2. B200 PART ONE Dr. Mohamed Hassan Introduction and CH2 -Environment

3. b200 PART I DR. M. HASSAN2 GUIDE Your final grade is based on: 6 Tutor Marked Assignments (TMAs)50% of final grade Final ExamsPart 1 and Part 250% of final grade Assignment weightings : TMAs 1 to 4 each hold 15% of the TMAs weight or 7.5% (7.5 X 4 = 30%) TMAs 5 and the skills portfolio (TMA06) each hold 20% of the TMAs weight 10 X 2 = 20%

4. b200 PART I DR. M. HASSAN3 TMA01 is based upon keep on running and environments. TMA02 is based upon markets. TMA03 is based upon processes. TMA04 is based upon organizations. TMA05 is a case study based TMA across all 4 areas. TMA06 is a skills portfolio across both semesters.

5. b200 PART I DR. M. HASSAN4 Understanding Business Environment what is the meaning of the Environment ? The economy company The state The economy The society

6. b200 PART I DR. M. HASSAN5 The firm as a collection of productive resource The firm is a collection of productive resources: 1- Tangible resources- raw material, land, equipment,..etc. 2- Intangbile resources –human, organzatonal resources and information  The firm is a pool of resources that is organized in administrative framework

7. b200 PART I DR. M. HASSAN6 The Company’s Macroenvironment

8. b200 PART I DR. M. HASSAN7 SWOT analysis Strengths (internal) Weaknesses (internal) Opportunities (external) Threats (external)

9. b200 PART I DR. M. HASSAN8

10. 9 STEP analysis Socio-cultural factors Technological factors Economic factors Political factors

11. b200 PART I DR. M. HASSAN10 Sociocultural factors Demographics Distribution of income Social mobility Lifestyle changes Consumerism Levels of education Others?

12. b200 PART I DR. M. HASSAN11 Technological New discoveries and innovations Speed of technology transfer Rates of obsolescence Internet Information technology Others?

13. b200 PART I DR. M. HASSAN12 Economic Factors Inflation Employment Disposable income Business cycles Energy availability and cost Others?

14. b200 PART I DR. M. HASSAN13 Political/legal Monopolies legislation Environmental protection laws Taxation policy Employment laws Government policy Legislation Others?

15. b200 PART I DR. M. HASSAN14 Political Environment Includes Laws, Government Agencies, and Pressure Groups that Influence or Limit Various Organizations and Individuals In a Given Society. Increasing Legislation Changing Government Agency Enforcement Increased Emphasis on Ethics & Socially Responsible Actions

16. b200 PART I DR. M. HASSAN15 Political Environment Greater Concern for Ethics Greater Concern for Ethics Increased Legislation Increased Legislation Changing Enforcement Changing Enforcement Key Trends in the Political Environment Key Trends in the Political Environment

17. b200 PART I DR. M. HASSAN16 Economic sector analysis Sectors in economic are:  The household sector  The government sector  The business sector  The financial sector  The rest of the world sector

18. b200 PART I DR. M. HASSAN17  Mintzberg’s Physiognomy The environment can be viewed as a set of interested people, groups and stakeholders, exerting influence and being influenced by business activities. (cast of people) Mintzberg talk about power groups and the coalitions and how they could affect main decisions in the organizations. These coalitions can be either internal or external (employees associations, owners, associates and publics) SEE P.14 FIGURE2.2

19. b200 PART I DR. M. HASSAN18 The input output model (transformation Model) INPUTS OUTPUTS Processing Materials,resources, energy, information Goods or service Transformation process

20. b200 PART I DR. M. HASSAN19 TMA01 Why is Nike the Biggest Training shoe company in the world? You need to write an essay of 1000 words Essay type:- Introduction Body(ies) Conclusion References

21. b200 PART I DR. M. HASSAN20 Apply a STEP analysis help to analyse the current situation of Jamal Enterprises.(p.1) Jamal Enterprises is a family business with their office headquarters based in Beirut, Lebanon. They started as a single convenience shop in their home town of Tyre, selling everyday goods to direct customers from Tyre and its surrounding villages. It has been run by the Jamal family for two generations and has expanded signficantly. In the mid 1990’s when the current Managing Director Mr Ahmed Jamal (currently aged 64 years) took control the company diversified from their chain of 16 convenience stores, and also started to import and sell wholesale mobile telephones and complementary goods from two large warehouses close to Beirut. In 2006, 60% of the profit from the business came from convenience stores sales, 30% from the wholesaling business and 10% from the export of goods to Pakistan. 2006 saw a big downturn in the wholesaling business (attributed to the conflict in Southern Lebanon) but saw a big upturn in convenience store sales, particularly in essential goods.

22. b200 PART I DR. M. HASSAN21 (p.2) Jamal Enterprises uses a purpose built storage facility of 2 secure warehouses located outside Beirut which was opened in 2001 and is the hub of activity for the mobile telephone wholesaling business. Since launching this part of his business, Mr Jamal has faced increased market competition for some mobile telephone goods from internet sales (which have increased their market share in recent years). An expanding area of the business is in mobile telephone accessories aimed at the teenage market which Mr Jamal imports at low cost from China and sells through his wholesaling operation.

23. b200 PART I DR. M. HASSAN22 (p.3) Following a business trip to Islamabad in 2005, Mr Jamal also expanded his operation by starting to export reconditioned mobile telephones to Pakistan where they are in great demand by wholesalers. He feels that this is an area of potential growth where the business could earn greater profits. In staffing terms, the wholesaling and export businesses share 14 employees, and the convenience stores employ a total of 32 staff. The Headquarters employs 4 staff in general administrative duties as well as Mr Jamal himself who works full time as the Chairman and Managing Director.

24. b200 PART I DR. M. HASSAN23 (p.4) Mr Jamal is a widower with two daughters, one of whom is a successful accountant working in Dubai, the other of whom is married with 2 children living in the USA. He has no sons and is concerned about succession planning for the business as he wishes to retire in the near future. He has sought advice from two business colleagues and from his accountant daughter, as follows: Business colleague 1: Mohammad suggests that Mr Jamal should sell at least 5 of his convenience stores. He believes that the location of these 5 stores in Southern Lebanon is of concern as a long term investment due to the recent instabilities of the conflict. He believes that Mr Jamal has an excellent opportunity in terms of expanding his wholesaling and export operations and that this is the new and innovative direction his business should take. He believes that the convenience stores are in need of refitting and refurbishment in order to remain attractive and to improve competitive advantage. He suggests that Mr Jamal makes these changes and then sells Jamal Enterprises at a later date.

25. b200 PART I DR. M. HASSAN24 (p.4) Business colleague 2: Ahmed is concerned that Mr Jamal has a large proportion of his business based in the highly competitive business of wholesaling and exporting. Ahmed believes that his friend should sell the warehouses and maintain the chain of convenience stores as he does not have sufficient infrastructure to support an expansion of the export business. He has also suggested that the location of the convenience stores would be entirely suitable to be converted to include small internet cafes. Ahmed believes that this would lead to significantly increased revenue. He has suggested that Mr Jamal should appoint a Managing Director to run operations in the future and has offered his services. Accountant daughter: Mariam thinks that her father should sell the business and retire without making any significant changes to the business. She believes that the sale of the business will enable him to purchase a luxury apartment close to her sister in the USA and to be able to afford to visit her regularly in Dubai. Mr Jamal has a lot of thinking to do before making his final decision on the future direction of his business.

26. b200 PART I DR. M. HASSAN25 questions Apply a SWOT analysis model to Jamal Enterprises which would help the owner to make a decision on the future direction of the organisation. Draw the model of Mintzberg’s Physiognomy. Explain how it is used.