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Introduction to Business Environment
23/01/2018

Business Environment - is all he forcers / Factors that effect the survival of the business
...

2
...

4
...


Change - It can be Technical and human Change

Large Size, Might detract and attract talent

Diversification - Life Cycle of a Business - 1
...
Growth , 3
...
Decline

Globalisation - Introducing your product in to a new market( Country)

etc


Forces( Direct or Indirect impact ) ares are outside the control and influence of a
business
...
E
...
Develop

2
...
Analysis - Monitoring competitor behaviour
...
Keep

Categories of B
...
Internal Env
...
Leadership and Management - Charisma , Friendly , Passionate - Employees want
a leader who is likeable
...
External Env
...
Micro , B
...


1
...
Leadership Style

3
...





2
...
Political - education , health and quality

Margret Thatcher - 1970 - Deregulate the market( Look Up )


2
...
C is GDP - ( How much an economy
Inflation

Exchange Rates


25/01/2018

3
...



⁃
Divorce Rate , High divorce rate ( Diversify and change my product? ) - Will its
effect me ?


⁃
Culture - Teen , Individual , Group and the impact of culture ( unique selling
point ) , what kind of culture does the business have and how does the organisation treat
its employees ??


⁃
Religion - The type of message and how you advertise your product
...
Technological

- CRM - Customers Relationship Management - Targeting customers effectively ,
customers know you better
...
Technology

• Reduces costs
...
Environmental Factors

Climate Change


⁃
it’s creating new markets


⁃
diminishing or destroying existing ones


6
...


- The greatest Impact
...


Strategy Formulation
Definition :

“Determining the appropriate course of action for achieving organisational objectives and
purpose
...
build on their strengths

2
...
protect against internal vulnerabilities and external threats


Strengths

Ability is evaluated on 3 counts

• Versatility ; your ability to adapt to an ever changing environment
...
Franchise

2
...
Vertical or Horizontal Integration

4
...
E-commerce

• Markets: your ability to generate or create new markets
...
Utilising media to create new markets


Agile Organisations

-technical side , less controversial

-human side , much more difficult

The strength of resources has three dimensions :

A
...


1
...
Human Talent and knowledge

B
...
Allocation : your ability to distribute resources both effectively and efficiently


Opportunities

An opportunity is any situation which can be exploited favourably


- A trend or change of some kind

- an overlooked need that increases demand for a product or service

Threats

Can arise from both an internal and external factors
...
Consumers - adapt to their changes and interest , understand their needs and wants

2
...
1st step is to negotiate — in order to build a relationship
...
Shareholders( external parties ) - The owners of the business ( They win a share of the
business)
...


4
...
Consumer Movements

5
...
(the individuals depend on the
organisation to fulfil their own goals and whom , in turn, the organisations depends
...
Stakeholders
are individuals, groups or organisations that are affected by the activity of the business
...

Managers who are concerned about their salary
...

Customers who want the business to produce quality products at reasonable prices
...

Lenders who want to be repaid on time and in full
...

Business activity also affects the local environment
...

Internal stakeholders are groups within a business — eg owners and workers
...
”
The government & Media

Primary Forces
Porters model suggests that in order to develop effective organisational strategies
managers must: 1
...
React to those external forces within an industry that
determine an organisations level of competitiveness

Business Portfolio Analysis

The business portfolio is the collection of :

1
...
Products that make up the company


Boston Consulting Group Matrix

06/02/2018

Demographic Research
- We use this research to understand the Demand ( `customer’s characteristic and life
styles) We use this research to understand the work force ad what type of employees are
available to the business
...


- The demographic helps us understand the social changes in the world
...

2
...

4
...


Rapid urbanisation
Climate Change and resource scarcity
Shift in global economic power
Demographic and social change
Technological breakthrough

Data Collection Method
Direct Method - collected through a statistics registries (census) includes births and deaths
and as well as legal parts such as marriage, divorce and migration — census
...

Underlying demographic trends
Example :
-Who expects depressions to be the No
...
Customers
2
...
Demographic Trends

Market Segmentation
1
...
Demographic
3
...
Behavioural

5
...

This data is often compared using a population pyramid
...

-exhausting its supply of cheap labour
-move from rural areas
-get an education
-become more expensive
The Lewis Turning Point - this point in an economy’s move through industrialisation and
beyond

13/02/2018

Social and Cultural Environments
-Study and understand the cultures of the countries in which they will be doing business
...


{Neuroplastcity -

Change of a process and the first reaction is — 0% — logical and 100% — emotional }

-Incorporate this understanding into the marketing planning process
...



Culture
Culture - ways of living, built up by a group of human beings, that are transmitted from one
generation to another
...
Clothing

2
...
Decorative Arts

Subjective or abstract culture

1
...
Perceptions

3
...
Beliefs

5
...
g
...


Convergence is good because entrepreneurs are able to sell the same product to a bigger market
= more money = more competition and more entrepreneurial activity
...


Innovator means they simply create a product or service
...



“It describes the effects of a society's culture on the values of its members, and how these
values relate to behaviour, using a structure derived from factor analysis
...
g
...
Individualistic / Collectivistic : Personal Needs and Goals vs needs and goals of the group /
clan/organisation


2
...
It’s about characteristics of human behaviour
...

Feminine - nurturing and caring
...
”
“Femininity stands for a society in which social gender roles overlap: Both men and women are
supposed to be modest, tender, and concerned with the quality of life
...
Uncertainty Avoidance: How comfortable are people with changing the way they work or live
(low UA) or prefer the known systems ( high UA)
...
Avoids or Embrace Uncertainty

4
...
Accept of
inequality in distribution on power in society
...
“measures
the extent to which the less powerful members of organisations and institutions [like the
family) accept and expect that power is distributed unequally
...
Time Perspective: Long-Term perspective, planning for future , perseverance values vs short
time past and present oriented
...
Indulgence/Restraint : Allowing gratification of basic drives related to enjoying life and having
fun vs regulating it through strict social norm
...
Should you consider it or not depending on the
culture of the country and society
...



- Their might be jobs to offer but no talent within the county ( They will attract foreign talent )

- Their might be no jobs and high amount of talent , this is were people move abroad

Skill shortage can be due to corruption and narrow mindedness
...
Teamwork

2
...
Responsibility

4
...
Resource Capabilities - Employee force ( talent , skills , knowledge , machinery ,
Assets( Tables and chairs and facilities), Capital ( Finances)

- Core resource and secondary resources - SWOT analysis )

2
...
The Structure of the organisation and the characteristics of its culture
...
Performance of the organisation


Internal Analysis

1
...

Unique resources, capabilities, and core competencies
Core Competencies
- Key strengths and attributes

Challenge of Internal Analysis
1
...
How do we assemble bundles of resources, capabilities and core competencies to create
value for customers ?
3
...
Uncertainty
2
...
Intra organisational Conflicts - among people
Mission Statement
- Why the company exists and Purpose of organisation ( Slogan or catch phrase)
...

2
...

4
...


What is our business ?
Who is your customer?
What is the value to the customer?
What will our business be?
What should our business be ?

Mission statement Is a reflection of :

1
...
The previous history of the organisation, in particular any distinct competencies it has acquired
or images it has created in the eyes of potential customers - You create this through reputation Culture, product , brand image
3
...


4
...


Organisational ( Corporate ) Culture

Hoefstede

Is pattern of basic assumptions that are considered valid and that are taught to new members as
they way to :

1
...
think and

3
...
sense of identity

2
...
reinforces the values in the organisation

4
...
It helps us understand the
boundaries , limitations and rules of the culture

22/02/2018

Culture values can be shared in a number of ways, including
1
...
How authority is exercised and delegated
...

E
...
Steve Jobs - wanting things a specific way
...


3
...

Employee evaluation is important to assess employees weaknesses and strengths and you use
rewards to help them achieve their goals
...
By training , offering money, employee people, offer bursaries ,medical
benefits
...


- To assess who to let go and stay
...
The values and work orientated staff
5
...

employees have rights and responsibilities
...


6
...

- It reduces risk ,

- decrease productivity

- lose money without structured process

- conflict amongst employees

- creates confusion if there is no structured process amongst employees , managers

- It removes barriers of inclusion and reduces discrimination
...
How much initiative, risk taking, scope for individuality and expression is given
...



Resources
> Resources are assets employed in the activities and processes of the organisation

>They can be tangible or intangible

Intangibles ; patient -

trademark -

copy rights -

logo-

>They can be obtained externally and internally generated

Eternally - you might have to bring from the outside of the organisation, outsourcing e
...

consultants

Internally

>They can be specific and non-specific

> Specific resources can only be used for highly specialised purposes and add value to
god and services

> Less specific and are less important in adding value , but are more flexible


Fall in Several Categories
1
...

3
...

5
...
They are assets like industry-specific skills, relationships and organisational
knowledge which are largely intangible and invisible assets
...
Competences and capabilities will often be internally generate , but may be obtained
by collaboration with other organisation
...
Certain competences are likely common to competing businesses within a global
industry or strategic group
...
10 Multiple chose questions
2
...
are combination of resources and capabilities which are unique to a
specific organisations
Potential sources
1
...
Architecture
3
...
Strategic Assets
Criteria to evaluate Core Comp
1
...

2
...

3
...
Durability: How long does it take to be replaced by an alternative competence?
5
...
e
...
apple
...
Adaptability : How easily can the competence be leverage( find , acquired) or
adapted ?

7
...


Creating engagement by employees
...
employing people,
2
...
utilising
4
...
compensation their services
Purpose is to achieve the company’s target
...
Designing organisation structures ( What goals you want to achieve , the tasks to
achieve the goal and make vacant the positions needed to do the tasks )
2
...
Selecting and developing the people required to fill the roles: the right people, with
the right skills
...
Technically and Soft skills ( Interpersonal skills )
2
...
- The
conditions of the work environment
01/03/2018

The core of an Engaged Employee
1
...
Cognitive Commitment (Thinking)
3
...
Developing employment packages
2
...
Training - Look at one point in time - the weakness of employee from a skills point of
view or personality point of view and how can we close the gap
...
Development - Where we see where want to see ourselves as an organisation and do
we have the skills to fulfil those objectives
...

Welfare Functions can also assist performance by providing constructive assistance to
people whose performance has fallen out
...


Administration Objectives
The 4th type of objective is carried out in order to facilitate an organisations smooth running:
Hence there is a need to :

1
...

3
...

5
...

2
...

4
...
( the series( activities of
adding value to a product to sell ) - this includes marketing , HR , R&D , and
manufacturing , These are chain of events to deliver the product or service to the
customer , to make them happy and satisfied in order to create customer loyalty and
gain a competitive advantage over or competitors
...
Competitive advantage

a
...
value -adding activities
Resources should be superior to its competitors
2
...

A
...
Lower cost than competitors
2
...
Porter extended value chain analysis to the value system, analysis of the relationship
between the organisation, its supplies, distribution channels and customers
...
Configuration
- Concentration
- Dispersion

- Change in the business environment
2
...

2
...

4
...
Discuss the evolving role and functions of stakeholders in business
organisation
...
In the microenvironment is
suppliers , shareholders, competitors, customers, and intermediaries
...

Stakeholders can have a high or low influence or power over the business or high or low
interest in the business
...
We
can use the power matrix to determine wether they have power and/or interest in the
business
...
Shareholder



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