Question

This Task requires you to research the organisation highlighted (HSBC) and then undertake
a business environment analysis using appropriate business analysis tools/frameworks to
identify critical issues facing the organisation both in the domestic and international market
environments. Page 4 of 7
[912]
a) Discuss three reasons why it is imperative for your selected organisation to analyse the
business environment it faces. Using the PESTEL framework, identify and explain at least
five (5) important macro environmental influences currently affecting your chosen
organisation.
b) Explain the importance of Porter’s Five (5)-Forces model. Using the Five-Forces model,
examine the current behaviour of the selected organisation and explain what you believe to
be the five (5) most critical influences arising from the competitive market environments, both
nationally and internationally.

Answer 1

Answer:

Explain environmental scanning and the PESTEL checklist for a company’s general environment.

Explain the impact of Porter’s “five forces” on industry profits.

Explain competitor analysis.

Explanation:

The environment is always changing, and this is just as true for the business environment as it is for the physical world around us. Managers try to avoid being “taken by surprise” by unexpected events that would impact their organizations through an ongoing process called environmental scanning. Environmental scanning is a high-level, broad-based process of gathering, analyzing, and dispensing information for purpose of developing strategies or tactics. The process entails getting both factual data and qualitative opinions. Organizations also scan when they are considering whether to enter a particular industry.

Answer 2

Answer:

Important macro environmental influences

A company's nature includes both variables that can be easily manipulated and elements over which it has little control. The latter set of variables is thought to exist in the global atmosphere. Managers should keep an eye on trends and occurrences and try to predict what will happen next, because the general environment can have a significant impact on a company's performance. PESTEL refers to the overall environment's political, economic, social, technical, environmental, and legal components. Wise managers look for key opportunities and obstacles in each of these six categories and adapt their company's strategy accordingly.

Other countries, including China, have a high level of intellectual property theft. Piracy is also a major concern due to the overall environment in three other areas. In terms of social division, China is the most populous country in the world.

Second, China's economic wealth is growing at a rapid pace.

Third, rapid technological progress in computers and networking has facilitated piracy throughout the period. When all of these factors are considered, piracy is a major issue for businesses that rely on intellectual property to generate revenue.

Explanation:

Porter's five-force model

Porter's five-force model is the primary source of competitive pressure in the industry. He emphasised the importance of not combining it with more transitory elements such as market growth rates, government initiatives, and technological developments. These are only temporary effects, but the five forces are an essential component of any industry structure.

• Fear of new entrants: If your market requires little investment and effort, and your core technologies are not adequately protected, competitors may easily enter your market and undermine your position. You can keep a good position if you have substantial and long-lasting barriers to entry.

• Fear of substitution: This refers to your customers' ability to find a new way to do what they are doing. Employees, for example, may choose to conduct the process themselves or outsource it when they have a single software solution that automates a critical operation. A simple and low-cost replacement could undermine your position and jeopardise your profitability.

• Rivalry firms:When there is a strong rivalry, firms may acquire clients through aggressive price reductions and strong marketing efforts. If your suppliers and buyers believe they are not getting a good deal from you, they may move elsewhere in competitive markets.
• Supplier power: The easier it is to switch to a cheaper option, the more options you have. However, the fewer providers there are, the more assistance you require, the stronger your position, and the more you can charge. This could have an impact on your profit.
• Buyer power: They have more power when dealing with a few competent customers, but when you have a large number of clients, your power grows.

Organizations must adapt, manoeuvre, and fit into their external contexts in order to survive and thrive. Organizations are groups of people who join together voluntarily to pursue a common goal by establishing organised and coordinated goals and strategies.

Non-profit, profit-oriented, public, private, government, charity, family-owned, and publicly traded on stocks are examples of various types of organisations.

Companies, organisations, agencies, alliances, parties, consortiums, and conglomerates are all terms used to describe organisations.

When a country's economy is strong, business investment tends to grow and prosper. Multinational corporations can still make money in politically unstable countries, but there are more barriers and higher costs associated with doing business there.

Because political insecurity makes the country less appealing, commercial enterprises from outside and abroad must pay higher rates for business lending, higher insurance rates, and, at times, higher expenses to protect employees and operations.

Protectionism is the practise of governments enacting policies that favour domestic enterprises and businesses over those operating in foreign countries.

Protectionist policies may impose restrictions on the quantity of commodities imported or exported.

Quotas are intended to prevent foreign imports from meeting all of a product's demand, allowing domestic providers to fill the gap.

Fair trade promotes the use of labour, environmental, and social standards in the manufacture of products, particularly those exported from developing to developed countries. Importers may freely choose to comply with fair trade standards, or governments may implement them by combining employment law.

Hence, the above content explains the Porter's 5 Forces Model.

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