AOS3- external business environment and planning Flashcards
unit one
external environment
the elements outside of the business, which can impact a businesses’ operations
operating environment stakeholders
-customers
-competitors
-suppliers
-special interest groups
macro environment factors
-legal and government regulations
-societal attitudes and behaviours
-economic conditions
-technological considerations
-global considerations
-corporate social responsibility considerations
customers
the people who purchase goods and services from the business, expecting high quality at competitive prices
competitors
other businesses or individuals who produce and sell rival, or competing, goods or services to the ones offered by the business
suppliers
the businesses or individuals that supply materials and other resources that the business needed to conduct its operations
special interest groups
the groups of people who attempt to directly influence or persuade a business to adopt particular policies or procedures, including lobby groups, business associations and unions
legal and government regulations
the laws or regulations made by parliaments and courts, which affect how businesses operate and behave
societal attitudes and behaviour
the factors relating to changes in the attitudes, behaviour, tastes and lifestyles of communities on a local, national and international scale
economic conditions
the set of influences that relate to economic activity, including interest rates, wages, unemployment, exchange rates and inflation
technological considerations
the issues related to the growing use of tools, techniques or systems
global considerations
the pressures that arise as a result of businesses operating in worldwide markets and competing on a global scale
corporate social responsibility
considerations
the pressures on a business to take into account environmental considerations to ensure broader social welfare
federal government obligations
-payment of taxes for employees and businesses with company tax
-provision of superannuation
-customs regulation
state government obligations
-provision of employee entitlements
-payment of payroll taxes
-abiding by relevant legislation
local governments have control over?
-approving new development
-fire regulations
-parking regulations
key laws and regulations
-new business laws
-location laws
-health regulation laws
-employment regulations
-anti-discrimination laws
-os&s laws
-tax laws
-trade practices
-environmental legislation
societal attitudes
the ideas, values, and beliefs that people in a particular society hold
societal behaviours
relates to how people express their ideas, values, and beliefs (societal attitudes)
why are societal attitudes and behaviours important for business?
-they dictate what is socially acceptable behaviour, therefore businesses need to align with these to be successful
-they can change regularly and businesses need to keep up
why are trends important for business?
-businesses that plan for these changing demographics (trends) are likely to thrive, while those that don’t may struggle
societal values and beliefs
-shared principles and morals of a group of people or society
-eg protecting environment and the expectation that businesses will contribute positively to society
trends
the general direction in which people’s attitudes or behaviours in society are developing or changing
economic conditions
-the many influences that relate to economic activity in a country, region, or the world
-includes interest rates, wages, exchange rates, and inflation
-changes in taxes directly affect business profits
-higher employment levels lead to increased business activity
interest rates
-the cost of borrowing money (extra money to be paid back)
-rises negatively affect business activity and customer’s lives (expensive for businesses to take out loans)
business and consumer confidence levels
-how they feel about the economy
-when consumer confidence is high consumers will be optimistic about their financial condition
-when business owner confidence is high they can feel positive about the future and may plan to expand business
technological considerations
-relates to the growing use of, and dependence on, tools, techniques, or systems by businesses to solve problems or to serve a purpose in operations
-technology continues to advance, and businesses need to adapt to new technology to stay relevant and profitable
what do businesses use technology for?
-increase efficiency and productivity
-create new products
-improve the quality and range of goods and services
-hopefully make a profit
globalisation
means that businesses now operate in a worldwide market
facing challenges (competing on a global scale) and opportunities (selling to a global market)
global issues
-overseas competitors and markets
-offshoring labour
-exchange rates
-protection of IP at a global level
-online sales
movement in exchange rates
-depreciation: fall in value of country’s currency in relation to another (exports cheaper, imports expensive)
-appreciation: rise in value of country’s currency in relation to another (exports expensive, imports cheaper)
offshoring
-moving some of a business’ processes or services overseas under same or different business)
how can a business be socially responsible?
-avoid conflicts of interest
-ensure business is free of corruption
-become involved in community
-minimise waste and pollution
-develop skills of employees
how do customers affect/influence businesses?
-customers needs change over time, so businesses must respond, and these needs have to be prioritised
competitive advantage
something unique to the business which it does better than its competitors
how do competitors affect business planning?
businesses will need to create new strategies and/or products/services to counter competitors
how do businesses deal with competitors?
businesses will need to respond by either becoming highly efficient, or offering a valuable/unique product/service
supply chain
-the network of suppliers from which the business purchases resources
-management is critical, as if there are problems in the chain it can affect the final product
why should businesses care about suppliers?
-guarantees efficient running of the business
-having number of suppliers makes it less vulnerable to supply difficulties
how do suppliers affect business planning?
businesses need to ensure stability with suppliers to avoid any problems which could arise
main types of special interest groups
-specific issue groups
-environmental lobby groups
-business associations
-unions
-consumer groups
why do specific interest groups (eg environmental lobby groups) exist, effect on business planning, and example?
-interest: to focus on an issue important to the local community
-effect: causes businesses to take actions to improve operating (eg undertaking environmental impact studies)
-example: youth unemployment, environment groups
why do business associations exist, effect on business planning, and example?
-interest: supports businesses
-effect: provides reports on relevant issues etc
-example: australian chamber of commerce and industry (ACCI), speaks on behalf of Australian businesses at both national and international levels. ACCI publishes and distributes research and reports on a range of issues that may be relevant to planning a business
why do unions exist, effect on business planning, and example?
-interest: represents employees
-effect: businesses focus more on looking after employees
-example: cfmeu (union for people in construction industries etc)
why do consumer groups exist, effect on business planning, and example?
-interest: to monitor business performance in product safety, packaging, pricing etc
-effect: holds businesses accountable, ensures products are high quality etc
-example: choice
positive of advances in technology
-helps businesses creates new products
-increases efficiency
-improves quality of goods and services
negatives of advances in technology
-decrease in number of employees needed
-products have short life cycle and may not last long
-businesses may have to spend more money to ensure online spaces are safe
