1 / 25

COMP3357 Competition & Business Environment

This article discusses the tools used to analyze the macro and micro business environment, such as PEST, PESTLE, and SWOT analysis. It also explores the factors that affect the external business environment and their impact on competition. Additionally, it covers the concept of co-opetition and the role of e-business systems in transforming business.

risom
Download Presentation

COMP3357 Competition & Business Environment

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. COMP3357Competition & Business Environment Richard Henson University of Worcester April 2017

  2. Objectives • List most popular tools used to analyse the macro environment and micro (i.e. internal & immediately external environment) • Explain PEST and PESTLE and the information they provide • Explain SWOT analysis and its value to the business

  3. External Matters • Anything outside the organisation’s “system boundary” • could be business partners • could be government • The partnership with another entity will be in the context of sharing data for mutual benefit

  4. Economic Environment • The financial system in which the business is having to function • Local/regional factors (micro-) • National factors (macro-) • These factors can combine to encourage or discourage business growth

  5. Macro-economic Environment • Dependent on government-controlled factors like: • Government business growth funds • bank interest rates • income tax levels • VAT levels • corporation tax levels

  6. Micro-economic Environment • Factors that effect the local/regional economy: • Council tax rates • Local Enterprise Partnership business growth funds • Local council projects

  7. Business and Society • People buy products • People will buy (or not buy) for a complicated series of reasons.. • Examples (in pairs…)

  8. Reasons to Buy… • Peer pressure? • Price? • Expert recommendations? • Labour-saving? • Image of product? • Ethics of conditions creating the product

  9. Business Environment Analysis… • Macro environmental factors (PEST): • Political • Economic • Social • Technological • All effect the ability of a business to perform well…

  10. Extending “PEST”... • Two other factors… • legal • ethical • PESTLE

  11. A third macro-environmental breakdown of factors • SLEPT • PEST plus Legal • leaves out ethical (!) • What do you think about this!?

  12. Interactions between factors • To complicate matters further… • these factors all affect each other • e.g. Technology • affects economics & social habits • effect on politicians because of public opinion

  13. Political Response to public opinion? • Usually respond by • changing existing laws/regulations or • bringing in new ones… • Legal response to information technology advances etc… • UK government approach… “hands off” • leave it to market forces)

  14. Laws, Regulations, and Information Technology • Passing effective laws takes a lot of consultation etc… • Technology moving forward quickly (especially IT) • falling behind? GDPR an effort to catch up?

  15. Information Technology and Social/Socio-cultural matters • Strategic issues involving the use of the online business environment… • Legal/ethical • security of suppliers, partners, customers’ data • Social • acceptability of new technologies e.g. direct sales online, and email

  16. Social/age-based exclusion (no computer; not computer-literate; choice) • Legal – data protection, computer misuse… conventional laws, across national boundaries… • Ethical – use of cookies, etc. to target marketing • How these affect business direction...

  17. SWOT Analysis(internally focussed factors…) • Strengths • Weaknesses • Opportunities • Threats

  18. Why SWOT? • Despite “business planning”… • corporate initiatives don’t always go as planned! • more effective analysis required • SWOT developed by an academic… became popular in the 1970s • Typically presented as a 2x2 matrix…

  19. SWOT Matrix

  20. Competition • Basic principle of business • customer can choose from a range of products in a number of businesses • Competitive Forces (what drives competition?) • studied by academics (e.g. Porter) • wrote an International best seller about what he saw as 5 competitive forces

  21. Porters 5 Forces • Existing competitive rivalry between suppliers • Threat of new market entrants • Bargaining power of buyers • Power of suppliers • Threat of substitute products (including technology change)

  22. Co-opetition • Competitor businesses working together towards a common goal • more scope for this with e-business • share data • make supply chain more efficient? • common specialised e-marketplaces • Porter’s 6th Force…?

  23. E-business Systems to transform business • e- Business 2.0 • payment systems • e-procurement • e- SCM • e-marketing • e-Retail, e-CRM

  24. Thanks for listening… • Think about factors affecting business competition in the online environment… • We’ll cover them in more depth after Easter

More Related