Chapter 2.3 Flashcards
Define the macro environment
-Consist of a variety of variables/ forces that can affect the business positively or negatively.
-The positive or negative influence on the business can encourage or hinder the achievement of objectives.
List the major forces in the macro environment
-Economic
-Natural
-Political
-Technological
-International (Demographics)
Discuss the economic environment
-Consists of factors which influence the personal disposable income of consumers as well as their purchasing behaviour.
-Consumers have limited financial means to satisfy all their needs and :. forced to make a choice
List the Factors within the economic environment
-Interest rates
-Inflation
-Trade cycles
Explain Interest rates
= They’re an indication of the price at which money is available on the money and capital markets
a rise in rates = less spending
Define prime interest rate
The rate consumers pay to secure loans from financial institutions
11.75%
Define repo rate
The rate financial institutions pay to secure loans from SARS
8.25%
Explain inflation
Its the continual rise in the prices of products and services and it impacts the buying power
3-6%
Explain Trade cycles
Different phases in the economy
A business should be aware of the phase through which the economy is moving as each phase makes its own demands on the business
List the different trade cycles
-Prosperity
-Recession
-Recovery
Define the social environment
It is linked to the demographics of the market and the social and cultural aspects which may influence the market.
List the factors that influence the social environment
-Size and composition of the population: -Population growth
-Market composition
-The changing role of
women
-Life expectancy
-Geographical location
-Development of the market
List the other factors of the social environment
Changing life styles
Time
Healthier lifestyles
Define the technological environment
Embraces a rise to new products and services made available in the market
-It creates definite opportunities while also creating certain threats
Explain the natural/physical environment
This is the natural resources of a country
-Limited and expensive resources
-Environmentalism and Pollution
