Macro Enironment Grade 10

Macro Enironment Grade 10

1. The physical or natural environment

   • Important for our lives
   • We need to look after this environment
     • We depend on it to survive
     • We need to ensure that we have clean air and water
   • We need to look after our resources
   • External to the business
   • Business does not have much control over this environment
   • It refers to weather, physical location and availability of natural resources
   • Location and access to the rest of the world

2. The Economic Environment

   • The economy has a large impact on businesses
   • Interest Rate
     • Rate at which borrowed money must be repaid
     • Determined by the Reserve Bank
       • This bank sets the repo rate
         • Rate at which ordinary banks borrow money from Reserve bank
   • The Exchange Rate
     • Price at which one currency can be exchanged for another
     • When the rand is weak, we'll need more rand to buy $1
       • An American will be able to buy more rands with his fewer dollars
       • This is good time to export because SA goods will cost less in the destination country.
     • When rand is strong, it is cheaper to import
   • The Inflation Rate
     • Indication of how much the cost of goods is increasing
     • Measure of inflation is CPI
     • When prices rise consumers buy less for each rand
   • The Labour Force
     • All the people who productively work in economy
     • Right no. of people with right skill and education
   • GDP
     • Refers to how much a country produces in a year
       • Includes everything that was produced by everyone.
     • Indicator of a country's well being
     • If economy and GDP grows too quickly prices for goods will increase
       • This is because there is a rapid increased demand for goods

3. The Social Environment

   • All different issues in society that impact business
   • Unemployment
     • Everyone who is unable to work
     • 25% Dont have a job
     • High unemployment = high poverty levels
     • If poverty high, then businesses suffer because people dont have money to buy
   • Crime
   • HIV/AIDS
     • One of Highest level in world
     • Businesses help their people to get treatment
     • Many people end up dying

4. The Cultural Environment

   • Culturally diverse
   • 11 Official languages
   • Greek, Italian, German communities
   • Different cultures, different ways to look at a problem

5. The Demographic Environment

   • Characteristics of people in country
   • Characteristics such as age, gender, race, income and occupation
     • Young vs old
     • Women vs men
     • How many different races
     • Poor or rich
     • If businesses understand it then it helps them to match products

6. The Technological Environment

   • Fundamental part of any business
   • Use of science to solve problems
   • The more complicated the business the more complicated the technology being used

7. The Political Environment

   • SA been a democracy since 1994
   • Employment Equity Act and BEE Policy overcome past injustices

8. The Global Environment

   • Globalisation
   • Increase in global competition
   • More globalisation more opportunities for businesses

9. The Institutional Environment

   • Formal and Informal components
   • Formal = laws, rules, procedures that regulate how businesses are run
   • Informal = culture

10. The Relationships between Environments

11. Legal Environment

    • Its made up of all the different laws and agencies that enforce them
    • Laws are developed by National Assemblies and passed by parliament
    • Highest law is Constitution
    • Laws are enforced by different authorities