External Factors

Question 1

define macro and operating environments

Answer 1

Macro environments are made up of the broader conditions and trends in the economy and society in which the business operates in. eg societal attitudes and behaviours and global issues

Operating environment refers to the specific outside elements that businesses interact with and conducts business with stakeholders.
eg supply chain and competitors

Therefore, Operating factors has minimal control and Macro factors have no control over external factors.

Question 2

Economic conditions

Answer 2

high interest rates - have to reduce production costs because consumers are spending less money.
because consumers are paying more money on loans to pay back the bank instead of more expensive items so they choose woolies instead because its the cheapest option.

Interest rates are high due to its consumer because they are looking to save money by going to cheaper alternatives such as supermarkets because that’s their competitor. They can’t match their competitor’s price because to source ethically and locally more expensive. The economy is in a contraction as the total spending is down. Could have planned for it more to cut the labour so Piper can sell it for less and gain more customers and interest.

Question 3

Societal attitudes and behaviours

Answer 3

Social attitudes are the ideas, values and beliefs held by people in a particular society and behaviours relate to the actions that express these ideas, values and beliefs.
shared beliefs of consumers

sourcing ethically to appeal to customers.

Question 4

Supply chain

Answer 4

A system of organisations, people, activities, information and resources involved in moving a product or service from suppliers to manufacturers and then to customers.

Question 5

Competitors

Answer 5

other businesses or individuals who offer rival or competing goods and services to the ones offered by the business.
(a business may need to reconsider its manufacturing and operating costs to determine if they can produce their product at the lowest cost so they can offer lower prices.)
awareness of competitors = efficiency in production.
competitive advantage develops strategies to make sure it has an edge over competitors.

Question 6

Special interest group

Answer 6

groups that aim to influence change in law and policies of behaviour for a certain cause.

Question 7

environmental lobby groups

Answer 7

Are organisations that advocate for the protection of the environment.

They launch campaigns against businesses conducting activities that are harmful to the environment.

guide businesses to be sustainable when operating a new business.

protesting to the government through social media.

Question 8

interest rates

Answer 8

is the price charged or paid for the use of money. Usually on annual percentage of the total amount loaned or deposited.

low interest rates = less costly loan
high interest rates = more costly loan

Question 9

tax rates

Answer 9

percentage of income or value of a good or service or asset paid as tax.

must pay tax so they avoid legal penalties from gov.

Question 10

business and consumer confidence

Answer 10

how business owners or business and customers feel about the economy.

Question 11

overseas markets
overseas competitors
online sales

Answer 11

businesses set up locally and internally to allow for a more diverse customer base.

strengths = access to new customers and diverse customer base.
new products and services into the business.
weaknesses = cost may be too high for exchange rates and the shipping cost.
currency issues and tax rates.

anyone who sells the same goods and services overseas in the same industry.