Influences on factors and challenges relating to macro environment Flashcards
(35 cards)
Name the 7 macro environments.
- Physical/natural environment.
- Economic environment.
- Legal and political environment.
- Institutional environment.
- Technological environment.
- International/global environment.
- Social, cultural, and demographic environment.
Describe the physical/natural environment.
The physical/natural environment consists of:
- Natural resources - raw materials that are used as inputs to the business
- Physical location - where the business is situated.
- Infrastructure - man-made facilities and systems that support the functioning of the business (transportation systems, communication networks, utility supply and other services.)
Describe the economic environment.
The economic environment refers to all the economic factors affecting businesses and consumers.
What are the stages of economic growth?
- Stage 1: Expansion
- Stage 2: Peak
- Stage 3: Recession
- Stage 4: Recovery
Describe the legal and political environment.
The legal environment consists of all the laws, policies, and regulations that ensure consumers, society, and businesses are protected.
The political environment refers to the politicians who create these laws, policies, and regulations.
Describe the institutional environment.
The institutional environment includes government departments, municipalities, and other state institutions.
The government is a regulator, a consumer/customer, a supplier and an employer.
Describe the technological environment.
The technological environment refers to all the tools and machines used in businesses.
Technology has improved business operations, communication, production and marketing.
Describe the international;/global environment.
The effects of events that happen outside the borders of South Africa and factors that affect international trade (imports and exports).
Describe the social, cultural, and demographic environment.
- The social environment refers to factors that affect society - poverty, HIV/AIDS, unemployment.
- The cultural environment refers to religion, traditions, and communities.
- The demographic environment refers to aspects of the population such as age, race, gender, etc.
What control/influence does the business have over the macro?
No control/influence, however, can develop strategies to address factors.
In a SWOT analysis, what addresses the internal and the external?
- Internal strengths and weaknesses (micro environment)
- external opportunities and threats (market and macro environment)
What does PESTLE mean?
P: political
E: economic
S: scoiological
T: technological
L: legal
E: environmental
What are the steps for conducting a PESTLE analysis?
- Understand the PESTLE factors.
- Gather information.
- Analyse the findings.
- SWOT or action plan.
Why is political instability bad for business?
- discourage investment (foreign)
- have a negative effect on consumer confidence.
What are some challenges for businesses that are involved in international exporting/importing?
- Fluctuating exchange rates.
- Must compete with international companies.
What is a trade agreement?
An agreement between countries, to limit barriers to trade so that both countries can benefit from increased trade.
What are trade sanctions?
Laws passed that make it difficult for a country(s) to trade with other countries.
What are excise duties?
Levies imposed on high-volume daily consumable products. (petrol, alcohol, cigs)
Name some sociological factors that affect businesses.
- Poverty.
- Unemployment.
- Education.
- HIV/AIDS.
- Crime.
How can businesses use resources responsibly?
- Using water responsibly.
- Recycling materials.
- Sourcing sustainable materials.
What is micro lending?
Micro lending is granting of small loans to people who cannot obtain credit from banks.
What is the management information system? (MIS)
The process of controlling information in a business.
What does management information systems involve?
People - employees who gather, analyse, distribute, and use the data and information.
Data - the data and information gathered from reliable sources.
Software - software used to capture and analyse the data and information.
Hardware - the computers, printers, and servers used to capture and store the data.
What are the steps to developing a strategic response?
- Identify the challenge.
- Define the challenge.
- Gather and analyse information.
- Identify the stakeholders involved.
- Develop an understanding of each of the stakeholders viewpoints and requirements.
- Design a strategy to adapt to the challenges that meet the needs of the business and all stakeholders.
