external environment Flashcards
macro environment
the changes to this environment affect all businesses. a business has no control over this environment. factors include : legal and government regulations societal attitudes and behaviours economic conditions technological issues global issues corporate social responsibility
societal attitudes and behaiviours
trends
societal attitudes are the ideas, values and beliefs help by people in a particular society.
behaviours relate to the actions that express these ideas, values and beliefs
societal attitudes and behaviours are constantly changing
trends - a general direction in which peoples attitudes and behaviours are constantly changing or developing
operational environment
this environment is made up of stakeholders external t a business that have a direct impact on the operation of a business. a business has some control over this. factors incude customers competitors suppliers special interest groups
legal and government regulations
each level of government (federal, state and local) imposes its own direct and indirect regulations all businesses must adhere to. Federal gov' control -payment of taxes -provision of employee superannuation -observance of customs regulations
state gov’ control
- provision of employee entitlements
- payment of payroll taxes
- pollution controls - environment protection act
local councils control
- new development of buildings
- fire regulations
- parking regulations
- signs
economic conditions
refers to the many infuences that relate to econmic activity in a country, region or world. these include interest rates, wages, unemployment, echange rates and inflation.
expantion - increasing consumer spending, sales and profits rise, unemployment falling,
contraction - decreasing consumer sending, sales and profit falling, unemployment rising
peaks - wages and saleries at high levels, business operating at full capacity
troughs - wages and saleries at low levels, high level of unemployment, consumer spending at its lowest.
technological issues
relates to the growing use of tools, techniques or systems by businesses to solve problems or to serve a purpose in operations.
global issues
globalisation refers to businesses that now operate in a world wide market. business choose to operate globally due to unrestricted trade, high tech communications and lower manufacturing costs.
echange rates, and protection of intellectual property at a global level need to be considered.
global issues may include overseas competitors, overseas markets, exchange rates, copyright.
offshore labour
practice of moving some of a businesses process or service to the same or another business located in an overseas country
corporate social responsibility
refers to managing a business in such a way that takes into account the broader social wellfare of the employees, community, customers, suppliers and the environment is taken into consideration when making business decisions
customers and competitors
customers - are the reason businesses exist, they buy a business’s goods or uses its services, expecting high quality at good prices
competitors - are the businesses or individuals that offer rival goods or services. businesses should not only be aware of competitors but should closely monitor the environment for possible new competitors
suppliers and supply chain
a businesses suppliers provide resources that are needed for use in the production process. like raw materials, equiptment and machinery and information
supply chain is a network of suppliers from which the business purchases resources. it typically starts with sourcing of natural recources, followed by manufacturing and then assembly
special interest groups
groups of people who attempt to convince a business to change or adopt particular policies or procedures.
specific isssue groups - formed to focus on a specific area such as youth unemployment.
unions - employees choose to join a union in an attempt to improve pay and working conditions
business associations - these organisations support businesses through provisions of training and education programs.
consumer groups - these are lobby groups that monitor a businesses performance in terms of product safety
case studies - legal and gov regulations
sony - in 2020 federal law ordered sony to pay $3.5 million in fines for breaching australian consumer law. the company led customers believe they were not entitled to refunds on games purchased through their online store.
case studies - societal attitudes and behaviours
veganism - the popularity of veganism and vegetarian is rapidly growing, ethical consumers who do not use or consume animal products can be due to these reasons, animal cruelty, environmental impact and the health benifits
this has pushed for businesses like coles and woolworths to increase the number of vegan products being stocked. even fast food places like subway have introduced vegan options like fallafel subs.
case studies - economic conditions
bunnings - during covid, restrictions forced shopping to move online, although many businesses struggled bunnings benifitted majorly. there was high levels of employment, profits increased, and wages were high. this is called a peak during the phases of a business cycle
case studies - technological issues
bunnings - bunnings as a business need to take into account/adapt to technological changes in innovations in order to continue to grow and become even more successful. When planning, bunnings would have incorporated the required technology they needed such as phones and other communication technologies. An effect of introducing communication technologies is their ability to allow information to be transmitted rapidly to more customers pretty much instantaneously. This effect would have helped bunnings be able to expand and have multiple stores across the country which they have achieved.
Electronic funds transfers is another technology that bunnings along with close to nearly every store has. This allows bunnings to attract and keep customers as they are increasingly paying with debit or credit cards.
case studies - global issues
bunnings - bunnings has expanded its stores across both Australia and New Zealand. This has benefitted them as they are selling goods internationally, opening them up to increased profit and playing field. However being international, bunnings need to consider the exchange rates between the two countries meaning they will need to take into account New Zealand’s currency and economy. Bunnings have also benefited as they can have a larger supply chain and network of suppliers as they can source from two different countries.
case studies - corportae social responsibility
plantic fantastic - plantic fantastic manufactures a bioplastic made of cornstarch, this product is 100% copostable and dissolves in water.
this bioplastic is also produced organically with no waste, as during production one portion goes to animal feed another to compost.
or bunnings and sausage sizzle
case studies - customers
bunnings - to meet customers needs, products need to be constanly updated to the best quality and stocked appropriatly to ensure customers return. expectations of good prices and high quality are to be met to ensure profit is made and customers return with a happy experience.
case studies - competitors
bunnings - bunnings ensures they have a competitive advantage over their competitors like mitre 10, bunnings promises to ‘beat prices by 10%’. this is a business strategy to increase customers interest and ensure they buy from bunnings over competitors.
case studies - supliers & supply chain
cotton on - cotton on have over 300 supliers and factories globally, cotton only use ethically sourced cotton and are apart of the better cotton initiative.
most manufactoring factories are located in india, banglidesh and china, cotton on has a strong focus on trianing and educating designers on respecting boundaries of inspiration, and have routine quality inspections.
distribution, cotton on has recognised the carbon emmision problem and are working to reduce their footprint completly by 2050 by breaking down their supply chain in order to find problem areas
case studies - special interest groups
bunnings - the acci business associasion publishes reports and research on a range of different issues that may be relevant during planning
bunnings may look at these reports to see consumer interests, this will increase customer base as more popular products are being sold or policies about sustainability may change
