Lesson 6 - Operating Factors Flashcards
Operating factors
External to the business however the business has some control.
4 operating factors
Customer needs and expectations
competitors behaviour
Special interest groups
Suppliers and supply chain
Customer needs and expectations
Business must consider the needs and expectations of customers and how these change over time. If a business doesn’t respond to the changing needs the customer will go elsewhere and the business will lose sales.
Competitor behaviour
Competitor behaviour can influence a businesses decisions as if they are more suitably meeting the needs of customers, this could result in a fall of sales.
If competitor releases a product or develops a new idea this means we need to respond i order to remain competitive.
Social interest groups
A group of members with shared interest. They can put pressure on a business to act i line with these interests.
5 examples of social interest groups
Animal rights groups
Environmental lobby groups
Business associations
Unions
Customer needs
4 examples of social interest groups
Animal rights groups
Environmental lobby groups
Business associations
Unions
Environmental lobby groups
Are a special interest group that promote environmental issues to the public, government and businesses
Business associations
Are organisations that support businesses through the provision of training and education programs, advice and information.
Examples:
Small Businesses Association of Australia
Family Businesses Australia
Unions
Formed to represent and protect the rights of workers in a particular industry.
Employers become members of unions and unions:
Provide support and advise to elected a union representative, provide assistance and support to individual employers, offers services and facilities e.g health insurance
Setting up pay and work conditions:
Negotiate and bargain on the employees behalf during an enterprise bargaining process, argue employees cases during hearings held by Fair Work Commission when they are determining pay awards.
In the event of a dispute:
Union may take up matter on behalf of the employee with management
Represent employees in mediation and arbitration
NOTE - unions must apply for an entry permit to a workplace and give 24hrs notice
Trade union impact
Productivity - fall b/c employees not putting best effort b/c do not feel the business has right pay and conditions
Costs - cost increase because productivity falls. Cost of production increased = reduced profits or increase the price of the g/s = no longer competing priced = decreased sales
Profits - decrease - decreased productive and damage to reputation
Competitiveness - business struggle to attract best talent due to industrial action = hinder Billy to innovate and offer a quality g/s
Reputation - customers would not want to support an organisation that doesn’t treat its worker fairly > less customers > less sales > less profit
Consumer groups
Monitor a business in terms of product safety, packaging, pricing and adverting.
SIG impact on businesses
To minimise threat businesses should:
Consider the views unions and action groups when making decisions
Actively engage and seek feedback from these groups to minimise conflict
Suppliers and supply chains
Suppliers can impact the business in a number of ways. Without and effective supply chain. Business will fail to attract, delight and hold on to its consumers.
E.g production processes, distribution channels
Supply chain
The sequence of processes in led in the production and distribution of a product.
