1. Chapter2 The business environment
ACCA F1
Chapter2 The business environment

2. How to analyze the B.E.? Identify the environment
Political
Economic
Social
Technological
Analyzing the environment
SWOT analysis
Value chain
Five forces analysis

3. Environment
Definition: everything that surrounds an organization, physically and socially.
Environment should be analyzed by every organization, because it is related to the organization’s strategy.
Environment is changing, so it is a source of uncertainty.

4. Types of environment Global and local environment
General and task environment
General(macro) environment covers all those factors influencing all organizations indirectly, e.g. PEST.
Task(micro) environment includes those areas which have a direct impact on the organization, e.g. five competitive forces.

5. G.E.-political and legal in general
Government’s function: some policies
Political risk and political change
International organization: EU and WTO
Basic legal environment: general legal framework and some important laws(company law, contract law, tax law, etc.)

6. G.E.- other legal factors
Employment protection: including some requirements about retirement, resignation, dismissal and equal opportunity.
Data protection and security
The Data Protection Act 1998
Privacy: the right of the individual not to suffer unauthorized disclosure of information.
Healthy and safety: the duties of employer and employee, and some policies

7. G.E.- other legal factors
Consumer protection: the contract between seller and consumer refers to some consideration
Contract: a legally binding agreement.
Environmental protection

8. G.E.- economic environment
Chapter 3 and chapter 4

9. G.E.- social and demographic
Population and labor market：如人口老龄化
Family life cycle 家庭生命周期
Social structure and class
Socio-economic position
Buying patterns
Cultural trends: healthy and diet, women’s power, environment protection, etc.

10. G.E.- technological environment
The development of IT system may flatten the organization’s hierarchy.-chapter 5
Other effects of IT system
SOHO and home working
Outsourcing 外包

11. T.E.- SWOT analysis Internal appraisal External appraisal
Strengths- using strengths, resource-based strategy
Weakness
External appraisal
Opportunities-exploiting opportunities, position-based strategy
Threats

12. T.E.- value chain
Value activities: the means by which a firm creates value in its products.
Primary activities
Inbound logistics
Operations
Outbound logistics
Marketing & sales
Services
Support activities
Firm infrastructure
HR management
Technology development
Procurement

13. T.E.- Porter’s five forces model
The threat of new entrants to the industry
The threat of substitute products or services
The bargaining power of customers
The bargaining power of suppliers
The rivalry amongst current competitors in the industry