Chapter 2.2 Flashcards
The mission statement and objectives of the business
What the business hopes to achieve
The functions of the business
-General management
-Human resource management
-Operations
-Logistics
-Marketing
-Public relations
-Information management
-Finance
The production factors of the business
Resources available to the business such as raw materials, capital
Influence of management on the micro environment
As a manager of your own business you will exert a direct influence on the mission statement and objectives of the business
The customer market
Consists of the end-customers who carry out transactions in order to buy or consume items
The industrial market
Goods and services are purchased and used for manufacturing products or providing services to end-customers in the market
The resale market
Manufactured goods are purchased by businesses with the sole purpose of reselling them to individuals or other businesses as a profit in this market
The international market
Market operating internationally include foreign customers, retailers and authorities
The government market
Goods and services purchased to render governmental services
The competition
-Each business tries to convince customers that its products and services are the best and that they should buy from their business
-As an entrepreneur, you should be aware of competitors activities as they may cause a threat to your business and know everything about each competitor
The suppliers of resources and services
Entrepreneurs must decide on products to manufacture and market, the quantities they can produce and the capital required
-The entrepreneur will be dependent on other institutions in the external environment to carry out activities
Economic
It consists of factors which influence the customers personal disposable income and their purchasing behaviour
The disposable income of customers is influenced by:
-Inflation
-Interest rates
-Trade cycles
Social
This environment is governed by the demographics of the population and social and cultural variables
Size and composition of the population
-Population growth
-Market composition
-Changing role of women
-Life expectancy
-Geographic
-Development level of the market
-Other considerations: Changing awareness, Times, Healthier lifestyle
Technological
It includes all aspects which give rise to new or improved products and services
-Technological development creates definite opportunities and may also constitute a threat
-A business must keep up to date with changes in the field to ensure that products arent obsolute
Physical
Natural resources in the country and the total management of these resources
Variables of the physical sub-environment
Limited and expensive
Environmentalism and pollution
Political and statutory environments
The government influences businesses through its fiscal and monetary policies
Variables that influence individual businesses
-Statutory provisions
-Trade Unions
-Associations and institutes
International
The business must keep abreast of variables operating in the international sphere
Influences that originate in an external environment beyond the country’s borders include;
-International technology
-International politics
-International economy
