The Micro, Market and Macro Environments Flashcards
Reasons for Environmental Scanning (4)
- Identify threats
- Identify gaps in the market
- Competitors
- Strategy making
Environmental scanning before (4)
- Viability of product
- Strength of competitors
- Potential market size
- Stability of resources
Steps in Implenemting Management Strategy (8)
- Define business VMGO
- Analyse the environments in detail
- Consider possible issues when choosing
- Identify various strategic options
- Evaluate and analyze viability
- Plan implementation
- Implement
- Monitor and control
Micro Environment (8)
- Vision Statement
- Mission Statement
- Long-term and Short-term Objectives
- Choice of Strategy
- Culture of the Business
- Resources in the Business
- Business Functions
- Techniques to identify challenges
Business Functions (8)
- General Management
- Financial Function
- Human Resources
- Marketing Function
- Production Function
- Purchasing Function
- Administrative Function
- Public Relations
Techniques for challenges (4)
- SWOT
- Resource-Based Approach
- Value Chain Analysis
- Balanced Scorecard
Elements of the Market Environment (7)
- Consumers
- Intermediaries
- Regulators
- Competitiors
- Unions
- Suppliers
- NGO’s
Environmental Scanning Methods (2)
- SWOT Analysis
- Porters five forces
Porters Five Forces
- Level of rivalry
- Availability of substitute products
- Threat of new entrants
- Power of suppliers
- Power of buyers
PESTLE
- Political: International terrorism, Civil war, taxes, corruption, BEE, political stability
- Physical: Geography, climate, infrastructure, natural resources, basic services
- Economic: GDP, inflation, unemployment rates, exchange rates, interest rates
- Environmental: Global warming, recycling, carbon footprint, natural disasters, pollution, deforestation
- Social: Lifestyle choices, unemployment, poverty, crime, protests, HIV, cultural issues
- Technological: Innovation and progress, shorter production cycle, computer software, communication, transport, internet
- Legal: International laws, technology laws, any Acts, health issues on labeling
- Ethical: Waste, intercultural, piracy, child labor, sweatshops, fair trade
Kinds of Strategies (4)
- Informal Strategies
- Standard Strategies
- Simple Strategies
- Complex Strategies
Advantages of strategies (5)
- Gives direction in decision making
- Consistent decision making
- Differentiates roles
- Puts business in perspective
- Anticipates changes in environments
Types of Business Strategies (3)
- Corporate Strategies
- Generic Strategies
- Intensive Strategies
Corporate Strategies (3)
- Growth Strategy
- Decline Strategy
- Corporate Combination Strategy
Growth Strategy
Strategy to increase the market share
Decline Strategy
During difficult times.
> Divestiture: Selling parts of the business
> Harvest: Withdrawing large amounts of cash
> Liquidation: Business is sold
Corporate Combination Strategy
- Joint Venture: Business and stakeholders coming together
- Merger: Businesses combine by mutual consent
- Takeover: Buying most/all of a target company
Generic Strategies (3)
- Low cost Strategy
- Differentiation Strategy
- Focus Strategy
Low cost strategy
Outcompeting everyone by having the lowest cost
> Increase profit by reducing cost
> Increase market share by having lowest cost, so largest share
Differentiation Strategy
Different from competitors
Focus Strategy
Totaly understanding their market niche
Intensive Strategies (3)
- Market Penetration: Existing market, existing product
- Product Development: New product, existing market
- Market Development: New market, existing product
Other Strategies (3)
- Revise business mission
- Establish new objectives
- Allocate resources differently
