robustness
What is opportunities in the swot analysis?
Market development and business product development
What are threats in this swot analysis?
Environmental effects, market demand, obstacles
How is the micro environment analysed in the swot analysis?
Strengths and weaknesses
How is the market and macro environment analysed in the swot analysis?
External factors such as opportunities and threats
Who developed porters six forces model?
Michael Porter
What is porters six forces model used for?
Analysing the industry within which a business operates which is widely used in today’s competitive markets. It is used to measure profitability
What type of view does the porters six forces model have on the industry?
Holistic view on the industry in which the business is operating
What aspect does the porters model look at?
• Level of rivalry in the market
• Availability of substitute products
• Threat of new entrance that may join the market
• Power of suppliers
• Power of buyers
• Complimentary products 
What is level of rivalry in the market?
The business must find out as much as possible about the competitors. Doing a competitor profile is not a legal. Just getting to know your enemy so you can pre-empt any actions and adapt its own strategies to be more successful
What is getting to know everything about the competitors consist of?
Patents, quality, brand loyalty, new products, marketing, promotion strategies, distribution channels, employees, organisational culture, morale,
What is the availability of a substitute product?
Competitors may be selling the same product. When the a lot of the substitute products you need to make sure that yours is cheaper
What is a substitute product?
A different product that satisfies the same need
What is the threat of new entrance to the market?
Want to look at future competitive threat in order to establish what threats and opportunities are in the market environment.
What does the greater the profits up an opportunity for?
There will be new entrance in the market.
How is the threat of new entrance diminished?
If there are certain barriers entering the market
What made some of the barriers include?
Brand loyalty from existing customers, government policies, huge capital outlay or distribution channels
Why is these barriers an advantage to existing operators?
It makes it more difficult for a business to branch out to diversification
What is the power of suppliers?
A business does not have power when there are lots of suppliers in the industry
What is the interest of both the supplier and business?
To strengthen and build on this relationship for mutual benefit. If this is not done the business will suffer financial, public relations and other consequences
What is important in order to be a successful business?
Right quality and quantity of material at the right time at a reasonable price
What is the power of buyers?
It is important to know the buyers in terms of the demographics and the geographical profile. They can also target their lifestyle such as hobbies recreation and political beliefs. When there are a lot of businesses we do not have power
What maybe business also supply goods to?
Intermediaries in the distribution channel
When would a geographical profile only be useful?
To identify regions where there is a high concentration following certain religions
How is this information obtained?
Primary or secondary resource
Why would a buyer consider different alternatives
If the buyer is not satisfied or feels the competitor off is a better value for money
What does buyers turning to alternatives mean?
Financial loss for the business
What are complimentary products?
Services or goods that add value to your original product which means they work better together than apart
What type of relationship does a complimentary product form?
A symbiotic type of relationship and a good marketing strategy would be used to Salit
What is pesto analysis?
Political, economic, social, technological, environmental, legal
Why should we categorise businesses?
They are so diverse an Operate on many different levels – understand similarities and differences 
What are the two ways the word sectors is define?
- Public and private sectors
- Primary secondary and tertiary sectors 
What does public and private sectors refer to you?
The type of ownership and the aim of business
What is the public sector?
Owned and controlled by the government with the aim of providing the necessary infrastructure in the company – enable citizens to live and experience or constitutional right
Name a few constitutional rights
Living, working and staying healthy
What is the public sectors primary drive?
Not necessarily profit driven which means that the government of an subsides them in order to keep the cost of usage to an affordable minimum
What is the private sector?
Businesses owned and controlled by individuals, groups of individuals with the aim of making a profit
What concept you own is used to make as much possible money?
Supply and demand
What does supply and demand mean?
The businesses that do not sell products that are in demand, give bag service will go out of business
How do you or physical products go through the sectors of the economy?
Go to different stages of development
How does natural things occur?
Without human interference but today man has learnt to cultivate, farm and raise animals by working with nature
What are the five categories of primary products?
- Agriculture
- Animal husbandry
- Fishing
- Forestry
- Mining 
Why did society start to diversify?
People could do what they were good at and enjoyed and swapped XS products for things they needed
Today how are these materials are produced?
Commercially with large companies which often create artificial environment in order to manipulate the conditions to produce bigger and better products
What is the secondary sector?
One that takes the role materials that have been extracted in the primary sector and convert them into products that suits the Tayson demands of the human target market
What are the important aspects of the secondary sector?
• Most products are fairly complex and will go through several processes
• Production process includes the packaging for resale. In the sector the product is ready for the consumer 
What is the tertiary sector?
Interest both the production run smoothly and the products get to the customer safely on the correct time and state
What does the tertiary Sector deal with?
Services
What are the two types of services?
- Personal services
- Commercial services 
What are personal services?
Done for individuals
What are commercial services?
Done for businesses
How can Numerous services fall into either category? 
Depending on who the client is
When does tertiary services occur?
Throughout the production process
Why do you all products have a service components?
They need to be manufactured, transported
When will the costing of the product component and service component to be taken into account?
In the final pricing
