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1. Business organisation

and environment1.5 External Environment

A reasonable man adapts himself to thewo rld; an unreason able one persists in

trying to adapt the world to himself

George Bernard Shaw (1956-1950), Irish

author

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RecapO Explain the interests ofinternal stakeholders

O Explain the interests ofexternal stakeholders

O Discuss the possible areas ofconflictbetweenstakeholders

O Evaluate possible ways to overcome

stakeholder conflict (HL)

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Learning outcomesO 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 changein any of the PEST/PESTLE factors.

O Analyse the impact that external opportunities and

threatsmay have on business objectives and strategy.

O Explain how external opportunities and threats canimpacton business decision-making and SWOT

(strengths, weaknesses, opportunities, threats)

analysis.

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PEST analysisO A useful way to assess the impact of the external

environment on an organisations future activities.

Political issues include Economic issues include

New laws to limit the effects of smoking 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 Technological issues include

Ageing population New interactive televisions

More working women/one parent

families

Growth in mobile internet

Growing interest in environmentalissues

Increase in clean/green technologies

In p airs, select a well

knownHK company

and discuss andpr epare a PEST

analysis

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PEST / STEEPLE / PESTLE

Discuss the impact on a firms objectivesand

strategiesof:O New employment / consumer / competition

legislation

O Rising or falling interest / exchange ratesand

inflationO Slowing economic growth and rising unemployment

O Demographicchanges (e.g. de- or ageing

population)

O New productinnovations

Ethical

Environmental

Legal

Environ-

mental

Legal

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Opportunities & threatsIdentify opportunities and threats posed to the

Coffee Corner of:

O Social/cultural changesO New technologicalinnovations

O A downturn in the economicenvironment

O Environmentalissues

O Politicalchanges

O Legaldevelopments

O Increasing ethical concerns

How could these

oppor tuni t ies and

threats im pact on

Coffee Corners

dec is ion-making?

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O ____________________analysis:a useful way ofclassifying and assessing the ______ of the

external ___________ on a businesss

performance and activities

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O PEST/STEEPLE/PESTLE analysis:a useful wayof classifying and assessing the impact of the

external environment on a businesss performance

and activities

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HomeworkO Read pages 66-74 of Hoang

O Begin revising for an assessment next week

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RecapO Prepare a PEST analysis (or PESTLE and

STEEPLE) for a given situation and use it to analysethe impact of the external environment on a firm.

O Evaluate the impact on a firms objectives andstrategy of a changein any of the PEST/PESTLEfactors.

O Analyse the impact that external opportunities andthreatsmay have on business objectives and

strategy.O Explain how external opportunities and threats can

impacton business decision-making and SWOT(strengths, weaknesses, opportunities, threats)analysis.