Introduction

Question 1

state three possible divisions of business environment and define them

Answer 1

1. macro VS micro (society and government VS market)
2. market VS non-market (customers, suppliers, competitors VS others)
3. internal VS external (organisation VS everything else)

Question 2

who are the 4 agents (the stakeholders of BE)?

Answer 2

1. business (goal is profit) (=owners of businesses)
2. government (= legal framework)
3. society (= ideologies, values, material things, institutions) (depends on culture and ideology)
4. market (customers, suppliers, competitors)

Question 3

what are the 4 models of business environment?

Answer 3

1. the market capitalism model.
2. the countervailing forces model.
3. the dominance model.
4. the stakeholder model.

Question 4

which tools are used for analysis of:

1. macroenvironment
2. industry
3. competition
4. customer?

Answer 4

1. PEST(EL)
2. Porter’s five forces
3. benchmarking
4. primary marketing research

Question 5

explain what SWOT is.

Answer 5

SWOT is a framework that takes results from all other analyses and integrates them

Question 6

explain the difference between organisation, business, and department.

Answer 6

organisation = a company (may contain many different businesses)
business = a specific product in a particular industry
department = function-based unit in an organisation

Question 7

is there a defined starting point for BE analysis?

Answer 7

no, it depends on the industry the company is in.

most times, it’s easiest to start with industry and end with customers.

Question 8

explain how the PEST(EL) analysis is done.

Answer 8

PESTEL analysis is used to identify changes in the environment that can and will affect the company.
changes are identified with PESTEL factors, which are:
1. political (influences of gov on society)
2. economic (overall prospects of the market and economy)
3. socio-cultural (determinants of product demand and willingness to work)
4. technological (general trends in technology)
5. environmental (climate change and env. awareness)
6. legal (laws protecting society and people)
there are many PESTEL factors, so we usually first identify “key drivers for change”, which are the important PESTEL factors for a specific company.
then we categorise those KDCs into possible threats and opportunities, where one can also be both simultaneously.
with the help of those categories, we assess the importance of each KDC (its impact and extent on the company) and find strategic options how to minimise threats and maximise the opportunities.

Question 9

State 6 forecasting methods, from short to long term.

Answer 9

1. Trend extrapolation (enloning the trends into the future)
2. Regression (known dependencies)
3. Customer and marketing research (noise vs info)
4. Benchmarking
5. Delphi method
6. Scenarios

Question 10

State 3 possible approaches to forecasting and explain the difference between them.

Answer 10

They differentiate depending on the level of (un)certainty.

1. single-point forecast (low uncertainty, one possible outcome)
2. range forecast (probably outcome and a range of likely and unlikely ones)
3. alternative futures (high uncertainty, many different outcomes)

Question 11

define the term megatrend.

Answer 11

megatrend is a large-scale PEST movement that are typically slow to form but have a large scale and long-range impact.

Question 12

define the term inflexion point.

Answer 12

that is a moment when trends shift in direction (e.g. dramatically change their direction).

Question 13

define the term weak signals.

Answer 13

those are advanced signals of future trends that help us identify future inflexion points. they are usually in a form of unstructured, fragmented and ‘unusual’ bits of information.