Business Management - Unit 1 AOS 3

Business Planning

The process of establishing a business's goals and developing strategies to achieve them.

External Environment

involves the surrounding factors that can impact a business, which it has some to no control over.

Macro Environment

Social, global, legal, technological and economic conditions that a business works within and has no control over.

Examples of Macro Factors

-Legal and Government Regulations

-Societal Attitudes and Behaviors

-Economic Conditions

-Technologic Considerations

-Global Considerations

-Corporate Social Responsibility

Operating Environment

The primary external factors impacting a business that it has some control over.

Examples of Operating Factors

-Customer Needs and Expectations

-Competitors Behaviors

-Suppliers of Business Resources

-Special Interest Groups

Legal and Government Regulations

The laws and rules made by the government, as well as decisions made in the courts.

Employment Laws and Regulations

Rules that govern the relationship between employers and employees.

Examples of Employment Laws

-Wages

-Working Conditions

-Unfair Dismissal

Environmental Legislation

The set of laws that aim to preserve the environment.

Examples of Environmental Legislations

-Reducing Energy Use

-Recycling

-Reducing Waste

Industry Regulations

Rules that are specific to businesses within a certain industry.

Council Regulations

Are local government rules made to govern businesses operating in a specific geographic area.

Examples of Council Regulations

-Location

-Operating Factors

-Renovations

Taxation Requirements

Are laws and rules related to tax that apply to all businesses.

Examples of Taxation Requirements

-Obtaining an Australian Business Number

-Applying for a Tax File Number

Societal Attitudes

Collective values, beliefs, and opinions held by a group of people.

Societal Behaviour

The way people act and respond in various situations.

Values & 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.

Examples of Trends

-Advanced Technology

-Greater Focus on Gender Equality

-Focus on Health and Wellbeing

Economic Conditions

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

Interest Rates

The price paid for money that has been borrowed, expressed as a percentage.

Employment Levels

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

Benefits of Employment Levels

-Indicate availability of workers

-Influence how much a business pays employees to attract new workers

Tax Rates

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

Consumer Confidence

A measure of consumers' feelings and expectations about current and future economic conditions.

Technological Developments

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

Technological Developments Strengths

- Implementing technology in a business can increase the accuracy and precision of the production process, resulting in a consistent level of quality that can improve a business's reputation.

- Introducing technology can reduce the labour resources a business requires, thus reducing wage costs.

- Customers can purchase a good or service online at their convenience which can increase sales.

Technological Developments Weaknesses

- If technology breaks down, it can halt production completely.

- Technology has high initial set-up and maintenance costs.

- If business continually replace employees with technology, they may develop a poor reputation for increasing unemployment rates and minimising their contribution to the local economy.

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 Labour

Involves a business moving its services or processes to another country.

Benefits of Offshoring Labour

- Lower Labour Costs

- increased Efficiency

- Access a more diverse range of skills

- Cheaper prices for consumers

Exchange Rate

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

Online Sales

The buying and selling of goods and services using the internet.

Patent

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

Copyright

A legal framework that is free and automatically attached to creations such as books, documents, web pages, plays, artworks, photos, and songs.

Trademark

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

Corporate Social Responsibility

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

Advantages of Corporate Social Responsibility

- Implementation can result in a positive business reputation which may attract more customers.

- May attract highly skilled employees who value ethical conduct and are committed to achieving business objectives

- Customers may be willing to pay more for ethically produced goods and services.

Disadvantages of Corporate Social Responsibility

- Constant focus on corporate social responsibility may decrease productivity levels and the completion of other business tasks.

- Can be time-consuming to implement strategies.

- Can be expensive for a business to implement initially.

Examples of Environmental Considerations

- Sourcing environmentally sustainable resources from local suppliers.

- Waste management strategies.

- Eliminating unnecessary packaging.

Examples of Social Considerations

- Sourcing from local suppliers, rather than from overseas.

- Plan to produce services that are good for society.

- Plan to devote a portion of a business' profit to allowing their employees the opportunity to volunteer at a charity organisation.

Customer Needs

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

Customer Expectations

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

Customer Retention

A business' ability to keep its customers overtime and is a measure of customer loyalty.

Examples of Customer Needs and Expectations

- Customer convenience

- High quality good or service

- Social responsibility

- Responsive customer service

Competitors

Any business who operates in the same industry as yours and offers competing goods or services.

What Businesses Should Consider in Terms of Competitors

- Both local and overseas competitors

- Conducting market research to establish competitors

- How to differentiate their business from competitors

Affecting Factors of Competitors

- Selling a similar good or service cheaper

- Selling a highly unique good or service

- Threat of potential new competitors

Supplier

Any business that provides resources for an entity to use in the creation of their product to help them conduct their business.

Supply Chain

All the suppliers who a business will purchase from in order to conduct their business.

Sourcing Considerations

- Time

- Shipping costs,

- Social responsibility

- Access to resources

- Legal Regulations

Transport Considerations

- Road Transport

- Air Transport

- Rail Transport

- Sea Transport

Special Interest Group

A group of people who may have concerns about a particular product or business.

Environmental Lobby Groups

A formalised group of people who share a passion for a particular issue. They come together to form pressure on both business and governments to make changes.

Examples of Environmental Lobby Groups Purpose

- Organise protests

- Inform public through media platforms

- Campaign for new laws and regulations

Business Association

An organisation that is set up to support and provide advice to any business. They do this through training, education, and information for the business. They advocate strongly for their members.

Examples of Business Association Purposes

- Offer advice on how to start a business

- Provide outlines of legal requirements

- Provide up to date news

Unions

An organistion that has been formed by workers in order to represent their rights and interests to their employers.

Examples of Unions Purpose

- Influence employment laws

- Organise legal employee strikes

- Negotiate to improve wages and working conditions