Importance of Business Environment

1. LO1 - Analyse the impact and influence which the macro environment has on an organization and its business strategies 1. P1 Applying appropriate frameworks, analyse the impact and influence of the macro environment on a given organisation and its strategies. 2. M1 Critically analyse the macro environment to determine and inform strategic management decisions. 3. D1 Critique and interpret information and data applying environmental and competitive analysis to produce a set of valid strategic directions, objectives and tactical actions

2. Importance of Business Environment The business environment is multifaceted, complex and dynamic in nature and has a far-reaching impact on the survival and growth of the business. Proper understanding of the Social, Political, Legal and Economic Environment helps the business in the following ways:

3. Importance of Business Environment Cont’d (a) Determining Opportunities and Threats (b) Giving Direction for Growth (c) Continuous Learning (d) Image Building (e) Meeting Competition (f) Identifying Firm’s Strength and Weakness

4. How can companies compete in the Business Environment Companies can compete in the Business Environment through effective Business Strategy and Strategic Planning. A business strategy typically is a document that clearly articulates the direction a business will pursue and the steps it will take to achieve its goals.

5. How can companies compete in the Business Environment A business plan begins with an overall vision. From the vision, a mission statement for the business is constructed, usually the shorter and more precise the better. A mission leads to specific goals the business will achieve to accomplish its mission and that in turn leads to strategy to achieve goals.

6. How can companies compete in the Business Environment In a standard business plan, the business strategy results from goals established to support the stated mission of the business. A typical business strategy is developed in three steps: analysis, integration and implementation

7. What is a Mission Statement? Mission Statement - A mission statement brings your essence into focus so it is crystal clear who you are, what you do, and why you do it. It describes how your business is going to accomplish its vision.

8. Components of Mission Statement A typical mission statement contains three components: The overall purpose of your business – what are you trying to achieve What your business does – products and services it provides. 3. What’s important to your business – the values your business lives by

9. What is a Vision statement? What do we mean by a company's vision? The vision of a company are futuristic by nature. It summarizes the future plans of the company; this is what the company aspires to be in the future. so in essence it answers the question "Where the company wants to be in the future?"

10. What is a Strategic Plan? A strategic plan is a document used to communicate with the actions needed to achieve those goals and all of the other critical elements developed during the planning exercise.“scorecardbalanced.com

11. What is Strategic Planning According to scorecardbalanced.com "Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes/results, and assess and adjust the organization's direction in response to a changing environment. "

12. Strategic Planning Strategic intent is a compelling statement about where the organization is going and want to achieve. There are several Strategic Planning tools and Techniques such as: Cost Benefit Analysis SWOT Analysis Pestle Analysis Competitive Analysis

13. Strategic Management Strategic management is the comprehensive collection of ongoing activities and processes that organizations use to systematically coordinate and align resources and actions with mission, vision and strategy throughout an organization. Source: scorecardbalanced.com

14. Strategy Execution Strategy Execution is simply the implementation of the planned strategy. So after the strategy is planned it must be made a reality and making it a reality involves putting whatever is planned into action. Source: scorecardbalanced.com

15. Strategy Execution Cont’d Strategy execution requires proper management skills within the organization. Usually employees play a big role in strategy execution and are seeking employees with specific core competencies.

16. What are Core Competencies A core competency is a concept in management theory introduced by C. K. Prahalad and Gary Hamel. It can be defined as "a harmonized combination of multiple resources and skills that distinguish a firm in the marketplace". Core competencies fulfill three criteria: Provides potential access to a wide variety of markets.

17. What are core Competencies Cont’d Core competencies are the main strengths or strategic advantages of a business, including the combination of pooled knowledge and technical capacities that allow a business to be competitive in the marketplace

18. Business Goals & Objectives Strategic objectives are the building block of an organization. Strategic Plan and Objectives are long term and should align with the organization’ mission and vision.

19. Business Goals & Objectives For companies to be successful, profitable and compete effectively they must set goals and objectives for the organization. What are Goal? – What are Objectives -

20. Objectives • A business objective is a specific outcome or outcomes that is / are to be achieved. • Objectives capture the specific goals of the company. These are usually listed and measured within a specific time span. E.g. a year or it could be within a given month. • Successful businesses are based on both goals and objectives, as they clarify the purpose of the business and help identify necessary actions. Goals are general statements of desired achievement, while objectives are the specific steps or actions you take to reach your goal.

21. Business Goals & Objectives Goals are long-term aims you want to accomplish Objectives are concrete and can be measured. The goal is like the description of a destination and an objective is a measure of the progress that is needed to get to the destination; hence the goal is the outcome.

22. Business Goals & Objectives For example: A company goal is to be number one supplier of eggs – whilst the objectives is to sell 10,000 eggs in a quarter.

23. Difference between Goals & Objectives To accomplish something very important we need to set goals and objectives. Goals without objectives can never be accomplished while objectives without goals will never get you to where you want to be. The concepts are separate but related and will help you.

24. Reference Shah (2017). Vision and mission of companies. [online] Slideshare.net. Available at: http://www.slideshare.net/selectee4/vision-and-mission-of-companies [Accessed 25 Sep. 2017]. Shopify. (2017). Business Plan Vision & Mission Statement and Business Structure Types. [online] Available at: https://www.shopify.com/guides/businessplan/the-company [Accessed 25 Sep. 2017]. Quarrie, N. (2016). Business Strategy.