Business Studies
Research Assignment
Kumeren Govender 12A
Content Page
2 Introduction
3-5 The Primary Sector- Micro Environment
6 The Primary Sector- Market Environment
7-8 The Primary Sector- Macro Environment
9-10 The Secondary Sector- Micro Environment
11 The Secondary Sector- Market Environment
12-13 The Secondary Sector- Macro Environment
14 The Tertiary Sector - Micro Environment
16 The Tertiary Sector - Market Environment
17 The Tertiary Sector - Macro Environment
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Introduction
The three economic sectors (The Primary, Secondary and
Tertiary) all make up the production process of goods and
services. These sectors are all interrelated with the three
business environments (The micro, market and macro). The
businesses in the different sectors may have control and
influence over certain aspects of these environments. This will
be discussed throughout the assignment under the various
environments.
The product that will be researched in this assignment is
‘Furniture’.
The Primary sector will compose of the lumberjack company
which is concerned with obtaining raw materials. This would be
the lumber for the production of the furniture.
The Secondary sector will compose of the factory that purchases
the raw material and converts it into useful products such as the
furniture in households today.
The Tertiary sector will compose of the wholesalers, retailers or
agents who make the final product easily available to the
ordinary consumers. This is done by means of Storage, transport,
financing and insurance of products.
Wood Furniture Furniture Store
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The Primary Sector- (The lumberjack)
Trees will be planted and cut by this sector
The preparation of the forests & purchase of equipment,
seeds etc. will be performed by this sector.
The Micro Environment
This environment involves the internal operations of the
business and therefore the variables are completely controllable.
This is known as the decision-making environment which
implies management may improve its strengths or rectify its
weaknesses.
-The business Mission, Objectives and vision Statement.
“We aim to plant and cut down trees for timber to be used in
furniture manufacturing maintaining the highest code of business
ethics and conserving a sustainable environment. The high quality
of the timber produced will meet international standards. Our
objectives are to supply manufactures with excellent quality
timber. Marketing will be performed both nationally and
internationally to arrive at a significant income. Our duty will
incorporate the upbringing of society through social programs as
well as sustainable development ”
Functions of the Enterprise
1. Production Function
This function involves utilising physical resources such as
machines to cut down trees, physical labour, preparing the soil
and irrigation for the trees. The degree of influence this function
can have on the business relies on the productivity of the
materials. The higher productivity, the lower the cost of
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production per unit is and hence higher profit margins are
reachable.
2. Purchasing Function
This business function incorporates more than just buying raw
materials. It includes research, planning, strategising and policy
development. The business will need to research the type,
variety and nutritional information of the seeds used. This will
enable the business be maximise the timber output and
minimise the cost. Genetically modified seeds may be purchased
or a seeds that grows quicker. All these different options will
help indirectly to increase turnover. The purchase of seeds,
fertiliser, pesticides, tools and machinery will fall under this
function.
3. Marketing Function
This function is concerned with satisfying customer needs,
developing products of superior value, setting competitive prices
and distributing and promoting products effectively. The
business (lumberjack) should increase its market share and
should advertise more aggressively. It should ensure a decent
but profitable selling price is reached and also that raw material
is distributed in a professional manner.
4. General Management
The general management function ensures that all other
functions operate properly. It ensures that that the timber of the
right quality and quantity are produced as profitably as possible.
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5. Financing Function
This function guarantees that the lumberjack business has
enough capital in order to stay active in the business world. It
deals with securing loans from banks and other financial
institutions as well as contributing own or share capital. It also
ensures producing and analysing financial information to ensure
sensible and accurate financial decisions are made.
6. Human Resources
This involves all decisions affecting workers in the business. For
example in the lumberjack company many workers would do
hard and strenuous labour. Therefore the business should ensure
adequate working conditions are provided. They should all
comply with the relevant labour law. The business should also
ensure a good relationship with the workers is made and should
provide training and education to improve the work conditions
and efficiency.
7. Administration and Information Function
Recording of all information should be accurate and timeously
recorded. Records of costs, information from customers and
other financial information should all be needed and
documented for good financial decisions to be made. This
should include record keeping of all on-going operations in the
business. This in the lumberjack business would be the
technical, theoretical and financial information.
8. Public Relations Function
The business should maintain a good relationship with the
public.
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The market Environment
The conditions in this environment can rarely be influenced and
therefore the business needs to be adaptable.
1. Suppliers
Suppliers provide the business with a resource to produce
products. In this case this would be the fertiliser for the trees,
the pesticides, equipment, machinery and seeds needed.
2. Competition
Competition would include other businesses that produce
timber locally and internationally.
3. Intermediaries
These may be agents who may assist in the outsourcing of
transporting, delivering and handling. This may be agents who
transport the timber to the manufactures or the agents who
package the wood etc.
4. Trade Unions
Trade Unions protect the interest of the workers in the business.
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The Macro Environment
These are uncontrollable variables that the business can have no
or minimal influence on. The business will have to adapt to this
environment if order to reach its desired goals.
1. Physical Environment
The climate, effect of climate change, humidity and carbon
emission will all affect the growth of the trees and forms part of
the physical environment.
2. Technological Environment
This will include innovative and new machinery to improve the
cutting down and packaging of the trees into logs. Genetically
modified trees could also be used that grow faster and use less
physical resources.
3. Legislative Environment
This includes the various labour laws especially those affecting
the workers. The implementation of The basic Conditions of
Employment Act, Employment Equity Act , BBBEE all fall under
this environment. Also there are various Import and Export laws,
quotas and incentives.
4. Economic Environment
Economic forces such as interest rates, inflation, exchange rates
and economic growth all have effects for management which are
out of control by the business. This would be For Example: if the
lumberjack business loses out as the dollar-rand currency
decreases.
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5. International Environment
This environment would include the export taxes for exporting
the timber overseas as well as many other regulations.
6. Institutional Environment
The government plays an important role in the functioning of
the country and the business sector. Therefore subsidiaries to
these lumberjacks could be accomplished if needed to compete
in the over-seas market.
7. Social Environment
A business stands in the centre of the community and therefore
plays a major role in the well-being of society. This lumberjack
business could venture out into social responsibility programs.
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The Secondary Sector- (The Furniture Factory)
The secondary sector will involve the actual manufacturing on
the furniture. This business would buy the raw material (The
timber) from the suppliers and turn them into finished products.
The Micro Environment
Functions of the Enterprise
1. Production Function
This function involves utilising physical resources such as
machines to process raw material into furniture. The degree of
influence this function can have on the business relies on the
productivity of the materials. The higher productivity, the lower
the cost of production per unit is and hence higher profit
margins are reachable. This function is concerned with
producing furniture that is not only for the local markets but
also for the international markets.
2. Purchasing Function
This business function incorporates more than just buying raw
materials. It includes research, planning, strategising and policy
development. The business will need to research the type and
quality of the timber purchased. This will enable the business be
maximise the furniture output and minimise the cost. This
function also includes purchasing of equipment, machinery and
other item needed in order to operate the factory.
3. Marketing Function
This function is concerned with satisfying customer needs,
developing products of superior value, setting competitive prices
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and distributing and promoting products effectively. The factory
should identify the target market, advertise the furniture
produced, determine the right pricing strategies to capture the
identified target market and ensure that the furniture produced
reaches the retailers and other distributers.
4. General Management
This ensures the efficient operation of the entire business. The
general management function ensures that all other functions
operate properly. It ensures that that the furniture of the right
quality and quantity are produced as profitably as possible.
5. Financing Function
This function guarantees that the factory has enough capital in
order to stay active in the business world. It deals with securing
loans from banks and other financial institutions as well as
contributing own or share capital. It also ensures producing and
analysing financial information to ensure sensible and accurate
financial decisions are made. Large amounts of funds may be
necessary as manufacturing is a capital-intensive business.
6. Human Resources
This involves all decisions affecting workers in the business. For
example in the factory many workers would do hard and
strenuous labour. Therefore the business should ensure
adequate working conditions are provided. They should all
comply with the relevant labour law. The business should also
ensure a good relationship with the workers is made. The labour
force may not be largely unskilled but rather semi-skilled as
manufacturing of the furniture is highly mechanised.
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7. Administration and Information Function
Recording of all information should be accurate and timeously
recorded. Records of costs, information from customers,
suppliers and other financial information should all be needed
and documented for good financial decisions to be made. This
should include record keeping of all on-going operations in the
business.
8. Public Relations
This will include promoting a good image of the business in the
community, liaising with local and international customers and
maintaining favourable relations with government and
shareholders. This business should maintain a good relationship
with the relevant role-players.
As this is the internal business environment, these variables are
controllable.
The market Environment
The conditions in this environment can rarely be influenced and
therefore the business needs to be adaptable.
1. Suppliers
Suppliers provide the business with a resource to produce the
products (The furniture). In this case this would be the
equipment, machinery and raw material needed. The raw
material would include timber, nails, glue etc.
2. Competition
Competition would include other factories that produce
furniture locally and internationally.
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3. Intermediaries
These may be agents who may assist in the outsourcing of
transporting, delivering and handling. This may be agents who
transport the furniture to the retailers or the agents who package
the furniture etc.
4. Trade Unions
Trade Unions protect the interest of the workers in the business.
The Macro Environment
These are uncontrollable variables that the business can have no
or minimal influence on. The business will have to adapt to this
environment if order to reach its desired goals.
1. Economic Environment
Fluctuating economic forces such as interest rates, inflation,
exchange rates and economic growth all have effects for
management which are out of control by the business. This
would be For Example: if the factory loses out as the dollar-rand
currency decreases. This will affect the prices of the furniture
produced, profitability of the goods and international
competitiveness of the furniture producer.
2. Political Environment
The political environment involves the policies of the
government and establishments of trade agreements with other
countries. It concerns government subsidiaries to the factory
which may help to produce cheaper goods. It also involves
taxation policies.
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3. Social Environment
Factors such as poverty and crime will negatively affect the
factory. The factory will have to strategise and plan in order to
minimise the effects of poverty and crime. The community make
up the social environment.
4. Institutional Environment
The government plays an important role in the functioning of
the country and the business sector. Subsidiaries can be award to
business in order to help them compete with the international
market.
5. Legislative Environment
This includes the various labour laws especially those affecting
the workers. The implementation of The basic Conditions of
Employment Act, Employment Equity Act , BBBEE all fall under
this environment. Also there are various Import and Export laws,
quotas and incentives.
6. Social Environment
A business stands in the centre of the community and therefore
plays a major role in the well-being of society. This business
could venture out into social responsibility programs.
7. International Environment
This environment would include the export taxes for exporting
the furniture overseas as well as many other regulations.
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The Tertiary Sector- (The Furniture Store)
The Tertiary sector will compose of the wholesalers, retailers or
agents who make the final product easily available to the
ordinary consumers. This is done by means of Storage, transport,
financing and insurance of products.
The Micro Environment
1. Purchasing Function
This business function incorporates more than just buying raw
materials. It includes research, planning, strategising and policy
development. The business will need to research the quality and
quantity of furniture purchased. This will enable the business to
maximise the sales. This function also includes purchasing of
equipment, storage space, premises, cupboards etc. It would also
include the purchase of advertising space in newspapers etc.
2. Marketing Function
This environment includes promoting the sales of the product
(The furniture). The business should increase the market share
for South African produced furniture. Aggressive advertising
techniques should also be implemented. Competitive pricing to
meet the requirements of the target market should also be
adhered to.
3. Financing Environment
This function guarantees that the furniture store has enough
capital in order to stay active in the business world. It deals with
securing loans from banks and other financial institutions as
well as contributing own or share capital. It also ensures
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producing and analysing financial information to ensure sensible
and accurate financial decisions are made.
4. Human Resources
This involves all decisions affecting workers in the business. The
business should ensure adequate working conditions are
provided for the workers. They should all comply with the
relevant labour law. The business should also ensure that good
relationships with the workers are kept. Usually the furniture
store will have fewer workers than the Furniture manufacture.
5. General Management
The general management function ensures that all other
functions operate properly. It ensures that that the furniture of
the right quality and quantity are produced as profitably as
possible.
6. Public Relations Function
The business should maintain a good relationship with the
public.
7. Administration and Information Function
Recording of all information should be accurate and timeously
recorded. Records of costs, information from customers and
other financial information should all be needed and
documented for good financial decisions to be made. This
should include record keeping of all on-going operations in the
business.
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The market Environment
The conditions in this environment can rarely be influenced and
therefore the business needs to be adaptable.
1. Suppliers
Suppliers provide the business with goods in order to sell and
distribute to the general public. In this case this would be the
Furniture that is bought from the manufacturer or wholesaler.
2. Competition
Competition would include other businesses that sell furniture
locally and internationally.
3. Intermediaries
These may be agents who may assist in the outsourcing of
transporting, delivering and handling. This may be agents who
transport the furniture to the customers or the agents who
package the furniture etc.
4. Trade Unions
Trade Unions protect the interest of the workers in the business.
5. Consumers
Consumers purchase goods from the retailers. Therefore they
form a very important position to the supply and demand which
all affects the businesses profits. Consumer’s likes and dislikes
are always changing and therefore needs to be known by the
manufactures through the retailers.
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The Macro Environment
These are uncontrollable variables that the business can have no
or minimal influence on. The business will have to adapt to this
environment if order to reach its desired goals.
1. Social Environment
Factors such as poverty and crime will negatively affect the
furniture store business. The store will have to strategise and
plan in order to minimise the effects of poverty and crime. The
community make up the social environment.
2. Institutional Environment
The government plays an important role in the functioning of
the country and the business sector. The establishment of
furniture regulatory authorities would influence the quality and
quantity of furniture sold to consumers.
3. International Environment
Globalisation has made the task of local furniture retailers more
competitive as there are international counterparts that take the
advantage in trading in first world countries.
4. Technological Environment
This will include new developed technology which may aid the
sales of furniture to the consumers.
5. Legislative Environment
This includes the various labour laws especially those affecting
the workers. The implementation of The basic Conditions of
Employment Act, Employment Equity Act , BBBEE all fall under
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this environment. Also there are various Import and Export laws,
quotas and incentives.
6. Economic Environment
Economic forces such as interest rates, inflation, exchange rates
and economic growth all have effects for management which are
out of control by the business.
Conclusion
Across all three sectors of industry (Primary, Secondary,
Tertiary) the 3 business environments exist and need to be
adapted to by the relevant businesses. These sectors are crucial
to ensure that the product reaches the general public. From
cutting down of trees, manufacturing of furniture and
distribution and sales of products all sectors need to perform as
efficiently as possible. Hence this is possible by adhering and
adapting to the conditions and terms of the business
environments.
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