Relationship between the environment Environments Micro Market Macro

Relationship between the environment

Environments Micro Market Macro

Components of the Macro Environment • Physical environment • Economic Environment • Social, cultural and demographic Environment • Technological Environment • Legal and political Environment • Institutional Environment • International Environment

Changes in the Physical Environment • Deals with the natural environment • A change in the natural environment due to any of the factors which affects them: - Weather patterns - Global factors - global warming - extreme floods / droughts etc. • These factors can lead to: – an in price = directly impacts the economic environment – enforcing laws to eradicate waste = legal environment

Changes in the Economic Environment • Any change here can lead to: – the social, cultural and demographic environment being affected – the technological environment being affected – the global environment being affected HOW? • A in interest rates will impact the amount of money consumers have to spend – Can lead to a change in the way people spend their money • A in interest rates could have an opposite affect

• A change in the economic environment can lead to a change in the technological environment: How? - if labour costs = businesses will rather buy machinery to do mass production. - This will make it even harder for people to find jobs = lead to unemployment. • The economic environment can also affect the international environment: - exporting and importing goods if SA’s products are cheaper = we can export to other countries and gain a competitive advantage in the global market

Changes in the Social, Cultural & Demographic Environment • Can impact the political and legal environment through its trends as it can influence the peoples opinions and buying behaviours • Laws can then be put in place. Consumer Protection Act to protect consumers from negligent business practice

Changes in the Technological Environment • Changes that occur in the technological environment affects other environments: - Technology leads to unemployment which affects the social environment = mass production / robots - The economic as the prices of goods change = production - Affects the natural environment with improved technology has lead to a decrease in waste and pollution

Changes in the Legal, Political & Institutional Environment • Has a large impact on all business environments: - Politics affect social and cultural trends - Laws govern how we carry out business - Political / Economical stability = this will attract foreign investors - Taxes will influence imports and exports (excise duties) - Therefore changing the buying and selling

Changes in the Global Environment • SA trades internationally (finished goods) – an in travel and communication efficiency = – International laws would need to be abided by affects the political and legal environment _________________________