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Term 1
Profit
Financial gain a business makes, revenue minus all expenses.
CF: motivates bus innovation and expansion
Role:
1. Invest in research, tech and comm development
2. Eco stability
Attracts investors and talent
Employment
Jobs provided by the business to individuals, enabling them to earn an income.
CF: Types: full time, part time, casual, contract
Role:
Fin stability and skill development
Reduce unemployment, enhance societal wellbeing
Income
Earnings from wages, salaries, dividends and other revenue streams.
CF: wages and salaries employees, dividends shareholders
Role:
Consumer spending: Eco growth
Individual: Basic and luxury needs
Choice
Varieties of goods and services available to consumers due to competitive market.
CF: Encourage comp between bus
Role:
Consumers: ability to select products: needs
Drives innovation and comp for market share
Innovation
Process of improving/ creating products, services or processes to meet market demands.
CF: f on tech advance and efficiency
Role
Drives progress in tech, healthcare, infra
Encourages sustainable prac in industries
Entrepreneurship + Risk
Entrepreneurs create and manage bus, taking on financial and operational risks.
CF: Requires innovation, leadership, resilience
Role:
Inspire solutions for societal challenges
Foster eco growth(inn tech, products and services), job creation
Wealth
Accumulation of financial and non-financial assets contributing to eco prosperity.
CF: distributed through wage, investments, gov’t revenue
Role:
Public infra development, improved standard of living
Reduce poverty, equitable distribution
Quality of life
Material and non-material benefits contributing to societal wellbeing.
CF: Measured by access to healthcare, ed and leisure
Role:
Improve overall happiness and productivity
Encourages sustainable prac to protect future generations
Economic
Factors like interest rates, inflation, unemployment, and economic cycles impact business activity.
CF: Eco growth increase consumer spending and bus profits while high inflation erodes purchaisng power and raises cost
Booms: increased demand and profitability, low unemployment creates skilled workforce
Recessions: reduced demand, increase bakruptcy risks, high interest rates deter borrowing for expansion
Financial
Relate to currency exchange rates, access to capital, and global financial market stability.
CF: Exchange rate affect import/export profitability. Interest rates impact borrowing and investment costs.
Strong financial markets provide investment opportunities. Favourable exchange rates boost export competitiveness.
Unstable markets deter long-term planning.
Rising interest rates increase loan repayment costs.
Geographic
factors include climate, population distribution, and global trade opportunities.
CF: Proximity to Asia positions Australia as a key trade partner. Regional population shifts influence resource allocation.
Growing trade relationships with Asia expand export markets. Tourism benefits from Australia’s natural attractions.
Extreme weather events disrupt supply chains. Geographic remoteness increases logistical costs
Social
Social trends, demographics, and cultural shifts shape consumer behaviour and business practices.
CF:
Sustainability trends drive eco-friendly products.
Businesses adapting to social trends gain market share, Sustainability initiatives foster customer loyalty.
Rapid cultural changes may disrupt traditional markets. Failure to meet societal expectations can harm reputations.
Legal
Government regulations affecting business operations, such as labour laws and environmental policies.
CF: Compliance ensures fair practices but increases costs.Regular updates to laws require adaptive strategies
Legal compliance consumer trust
Non-compliance leads to fines and reputational damage. Overregulation may deter innovation.
Tech
Advancements in technology drive innovation, efficiency, and market expansion.
CF: AI and automation enhance productivity.
Innovation improves customer experience.
High implementation costs deter small businesses.
Competitive situation
Competition levels in an industry influence pricing, quality, and innovation.
CF:High competition drives differentiation and innovation. Market dominance limits consumer choice.
Encourages quality improvement and lower prices. Drives innovation to meet consumer needs.
Smaller businesses struggle against dominant players.
Price wars reduce profitability.
Markets
Market influences include consumer demand, global trade patterns, and supply chain dynamics.
CF:Demand fluctuates with economic conditions. Globalisation increases competition and opportunities.
Expands business reach to international markets. Encourages innovation to meet diverse demands.
Volatile markets create financial instability.
Supply chain disruptions hinder operations.
