External environment

Question 1

business environment

Answer 1

the surrounding conditions in which the business operates. can be divided into two categories: internal and external environment

Question 2

external environment

Answer 2

consists of operating and macro environments, little to no control over

Question 3

internal environment

Answer 3

consists of factors business most control/some control over

Question 4

operating environment

Answer 4

refers to the stakeholders the business interacts with in conducting its business. has a direct impact on the operations of the business. little control

Question 5

planning

Answer 5

is the process of setting goals/objectives, and deciding how they will be achieved

Question 6

interest rates affects on planning

Answer 6

high interest rate - loan repayments increase. less likely to borrow + business makes large profit
low interest rate - business loans more affordable loan repayments lower. more likely to borrow money. expansion more likely to occur as owners more confident they can borrow money and afford to ‘service their loan’
high - loan + business makes large profit
low - loan + expansion + borrow money

Question 7

tax rates (economic conditions)

Answer 7

• the percentage of income/value of good, service or asset paid as tax
• tax rates on certain activities affect owner decisions when planning.
• e.g. activity option that offers tax reductions may be attractive option in planning
  on certain activities affect planning + tax reductions attractive

Question 8

business and consumer confidence levels (economic conditions)

Answer 8

• how they are feeling about economy.
• high business confidence - reflected in decisions made when planning e.g. owner could plan to expand the business, take on more debt or employ more workers
• high consumer confidence - consumers optimistic about financial condition and their ability to find/maintain employment. more likely to make purchases
  high - owner confident + expand
  low - optimistic financial conditions + makes purchases

Question 9

values and beliefs (sociel attitudes and behaviours)

Answer 9

shared principles and morals of a group/society, including protecting environment and expectation businesses will contribute positively to society
principles/morals of society + environment + society

Question 10

trends (societal attitudes and behaviours)

Answer 10

trend - general direction which people’s behaviour in society is developing/changing. e.g. changing demographics and workplace culture
direction behaviour in society developing + demographics + workplace culture

Question 11

global issues affect on planning

Answer 11

owner needs consider global issues like overseas competitors and markets, offshoring labour, exchange rates, protection of intellectual property at a global level and online sales

Question 12

overseas competitors

Answer 12

owners who compete with them need competitive advantage based on strengths business, and reducing costs/improving quality of product. may also plan to differentiate their goods and services from other businesses.
competitive advantage + costs + quality + differentiate goods

Question 13

overseas markets

Answer 13

selling goods/services to overseas markets spreads the business’ risk and allows it to grow.
issues - transportation and distribution, conversion of currency, taxes and duties, marketing and packaging requirements and different customs and cultures

Question 14

offshoring labour

Answer 14

• moving some of a business’ processes or services to same or another business located overseas.
• do this to take advantage of lower costs, including labour and transportation, more favourable economic conditions in other countries

Question 15

explain (definition) why ashburton cycles would need to consider exchange rates when planning their business

Answer 15

• a depreciation (a fall in the value of a country’s currency in relation to another country) make exports cheaper and imports more expensive. exporting businesses benfit. manufactures importing goods face increasing costs
• an apreciation (an increase in the value of a countrys currency in relation to another country) exports more expensive and imports cheaper, reduces competitiveness of businesses that export.

Question 16

evaluate (advantages + disadvantages) why csr is an important consideration during the planning stage

Answer 16

• corporate social responsibility refers to managing a business in a way that the social welfare of the community, employees, customers, suppliers and the environment is taken into consideration when making business decisions. this is over and above legal responsibilities
• to be socially responsible, should aim to provide for greater good of society. important recognises their business activities have impact on society locally and needs to give careful considerations to its actions
• whilst csr can be costly to implement, more expensive ebikes, the benefits should outweigh the costs form of ensuring that business’ production process will not have serious/negative impact on environment/community

Question 17

environmental considerations

Answer 17

• Important ensure business’ production process wont have a serious/negative impact on environment when planning.
• E.g. could support environmentally friendly suppliers

Question 18

planning the productions of goods and services that are in society’s best interests

Answer 18

• ensure that production process doesn’t have serious/negative impact on community health social conditions
  e. g:
• fair and equitable treatment of customers by manager

Question 19

operating factors (css)

Answer 19

customers
competitors
suppliers
special interest groups

Question 20

outline (brief description) two reasons why ashburton cycles would need to consider customers when planning

Answer 20

• customers - reason why businesses exist. buy goods or use its services, expecting a high quality at competitive prices. must respond to the needs of customers, making sure that right product is delivered at the right time.
• needs to plan to produce high quality products. to ensure future viability and profitability, needs to recognise/assess changes in consumer tastes so it can constantly satisy consumer needs/wants

Question 21

using an example from the article, explain how competitors affect ashburton cycles’ business planning

Answer 21

competitors are businesses/individuals that offer rival goods/services. needs to be aware of existing competitors, like kmart and big w, and have to monitor environment for potential newcomers. to remain competitive, must respond to any change in actions of competitors

Question 22

explain why it is important that ashburton cycles is aware of where suppliers are sourced from and how they reach the business

Answer 22

• suppliers provide resources used in production process. good relations with suppliers important to guarantee efficient running, important to have reliable supplier network. one supplier puts business at disadvantage
• location distance to suppliers. delivery, rate stock, quality, and pricing/comparisons other suppliers of similar products, to identify if they can better meet ashburton cycles standards.
• suppliers - sustainable + corporate social responsibility

Question 23

unions (special interest group)

Answer 23

• employees may join a union to improve their pay and working conditions.
• unions represent employees in many workplaces in australia.
• unions work to prevent anything that diminishes employee rights, safety or conditions

Question 24

environmental lobby groups (special interest groups)

Answer 24

promote environmental issues to the public, government and businesses

Question 25

describe two societal attitudes or behaviours that have changed in recent times that may have affected ashburton cycles plannings

Answer 25

• society values environment and expects businesses to also value it. will adapt to this through selling sustainable ebikes
• belief businesses must cater workplace diversity. should accept employees of different genders, ethnicities, disabilities, etc. to showcase consideration of society’s beliefs by contributing positively to society
• ebikes + workplace diversity

Question 26

Using an example, explain why it is important for ashburton cycles to comply with legislation and government regulations

Answer 26

important that sound working knowledge of laws that will affect their operations when planning. if dont obey the law, risk losing customers, their reputation, being fined, or losing right to continue trading.
knowledge of laws - risk customers, reputation, fined, trading

Question 27

macro environment

Answer 27

the broad conditions and trends in economy/society within which business operates. no control

Question 28

discuss the impacts technology has on ashburton cycles

Answer 28

• technological issues relates to the growing use of tools, techniques or systems by businesses to solve problems or serve a purpose in operations.
• speed of change of technology - product life cycles becoming shorter. dont last for long time and constantly need updated. need to spend more time and money on r&d to remain competitive.
• changing technology opens up new markets, can present opportunities, selling ebikes
• product life cycles becoming shorter & new markets

Question 29

macro environment

Answer 29

the broad conditions and trends in economy/society within which business operates. no control

Question 30

legal and government regulations

Answer 30

• equal opportunity act (2010) - need to be aware of legal responsibility when recruiting staff. unlawful to discriminate against an employee or not provide everyone with equal opportunity to work
• development business premises influenced by local government zoning, building and signage regulations.
• competition and consumer act (2010) - consumers right to purchase goods of good quality and fit for purpose they were bought. e.g. cant produce faulty goods, product safety and price monitoring
  equal opportunity - competition & consumer + zoning, building, signage