L7 l BUSINESS ENVIRONMENT l Macro Environment

Question 1

What is the Makro Environment?

Answer 1

Uncontrollable, external forces of a Business.

Question 2

What does PESTEL stand for?

Answer 2

P - Political
E - Economic
S - Social
T - Technological
E - Environment
L - Legal

Question 3

Political factors?

Answer 3

Political developments within a country or in other countries that have an effect on the business.

Question 4

Economic factors?

Answer 4

• These are factors such as inflation, exchange rates, interest rates and taxes.
• These economic factors could impact on the selling price of goods and services.

Question 5

Social factors?

Answer 5

• Social factors have an impact on the standard of living, the quality of life and disposable income levels of communities.
• These are factors such as poverty, crime, HIV/Aids, unemployment, etc.

Question 6

Technological factors?

Answer 6

• Technological factors poses both a threat and an opportunity for a business.
• A threat could be the fact that technology (in which large sums of money were invested), becomes outdated.
• n opportunity is the ability of a business to create a competitive advantage using new technology.

Question 7

Environmental factors?

Answer 7

• These are factors such as pollution, natural disasters, and oil spills.
• Impact on the ability of the business to obtain raw materials.

Question 8

Legal factors?

Answer 8

• Laws within a country.
• Examples of such laws: Labour Relations Act

Question 9

How do you analyze the Micro environment?

Answer 9

• SWOT (but only STRENGTHS and WEAKNESSES)

Question 10

How do you analyze the Market Environment?

Answer 10

• SWOT (but only OPPORTUNITIES and THREATS)

Question 11

How do you analyze the Macro Environment?

Answer 11

• SWOT (but only OPPORTUNITIES and THREATS)
• PESTEL Elements

Question 12

SWOT

Answer 12

STRENGTH
WEAKNESS
OPPORTUNITIES
THREATS

Question 13

Strength?

Answer 13

• internal capabilities of the business, which could be used to help the business gain a competitive advantage.
• Examples of possible strengths: The business’s ability to get hold of raw materials.

Question 14

Weaknesses?

Answer 14

• The factors which could limit the success of a business if these factors are not dealt with correctly.
• Poor marketing, lack of resources, low-skilled employees.

Question 15

Opportunities?

Answer 15

• These opportunities are seen as favorable external factors.

Question 16

Threats?

Answer 16

• These are unfavorable factors for the business originating from the market or macro environments.

Question 17

What does the PESTLE analysis help with?

Answer 17

Helps a business to understand the impact that each of the factors in the macro environment could have on the business.

Question 18

What are the 3 Characteristics of a business environment?

Answer 18

• Complex
• Multi-faceted
• Dynamic

Question 19

Why are business environments are complex?

Answer 19

• Because they are ever-changing due to the competitive and hostile factors within each environment.
• Different stakeholders, with each placing different demands on the business.

Question 20

Why are business environments Multi-faceted?

Answer 20

What is seen as positive for one stakeholder group might not be positive for another.

Question 21

Why are business environments Dynamic?

Answer 21

The business environments (internal and external) experience constant change.