LO3 Use contemporary examples to demonstrate both

the positive and negative influence/impact the macro

environment has on business operations.
Political (P)
• Political is the first factor that investor, the owner of the enterprise must
care about it and statistical analysis so that they forecast about safe level in
domestic activities or foreign activities.
• Political factors are a complicated question in the business activities.
• The investors want to fast-growing market, they must have keen intelligence
with the political situation of the geographical position of a country and they
forecast about political happenings on a national scale, regional, the world
so that they have many determine theirs company own destiny.
• No one wants to invest a business project of a nation where have
happenings about the political dispute and military dispute.
Economic (E)
• the economic factor is one of the most important factors in business
activities,
• it depends on taking from and improve business environment.
• Besides, it exerts an influence on the enterprise about fair
competition or competes with other companies.
• This is a very important factor and catches the owners of the
enterprise attention.
• There are many factors of the macro environment but we can say the
following factors have effective with business activities.
Social (S)
• there are many different definitions of social but common point of social is
a system of values and standards in the life of people.
• Social has participated with many groups of people and they build together
for better benefits of social. The value form on social foundation, it brings
forward background that social standards are formed and demonstrated.
• The values of social including liberty of individual, justice, obligation of
social, collective responsibility,… The values also are reflected in the
political system and economy of the social.
• The standards are rules from social, it obliges people about carrying their
duties of social rules.
Technology (T)
• Technology is one of the dynamic factors that it implicates with
opportunities and risks for enterprises.
• The pressures and threats from technology environment:
• The emergence of new technologies creates opportunities for the
competitiveness of the alternative products and it threats the traditional
products of industry.
• The explosion of new technologies makes old technologies outdated and it
creates economic pressure for enterprises. Enterprises must concentrate
about technological innovation because technological innovation helps
enterprises on the road of competition with other competitor in industry.
Legal (L)
• the legal factor has more large influence with business operations of the
enterprise.
• The enterprise must comply with the rules of government including the policy of
employee recruitment, the policy of business tax, the price of products,…
• Concurrently, the activities of Government also create many opportunities or
risks for the enterprise.
• The Government will intervene with business activities if the enterprise break
principles of legal factor including law system and social policy.
• For example, the society always care about environment pollution or the save of
energy in the policy of Government.
• The society expect with stern rules about food safety for customers.
Environment (E)
• natural conditions including geographical location, climate, natural landscape, land, mineral
resources… We can say that natural conditions always an important factor in the lives of people
(especially, factors of ecological environment). In addition, it is also an input very important of
economic industries such as agriculture, industry, tourism, transportation. In many cases, the natural
conditions becomes an important factor in order to form competitiveness of products, services in
business activities.
• However, we are witnessing natural conditions that has been serious downgraded in recent years.
Especially, the pollution of the environment is increasing, the rapid exhaustion and scarcity of the
earth’s natural resource. The price that people pay for downgraded of environment is considerable.
• The owner of the enterprises needs keen intelligence with threats and opportunities of three trends
in the environment:
• Shortage of materials
• Increase energy costs
• The level of environmental pollution increase
LO4 Determine the internal strengths and weaknesses of
specific businesses and their interrelationship with external
macro factors
Applying SWOT analysis to evaluate
internal environment
• A case study of Ajinomoto company
• The Ajinomoto firm comprises 136 subsidiary businesses, 20 member
companies, and 110 facilities that manufacture products in 23
countries and regions across the globe, including Japan.
• When the Ajinomoto Corporation was created in 1991, it was the first
Japanese company to do so.
• Foreign money (100 percent) has been invested in Ajinomoto firm of
Vietnam, which has received 8 million dollars (US) from Ajinomoto
corporation (Japan).
• Ajinomoto Vietnam aspires to become one of the enterprises that
combines key factors such as an excellent company,
• a strong development company with "a secluded specific
characteristic" in the area of operations related to food products and
health.
• The firm aspires to be a leader in spice production research, to adapt
to the cultures of different parts of the globe,
• and to create the business circumstances that will allow for the
development of new markets.
SWOT analysis (Strengths)
Organizational structure
The Organizational structure of the
enterprise was organized by an online human resources with 2.350
model with departments.
Departments have functions and
common task about qualifications of
the enterprise.
The enterprise impulse the
development of specializing
production, technical skill for
employees.
Administrators create to increase the
efficiency of operations through a
combination of a coworker in the
enterprise.
Human resources
Ajinomoto Corporation has profuse
employees.
The employees of Ajinomoto
Corporation has laborious, intelligent,
creative in work.
The quality of employees incessantly
improves through every day.
The employees of Ajinomoto
Corporation has a high level of
education and the ability to
communicate with English.
Company image
Ajinomoto corporation is building image of a
product that is known all over the world. The
customers always support for products of the
enterprise because they have carefully
prepared for business strategy.
They very active about technological
innovation, research development of
production process. They create many new
products, increase customer’s choice.
They receive many comments of customer
about a company that have production
process: clean, food safety, environmental
friendliness.
Strengths
Physical capital Financial
resources
Ajinomoto Corporation has many strengths in the Ajinomoto Corporation has many the policies
material capital because of the development of the for promote of products such as the policy of
business in recent years. products,
It brings a lot of profit to the company from the the price policy of products,
business. the distribution policy of products,
Ajinomoto corporation has many financial
resources from business activities.
the market share of the company's products
always accounts for the market share in the
domestic market.
Weaknesses
Organizational structure Physical capital
The leadership of enterprise only focused on the The Ajinomoto company
work every day so that organization structure is dependent on the
reduces connectivity and exchange between material capital of the
departments. parent company for
When the enterprise hasn’t connected between processes such as
employees in different departments, the enterprise factory building, market
has trouble with business organization. The person development, business
rank first of the enterprise who has trouble about expansion.
spending more time to coordinate activities of all
members in different departments.
opportunities
Organizational structure
Departments that work closely together
that create increased productivity in the
business process. The smooth combination
of the departments of the company has
helped the company build its image not
only in Vietnam but also in the world.
Human resources
The employees of Ajinomoto Corporation are working
according to office hours from Monday to Friday. They
have 2 days off (Saturday and Sunday). The employees
work in the dynamic environment. The employees
always receive high salary system, executive
compensation, gifts, employer’s liability insurance,
training. Students are studying in universities. They are
recruited for professional training by Ajinomoto
company.
 THREATS

Human resources Company image Physical capital

Ajinomoto held product Ajinomoto corporation has production of Timely application of
distribution model food products including technology to the production
the staff in the same team with the spices, model,
opportunity to exchange training cooking oil, Ajinomoto had the
and professional skills drinks, opportunity to increase
Besides, there are also medicine,… productivity,
opportunities to study abroad to the company has many competitors in product yield,
apply to reality. the production of spices including reduced profitability
Ajinomoto personnel will be Maggi, higher personnel
trained to make and easy to Vedan,
exchange skills easier Nestle
Therefore, the enterprise has disadvantage
of market share in domestic.