Business Studies Grade 12 Term 1 Week 7 2021

Directorate: Curriculum FET SUBJECT and GRADE Business Studies Grade 12 TERM 1 Week 7 TOPIC Application of the industrial analysis tools: SWOT analysis, Porter’s Five Forces and PESTLE AIMS OF LESSON At the end of this lesson, you should be able to: • Compile a SWOT analysis • Name and identify the elements of Porter's Five forces model • Apply Porter's Five Forces model • Name and apply PESTLE analysis factors • Explain how PESTLE factors pose challenges to businesses • Recommend ways in which businesses can deal with the challenges that are posed by PESTLE factors RESOURCES Paper based resources • WCED Grade 12 Business Studies Core Notes (2020): p. 31 - 34 • BSTD Revision for the Final Exam Workbook (2019): Environments • Via Afrika Business Studies Grade 12 Learner's Book • Platinum Business Studies Grade 12 Learner's Book • Oxford Successful Business Studies Grade 12 Learner's Book • Solutions for a Business Studies Grade 12 Learner's Book • Focus Business Studies Grade 12 Learner's Book

https://ultradeep.co.za INTRODUCTION • In grade 10 you were introduced to the SWOT analysis. This is an analysis tool used in the Micro environment of a business. • Read the case study below and complete the SWOT analysis in your workbooks by quoting from the scenario. ZETTIE’S BOUTIQUE Zettie is the owner of Zettie's Boutique, situated in Parow. She sells affordable suits for ladies and gentlemen as well as imported shoes and designer jackets. She has a degree in business management and her sales manager has a diploma in marketing. The demand for her products has increased so much that she has opened new branches in Hermanus and Paarl Shelly’s Boutique that sold designer clothing in Hermanus and Paarl has closed both their branches. The municipalities in two of the cities have shortened trading time by one hour and increased their levies on rates. Regular increases in the fuel price have increased transportation cost between branches. The overall impact has been that there is a decrease in the profits of the boutique. Zettie has employed John, a new cashier with no experience. John treats customers unprofessionally. Draw the template of a SWOT analysis in your workbook and quote two STRENGTHS, two WEAKNESSES as well as one Remember! You MUST OPPORTUNITY and one THREAT. quote directly from the text! DO NOT use your OWN WORDS STRENGTHS WEAKNESSES • • • • OPPORTUNITIES THREATS • • • As you know a Business is affected by what happens within the business (also called the micro environment), and outside of the business (the market and macro environments) • Now to determine the impact of the elements of the market and macro environments on the business we will use the Porter’s Five Forces and PESTLE analysis tools. https://tvetpapers.co.za

https://ultradeep.co.za 3 CONCEPTS AND SKILLS Porters five forces CAN YOU? • Business use the Porters five forces model to analyse their position in the market. According to Porter five elements can be used to Determine how the determine a Business’s place in the market. These forces are: other examples may Competitive rivalry • Number of e.g. Many impact the business’s Refers to the number competitors competitors will place in the market. of competitors and • Quality drive prices their ability to differences down influence the market. • Customer loyalty So? What can the Power of buyers • Number of e.g. fewer business do? The business must customers customers will assess how easy it is • Size of each order drive prices up They can improve for buyers/customers • Ability to the quality of their to drive prices down. substitute product/service Analyse the market environment of Farah’s Power of suppliers • Number of e.g. few Events using the Porter's Five Forces model. Refers to the extent to suppliers suppliers can which suppliers can • Size of suppliers drive prices up FARAH’s EVENTS influence prices. • Uniqueness of Farah's Events specialises in catering for product/service weddings. Despite Farah's high prices, she Threat of new entry • Time and cost of e.g. if a business has many customers due to excellent Determine how easy it entry can enter the service and stylish decor. It was easy to is for a new business • Barriers to entry market easily, it start her business, as she only needed a to enter the market • Specialist may drive prices trading license and a small amount of knowledge down capital. Farah's Events buys all her Threat of substitution • Cost of change e.g. if your products from West Coast Ltd, who is the Buyers preparedness • Uniqueness of product is only provider of wedding decorations and to substitute your product unique, the price materials in this industry. Helena's Party product • Substitute will not be Planners, who operates in the same area, performance influenced. offers similar services at affordable prices. PESTLE ANALYSIS You need to name the PESTLE factor, identify challenges of each factor Remember! You and make recommendations to businesses on ways to deal with the must also advise identified challenges. Business on ways to improve their You will find notes on this topic on page 33 and 34 of the core notes. market share after identifying the problems https://tvetpapers.co.za

https://ultradeep.co.za 4 ACTIVITIES/ASSESSMENT You will find activities on these topics in your textbooks. Please refer to the section on Industrial analysis tools for activities. You can also find good exercises on these topics in previous examination papers. Below are questions on these topics you can find in previous papers: Examination Questions Nov 2018 6.1 Nov 2017 2.3 and 2.5 Nov 2016 7 March 2018 2.5 March 2017 6.1 March 2016 2.1 CONSOLIDATION • This lesson dealt with the Gr 12 Industry analysis tools as set out in the Gr12 Examination Guidelines. • Understanding the content should enable you to apply the knowledge and skills required to successfully answer questions based on these topics in all Formal Assessment Tasks. • You should be able to identify challenges in the micro, market and macro environments, link it to the elements of the SWOT-analysis, Porters five forces model and PESTLE-analysis and advise business or make recommendations on how to address these challenges. • Thank you for spending time to work through this lesson and the prescribed content. Remember: “Success is no accident. It is hard work, perseverance, learning, studying, sacrifice, and most of all, love of what you are doing or learning to do.” – Pele VALUES • Caring: You are our most important clients in the educational landscape, therefore it’s important that that we provide you with the necessary resources for self-directed study. • Responsiveness: It’s our responsibility to make sure that quality lesson plans are developed timeously and distributed to you. • Competence: After working through the lesson plans you should be able to demonstrate the skills and knowledge acquired, to complete the required assessments tasks successfully. ACTIVITY ANWERS Baseline Activity: SWOT-analysis STRENGTHS WEAKNESSES • She sells affordable suits for ladies and gentlemen • have increased transportation cost Please • imported shoes and designer jackets • there is a decrease in the profits of the boutique note!! • She has a degree in business management • Zettie has employed John, a new cashier with no You • her sales manager has a diploma in marketing experience must • she has opened new branches in Hermanus and • John treats customers unprofessionally use Paarl the words from the https://tvetpapers.co.za

https://ultradeep.co.za 5 OPPORTUNITIES THREATS • The demand for her products has increased • The municipalities in two of the cities have • she has opened new branches in Hermanus and shortened trading time by one hour Paarl • increased their levies on rates • Shelly’s Boutique that sold designer clothing in • Regular increases in the fuel price Hermanus and Paarl has closed both their branches Porter's Five Forces model FORCE ELEMENT FROM SCENARIO ADVICE • Despite Farah's high prices, she has many She can improve her market share by Power of buyers customers due to excellent services and stylish a rigorous marketing campaign decor. • It was easy for Farah to start her business Try to increase market share by Barriers to entry because it required a small amount of capital diversifying, e.g. a wider variety of • And only a trading license. events • Farah may be stronger than Helena's Party Try to improve market share by Competitive rivalry Planners, as she renders excellent services. diversifying, e.g. introduce a wider • Despite Farah's high prices she has more range of products and services customers than her competitors. • West Coast Ltd has more power over Farah' s Farah can try to produce some of the Power of suppliers Events, since West Coast Ltd is the only products herself or to get the services supplier in the market of suppliers in other areas • West Coast Ltd can easily increase the prices of their services. • Some customers may prefer to organise Include traditional ceremonies in the Threat of substitutes traditional wedding ceremonies on their own, product she offers which may not require the services of Farah's Events. https://tvetpapers.co.za