hi there welcome to my YouTube channel my name is teacher Elona Smith and on this channel I focus on teaching business studies for grades 10 11 and grade 12 today we're looking at the first chapter for term 1 which is influences on the business environment so stay tuned and I hope you [Music] enjoy all right so let's kick it 2024 we're looking at the influences on the business environments so let's go here is the book that I have used to make these slides today I take no credit for the information given and created in these slides it is used for the main purpose for the student and I've used the words as is just to make sure that everything is exactly the same and that I'm worried if I paraphrase it it may change the meaning and we know with business studies we do need to write the exams word for word so that is why I have done so all right what we will be looking through today we'll be revising the components of the micro macro and Market environment we'll be looking at the business's control over these environments and then briefly looking at the challenges remembering that the challenges is a sep for chapter which we will deal with in another video all right so in grade 10 you learned that a business operates in three different but interrelated environments these environments are the micro macro and Market environments bearing in mind the reason they saying interrelated is because they all work together they can't work by themselves so you need all three of the environments in order for a business to operate and you can't EX exclude or ignore one of the environments so for a business to be successful entrepreneurs need to constantly be aware of the challenges in the three business environments and they need to come up with strategies which can be turned into opportunities before we move much further let's look at a typic example of a challenge we had the pandemic and um if you think about the impact that that had on colleges and universities so because of that they it obviously was a challenge but they came up with strategy so that they can do the learning online and since then you can see how much online learning we do nowadays and I must say I do think that was definitely expedited because of the pandemic so here are the three different environments the micro macro and Market it's a nice little diagram I would encourage you to pause the video at this stage take a um a picture of this diagram and jot it down you'll see the micro they're all inside each other so now it's an easy way to remember these is that the micro is on the inside visually you can see it's on the inside so it's the inside of the business the market is going a little bit out and then the macro is going further out so the further out we go the more we lose control okay if you remember from grade 10 Micro we have full control Market we have less control and we can also influence and then when it comes to macro we have no control so the further out it goes from our Circle the less control we have over it all right so let's revise these components we're looking at the micro environment the micro environment as I said it's on the inside internal okay can remember this for the i in micro micro has the I so we know it's internal and it's inside it includes everything inside the business all the internal affairs of the business are managed by the directors or the owners of the business the micro environment is also known as the internal operating system a business has full control or complete control over this environment so what are the components we did look at these in grade 10 so this should J you memory Vision the mission the goals and objectives the organizational structure the organizational resources the organizational culture management and Leadership and then the eight business functions the market environment the market environment is the immediate external environment of the business the business has limited or little control over this environment for the business to be successful it has to be able to influence these components within the environment so what are the components customers suppliers intermediaries competitors and then other organizations such as cbos ngos Regulators strategic allies and unions then we're moving on to the macro environment the macro environment is the broad external environment of the business a business has no control over this environment remember what I said with the diagram and so it needs to adapt to the challenges in in this environment in order for them to succeed now if we think about the pandemic just try and brainstorm and think when I'm done with the slide I'll come up with the answer which environment would the pandemic fit would it fit in the micro the macro or the market environment so the components include social political legal economic technological physical and then Global or internal environments there's a nice little acronym of pestl so pestl um if we go through it the P stands for political the E is economical the S is our social the t is our technological and then our L is our legal and then our other e is our environmental that's where that one fits in the internal environment consists of the micro environment of the business and the business itself whereas the external is the market and the macro environments remember that that's a nice one for a multiple choice question so to answer your question the pandemic would definitely be in the macro environment firstly because it is external it didn't happen within the business it happened globally secondly we had no control over it when the government put in the legislation for businesses to close because of the crisis the businesses had no control over that so that's why it is the macro environment then the business control over these environments the success and profitability of a business depends on the factors within these three business environments entrepreneurs may try to influence or to control some of these factors to create conditions that will be favorable to the business so for example businesses May influence the government to ensure that the laws that prevent them from achieving their goals are not passed but remember we are influencing we cannot change their mind we cannot tell them what to do we can just influence and give our input and hopefully that they don't let these laws pass not all factors in the three environments can be influenced or controlled by businesses some can easily be be controlled by the business While others are not as easy to control so for example excuse me a business has full control over the prices of its goods but has little control over the components in the market environment such as the suppliers or the actions of our competitors in addition a business usually has very to little control over the factors in the macro environment okay so remembering some things we can influence and some things we can try and control but we can't control everything um a couple years ago when I think it was 2015 when there was an increase in vet when vat went from 14 to 15% did the businesses have control no they just had to comply another example is when they put a sugar tax in place in South Africa to try and overcome obesity um so when that happened as well Coca-Cola and these type of companies they did try and obviously influence the government to not let these laws pass but at the end of the day they did and now they needed to find strategies and ways on how to combat it that's why nowadays I get a bit confused in the shop sometimes you get all your different types of Coca-Cola bottles have you noticed there's a 2 L there's a 1 and A2 there's a 1.75 I think so that's a way that they could combat it they just made the quantity smaller but kept the price the same so as consumers cuz we're in such a mad rush we would look and say oh Coca-Cola bottle it's the same price as what I'm used to we grab it only when we get home do we beow okay shoot it's not it's not a 2 L it's a 1.75 I've made this mistake a couple times so speaking from experience so control over the mic micro environment the business remembering again has full and complete control over this environment it can influence the internal functions of the business and exercise control by doing the following remembering again we have full control so we can establish and revise its Mission Vision goals and objectives to be in line with the current trends it can engage in Strategic Management systems and ensure that plans are implemented and revised when necessary we can establish policies procedures and management structures that could move the business in the right direction so perhaps we see something's not working out something we we can improve our structures we can maybe previously we didn't have a customer service department for example but we've seen the need for a customer service department so we can change and restructure the business in that way cuz remember we have full control over that ensure that all business's resources are used effectively and efficiently and for the benefit of the business ensure that all employees understand the culture of the business and are working to towards the agreed goals and values that accommodate to all the stakeholders of the business leading employees organizing and directing their activities controlling their actions to achieve goals and objectives of the business all right continuing so there's a nice little diagram where we can see the core values and what each one can do to try and um strive towards and work towards these core values in a large organization the chief executive officer together with the other remaining business functions exercise control over the micro environment each departmental head takes responsibility for the different aspects of the micro environment of their departments now we're looking at the influence over the market environment okay a business has limited control over the market environment but in some cases it is possible to influence and shape the components of this environment so remembering we have limited and very little control so it's not that we have no control or full control this one thats in the middle we have very limited but with this environment it's a very nice environment that we can influence some components of the market environment may be easier to influence than others it's easier to influence A supplier versus a a competitor of yours so below are some examples on the next slide that entrepreneurs can use for some of the aspects of the market environment so we're looking at our customers so this one breaks a down into each of the different components it's a bit of a um broader section so entrepreneurs can influence the decisions of customers um by using a well structured and well executed marketing plan a marketing strategy is a plan of action that describes the marketing objectives of the business and the strategies and activities that will be used to achieve these objectives the entrepreneur could conduct market research to identify the needs or wants of the target market and then devise strategies to provide goods and services that will be required by the customer to satisfy these needs and wants a business could attract and influence customers decisions through good marketing campaigns such as promotional sales discount prices extended working hours and persuasive advertisements so I think a very good one was when Prime energy drink came into South Africa who got on board with that one Checkers did so what do you think they did with the customers now they didn't need to make a decision where they were going they knew we're going to Checkers and now when people go to Checkers maybe there's a customer that doesn't normally shop at Checkers they go there for Prime energy drink then they get to see you know what Checkers is a very nice store I like their variety I like their range and right there you've gained another customer and you've gained another client so that's just a simple example I know it's a lot of grocery stores they have their end of the month sales and a lot of your buy two to get one free I know that how clicks um influences their customers is they have a three for two on some of their products so if you buy three of the product you effectively only paying for two and you're getting the one for free and that can make a customer decide to go to Checkers versus the competitors such as disem just a simple example and this is how they can influence if you years ago uh Pick and Pay had the little stickies and then Spa had the Angry Birds these are more ways of how to influence a customer to make sure the customer comes to our company and not to our competitor suppliers entrepreneurs could in also influence the decisions and actions of their suppliers by signing long-term contracts for the input of raw materials at fixed prices or by forming a strategic alliance with their supplier businesses could also decide to buy in bulk to get discounts from their suppliers and in this way ensure that they have adequate raw materials at the time okay so with our suppliers we can always come up with an arrangement we can come up with um especially the buying in bulk cuz then some of your products you're actually going to make more profit on because you bought them at a cheaper rate than the first ones that you bought them for then our competitors these ones are a little bit trickier to influence although businesses has have little to no control over their competitors they might form a strategic Alliance join a community business Forum or form a Consortium with other business owners to share ideas and resources to undertake a project that will benefit all members of the group so perhaps let's say Pick and Pay Checkers and Spa decide that they are going to host a fun charity run in the community so the host is run and they sponsor let's say a shirt or all the money that is collected they will give to charity and they will provide food that's a way that the competitors can work together I would say it doesn't form into the part where they um I can't think of the word but basically you get some competitors that price fix that's obviously not allowed um but this is more of them forming a strategic Alliance and kind of working together um think of an example of let's say a grocery store and a fast food restaurant and the grocery store can supply the fast food restaurants and give them a cheaper rate say listen if you buy from us then you'll get it from a cheaper rate than if you had to go with another grocery store just simple examples like that Regulators a single business cannot influence the decisions of its Regulators Regulators are government bodies that make rules and regulations to check the business's activities however when the businesses join together they could influence a regulator to some extent so for example if there's a representative for the business they can lobby with the regulator to take away or pass laws that will help them to achieve their goals then we have unions businesses can also influence the decisions of unions if they try to maintain a good relationship with them businesses can achieve this by engaging in a collective bargaining session with trade unions to explain certain concerning issues to the leader or try to persuade them to side on their point of view view then we're looking at influence over the macro environment businesses have no control over the macro environment the following factors are not within their control so political factors such as Government POC policies or government stability economic factors so that's where uh with the government policies that's where they added lockdown we had no control over it we couldn't decide no our business will stay open for ab and C all businesses were closed and they essential workers economic factors so such as the inflation rate if the inflation rate increases well toughies things are going to increase and we need to move forward with that and the fluctuation in prices of foreign currency we have no control over that social factors so if there are low income levels of our customers and perhaps there's unemployment perhaps where our business is situated there's a lot of unemployment so people are not buying from our business if we maybe have luxury couches because they just don't have that disposable income that is out of our control yes we can come up with strategies but we cannot control how much that person earns we cannot control whether that person will get a job or not if that makes sense so yes we can come up with strategies to combat these but we're looking at the actual problem at hand and the all that we cannot change in any way technological factors so such as changes in new technology and internet infrastructure legal factors such as recent legislation and labor laws environmental factors such as climate change and environmental sustainability an entrepreneur cannot control the components of the macro environment directly so that's what I meant we can't go to the governments and say we are not accepting the new inflation um levels or the new interest rates you have to change them we cannot do that but the entrepreneurs can join forces and they can try and influence some of these aspects all right then businesses can Lobby this is also macro businesses can Lobby for Mutual trust that is a group of businesses could use their influence and combined powers to persuade the government to change certain regulations or establish certain policies that will help them achieve their goals so let's say for example I know the price of bread is getting quite High these businesses can Lobby together and actually create a price ceiling which is I know a bit more getting into economics for the price of bread so they can say listen we need to cap it somewhere people are not buy buying bread anymore they rather making their own bread at home or they buying brown bread so people are not buying white bread so they can say Okay 20 Rand is the most expensive that you can charge for bread and they actually make it a government legislation that way but this is a businesses lobbying together working together and then going to the government to try and find Solutions businesses can hedge against inflation by investing their Surplus assets or money into Investments so such as gold Oil Pro uh property and they can yield good returns so again we have inflation now they can invest in some things and actually get good returns back on it businesses could also Network to share information on how to overcome some of the challenges that they face in the technological environment all right then and as I said this is a small section we're looking at the challenges of the business environment the three business environments do not operate in isolation like we mentioned they are interrelated and they also influence each other the market and macro together operate in the external environment of the business and may create some challenges to the businesses activities in any three of these business environments May influence or have an impact on the other two environments the profitability of a business still depends on the factors of all three of these environments so for example if the employees in a particular business environment remember micro why cuz we're talking about the employees the employees are inside the business so the employees are not very skilled so therefore they cannot produce quality uh Goods it will cause a decrease in the demand for the businesses goods and services so that is obviously a challenge within the micro environment can we control that yes we can train and scale our employees or alternatively we can bring in more trained and skilled employees to try and combat this problem their customers or consumers which is the market why customers consumers are just sitting outside of our Circle we'll stop buying goods and products from the business and instead buy it from competitors why CU in the micro environment our employees are not very skilled so this now has an impact on our Market environments they're going to go to consum our competitors Instead This may cause that the business May retrench some of its employees leading to an increase in unemployment which unemployment is dealing with the max macro environment so you can see how they can all work together and all effectively um affect one another similarly a change in the macro environment so if there's an increase in the interest rate this could lead a business which is micro environment inside uh could lead the business to borrow less money from the banks and produce fewer goods and services businesses May then decide to increase their prices for goods and services which will cause the customers Market because why customers are sitting just outside our Circle we can have little control but we influence them it'll cause the customers to buy fewer Goods to satisfy their needs and wants and then this will turn into other socioeconomic issues further down the line because of the increase in interest rate a long-term survival of a business will depend on how best it can monitor respond to and influence the environments in which it operates in so for example if a business fails to identify reliable suppliers in the market it will not be able to get the resources it requires to produce its goods and services this will eventually cause the business to lose customers and it could threaten their survival so what are the ways that businesses can get involved in the macro environment businesses could improve the economic and social well-being of the people in their community and the country if they actively get involved in the macro environment here are some ways that businesses can get involved in the macro environment so they can create job opportunities for the people within the community undertake social responsibility program to improve welfare of people in the community improve export markets by expanding into new African markets undertake scientific research to improve traditional medicines engage in collective bargaining or lobbying to improve working conditions and to change government legislation just an interesting one on there they are actually looking in rolling out the 4-day work week they did the experiment last year and all the research on that in South Africa and maybe in the future we can see a 4-day work week a Monday to Thursday or a Tuesday to Friday so there's something where the businesses are getting involved I can't remember where but a company overseas came to see that their employees were a lot more productive working in a 4-day work week than if they were to work in a 5-day work week so the amount of work they were getting done in 5 days they got more done working in 4 days and then obviously they wanted to experiment this in other countes so you can see how the businesses are getting involved and CH small changes can be made they can enter into private or public Partnerships to provide infrastructure in the country they can provide education and training programs for workers to improve the service delivery then the benefit of businesses getting involved in the macro environment so how can businesses benefit by this they will gain good publicity and so attract and retain loyal customers they will attract and retain skillful employees in their communities government tenders and contractors are normally given to the business that is involved in the macro environment businesses that support their communities normally get some tax rebates businesses that get involved in the macro environment can anticipate likely challenges and advice strategies to turn these into opportunities top investors are attracted to businesses that are involved in the environment it prevents environmental damage by decreasing the business's carbon Footprints and then knowing people's age gender Customs traditions and preferences will make it easier for the business to to appeal to customers so if you think about a business that if you think about a business that you know a business in your community it's nice to know that the business gets involved it's nice to know that they have projects they have fund runs they give back to charity it makes you as a customer want to support these companies want to actually invest I saw the other day when I went to a pick and pay that the shopping trolley actually said the shopping trolley is made from recyclable bottles um so it's 100% recyclable so if you think about like that I don't know if it's all pick and pays or just this one Pick and Pay I went to but something like that it makes a customer feel good to know you know what they care about the environment they're trying to save it for future Generations they're making trolleys from old used bottles which saves on them so I don't know if that'll make me want to go to Pick and Pay but it does show a good impression to see that the company does care about the triple bottom line which is the people social and economic it does show that they care and that'll make customers more inclined to go shop there all right then a little mindmap recap so also a nice little one that you can jot down just showing all the different components of the three different environments we've been through and then looking at the control over the environment and just some notes there so you're more than welcome to pause it here and jot down some notes all right there's my resources that I've used for this video as I mentioned the first link is the textbook in the beginning that I have made use of I have received that from the Western cap education department website which you can download the textbook for free it's a learner book it's very nice it's very colorful it has little diagrams it even has videos that you can go check out as well it's really awesome oh well I hope you enjoyed this video if you liked it please give it a thumbs up please comment down below what was interesting for you and maybe some of your thoughts on this chapter this is going to be a good year I hope to be posting a lot more this year let me know what you're looking forward to I can add it to my schedule and then I hope to see you guys in my next video bye for now [Music]