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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
Globalization
The process where regional economies form global ones because of advancements in communication and transportation
26
Challenges from globalization
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
27
main ways in which a business can adapt to challenges
``` Information management Strategic responses Acquisitions or take overs Mergers Networking Lobbying Power relationships ```
28
Acquisition
When 1 business buys some or all of another business, it is a way to grow a business
29
Alliance
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
30
Takeover
The purchase of one company by another, it is a specific type of acquisition
31
Merger
When 2 businesses join together to form 1 and function as a new business
32
Lobbying
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
33
How does lobbying benefit a business
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
34
Bargaining with trade unions
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
35
Hedging against inflation
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
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Networking
A process where individuals or groups exchange information which is beneficial to each other
37
Benefits of networking
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
BEE
Black economic empowerment which is a form of affirmative action that business have to comply with Tries to address imbalanced of the past
39
Piracy
The illegal duplication of software or music
40
Bootlegging
The unauthorized recording of live performances or broadcasts
41
Royalties
Percentages of profit which are paid to the owner of an intellectual pice of work
42
Counterfeiting
When designs are copied as if they were originals
43
Dumping
Excess supplies are sold somewhere at much lower prices
44
Intellectual property
Refers to creations of the mind such as songs or films
45
Copyright
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
Patent
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
Trade mark
A symbol, name or expression that shows where a product comes from... i.e... its brand People judge trademarks for quality
48
Industrial relations
Refers to relationships between employee and employer and their trade union
49
Industrial action
Action undertaken by employees to protest against employment issues
50
Labour strikes
Occur when workers stop working and forfeit their pay to make an impact on employees
51
Strikes
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
Go slows
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
Picketing
When employees block the entrance to the company building | This effects the business operations and results in a loss
54
Lockouts
When their has been a disagreement and employers keep employees away from work until they have come to an agreement
55
Labour relationships act
Outlines relationship between employer and employees it also regulates the rights of trade unions and promotes facilities for collective bargaining
56
Trade unions
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
Roles of trade unions
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
Functions of trade unions
Collective bargaining Mediation Arbitration
59
Collective bargaining
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
Mediation
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
Arbitration
When a third uninvolved person hears each side of the story and makes a final decision which the parties have to accept
62
Grievance
A formal complaint laid by the employees when they feel they have not been treated fairly
63
Grievance procedure
A framework in which a grievance is resolved...
64
Stents to grievance procedure
- 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
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Primary sector
``` Extracts and gathers Farming Fishing Forestry Mining ```
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Secondary sector
Process the natural into fished goods | ... factories and construction
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Tertiary sector
Provides finished goods and services to other business or to end consumers
68
Backwards link
A business in a sector buy goods from a business in the same or different sector
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Forwards link
A business sells goods to another business in the same or a different sector
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Strategic responses
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
Intensive strategies
Aimed at increasing sales and market share by using available resources there are 3 types... Market penetration Market development Product development
72
Market penetration
Selling existing products into existing markets... e.g.. decreases in prices, more advertisements and promotions
73
Market development
Selling existing products into new markets e.g.. finding a new target market, exporting of stock
74
Product development
Introduce new products into existing markets
75
Diversification strategies
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
Concentric diversification
A business adds new products or services which are related to existing ones and will appeal to new customers
77
Horizontal diversification
A business adds new products which are unrelated to existing ones but may appeal to existing customers
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Conglomerate diversification
A business adds new products or services that are unrelated to existing ones but will appeal to a group a new customers
79
Defensive strategies
These strategies are usually resorted to when a business is under severe pressure with very few options.. there are 3 Retrenchment Divestiture Liquidation
80
Retrenchment
Decreasing the number of posts, the number of products, or closing a certain part of a business down
81
Divestiture
A business sells certain parts of the business which are non profitable, or sells off an asset which are not productive
82
Liquidation
By selling off assets of the business so as to raise cash to pay the debtors, employees and close the business
83
Different types of mergers
Horizontal integration- merging with another business in the same field Backward vertical integration-- merging with supplier Forward vertical integration -- merging with the distributor
84
Power relationships
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
Strategic alliance agreements
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
Persuasion of large investors
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
Company representative influence
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

Business Studies (8 decks)

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