Chapter 5 micro macro market
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Chapter 5: Micro, Macro & Market. Environments. RECAP : WHAT IS MACRO ENVIRON?. External Factors influencing a business Mangt has NO CONTROL over them Events r often BIG & COMPLEX Examples: Tsunami (affects whole country/world or community)

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Chapter 5: Micro, Macro & Market

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Chapter 5 micro macro market

Chapter 5: Micro, Macro & Market

Environments


Recap what is macro environ

RECAP: WHAT IS MACRO ENVIRON?

External Factors influencing a business

Mangt has NOCONTROL over them

Events r often BIG & COMPLEX

Examples: Tsunami (affects whole country/world or community)

Identifying MACRO factors is done through PESTLE


What is pestle

WHAT IS PESTLE???

PPOLITICAL ENVIRONMENT

EECONOMICS

SSOCIAL factors

TTECHNOLOGY

LLEGISLATION

EEnvironmental factors

EXTENDED PESTLE INCLUDES EXTRA:

PPhysical

EEthical


Trends or crisis

TRENDS or CRISIS

  • External environment very VOLATILE due to fast technology changes & globalisation

  • Events in macro environment occur either by

    • TRENDS (Predictable Changes eg Labour developments & economic trends)

      OR

    • CRISIS (Unpredictable changes eg flood, mad cow disease)


What s a strategy

WHAT’S A STRATEGY???

Very specific plan of action

To effectively use resources

To achieve organisation objectives

ADVANTAGES of strategies:

Gives DIRECTION

Ensures CONSISTENCY in decision making

DIFFERENTIATESmngtROLES & responsibilities

Puts broader economy into perspective

Anticipates CHANGES in environments

Helps create COMPETITIVE ADVANTAGE


8 steps to implement mngt strategy

8 STEPS to IMPLEMENT MNGT STRATEGY

  • DEFINE co.’s vision, mission & objectives

  • ANALYSE different environments in detail:

    • MICRO using e.g. SWOT

    • MARKET using e.g. SWOT

    • MACRO using e.g. PESTLE

  • Possible ISSUES a co. should consider when choosing strategy:

    • ROI

    • RISK factors

    • Potential for GROWTH

    • Co. Image

    • Effect of decision on o.ship

    • Political (BBBEE) or Social (AIDS)


8 steps cont

8 Steps (Cont.)

IDENTIFY various strategic options available

EVALUATE & Analyse viability of each option- RANK in order

PLAN implementation of chosen strategy

IMPLEMENT chosen strategy

MONITOR & CONTROL- manage changes


Different strategies

DIFFERENT STRATEGIES

  • CORPORATE:

    • GROWTH

    • DECLINE

    • CORPORATE COMBINATION

      • Joint Venture

      • Merge

      • Takeover

  • GENERIC:

    • LOW COST

    • DIFFERENTIATION

    • FOCUS (Niche)


  • Events from trends

    EVENTS from TRENDS

    EVENTS are from Trends OR Crisis

    Trends r PREDICATABLE- pre-empt what’s happening & plan ahead: Environmental Scanning

    Watch competitors

    Similar industries

    Learn from DEVELOPED nations

    Seasonal- learn for next time


    Events from crisis

    Events from CRISIS

    • Crisis: unforeseen circumstances

    • Have CONTINGENCY (what if...) plans

    • Eg 9/11 affected whole economy

    • 2 possible types of strategies to manage crisis:

      • RISK MNGT ASSESSMENT Strategies

      • DECISION TREES


    Risk mngt assessment strat

    RISK MNGT ASSESSMENT STRAT

    Pre-deciding“WHAT WOULD HAPPEN IF...”

    Scenario Planning

    Assess POTENTIAL physical 0r health RISKS

    Put contingency plans in place

    Eg. Insuranceco.s use this to det. Yr RISK PROFILE

    Eg. FACTORY uses this to have a plan in the event of THREAT.

    Would be a detailed plan


    Risk mangt assessment factory example

    Risk Mangt Assessment Factory Example

    • Factory Risk ASSESSMENT Would Specify:

      • Who in charge, duties

      • Other critical responsibilities

      • EMERGENCY EQUIP: Spare phones/radios, First Aid, Tel Numbers, Ee records

      • ESCAPE ROUTES & PROCEDURES: Eg deactivate lifts in a fire

      • TRAIN WORKERS: Train & practise evacuation

        In the event of emergency, Ees feel more in control as they know what to do, and who is in charge of what area of responsibility.


    Decision trees

    DECISION TREES

    Graphically shows options for COMPARISONbetw diff options avail.

    Promotes logical decision making

    Helps CLARIFY avail options

    Benefit is poss options r QUANTIFIED so each decision process can be CALCULATED and a value reached that shows PROBABILITY success of each option.


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