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T-Technological

S-Socio Cultural

Deals specifically with the people of the community, country and target market.

Technology is changing at a rapid rate.

Businesses must stay aware of changes in trends and spending patterns.

Businesses need to adapt to the constant

Social economic issues also play a part.

L-Legislative

E-Economic

These factors have a big impact on consumer buying and spending patterns.

Laws and regulations have been put in to place to ensure a framework of legal systems for international trade and different industries.

Changes in interest rates, income levels, and inflatin all impact on business.

Changes in legislation/laws have an immediate impact on business operations.

E-Environmental

P-Political

The demand and supply of natural resources have an impact on the way businesses function.

Government plays a large role in the development of policies and legal framework.

Scarce resources may cause an increase in production costs and thus product prices.

Decisions made by government have a large effect on how a business operates.

PESTLE

Analysis used to measure the effects of the elements in the MACRO environment and its effect on the business

Macro Environment

  • ALL factors outside of the business.
  • Business has NO control and absolutely NO INFLUENCE.
  • All factors have an influence on the business.

Business Environments

Eight Business Functions

Administration

General Management

Levels of management.

Lower

Middle

Top

Responsible for collecting, processing and storing all data and information.

Management Tasks:

Leading

Controlling

Organising

Planning

Directing

Activating

Organisational structure

Functional

Project

Matrix

Finance

Types of Finance

Budgeting

Start-up

Borrowing money to start a business.

Capital Budget

Cash Flow

Drawn up every 3-5 years

Estimates fixed capital needed.

Money to cover running costs.

Replacement

Cash Budget

Money to replace computers & Equipment.

Purchasing

Done at the end of every financial year.

Estimates working capital needed.

Expansion

Money to grow a business.

Human Resources

It is essential that the department gets the best products and services at the lowest prices from the most reliable suppliers

Types of Capital

Sources of Finance

Bank Loans

Fixed

Land, buildings, machinery, equipment and stock.

Overdraft

Working

Wages, salaries, water and electricity.

Asset Based Loans

Own

Quantity

Quality

Grants

Money provided by the owners of a company.

Angel Funding

Borrowed

Money received from a finacial institution.

Venture Capital

To look after employees or workers.

Also responsible for recruiting

Timing

Activities

Price

Place

Suppliers

How are these related?

Public relations

Production

Responsible for the production of goods and services.

Production has to take products from raw to finished products.

Responsible for keeping cutomers, suppliers, shareholders and everyone else involved in the business happy.

Marketing

Assesses the demand of the consumers.

Marketing has to take note of the trends in the market and keep an eye on competitors.

Micro Environment

Components:

  • Vision, mission, goals and objectives.
  • Organisational culture.
  • Organisational Resources.
  • Management and Leadership.
  • Business Organisational Structure.
  • Eight Business Functions.
  • ALL internal business processes.
  • Business has FULL control.
  • It has the most direct positive and negative influences.
  • There are 3 environments:
  • Micro (Internal)
  • Market (External)
  • Macro (External)

Analysing the Micro Environment.

S - STRENGTHS

  • Positives for the business.
  • Factors that give the busine competitive advantage.
  • EG:
  • Good staff, good organisational culture, good facilities.
  • NOT: Market Share, Few competitors etc.

W - WEAKNESSES

The economy is a complex system, with both businesses and individuals interacting on multiple levels. It is NOT possible for one business to live independently from the system.

  • Negatives for the business.
  • Factors that the business eeds to work on.
  • EG: Bad staff, weak organisational culture, bad facilities.
  • NOT: Competitors, Change in economy etc.

Market Environment

Elements:

  • Customers
  • Suppliers
  • Competitors
  • Regulators
  • Unions
  • Intermediaries
  • Non-governmental organisations NGO's
  • ALL factors immediately outside of the business.
  • Business has NO control but can INFLUENCE.

Analysing the MARKET Environment.

O - OPPORTUNITIES

  • Chances to use aspects/elements to increase sales and profits.
  • EG:
  • Interest rates go down, Product sales increase.
  • NOT: New Products, Good business plan etc.

T - THREATS

  • Aspects of the market environment that could create problems.
  • EG: Interest rates go up, Competitor brings out new product.
  • NOT: Low productivity rate, weak staff development etc.

Analysing the MARKET Environment.

PORTERS 5 FORCES

Level of Rivalry in the Market

Threat of new entrants

Power of Buyers

Power of Suppliers

Availability of Substitute Products

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