Chapter 1

Question 1

SWOT Analysis

Answer 1

The SWOT analysis is a tool to used conduct an environmental scan.

Question 2

Micro environment

Answer 2

The micro environment is the internal environment of the business and it includes all the factors inside the business that could affect the source of failure of the business.

Question 3

Strength

Answer 3

A strengths of the business are the characteristics that give the business an advantage over others.

Question 4

Weakness

Answer 4

Weaknesses of a business are the characteristics that place the business at a disadvantage relative to others

Question 5

Opportunities

Answer 5

The opportunities of a business are the elements in the environment that the business could exploit to their advantage.

Question 6

Threats

Answer 6

The threats of a business are the elements that could cause trouble for the business.

Question 7

Porter’s 6 Forces

Answer 7

It is a method used to breakdown and understand the competitive nature of an industry or business.

Question 8

Market environment

Answer 8

The market environment consists of elements immediately outside of the business.

Question 9

Threat of new entrants

Answer 9

Refers to how easy it is to enter and leave the market.

Question 10

Rivalry amongst existing competitors

Answer 10

It is where the existing competition uses tactics such as price competition, product introduction, and advertising campaigns.

Question 11

Threat of substitutes

Answer 11

When companies are forced to compete with industries producing substitute products or services.

Question 12

Bargaining power of suppliers

Answer 12

Refers to the pressure that suppliers can put on companies by raising their prices, lowering their quality or reducing the availability of their product.

Question 13

Bargaining power of buyers

Answer 13

The customer’s ability to drive the prices of a product or service, compel brands to improve quality and nudge them to offer better customer service.

Question 14

PESTLE Analysis

Answer 14

Assessing the macro environment with the use of PESTLE helps align the business to forces of change that could affect the business.

Question 15

Macro environment

Answer 15

The external environment of an organisation that they have no control over.

Question 16

Political

Answer 16

Political factors centre on the role of government in shaping the business.

Question 17

Economic

Answer 17

Economic factors are the determinants of the economy’s performance.

Question 18

Social

Answer 18

Social factors are influences on consumer behaviour.

Question 19

Technological

Answer 19

Technological factors refer to the way new practices and equipment can affect the business.

Question 20

Technological

Answer 20

Technological factors refer to the way new practices and equipment can affect the business.

Question 21

Environmental

Answer 21

Environmental factors make up the physical and social environment in which people live and conduct their lives.

Question 22

Legal

Answer 22

Legal factors pertain to any legal forces that define what a business can or cannot do.

Question 23

Conclusion

Answer 23

This report suggests that the business…

Question 24

Complementary

Answer 24

The effect of complementary goods on an industry’s profitability generally depends on how reliant the product or service is on the compatible product.