Business Environment and Entrepreneurship

This assignment involves analyzing the business environment and entrepreneurship, focusing on the modernization of institutional environments for entrepreneurship development in Russia. It also explores how business environments affect socio-economic performance in informal microenterprises and examines the influence of business environment on mine safety improvement in complex operational and business environments.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
Assessment 2....................................................................................................................................1
5.1 Task............................................................................................................................................1
Impact of macro and micro environmental factor's.....................................................................1
Analysis of internal business environment:................................................................................4
Reflection of Porter's 5 force model:..........................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
The business environment is very essential for the better growth of the organisation in a
market. The effective business environment helps the company to perform its business
operations in very significant an effective manner (Armstrong and et.al., 2015). For this report,
in the first task the auto mobile industry is been taken with cars as the sub sector. For the second
task, Toyota is been taken as organisation of context, in the report. In this report, we will conduct
a PESTLE and Porter 5 force model to identify the influence of the macro and micro
environmental impact on the auto mobile sub sector of the economy of the nation. Besides this,
the internal business environment of the cited firm is been taken into consideration using the
value chain model. Other than this, the usefulness of the 5 force model is been reflected in the
report (Botha, Kourie and Snyman, 2014).
Assessment 2
5.1 Task
Impact of macro and micro environmental factor's
The business is deeply impacted by the various internal or external i.e. micro and the
macro environmental factors that are been present in the Auto mobile sector. Basically the auto
mobile sector consists of the various sub sectors like cars, motorbikes, trucks etc. but the major
part of the auto mobile industry acts in the manufacturing of the cars. The cars have been the
most important part of the auto mobile industry and is the biggest sub sector of this industrial
sector (Belás and et.al., 2015). Thus, it is deeply susceptible to the impacts of the changes in the
macro and the micro environment of the auto mobile industry. The macro environment of the
sector can be identified by the PESTLE model whereas the micro environment can be assessed
using the Porter's Five force model. The assessment of these factors will help the company to
make the suitable changes in the various operations of the company in order to sustain the
various changes.
The PESTLE and the Porter 5 Force model that affects the Auto mobile industrial sector is as
follows:
PESTLE Analysis: This will help in the assessment of the macro environmental factors on the
Auto mobile industry which consists of the various factors such as:
 Political: The political factors plays a very deep and significant role in the manufacturing
of the cars by the auto mobile industry. The change in the political conditions on the
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national or the international level will lay a very deep impact on the various operations of
the cars manufacturing by the auto mobile industrial sector (Epifanova and et.al., 2015).
The good and supportive political factors will lead to the rise in the better and increased
production of the cars by the various organisations in the auto mobile industry. On the
other hand, the negative and non supportive government on the local, national or
international level will lead to the decrease in the production by the auto mobile industry.
Besides this, the various governmental policies will lay a very deep impact on the overall
operations of the company.
 Economic: The economic conditions also has the deep impact on the various sort of the
operations of the car manufacturing by the auto mobile industry. The weaker or the
depressive economy on the national or international level will deeply affect the
production and sales of the cars and may lead to its reduction (Bah and Fang, 2015).
Contrary to this, the good and growing economy will support the production of the cars
by the auto mobile sector and will further lead to the better production and selling of cars.
 Social: The social factors of the location also has a very deep impact on the various
operations that are been taken into the consideration by the auto mobile industry to carry
out the operations in a better way. The auto mobile industry has to take into the
consideration the suitable measures to meet any sort of the challenge that is been caused
due to the social environment of the locality or on a global level.
 Technological: With the advancement in the latest technologies on the regular basis, the
auto mobile industry has to look after the adoption of these technologies to make the cars
more advanced and suitable to meet the changing demands of the customers in a very
innovative way. Other than this, the auto mobile industry can also adopt the latest
technologies to improve the manufacturing and production process (Savrul, Incekara and
Sener, 2014).
 Legal: The auto mobile industry has to look after the various legal obligation that is been
set by the government or the legislation of the country in regarding to the car
manufacturing. The auto mobile industry should look after that the car must meet the
various safety standards and measures that are been set by the various agencies or the
government. Besides this, the industry should also look after the avoiding of the various
legal issues to maintain the productivity.
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 Environmental: This is the most important factor that is been taken into the
consideration by the company. As with the rise of pollution and prices of the crude oil,
the people are now looking for the cheap and clean variants of the cars, which is needed
to be economic too (Moroni, Arruda and Araujo, 2015). The option of manufacturing the
electric cars or the cars running on bio fuels have been increased in recent time and thus,
has come up as the big opportunity for the auto mobile car manufacturing industries.
Besides this, the industrial sector is also deeply affected by the various micro
environmental factors which are assessed by the Porter's 5 force model and are as follows:
Porter's 5 force model: The porter five force model to assess the micro environmental factors of
the auto mobile industry is as follows:
 Competition in the Industry: The competition that is been faced by an auto mobile
manufacturing company in the industrial sector is the major factor that affect the micro
environment of the company. The organisation must take the suitable measures that must
be handled by the auto mobile industry in order to sustain the position of the company in
the market and get a better productivity. Various companies can opt for the different
strategies to sustain in the market (Virglerová, Dobes and Vojtovic, 2016).
 New entrants in the Industry and market: The rise in the number of the new entrants
in the auto mobile manufacturing industry of cars is also a major factor that has affected
the overall operations of the auto mobile industry on a significant level. The rise in the
competitors have made the various companies to take into the consideration different
types of effective measures to maintain their market position. The car manufacturing
firms has to effectively manage the new entrants in the market.
 Power of suppliers: The suppliers are the firms or the individuals that provide the auto
mobile manufacturing firm with the effective resources and the raw material to carry out
the production process. They will lay a very significant and deep impact on the various
operations of the company. Thus, the industry has to look after the effective measures of
the various operations that are been made by the company. The needs and the demands of
the supplier should be met effectively by the car manufacturing industry (Smith, 2017).
 Power of customers: The customers too lay a very deep and significant impact on the
operations of the company and have affected the production and manufacturing capacity
of the various companies in the car industry sector. The demands and the requirements of
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the customers are to be met by the organisation to maintain the better productivity and
sustainability by the auto mobile industry. If the cars that is been manufactured by the
company fails to meet the expectations of the customer's, it will lay a very deep impact
on the satisfaction level and the goodwill of the company (Cai and Yang, 2014).
 Threat of substitution: With the change in the environmental factors and the demands
of the customers, the cars are quite susceptible to various sort of the treats of getting
substituted or replaced by the alternative solutions. The rise in the prices of the crude oil
and increase in the pollution on the global level has lead the increase in the demand of the
cheaper and cleaner alternative of the diesel cars. Thus, the car manufacturing firms has
to look after the effective measures to improve the quality of the various operations that
are been taken into the consideration by the company to get a better growth and maintain
their market position (Menychtas and et.al., 2014).
Analysis of internal business environment:
The internal assessment of the various factors that will have a deep impact on the various
operations of the company. The car manufacturing companies like Toyota group will have a deep
and significant impact on the various operations of the business firm. In order to get the
assessment of the internal business environment of the company, the value chain model can be
used. This will help in the better understanding of the various operations and will help the
company to take into consideration various measures to meet the requirements and demands of
the customers. The Value chain model for the Toyota Group is as follows:
Value chain model of Toyota:
 Inbound logistics: The inbound logistics is the effective part of the value chain model
which will help the Toyota Group to adopt Just in time (JIT) approach to reduce the
inventory cost of the various operations that are been taken into the consideration by the
company (Georgescu and Popescul, 2015). The JIT approach will help them to assess and
refurnish the assembly and the production line in order to minimize the wastage of the
important resources that occurs while the production is been in the process. Besides this,
it will also help the business firm to manage the resources that they receive from the
suppliers and the logistics department of the company. Also, as Toyota doesn't own its
raw material, which it requires purchasing from others. In this case, the inbound logistic
approach will deeply help the company to haver a better productivity and profitability.
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Also, this approach will help the company to manage good relationship with the
suppliers. This help the company to optimize the supply and production process of the
company. And helps in increasing the production efficiency of the cited firm in a very
sustainable manner (Khan and Quaddus, 2015).
 Operations: It includes the adoption of the various measures or the activities that will
help the company to carry out the production facilities in a very effective and efficient
manner. It involves the assembling and the manufacturing process of the car that is been
followed by the company. Toyota Group has maintained brand image of having a good
services and production processes that are been taken into the consideration by the cited
firm. Besides this, the business organisation has a manufacturing process of its own
known as Toyota Production System(TPS). This is the structure that is been used to
integrate the better JIT and lean management approach to reduce the wastage of the
resources and effectively carry out the production. This approach helps the company to
fulfil the customers requirements in a better way (Belás and et.al., 2014). Besides this, the
identification of the internal glitches and the defects and their effective removal will help
the company to meet the operational requirements of the company in a better way. Also,
it helps the company to carry out the operations in a fixed time period, leading to the
timely delivery of the finished product. Other than this, the approach of work
optimisation and Total Productive Management(TPM) helps the business firm to
effectively carry out the task and resource allocation and effective checking of the quality
of the finished product. This will not only save the precious resources of the company
and maintain the standard of the quality of production process.
 Outbound logistics: This process is been taken into the consideration after the execution
of the production process. In this, the finished product or the service I.e. the car, is been
sent to the retailers, deals and finally to the customers. The Toyota Group to effectively
manages the process of distribution of the cars from the factory to the outlet, on the
worldwide level. This is been done in order to ensure the better delivery of the finished
goods to the right person or the customer, in the given time frame (Sodeyfi, 2016). Other
than this, it will look after the delivery of the product to the customer with responsibility
and effectiveness by the Toyota motor Sales department. Other than this, the service
department will help the company to provide the effective parts and other services from
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the production plant to the service centres of the cited firm. Apart from this, the outbound
service will help the company to effectively look after the shipping and tarnsferring of the
finished products in a better way and provide the essential technical support and logistics
for it.
 Marketing and sales: After the finished cars are been effectively transferred to the
retailers and the dealers, they will look after the marketing and the sales of the products
to the customers. They will look after the effective development of a marketing plan in
order to promote and conduct the sales of the cars. Besides this, they will also look afetr
the providing of the additional support to the customers in order to meet their needs and
demands and maintain the brand image of the company in the market (Niemann-Struweg,
2014). The various approaches that will be undertaken by the retailers of the Toyota
group will help the company to gain a better idea of n the market conditions and take the
suitable measures to improve the quality and efficiency of their services to the customers.
The retailer's or the dealers along with the collaboration of the Toyota Group can adopt
various CSR measures to improve their quality and meet the requirements of the
organisation and the customers in a very effective way. This will help the company to
builds the better goodwill and trust level among the customers, contributing in the rise of
the brand value and customer satisfaction level.
 Services: It involves the various services that are been taken into the consideration by the
company to meet the needs and demands of the customers, after the selling of the product
i.e. cars. It involves the service centres and the authorised dealers, taking into the
consideration various approach of having the time to time check of the various
components of the cars and carrying out its maintenance process (Komljenovic, Loiselle
and Kumral, 2017). The cited firm opt to provide the effective and fast service to its
customers in order to gain a better satisfaction level and maintain the brand image and
goodwill of the company. Other than this, the organisation look after the effective
management of the quality level of the company to meet the requirements of the
consumers. The key feature of the services that are been provided by Toyota Group is
that the services are quite fast, reliable and economic to the customers, ensuring the better
customer retention and satisfaction level.
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Reflection of Porter's 5 force model:
The effective implementation of the porter 5 force model in the organisation or car sub
sector of the auto mobile industry will be of the great benefit and help to the organisation and the
industry as the whole. It will help the firm to take into the consideration the effective measures to
meet the requirements of the customers and adopt various measures to improve and maintain the
quality of the various operations and the services, that are been provided by the company,
including the production process. This will help and motivate the companies or the various auto
mobile manufacturing organisation to meet the requirements of the consumers in a better way
(Apăvăloaie, 2014).
The assessment of the various competition in the market will help the company to adopt
effective measures to improve the quality of the service to gain a better competitive advantage
over its rivals. To avoid the stiff competition, many companies can opt for the effective pricing
and the marketing process that will help the company to meet the requirements of the customers
in an effective and efficient manner. The supplier's needs and demands are been also taken into
the better consideration leading to the building of the better relations with the brand and meeting
the needs of the customers that are been taken into the consideration by the auto mobile firm.
The customer power is also been taken into the effective consideration and meet the
requirements of the company and the customers in a very significant manner. This helps the
company to improve their operations and the product and service quality, in order to fulfil the
requirements of the customers. Other than this, the effective threat of the substitution and new
market entrants is also required to be taken into the consideration by the auto mobile firm. This
assessment will help the company to adopt the sustainable measures that will lead to the
maintaining of the better and strong market position of the company (Belás and et.al., 2014). The
threat of getting substituted will lead the company to inculcate the approaches of incorporating
the innovation in the product or the services provided by the company. This will help the
company in getting better customer satisfaction level, leading to their retention. On the other
hand, the threat of the new market entrants will make the company to adopt various strategies
that will help the company to cope up with the rise in the competition and maintain the effective
market position.
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CONCLUSION
Thus, from the report we can say that the effective assessment of the business
environment of the company will lead the to the adoption and meeting of the various needs and
the requirements of the customers to gain a better market position and meet the competition. This
report covered the PESTLE and the Porter's 5 force model for the assessment of the macro and
micro environmental factors that affect the productivity of the company. Besides this, the value
chain model is been taken into the consideration to get a better understanding of the various
internal factors that can affect the business of the Car manufacturing company, Toyota Group of
the auto mobile industry. Besides this, the reflection on the adoption of the Porter's 5 force model
is been discussed.
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REFERENCES
Books and journals
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Africa. Journal of Development Economics. 114. pp.159-171.
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priorities: The role of performance frontiers. International Journal of Production
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improvement in a complex operational and business environment. International Journal
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