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Business Studies > Enviornments > Flashcards

Enviornments Flashcards

1
Q

A business is surrounded by 3 environments they are..

A

Micro
Market
Macro

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2
Q

SWOT analysis

A

A way to measure all the strengths and weakness of a business and how to carefully analyze it
It is 4 quadrants with 1 being weaknesses, 2 being strengths, 3 being opportunities and 4 being threats

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3
Q

The Micro environment

A

This is also know as the internal environment
It is all the activities and functions that happen within a business
It can be managed and has direct effect on the business

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4
Q

Components of Micro environment

A 
Vision, mission, goals and objectives
Organizational culture 
Organizational structure
Organizational resources
Business functions
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5
Q

What control do businesses have over their micro environment

A

They have full control over it, all components can be controlled by management

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6
Q

Micro environment ability to adapt to challenges

A

They can adapt easily, this is because everything is controlled with in the business so therefore can be changed.

  • Managers lacking skills can be trained
  • Problems can be identified, evaluated and new solutions put in place
  • managers must listen and respond to all stakeholders especially employees as they effect the success of a business
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7
Q

List challenges that could come up in the micro environment

A

Difficult employees
Increased departmentalization
Lack of management training and skills
Lack of vision mission and goals

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8
Q

The Market environment

A

This is an environment which functions outside of the businesses micro environment. They have a direct effect on the business though as they are all closely related
This environment is external to the business

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9
Q

Comments of the Market environment

A 
Suppliers
Customers/consumers
Competitors
Intermediaries
Trade unions (civil society)
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10
Q

How much control does a business have over a market environment

A

They don’t have direct control, but can influence components, as all components work externally of the business

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11
Q

Market environments ability to adapt to challenges

A

The key to adapting to all challenges here are relationships and information
management must research until they have as much info about…
-a large number of suppliers
-the needs/wants of customers
-how can intermediaries be used effectively
-the rules and regulations
-their competitors and what they offer

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12
Q

Challenges in the Market environment

A 
Their competitors 
Changes in consumers behavior
Shortage of suppliers or problems with them 
Their regulator and their rules 
Sociocultural factors
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13
Q

Tax

A

Financial charge imposed by the government

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14
Q

Inflation

A

The continuos increase in the price of goods and services, which results in a decrease of buying power

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15
Q

Interest rate

A

% of a borrowed amount of money that the borrower has to pay back to the lender

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16
Q

Exchange rate

A

The value of one currency in terms of another currency

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17
Q

Regulator

A

A body that ensures businesses adhere to all laws and standards

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18
Q

Examples of regulators

A

ICASA independent communications authority of south africa
NCR national credit regulator
FSB south african financial service board

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19
Q

Macro Environment

A

This is an external environment
All the functions that happen outside of a business and they have no control over
They indirectly effect the business

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20
Q

Components of Macro environment

A 
Physical or natural environment 
Global or international environment 
Social, cultural and demographic environment 
Institutional environment
Economic environments 
Technological environments
Political and legal environments
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21
Q

What control do the macro environments have over the components

A

They have no control over them, they happen completely independent of the businesses

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22
Q

Macro environments ability to adapt to challenges

A

Businesses which can successfully adapt to challenges in this environment will gain an edge over other businesses by…

  • being more prepared and flexible for economic fluctuations
  • spending more money on finding alternatives resources if supplies become scarce
  • taking advantages of the diversity with in the global market
  • promote itself as transparent, ethical, socially responsible and environmentally aware
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23
Q

Challenges in the macro environment

A 
Changes in income levels 
Economic factors 
Political changes 
Legal factors 
Lab our relationships 
Globalization 
Socioeconomic factors
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24
Q

Challenges of technological advancements

A

Job losses
Pollution
Expensive investments

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25
Q

Globalization

A

The process where regional economies form global ones because of advancements in communication and transportation

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26
Q

Challenges from globalization

A

A level of completion which disadvantages some developing countries
Counties taking loans they struggles to pay back
The spread of Allien plants and species
The rapid spread of dangerous diseases
Strong nations advancing at their own interests at the costs of weaker ones

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27
Q

main ways in which a business can adapt to challenges

A 
Information management 
Strategic responses 
Acquisitions or take overs 
Mergers
Networking 
Lobbying 
Power relationships
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28
Q

Acquisition

A

When 1 business buys some or all of another business, it is a way to grow a business

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29
Q

Alliance

A

An agreement between 2 businesses to pool together their expertise , it is usually motivated by a desire for cost reduction and improved service for the client

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30
Q

Takeover

A

The purchase of one company by another, it is a specific type of acquisition

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31
Q

Merger

A

When 2 businesses join together to form 1 and function as a new business

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32
Q

Lobbying

A

The process where a business tries to influence the decision made by officials
It can be done by various people who have similar motives, believes or commercial positions

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33
Q

How does lobbying benefit a business

A

Business can exert influence over regulators and other stakeholders
Team building can be facilitated
Strategic alliances can be formed
Persuading of further investment of capital

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34
Q

Bargaining with trade unions

A

Businesses have to have bargaining sessions wth trade unions to which their employees belong to
This requires very good negotiate skills
Businesses and trade unions have complicated power relationships
Essential for business to be fair, transparent, and have trust between the unions

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35
Q

Hedging against inflation

A

Business try to invest money in a way that the value of the money grows faster then inflation
It can protect capital of a business from inflation
Can be done by buying shares, property or precious metals

36
Q

Networking

A

A process where individuals or groups exchange information which is beneficial to each other

37
Q

Benefits of networking

A

Helps to develop new relationships and new opportunities
It can influence consumer behavior
Businesses can become aware of their competitors
Gain new/more customers
Create product awareness

38
Q

BEE

A

Black economic empowerment which is a form of affirmative action that business have to comply with
Tries to address imbalanced of the past

39
Q

Piracy

A

The illegal duplication of software or music

40
Q

Bootlegging

A

The unauthorized recording of live performances or broadcasts

41
Q

Royalties

A

Percentages of profit which are paid to the owner of an intellectual pice of work

42
Q

Counterfeiting

A

When designs are copied as if they were originals

43
Q

Dumping

A

Excess supplies are sold somewhere at much lower prices

44
Q

Intellectual property

A

Refers to creations of the mind such as songs or films

45
Q

Copyright

A

A type of intellectual property right, which refers to the exclusive right granted to a creator of an original work. Copying of copyrights are illegal
Copy rights are automatic amend don’t require registration

46
Q

Patent

A

Exclusive rights granted to an inventor of something which they have created for a limited amount of time. You have to get it processes by the government and usually last 20 years

47
Q

Trade mark

A

A symbol, name or expression that shows where a product comes from… i.e… its brand
People judge trademarks for quality

48
Q

Industrial relations

A

Refers to relationships between employee and employer and their trade union

49
Q

Industrial action

A

Action undertaken by employees to protest against employment issues

50
Q

Labour strikes

A

Occur when workers stop working and forfeit their pay to make an impact on employees

51
Q

Strikes

A

They are legal and protected by the governments only when they are called by a union and have been negioted with the employer for 30 days and they have been referred to the CCMA commission for conciliation mediation and arbitration

If this process has not occurred they are illegal

52
Q

Go slows

A

Workers do their work but at a very slow pace to try prove a point
They effect the productivity and income of a business

53
Q

Picketing

A

When employees block the entrance to the company building

This effects the business operations and results in a loss

54
Q

Lockouts

A

When their has been a disagreement and employers keep employees away from work until they have come to an agreement

55
Q

Labour relationships act

A

Outlines relationship between employer and employees it also regulates the rights of trade unions and promotes facilities for collective bargaining

56
Q

Trade unions

A

An origination formed by workers to protect the rights and interests through collective bargaining
COSATU congress of SA trade unions is the biggest one
Trade unions formed during the industrial revolution

57
Q

Roles of trade unions

A

Protecting the interest of its members
Advancing the interest of its members
Negotiations between employees and employers
Providing legal and financial advice
Providing benefits and training facilities to its members

58
Q

Functions of trade unions

A

Collective bargaining
Mediation
Arbitration

59
Q

Collective bargaining

A

When the employee together with the employer negotiate and bargain over aspects in the workplace, if an agreement cant be reached a mediator is called

60
Q

Mediation

A

When a third uninvolved persons comes to listen to the problem and guides them to try come to a satisfactory result, if the 2 conflicting parties still dont agree then an arbitrator is called

61
Q

Arbitration

A

When a third uninvolved person hears each side of the story and makes a final decision which the parties have to accept

62
Q

Grievance

A

A formal complaint laid by the employees when they feel they have not been treated fairly

63
Q

Grievance procedure

A

A framework in which a grievance is resolved…

64
Q

Stents to grievance procedure

A
  • A worker with a grievance brings it to the attention of a supervisor and they must try solve the matter within 1 working day
  • if the workers is still not satisfied they can submit a formal complaint in writing which is given to the relevant manager
  • the manager will then call a meeting within 1 working day unless agreed upon to extend it
  • minutes will be kept in the meeting
  • if the employee is still not satisfied they can then go to top level management
  • If their is still issues the problem can be taken up with the CCMA
  • a worker can appeal if he or she is still not happy
65
Q

Primary sector

A 
Extracts and gathers 
Farming
Fishing 
Forestry 
Mining
66
Q

Secondary sector

A

Process the natural into fished goods

… factories and construction

67
Q

Tertiary sector

A

Provides finished goods and services to other business or to end consumers

68
Q

Backwards link

A

A business in a sector buy goods from a business in the same or different sector

69
Q

Forwards link

A

A business sells goods to another business in the same or a different sector

70
Q

Strategic responses

A

Designed for various challenges
Done by analyzing all info, identifying stakeholders involved and getting a clear picture of each stakeholders viewpoints
Business who engage in strategic responses will have better negotiating power when dealing with suppliers

71
Q

Intensive strategies

A

Aimed at increasing sales and market share by using available resources there are 3 types…
Market penetration
Market development
Product development

72
Q

Market penetration

A

Selling existing products into existing markets… e.g.. decreases in prices, more advertisements and promotions

73
Q

Market development

A

Selling existing products into new markets e.g.. finding a new target market, exporting of stock

74
Q

Product development

A

Introduce new products into existing markets

75
Q

Diversification strategies

A

A growth strategy where a business markets new products in new markets, it is used to increase sales and ensure growth in a business.. there are 3 types..
Concentric diversification
Horizontal
Conglomerate

76
Q

Concentric diversification

A

A business adds new products or services which are related to existing ones and will appeal to new customers

77
Q

Horizontal diversification

A

A business adds new products which are unrelated to existing ones but may appeal to existing customers

78
Q

Conglomerate diversification

A

A business adds new products or services that are unrelated to existing ones but will appeal to a group a new customers

79
Q

Defensive strategies

A

These strategies are usually resorted to when a business is under severe pressure with very few options.. there are 3
Retrenchment
Divestiture
Liquidation

80
Q

Retrenchment

A

Decreasing the number of posts, the number of products, or closing a certain part of a business down

81
Q

Divestiture

A

A business sells certain parts of the business which are non profitable, or sells off an asset which are not productive

82
Q

Liquidation

A

By selling off assets of the business so as to raise cash to pay the debtors, employees and close the business

83
Q

Different types of mergers

A

Horizontal integration- merging with another business in the same field
Backward vertical integration– merging with supplier
Forward vertical integration – merging with the distributor

84
Q

Power relationships

A

A way in which business can gain some control over macro environments by establishing relationships with powerful people it can be done in 3 ways…
Strategic alliance agreements
Persuasion of large investors
Company representative influence

85
Q

Strategic alliance agreements

A

Agreements between 2 or more firms to engage in an activity on a shared basis
It helps build on the expertise of each parter and helps them to complement each other
Business that want to form an alliance must have similar objectives

86
Q

Persuasion of large investors

A

If a business has large powerful investors it can benefit by gaining credit more easily and get better deals from suppliers
Business can also note powerful people to sit on their board
Association with influential people has a positive influence on the business and its image

87
Q

Company representative influence

A

A company representative is someone who acts on behalf of the company
He/she represents the companies believes, policies, products and services
People rate business based on their representatives
This means that the representative should be selected very carefully

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