Bus 321 Environmental

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Strategic Business Management

BUS 321
ANALYSING BUSINESS ENVIRONMENT
Telecommunication industry
Banking industry
Business environment
• These are internal and external factors
(environmental forces) that affect or
influence business activities.
• Knowledge of business environment sets
the foundation for development of
strategies for attainment of
goals/objectives.

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• The business environment is dynamic
and unpredictable
• Environmental scanning is a
continuous process

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Categories of business environment
• Two major levels:
– The external business environment:
made up by environmental
conditions/factors outside the
organizational boundary.
– The internal business environment:
Constitute environmental
forces/conditions/factors within the
organization.
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The external business environment
• Factors/conditions located outside the
organizational boundary.
• Sub-divided into:
– Macro business environment
– Micro business environment

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The Macro business environment
• Forces/elements outside the organization
which are beyond the control of the
firm/company i.e. uncontrollable factors
• An organization is required to adapt or
cope with those elements/factors.

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The economic situation Political/Legal
Household income ( purchasing power ) Political stability
Unemployment levels Government spending,
Interest rates eg on loans, deposits Attitudes of political leaders
Taxation towards various businesses
Exchange rates Laws and regulations (e.g. quality,
competition, tax, )

Demographic Social/cultural
Population Size (growth rate, distribution Values
Age structure(eg young, old) Beliefs
Ethnic groups Attitudes
Education level Lifestyles
Social groups

Technological Natural environment


Tools/systems in eg manufacturing, Geography and climate
  -eg natural resources
The micro business environment

• The micro environment covers factors


that may directly business activities
• The firm can influence the elements in
this environment as a result it represent
“the Controllable environment” of the
business

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Suppliers Consumers Distributors
number and size Target (intermediaries)
(supplier power) audience
affects price/cost (behaviors)
incurred by organizations

Competition
Attractiveness of the industry
Interest groups
Monitor business activities
-Media, general public
 
Five Forces Analysis
https://www.google.com/search?q=five+forces+analysis&rlz=1C1JZAP_enTZ881TZ881&sxsrf=ALeKk02uL_j2nvMfK-4cAkzeeUjnSCSlUw:1591164001697&tbm=i
sch&source=iu&ictx=1&fir=fsmGqojUDRB8pM%253A%252CTSOjqwcg19g_cM%252C_&vet=1&usg=AI4_-kT0OqsRvQzw0u-3soceRQmbkXb43Q&sa=X&ved=2a
hUKEwiEz-bo--TpAhUYCWMBHUOADZsQ_h0wAXoECAkQBA#imgrc=fsmGqojUDRB8pM:
INTERNAL BUSINESS
ENVIRONMENT
Internal analysis
• The internal business environment:
Constitute environmental
forces/conditions/factors within the
organization.
• Culture
• Structure
• Resources
Organizational structure
“a system of hierarchy in an
organization.

defines how activities


various activities are
directed toward the
achievement of
organizational aims.

Specifies lines of authority,


communications, rights and
duties of an organization
Structure…
Resources
Organizational Resources
Organizational
resources are
assets an
organization has
for carrying out
work activities and
processes

They can be
tangible or
intangible.
Organizational Resources

• Financial • Human resources


resources – Quantity and
– E.g. equity, cash quality of human
resources(skills,
reserves, etc.
experience)
• Physical resources • Intangible resources
– E.g. Equipment, • E.g. Brands
land, building,
$57.3 billion Brand value

 is the financial amount


your brand is worth.
 brand value is based on an
amount on the balance
sheet

brand equity is
the value of a brand based
on how important a
customer views
that brand. Brand
value can affect a
Coca-Cola's brand value  company's revenue and the
overall market.

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