Chapter 3

Business planning

Process of establishing a business’s goals and developing strategies to achieve them

External Environment

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

Macro factors

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

Operating factors

External factors impacting a business that it has some control over

Legal and government regulations

Laws and rules made by parliaments and governments, as well as decisions made by the courts

Employment laws and regulations

Rules that govern the relationship between employers and employees

Environmental legislation

Laws that aim to preserve the environment

Industry regulations

Rules that are specific to businesses within a certain industry

Council regulations

Local government rules made to govern businesses operating in a specific geographic area

Taxation requirements

Laws and rules related to tax that apply to all businesses

Societal attitudes

The collective values, beliefs, and opinions held by a group of people

Societal behaviour

The way people act and respond in various situations

Values and beliefs

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

Trend

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

Interest rate

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

Employment level

Measured as the percentage of the labour force who are working in paid employment

Tax rate

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

Consumer confidence

Measure of consumers’ feelings and expectations about current and future economic conditions

Economic conditions

Conditions that exist in relation to the productive performance and financial stability of a nation or other geographical area

Interest rate

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

Tax rate

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

Overseas competitors

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

Overseas markets

Any markets that are outside of a business’s own country of operation

Offshoring of labour

Involves a business moving its services or processes to another country

Exchange rate

The Relative price at which the currency of one country can be exchanged for the currency of another country

Currency appreciation

Increase in the value of a currency against another foreign currency

Currency depreciation

Decrease 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 referred to as e-commerce