1.

Business organisation and environment

1.5 External Environment
A reasonable man adapts himself to the world; an unreasonable one persists in trying to adapt the world to himself George Bernard Shaw (1956-1950), Irish author

Recap
O Explain the interests of internal stakeholders
O Explain the interests of external stakeholders O Discuss the possible areas of conflict between

stakeholders O Evaluate possible ways to overcome stakeholder conflict (HL)

Learning outcomes
O Prepare a PEST analysis (or PESTLE and STEEPLE)

for a given situation and use it to analyse the impact of the external environment on a firm. O Evaluate the impact on a firms objectives and strategy of a change in any of the PEST/PESTLE factors. O Analyse the impact that external opportunities and threats may have on business objectives and strategy. O Explain how external opportunities and threats can impact on business decision-making and SWOT (strengths, weaknesses, opportunities, threats) analysis.

In pairs, select a well known HK company and discuss and prepare a PEST analysis

PEST analysis

O A useful way to assess the impact of the external

environment on an organisations future activities.

Political issues include
New laws to limit the effects of smoking

Economic issues include

An appreciating exchange rate

The country joining a trading bloc (ASEAN)

Economic slowdown or downturn

Elections resulting in a new government Rising unemployment

Sociological issues include

Ageing population More working women/one parent families

Technological issues include

New interactive televisions Growth in mobile internet

Growing interest in environmental issues

Increase in clean/green technologies

PEST / STEEPLE / PESTLE

Ethical

Environmental Legal

Legal Environmental

Discuss the impact on a firms objectives and strategies of: O New employment / consumer / competition legislation O Rising or falling interest / exchange rates and inflation O Slowing economic growth and rising unemployment O Demographic changes (e.g. de- or ageing population) O New product innovations

Opportunities & threats

Identify opportunities and threats posed to the Coffee Corner of: How could these opportunities and O Social/cultural changes threats impact on O New technological innovations Coffee Corners decision-making? O A downturn in the economic environment O Environmental issues O Political changes O Legal developments O Increasing ethical concerns

O ____________________analysis: a useful way of

classifying and assessing the ______ of the external ___________ on a businesss performance and activities

O PEST/STEEPLE/PESTLE analysis: a useful way

of classifying and assessing the impact of the external environment on a businesss performance and activities

Homework
O Read pages 66-74 of Hoang
O Begin revising for an assessment next week

Recap
O Prepare a PEST analysis (or PESTLE and

STEEPLE) for a given situation and use it to analyse the impact of the external environment on a firm. O Evaluate the impact on a firms objectives and strategy of a change in any of the PEST/PESTLE factors. O Analyse the impact that external opportunities and threats may have on business objectives and strategy. O Explain how external opportunities and threats can impact on business decision-making and SWOT (strengths, weaknesses, opportunities, threats) analysis.