BUSINESS AO3 (CHAPTER 3) SAC 3

What is the external environment?

Surrounding factors that impact a business, which it has minimal control over

What is business planning?

Business planning involves establishing business goals and developing strategies to achieve them

What are macro factors?

Social, legal, technological, and economic conditions that a business operates in and has no control over

What are operating factors?

The primary factors that impact a business, which a business has some control over (customers, suppliers)

What are legal and government regulations?

the laws and rules made by parliaments and governments, as well as decisions made by the courts to upkeep safety of community and fair competition within industry

What can happen if a business does not comply to legal and government regulations?

consequences such as fines forced closure, or damaged reputation

What are employment laws and regulations?

rules that govern the relationship between employers and employees (eg business owner must provide safe working environment for employees, business owner should consider rules such as minimum wages)

What is environmental legislation?

The set of laws that aim to protect the environment (eg minimises businesse’s impact on enviro and protects resources such as oil, water)

What are industry regulations?

Rules that are specific to a business within a certain industry (eg may require business to obtain certain cetificates/qualifications/permits)

What are council regulations?

Local government rules made to govern a business operating in a specific geographic area (eg renovations of business: heritage listings restrict can limit renovations. waste disposal of a business: local laws can decide where a business disposes of waste

What are taxation requirements?

rules and laws related to tax that apply to all businesses (eg obtaining an ABN which allows a business to register for GST)

What are societal values and beliefs?

the principles, standards, and assumptions upheld by individuals or a group of people, which influence how they make decisions

What is societal behaviour?

the way people act and respond in various situations.

Good mental and physical health (societal values and beliefs)

Business should adapt their plan to suit the growning importance of wellbeing (eg supermarket selling healthier foods)

Employee wellbeing (societal values and beliefs)

employees should have a work-life balance in their jobs. Businesses should consider this by allowing employees flexible work hours and work from home options

Environmental Sustainability (societal values and beliefs)

Business can have negative impacts on environment. A business should source resources ethically and aim to reduce waste and pollution created.

Hygiene Practices (societal values and beliefs)

Businesses could consider placing hand sanitisers out the front of stores, or encourage employees to wear masks.

What is a trend?

A trend is a general development in the way a group of people in society are behaving

Increased reliance on advanced technology (Societal trends)

Businesses should search for ways to upgrade technological products to stay competitive, ensure latest advancements are implimented in processes

Greater focus on achieving gender equality (Societal trends)

A business may impliment workplace policies such as gender quotas

Increased purchasing of products related to wellbeing (Societal trends)

More business are selling activewear, exercise equipment

What are economic conditions?

The conditions that exist in relation to the productive performance and financial stability of a nation (macro factor)

What are economic condition indicators?

interest rate, employment levels, tax rates, level of consumer confidence

What are interest rates?

Price paid for money that has been borrowed, expressed as a percentage

What does high/low interest rates mean?

low interest rate = business loans are less expensive, repayments are easier to manage

high interest rate = business owner will have to pay more for the amount borrowed

What are employment levels?

Measured as the percentage of the labour force who are working in paid employment, full-time students and retired individuals are not included

What does it mean when the unemployment rate is low?

employment levels are high, and a business may find it difficult to find workers, or have to offer higher wages

What does it mean when the unemployment rate is high?

employment levels are low, and businesses will find it easier to attract workers, may only need to offer minimum wage

What are tax rates?

the percentage of income or spending that is required to be paid to the government by individuals or businesses

What is consumer confidence?

A measure of consumer’s feelings and expectations about current and future economic conditions

What does high and low consumer confidence mean?

High consumer confidence = there is a belief that the economy will grow

Low consumer confidence = belief that economy will slow down

customers who believe economic conditions will grow = more likely to spend money, optimistic about financial and job security

What are technological developments?

the invention and innovation of tools that solve problems and enhance processes.

What are automated production lines? (technological developments)

Used often in manufacturing lines to reduce need for human labour, faster processes and more precision

What is an online presence? (technological developments)

operating online, or alongside a physical store, convenient, accessible

What are overseas competitors?

Businesses that are located in other countries that operate in the same industry and offer a similar good or service.

Globalisation

The process by which governments, businesses, and people across the globe are becoming more interconnected, allowing increased international trade and cultural exchange.

Differentiation

Involves a business distinguishing its goods and services form competitors that are selling similar items in the market.

Overseas Markets

Are any that are outside of a business’s own country of operation, more planning due to different legal regulations, business owner must understand customer needs and expectations, so they can adapt their products to suit these

Offshoring of Labour

Involves a business moving its services or processes to another country, to increase efficiency or or access more diverse range of skills

Exchange Rates

Is the relative price at which the currency of one country can be exchanged for the currency of another country

Currency Appreciation

is an increase in the value of a currency against another foreign currency.

Online Sales

Involve buying and selling goods and services using the internet and is also reffered to as e-commerce

Copyright

is free and automatic protection used on original ideas such as writing, art, sound, films, and photographs.

Trademarks

An exclusive right granted over a unqiue aspect of a business, such as a symbol, word, sound, or number, that is used to distinguish the business or its products

Patenting

A patent is a license that provides a business with exclusive rights to use innovative devices, substances, methods, and processes.

Corporate Social Responsibility

Is the ethical conduct of a business beyond legal obligations, and the consideration of social, economic, and environmental impacts when making business decisions.

Environmental Considerations

involve taking responsibility for the business’s impact on the environment, as well as promoting the wellbeing of the planet.

Social Considerations

Involve aiming to positively contribute to the wellbeing of society.
A business needs to consider their impact on society. Goods and services produced can have a direct impact on society.
(sourcing ethically)

Customer needs

are the essential requirements that customers intend to fulfil with the purchase of a good or service from a business.

Customer expectations

are the values or benefits that customers seek when purchasing a good or service from a business.

Customer needs and expectations example

High quality good or service: BO could work closely with suppliers to make sure resources are high quality, or inspect products before distribution

competitive advantage

refers to the conditions or attributes that place a business in a superior position compared to its immediate competitors.

Competitor Behaviour

Competitors selling a similar good or service for a lower price: business should reconsider manufacturing + operating costs to offer product at similar/same price as competitors

Supply chain

is the network of individuals or businesses that are involved in producing and distributing a good or service to customers

suppliers, manufacturers, wholesalers, retailers, customers

Suppliers

are individuals or businesses that provide the resources required to produce goods and services

Sourcing Considerations

access to resources: local may not have necessary resources, overseas may

time: local = recieve resources faster, shipping time may take longer

Retreiving Considerations

road = cost effective only in au
air = expensive, fast
rail = slow, only in au
sea = only for tas, slow

Special interest groups

organisations or a group of people that seek to influence laws, policies, or behaviours to benefit a specific cause
unions/environmental lobby groups

unions

are organisations composed of individuals who represent and speak on behalf of employees in a particular industry to protect and improve their wages and working conditions

environmental lobby groups

organisations that advocate for the protection of the environment and promote environmental issues to businesses, the government, and the public.

business associations

are organisations that advise and support businesses in a particular industry