exam 1 Flashcards
External environment
Involves surrounding factors of a business which it has minimal control over
Macro factors
social, legal, technological and economic conditions that a business has no control over
Operating factors
Primary external factors which a business has some control over
societal attitudes
the collective values, beliefs and opinions held by a group of people
Societal behavior
way people act and respond in various situations
why should technological developments be considered when planning
can improve different aspects of their business and its operations. eg eftpos, automated production lines, websites and social media
overseas competitors
businesses that are located in different countries that operate in the same industry
overseas markets
any market that are outside of a business’s own country
offshoring of labour
moving its services or processes to another country
online sales
buying and selling goods and services using the internet
global sourcing of inputs
business acquiring raw materials and resources from overseas suppliers
overseas manufacture
business producing goods or services outside of the country where its headquarters are located
global outsourcing
transferring specific business activities to an external business in an overseas country
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
what are the 5 main reasons people start businesses
personal independence, financial independence, to make a product, to fulfil a market need and fulfil a social need
what is personal independence
involves a person being in control of their own decisions and actions.
what is financial independence
the ability to fund a desired lifestyle without relying on income from another individual
What is making a profit
involves a business generating more revenue than expenses it incurred
what is fulfilling a market need
is the desire to fill a gap in the market where there is a demand for products but little to no supply
what is fulfilling a social need
the desire to address a social issue in the local or wider community
what are the 6 main sources of business opportunity
innovation, market opportunities, changing customer needs, research an development, technological development and global markets
What is innovation
involves creating or improving products, processes, or services to solve a problem
what is market opportunity
trends or desires that are not being met by existing businesses
what is changing customer needs
transitions in what customers demand from businesses
What is research and development
involves investigating and testing new product ideas and processes
what are technological developments
advancements in machinery, computers and software
what are the 2 types of goals
social and financial goals
what does SMART stand for
Specific, Measurable, Attainable, Relevant and Time Bound
Why are goals important
provide direction and purpose, giving employees and managers a clear understanding of what the business is trying to achieve
how do businesses contribute to the economy
supporting employment levels. taxation, infrastructure, international trade and research and development
How do businesses contribute to social wellbeing
they help raise living standards and implement strategies to assist the mental wellbeing of employees
What is the internal environment
involves factors within a business that they have control over
What are some examples of factors in the internal environment
business location, type of business and type of business model
what are the types of business
sole trader, partnership, private limited company, public listed company, social enterprise and government business enterprise
advantages of sole trader
least expensive and have full control
advantages of partnership
greater range of expertise and minimal startup costs
advantages of a private limited company
limited liability for shareholders and variety of expertise
advantages of a public listed company
lots of expertise and shareholders have limited liability
advantages of social enterprises
gets financial support from other business and purposeful work so more likely to stay at the business
disadvantages of sole trader
can’t take time off and hard to expand
disadvantages of partnership
profit is shared and shared decision making
disadvantages of private limited company
complex to establish and hard to change structures
disadvantages of public listed company
expensive to set up and takes a lot of time to set up
disadvantages of social enterprise
hard to make profits
what are the 6 types of business models
online business, direct-to-customer business, bricks and mortar, franchise, importer, exporter
what is an online business plus an example
a business model where goods and services are traded via the internet such as netflix
what is an direct-to-customer business
is a business model where the businesses products are sold directly to customers
what is an bricks-and-mortar business plus an example
a business model that has a physical store presence such as target
what is an franchise business plus an example
is a business model that grants another person the right to operate under its name such as McDonalds
what is an importer business
purchases goods and services from overseas and sells them in its home country
what is an exporter business
produces good and services in its home country and sells them to overseas buyers
what are the 3 types of resources
natural, labour and capital
what are natural resources
raw materials from the environment that are used in the production of goods are services
what are labour resources
people that provide the businesses with their skills and qualifications to perform business activities
what are capital resources
the tools and machinery that are used to produce goods and services
