Influences in the business environment Flashcards
Module 1 Chapter 3
business environment
refers to the surrounding conditions in which the business operates. It can be divided into two broad categories: external and internal.
business (corporate) culture
the values, ideas, expectations and beliefs shared by members of the organisation
complementary business
one that sells a similar range of goods and services
deregulation
the removal of government regulation from industry, with the aim of increasing efficiency and improving competition
ecologically sustainable
when economic growth meets the needs of the present population without endangering the ability of future generations to meet their needs
economic cycles
(or business cycles) the periods of growth (‘boom’) and recession (‘bust’) that occur as a result of fluctuations in the general level of economic activity
external environment
includes those factors over which the business has very little control
financial resources
the funds the business uses to meet its obligations to various creditors
globalisation
the process that sees people, goods, money and ideas moving around the world faster and more cheaply than before
human resources
the employees of the business; generally its most important asset
information resources
the knowledge and data required by the business, such as market research, sales reports, economic forecasts, technical material and legal advice
internal environment
includes those factors over which the business has some degree of control
market concentration
refers to the number of competitors in a particular market. There are four main types of market concentration.
monopolistic competition
where there is a large number of buyers and sellers in a particular market (e.g. local retailing shops)
monopoly
complete concentration by one business in the industry (e.g. Australia Post)
oligopoly
where a small number of larger firms have a greater control over a market (e.g. car manufacturers)
perfect competition
where there is a large number of small firms that sell similar products. They are unable to differentiate products from each other and so can only use price as a way of achieving market share (e.g. fruit and vegetable growers).
physical resources
the equipment, machinery, buildings and raw materials used by the business
regulations
rules, laws or orders that businesses must follow
stakeholder
any group or individual who has an interest in, or is affected by, the activities of a business
support services
the activities needed to assist the core operations or prime function of a business
sustainable competitive advantage
refers to the ability of a business to develop strategies that will ensure it has an ‘edge’ over its competitors for a long period of time
