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Business Management > AOS 2 - Internal Environment > Flashcards

AOS 2 - Internal Environment Flashcards

1
Q

Define the internal environment

A

The internal environment involves factors within a business that a business has control over.

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2
Q

Define the external environment

A

The external environment involves the surrounding factors that can impact a business, which it has minimal control over.

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3
Q

Define macro factors

A

Macro factors are social, global, technological, and economic conditions that a business works within and has no control over.

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4
Q

Define operating factors

A

Operating factors are the primary external factors impacting a business that it has some control over.

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5
Q

List some internal factors

A

Business model, business structure, resource needs, business location, sources of finance, support services, business planning, business values, and employees.

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6
Q

List some operating factors

A

Customer needs and expectations, competitors behaviour, supplier and supply chain, and special interest groups.

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7
Q

Describe the relationship between the internal and external business environments

A

Both the internal and external business environments can influence and affect each other. A business has control over the internal environment and can plan for internal factors, which can influence the impact of its activities and decisions on the external environment. Alternatively, a business has no control over external factors, meaning changes in the conditions of the external environment can have a significant impact on the internal environment of a business.

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8
Q

List some macro factors

A

CSR considerations, legal and government regulations, societal attitudes and behaviours, economic conditions, technological considerations, and global considerations.

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9
Q

Define sole trader business model

A

A sole trader is a business structure that is owned and operated by one individual.

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10
Q

Define partnership business structure

A

A partnership is a business structure that is owned by two to 20 owners.

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11
Q

Define private limited business structure

A

A private limited company is an incorporated business structure that has at least one director and a maximum of 50 shareholders.

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12
Q

Define public listed company

A

A public listed company is an incorporated business structure that has an unlimited number of shareholders and lists and sells its shares on the ASX.

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13
Q

Define social enterprise business structure

A

A social enterprise is a type of business that aims to fulfil a community or environmental need by selling goods and services.

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14
Q

Define government business enterprise business structure

A

A government business enterprise (GBE) is a business that is owned and operated by the government.

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15
Q

List three advantages and disadvantages of a sole trader business structure

A

Advantages include
the owner receiving full business profits, owner having full decision making power, and it’s easy and simple to set up

Disadvantages include
the owner having full legal responsibility, owner is responsible for business debts, and it can be difficult to take time off.

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16
Q

List three characteristics, advantages and disadvantages of a partnership business structure

A

Characteristics involve being unincorporated (all owners liable for business debts), all partners share risks (time, money, legal), and partners share responsibility profits, and risk.
Advantages include financial risk is shared between partners, less financial limitations due to more people, and owners can share the workload.
Disadvantages include unlimited liability, can be difficult to reestablish business structure if partner leaves, and the business profits need to be shared.

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17
Q

List three characteristics, advantages and disadvantages of a private limited company business structure

A

Characteristics involve having shareholder’s specifically selected and approved by board of directors, shareholders expect a return on original investment by receiving dividends, and shareholders can only sell their shares to people approved by the business.
Advantages include limited liability, bank more willing to provide loans, and the business is not threatened if a director leaves.
Disadvantages include is complex to establish and requires more time, complex reporting requirements (annual reports), and expensive to establish and operate.

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18
Q

List three characteristics, advantages and disadvantages of a public listed company business structure

A

Characteristics include requires seven shareholders, and three directors, required to share financial reports to the public on the ASX, and any person can buy sell shares.
Advantages include shareholders have limited liability. The business has great access to capital and the business has greater access to resources through more people involved in the business.
Disadvantages include conflicts can rise between directors, greater investment in time to set it up and expensive to own and operate .

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19
Q

List three characteristics, advantages and disadvantages of a social enterprise business structure

A

Characteristics include that at least 50% of profit goes towards social environmental cause, it operates in the public sector, and the main objective is to contribute to society or the environment.
Advantages include that it is helping improve a social environmental issue, employees are more likely to be motivated and satisfied with their work, and the business is more likely to be supported by the government.
Disadvantages include that it can be challenging to balance profit with 50% of it being gifted, it can be difficult to obtain loans, and expensive to establish and run.

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20
Q

List three characteristics, advantages and disadvantages of a government business enterprise business structure

A

Characteristics include that it fulfil a specific purpose, outlined by the government, operates in public sector, and has it important reporting requirements.
Advantages include that it improves the community, there’s healthy competition to the private sector, and it can rely on government for initial funding.
Disadvantages include that productivity can be lower, the government can interfere in Ular business strategies, and the business has to follow heavy red tape.

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21
Q

What are the choice factors of a sole trader business structure

A

Choice factors include high risk as one individual is responsible, limited access to resources, high-level of control and low set up cost

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22
Q

What are the choice factors of a partnership business structure?

A

Choice factors include that risk is all shared, greater access to resources and skills. Due to more people, level of control is shared between partners, and low set up cost.

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23
Q

What are the choice factors of a private limited company business structure?

A

Choice factors include low level of risk, due to limited liability, greater access to resources from shed expertise, depending on how much a shareholder, owners level of control can be limited, it is expensive to set up and run

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24
Q

What are the choice factors of a public listed company business structure?

A

Choice factors include limited liability, although it depends on original investment, finances can be found by selling shares which means greater access to resources and expertise, limited level of control since directors control business decisions, and expensive to create an operate.

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25
Q

What are the choice factors of a social enterprise business structure?

A

Choice factors involve high risk from giving away. Profit and liability depends on business structure, government is likely to assist with resources, depends on legals and business structure for level of control, and is expensive to create and run and bank, and maybe less willing to provide loans.

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26
Q

What are the choice factors of a government business enterprise business structure

A

Choice factors include very limited risk, easy to access resources, level of control is sometimes low as it is controlled by the government, and expensive to operate, but not costly to set up.

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27
Q

Define business model

A

A business model is a plan that identifies how the business will operate to make a profit.

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28
Q

Define online business

A

An online business is a business model that trades its goods and services via the Internet.

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29
Q

Define direct to consumer business

A

A direct to consumer business is a business model where the business products are sold directly to consumers with no intermediaries involved.

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30
Q

Define bricks and mortar business

A

Bricks and mortar it’s a business model that has a physical store presence.

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31
Q

Define franchise

A

A franchise is a business model that grants another person the right to operate under their name, uses its business systems and sell its goods and services.

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32
Q

Define importer

A

An importer purchases goods and services from overseas and sell them in their home country.

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33
Q

Define exporter

A

An exporter produces goods and services in the Home country and sells them to overseas countries.

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34
Q

List two advantages and disadvantages of an online business

A

Advantages of an online business include accessibility - easy to use and access and cheap - don’t need to pay rent
Disadvantages of an online business include customers can’t try on or touch products and it’s timely to train people to take online orders.

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35
Q

What is an online business advertising model and how does it work?

A

An advertising model allows for businesses to advertise online for a fee on another businesses website. Other businesses pay to advertise on their website so that can promote their business, so the business makes money through allowing other businesses to advertise on their platform.

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36
Q

What is an online business brokerage model and how does it work?

A

A brokerage model is a place where buyers and sellers can exchange products online. Money is earned by charging sellers a fee when sales are made, for example EBay.

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37
Q

What is an merchant business advertising model and how does it work?

A

A merchant online business model is when a business sells its products on their own website via the internet since customers can pay online for their product.

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38
Q

What is an online business subscription based model and how does it work?

A

Businesses charge customers a fee to use the website or application as away to make money, for example Netflix.

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39
Q

List two advantages and disadvantages of a a direct-to-consumer model

A

Advantages include easier for customers to buy straight from business, and higher profits for the business without intermediaries.
Disadvantages include difficulty growing business, and high level of competition.

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40
Q

List two advantages and disadvantages of a bricks and mortar model

A

Advantages include positive customer experience and satisfaction, and promotion and brand recognition.
Disadvantages include difficulty to access store for customers and employees, and inconvenience from busy store or long line.

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41
Q

List two advantages and disadvantages of a franchise model

A

Advantages include that it may attract customers from good reputation and customer loyalty, and established processes reduce time.
Disadvantages include high costs and reputation may be damaged from other stores.

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42
Q

List two advantages and disadvantages of a importer model

A

Advantages include providing access to products and resources that otherwise available and access to cheaper materials.
Disadvantages include reducing local employment and long waiting times.

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43
Q

List two advantages and disadvantages of a exporter model

A

Advantages include wider customer base from access to global market, and customers may be willing to pay more.
Disadvantages include higher transportation costs and business must accommodate different customs and laws.

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44
Q

What is five things included when you buy an existing business?

A

Premises, equipment, existing stock, employees, and goodwill.

45
Q

What are the advantages of buying an existing business compared to establishing a new business?

A

Strong reputation means loyal customers, less time spent training employees, can generate more revenue as the business can immediately open, and time is saved as process and equipment is already established and purchased.

46
Q

What are the disadvantages of buying an existing business compared to establishing a new business?

A

Negative reputation may repell customers, employees may be uncooperative to change, the business can be overpriced from goodwill, and success may be been attributed to previous owner.

47
Q

What are the advantages of establishing a new business compared to buying an existing business?

A

Full decision making power in the creation of the business, no goodwill cost, can create a unique business, and entrepreneur can make quick decisions due to full authority.

48
Q

What are the disadvantages of establishing a new business compared to buying an existing business?

A

Greater risk with new business, can be difficult to create a customer base, takes longer to generate a revenue, and time is needed to find and train staff.

49
Q

Define natural resource and provide examples

A

Natural resources are raw materials from the environment that are used in the production of goods and services. E.g wood, food, water, and land.

50
Q

Define labour resource and provide examples

A

Labour resources are the people who provide the business with their skills and qualifications to conduct business activities. E.g factory worker, sales person, vet, assistant.

51
Q

Define capital resource and provide examples

A

Capital resources are man-made goods used in the production of goods and services. E.g tools, equipment, technology, machinery.

52
Q

What are the natural resource supplier considerations?

A

Cost - may want to choose cheaper supplier to reduce expenses and increase profit
Quality- may choose supplier with higher quality to improve product quality
Location - save time by choosing closer supplier
Reliability - want a reliable supplier (time, quality)

53
Q

What are the natural resource considerations nature of resource?

A

Perishability - must consider expire date so must plan to order more frequently and in less quantity
Storage requirements - some resources require specific storing such as refrigeration
Security requirements - some resources need to be stored with security
Seasonal availability - some resources are only available at certain times of the year

54
Q

What are the natural resource CSR considerations?

A

Environmental standards of suppliers - a business may choose environmentally friendly suppliers
Social standards - choose suppliers who treat their employees right
Environmental impact of sourcing - avoid resources that harm the environment
Location of supplier - choose Australian supplier to support the nation’s economy

55
Q

What are the labour resource cost considerations?

A

Wages and salary - can cut costs with minimum salary but employees may be less motivated
Quantity - employ the right number of employees to have enough but also save time and money
Time - have labour resources available only when needed to cut costs

56
Q

What are the labour resource quality considerations?

A

Qualifications - they must match the job position
Skills and knowledge - allow employee to complete the job well
Training - implement training to perform tasks to desired standard

57
Q

What are the labour resource CSR considerations?

A

Employee well-being - improving work hours improve employee’s wellbeing, providing job security makes employees feel financially safe and valued in role

58
Q

What are the capital resource supplier considerations?

A

Cost - increase profit by choosing lower priced supplier
Quality - choosing higher quality capital resources increases product quality

59
Q

What are the capital resource consideration nature of resources?

A

Capability - technologically advanced and capable of completing task
Operation requirements - employees may need to be trained to use the capital resource
Maintenance requirements - may need to continuously maintain resource which can be timely or costly

60
Q

What are the capital resource CSR considerations?

A

Environmental sustainability - can reduce impact on the environment
Social sustainability - sourcing local capital resources to support community is good for business reputation

61
Q

What are the factors affecting choice of location for shopping centres?

A

Very high visibility and accessibility, very high rental price, high proximity to competitors, high proximity to complementary businesses, easy access to suppliers, close proximity to customers, must consider area demographics, and must regard laws and regulations.

62
Q

What are the factors affecting choice of location for shopping strips?

A

Very high visibility, cost is dependent on popularity (rent or owned) but usually high, likely to be close proximity to competitors, likely to be close proximity to complementary businesses, usually close proximity to suppliers, close proximity to customers, must consider area demographics, and laws and regulations may impact signage, building, or extending.

63
Q

What are the factors affecting choice of location for home businesses?

A

Low visibility and accessibility, no additional cost for rent, extremely low proximity to competitors,low proximity to complementary businesses, convenient and easy for owner, maybe consider area demographics, and required to follow laws and regulations.

64
Q

What are the factors affecting choice of location for online businesses?

A

Very high accessibility and low visibility but can build online presence, no rental cost but costs for website maintenance, very high competition, can make online deals with other businesses, convenient and easy for owner, may need to consider permits and shipping laws and regulations.

65
Q

What are two advantages and disadvantages of shopping centre locations?

A

Advantages include greater exposure to customers, and easy access to suppliers
Disadvantages include rent is more expensive, and increased competition

66
Q

What are the factors affecting choice of location for shopping strips?

A

Advantages include fewer competitors, and it’s likely for locals to visit shopping strip.
Disadvantages include less foot traffic, and rent can be expensive.

67
Q

What are the factors affecting choice of location for home businesses?

A

Advantages include high, flexibility, and travel time is saved.
Disadvantages include low visibility, and it may be difficult to balance work life.

68
Q

What are the factors affecting choice of location for online businesses?

A

Advantages include a wider customer base due to accessibility, and no rent for physical store.
Disadvantages include very high competition, and cost involved with website maintenance

69
Q

What are the factors affecting choose of source of finance and why is it a factor?

A

Business structure - the business structure will impact the ability to receive the source of finance.
Overall cost - if the source of finance will include a cost for the business.
Flexibility - the business has flexibility surrounding the time and amount of source of finance.
Level of control - how much control over the business the owner will have.

70
Q

Define equity capital

A

Equity capital is money contributed to a business by an investor in exchange for partial ownership.

71
Q

Explain how equity capital works.

A

Investors contribute a sum of money towards a business and in return, they gain a decided amount of partial ownership. Depending on On how much ownership the investor has, they can make decisions for the business.

72
Q

What is personal equity, private equity, and public equity?

A

Personal equity is money from owners, personal savings, friends, family, or business partner.
Private equity is money from a business selling it shares to specifically selected individuals that must be approved.
Public equity is money from shares to the general public.

73
Q

Define debt capital

A

Is money that has been lent to a business by an external source.

74
Q

Explain debt capital

A

The most common source of depth capital is money lent by bank and is paid back overtime with interest.

75
Q

Define grant

A

A grant is money given by government, or another organisation for a particular reason.

76
Q

Explain grants

A

Often provided by governments or other organisations with this specific purpose, and the business must meet the set requirements by the organisation to obtain a grant.

77
Q

Define overdraft facilities

A

Overdraft facilities are agreements between banks and businesses are individuals, that allow a bank account to be withdrawn below zero.

78
Q

Explained how an overdraft facility works

A

An overdraft that you borrow money even if you have insufficient funds by allowing you to go into the negatives, they must be paid back or interest is extremely high.

79
Q

What are the factors affecting the choice of equity capital?

A

Equity depends on business structure, doesn’t usually have any added cost, depends on type of equity, flexibility, and personal equity has full control but other types of equity have limited control.

80
Q

What are the factors affecting the choice of debt capital?

A

Small businesses may found a difficult with debt but it is easier for larger companies, the overall cost of depth is costly as you must repay the loan with interest, debt capital is flexible as you can choose the time period and amount of money, and the owner has a high-level of control of the business.

81
Q

What are the factors affecting the choice of grants?

A

Grants has minimal impact on the business structure, no additional cost for business, low flexibility as you can’t choose how much is received and you must make the requirements, and there’s less control over how the money is used if funded for specific purpose.

82
Q

What are the factors affecting the choice of overdraft facilities?

A

Minimal impact on business structure although it is easy for larger companies to pay back quickly, very high interest rate is paid if back late and relatively expensive, highly flexible as you can decide the time and amount, and high-level of control for the owner.

83
Q

Define business support services

A

Business support services are the specialised people, facilities, or amenities that aim to help a business successfully operate.

84
Q

Describe legal support services and provide examples of how advice is offered or how it assists the business.

A

Support services can involve can include solicitors and lawyers, and they can help choose an appropriate legal business structure, draw up contracts (such as leases and partnerships), inform and advise about changes to the law impacting the business, and provide legal representation in court.

85
Q

Describe financial support services and provide examples of how advice is offered or how it assists the business.

A

Financial support services can include financial advisors, accountants, and bookkeepers. Financial support services can evaluate the financial feasibility of the business concept, establish and maintain financial information, determine tax obligations, pay workers all entitlements, set financial goals, and advise on possible business strategies.

86
Q

Describe technological support services and provide examples of how advice is offered or how it assists the business.

A

Technological support services can include IT consultants and IT specialists, and they can help develop in maintaining technological systems such as websites, advise on hardware that can improve operations, maintain online security of customers, and train workers to use and understand technology.

87
Q

Describe community based support services and provide examples of how advice is offered or how it assists the business.

A

Community based support services can include like-minded individuals, start-up hubs, business classes, and local council events. Community base support services can help develop management skills for successful leadership in business, help establish a business idea, support and provide local jobs for the community, and provide services for the local community.

88
Q

Define formal networks business support service

A

Formal networks are interconnected groups of people and official organisations that assist in offering professional support to business owners.

89
Q

Define informal network business support service

A

An informal network is an unofficial interconnected group.

90
Q

Define business mentor business support service

A

A business mental is an experienced and knowledgeable business person who provide guidance and advice.

91
Q

Describe formal networks support services and provide examples of how advice is offered or how it assists the business.

A

Formal networks include experienced business owners and organisations, and can help with refining the business concept, seek new business opportunities, help set goals for business success, and interacting with other business people to grow business contacts.

92
Q

Describe informal networks support services and provide examples of how advice is offered or how it assists the business.

A

Informal networks include friends, family, and social media. Informal networks can help with discussing the business idea, suggesting possible business opportunities, setting goals for business success, and continuous personal support.

93
Q

Describe business mentors support services and provide examples of how advice is offered or how it assists the business.

A

Business mentors can be found through government programs, formal networks, and informal networks. Business mentals can help develop management skills for successful leadership, refine the business concept, write business plans, suggest new business opportunities, set goals for business success, and access business networks to connect with others.

94
Q

Define business planning

A

Business planning is the process of establishing a businesses goals and developing strategies to achieve them.

95
Q

Define business plan

A

A business plan is a document that outlines a businesses goals and objectives, as well as strategies to achieve them.

96
Q

Define a SWOT analysis

A

A SWOT analysis is a planning analysis tool that helps a business identify its internal strengths and weaknesses, as well as any external opportunities and threats.

97
Q

Describe the four key benefits of a business plan for a business

A

Business - helps assess whether a business is viable to determine if the business can successfully operate. Also helps businesses, establish goals and objectives.
Employee - employee performance may improve if provided with clearer direction and objectives
Time - business can save time in the future by planning ahead for business crisis and emergencies.
Money - can help business obtain external finances as investors can see. Business is financially viable.

98
Q

Explain the purpose of developing a business plan

A

The purpose of developing a business plan is to create business goals that are realistic, measurable, specific, and still challenging to improve the business in someway. Business goals are also allow business to plan marketing and financial strategies to assess business viability to plan for success.

99
Q

What are the key features of a business plan?

A

Executive summary, business owners, product, operations plan, marketing plan, financial plan, corporate social responsibility, and supporting documents.

100
Q

What is an executive summary?

A

An executive summary is an overview of a business plan, such as the products, strategies, philosophy, and objectives

101
Q

What is the business brand in a business plan?

A

Business brand outlines businesses vision, competitive advantage and includes the business name logo and slogan.

102
Q

what are the business owners role in a business plan?

A

Outlines the owners roles, responsibilities, skills, qualifications, and experiences.

103
Q

What is the product role in a business plan?

A

Provides detailed description of current or feature products. It includes possible innovations, competitive advantages, estimate of customer demand, and product price.

104
Q

What is the operations plan in a business plan?

A

The operations plan is the product process, which involves suppliers, inventory, equipment, location, and facilities,

105
Q

What is the marketing plan in the business plan?

A

The marketing plan is marketing strategies which involves target customers, promotion, competition, planning and advertising.

106
Q

What is a financial plan role in a business plan?

A

Financial plan includes financial feasibility and financial goals, which can include estimates of initial and ongoing costs sales, cash flow and financial objectives

107
Q

What is CSR role in a business plan?

A

Corporate social responsibility, outlines community and environmental impact

108
Q

What is the supporting documents in a business plan?

A

Supporting documents is evidence and additional documents in the business plan.

109
Q

What is included in a swot analysis?

A

A SWOT analysis includes internal strength such as great reputation, highly trained and qualified employees and high-quality goods and services. W Stands for internal weaknesses which can be negative work environment and culture, insufficient resources (such as money and other resources) and outdated technology. O Stands for external opportunities which can be the creation of new goods (innovation), changing customer needs, and improving economic conditions. T stands for external threats which can be competitors improving strategies, changes in customer preferences, and changes with locations such as increased rent.

Business Management (3 decks)

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