Business and Business Environment A2 Environmental Analysis

ASSIGMENT 2
UNIT 1 BUSINESS AND BUSINESS ENVINROMENT
A2 Environmental Analysis
Lecturer: Soumitra Chowdhury
Student name’s : Nguyen Duc Vinh Hoan
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TABLE CONTENTS
Task 3
I. The PESTEL framework ................................................. 3
II. The positive and negative impact the macro environment on
business operation ......................................................... 5
Task 4
I. The internal and external analysis of specific organizations in oder
to strengths and weaknesses............................................ 7
1. Using SWOT analysis to evaluate internal environment...... 7
2. Five forces model analysis............................................ 9
II. Explain how strengths and weaknesses interrelate with external
macro factors.................................................................10
1. Government policies ...................................................10
III. Evaluate the impacts that both macro and micro factors have upon
business objective and decision-making...............................11
1. General evaluation ......................................................12
2. The important of political environment..............................12
Conclusion.....................................................................13
References.....................................................................14
Task 3: Demonstrate both the positive and negative
impact the macro environment has on business operations
I. The PESTLE framework
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In the environment business, there are a lots of factors impact directly to business
operations. In addition, the development of business depends on many factors of
business environment such as political, economic, sociological, technological,
legal and environments. The most of business always analyze about business
environment through PESTAL analysis before they make decision investments .
Business should needs to forecast about needs, cultural , political , social to
achieve the successful in business .
1. Political
With a transnational company, they need to know about the government stability
of a national that they will invest in it. The government stability of a national is
very important to attract the foreign companies because these companies want
to a stability environment to ensure that they can operate in the long term.
Nowadays, the developing countries often have a lot of incentive policies to
attract FDI. In addition, the Government also come propose the tax policy
towards foreign companies.
For example: Metro cash and carry opened the first supermarket at Viet Nam in
2002. Metro cash and carry revenue increased more than 20 times based on the
stability political of Viet Nam. In the Covid-19 pandemic, the government had
controlled very good the spread of corona virus based on the political regulation
of Viet Nam in comparison with Western countries.
2. Economic
Economic play an important role in the development of business and it affects to
direct to the business’s revenue. The multinational companies often chose the
countries which have a good economic growth, low interest rates, stable
exchange rates. Interest rates have a big influence on capital costs and on
business expansion strategies. On the other hand, the driving of the inflation will
help company is able to maintain on stable salary cost and other cost .
For example: Metro cash and carry entered Viet Nam in during the period of Viet
Nam’s economic growth about 6% every years. Based on this economic growth,
Metro’s revenue grew from $30 million to $650 million. The inflation rate will also
control quite good in this during time , it helps the price of production don’t impact
to customer.
3. Sociological
The most of companies always have an evaluation about sociological because it
relates to the consumer habits, behaviors, the customer’s preference. Social
cultural factors affect to the total demand for goods and services of the business
and how business meets the needs of customers. In addition, Demographic
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provides companies the information about age, population to companies can
evaluate the marketing strategies.
For example: Cultural of Vietnamese people go to the street market every
morning to buy foods and essential items. However, Metro cash and carry
changed the habits of Vietnamese people that is buying foods and items in the
supermarket and they succeeded.
4. Technological
Technology is affecting to every aspects of people on over the world. Technology
always be opportunities and risks towards organization. The appearance of new
technology creates many new products to replace the traditional products with
many advance technologies to be suitable with the global trending. However, the
new technologies will make an economic pressure for organization because they
always have to rival to competitions about technologies and products. In addition,
the development of new technologies will help business reduces the production
costing but high quality. Technological influences to 2 basic factors of business
that is the competitiveness on the market and the consume products of business.
For example: Metro cash and carry applies the new technologies in transport the
products to customers through application on the web or smartphone faster and
more convenient compare with the traditional transport.
5. Legal
Legal factors influence very big to the business operations in every organization.
The organization have to comply the legal of government in every national that
they invest. The legal of every national is dissimilarity, it depends on a lot of
factors such as political, economic, history. However, the legal of government
often include the policy of business tax, business license to suitable with the
different industry. In addition, government also propose about the remission policy
of tax and the import tax. In contrast, the increase of the business tax will bring
many risks of profits in the organization
For example: Metro cash and carry invested in Viet Nam will be received a policy
of business income tax and the import tax. Globalization bring to the commercial
policies which is helpful for Metro cash and carry.
6. Environmental
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