Business Studies: External Influences

Purpose of Note Making

• Understanding the importance of note making in relation to assessment and studying for exams.

Summary of Internal Influences

• Acknowledgement that summarizing internal influences has yet to be done but that students should already have knowledge of the topic.

• Goal: Ensure understanding of internal content without repeating what has already been covered.

Homework Submission

• Reminder for students to submit homework on time. Due date: tonight.

External Influences on Businesses

• Definition: Factors outside the control of a business.

• Key Areas of External Influences:

  • Technological:

    • Represents opportunities for businesses.

    • Example: Adoption of new technologies can increase productivity and reliability while reducing costs.

    • Specific technologies include video conferencing tools like Zoom and Microsoft Teams.

  • Impact of technology on labor force quality and retraining needs.

Case Study Examples

• Examples of Companies Adapting Technology:

  • Ford: Robotics in manufacturing.

  • Dior: Changing their product line from couture to perfumes to adapt to market needs.

  • Ansett: Shifted from airline services to perfumes to save their business.

  • Uber Eats: Revolutionized hospitality and food services.

Key Business Terminology

• Market Leader: A business that controls the majority of market share. It does not mean total control but a significant portion of the market.

• Market Share: Percentage of sales in a market attributed to a particular company compared to the total industry sales.

• Competitive Advantage: Differentiation from competitors in product or pricing to increase sales and market share.

• Differentiation and Competitive Advantage:

  • Coca-Cola vs. Pepsi: Both are cola brands, differentiation is through branding and marketing.

  • Aldi and Woolworths: Compete on price.

Types of Market Structures

• Monopoly: One company dominates the market (e.g., Sydney Water).

• Oligopoly: A few large firms (e.g., grocery stores, major telecommunications).

• Monopolistic Competition: Many firms sell similar products with some level of differentiation (e.g., fashion industry).

• Perfect Competition: Many small firms selling identical products, competing primarily on price (e.g., restaurants, hotels).

Competition and Market Entry

• Factors influencing competition:

  • Ease of entry into the market and its effect on the number of competitors.

  • Example: Unique or specialized services (e.g., high barriers in telecommunications).

Influence of External Competition

• Advertisements comparing products (e.g., Coke vs. Pepsi).

• Technology's role in marketing and operations:

  • Example: Viral trends on social media impacting stock and sales strategy (e.g., Kmart product placement).

Summary of Key Points for the Lesson

• Students should review their notes and examples of how businesses respond to external influences, particularly technological change.

• Importance of practical examples and clear terminology for understanding competitive positioning.

• Prepare for final assessments by ensuring comprehension of internal influencers and their impact on business.