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• External factors


  Factors outside of the business that they have little control over
• Types of external factors

  • Macro factors
  • Operating factors
• Macro factors


  • Social, legal, technological, and economic conditions and factors that a business has no control over
  • Examples include CSR, societal attitudes and behaviour, technology, interest rates, laws, and regulations
• Operating factors


  • Primary external factors impacting a business that it has some control over
  • Examples include: special interest groups, suppliers and supply chain, competitors behaviour, customer needs and expectations
• Employment laws and regulations

  1. Govern the relationship between employers and employees

  2. When hiring people government must go through regulations

  3. Legislation sets minimum wages and working conditions, unfair dismissal and resolving workplace disputes

  4. Employees must follow the safety and workplace regulations
• Environmental legislation


  1. Set of laws that aim the preserve the environment

  2. Protect environment from harmful business activities

  3. Businesses rely on natural resources, and these must be protected, having minimal impact on the environment

  4. Minimising energy use, reducing water use, reusing, recycling, and reducing waste
• Industry regulations


  1. Businesses must research regulations specific to their industry and make sure they are followed

  2. Qualifications, registrations, permits, licenses

  3. Refer to Australian business license and information service (ABLIS)

  4. For example, working with children check
• Council regulations


  1. Made by local government to govern businesses operating in a specific area

  2. Location of a business

  3. Operating hours of a business

  4. Types of signs the business displays

  5. Renovations of business premises

  6. Waste disposal of a business
• Taxation requirements


  • Tax that applies to all businesses
  • Must fulfil tax to operate legally
  • Obtain an Australian business number (ABN)
  • GST (goods and services tax), TFN, (Australian tax office) ATO (Australian taxation office)
  • Makes business easily identified
• Societal values and beliefs


  • Principles, standards and assumptions upheld by individuals or a group of people that influence how they make decisions
  • Collective values enable individuals to form opinions on how businesses should operate
  • Expectation for businesses to have a positive impact on the environment and society
  • Businesses must allow employees to have a work – life balance
• Greater awareness about improving physical and mental health


  • Businesses have products that align with growing priority of good health
  • Supermarkets selling healthier food, employees have mental health days
• The wellbeing of employees

  • Because of higher need for family time, employees are encouraged to achieve a work-life balance
  • Receive appropriate mental health support
  • Flexible working hours, benefits, team building
• Environmental sustainability


  • Businesses reduce negative impact on the environment
  • Businesses source their materials ethically
  • No plastic bags, eliminating greenhouse gases, recycling
• Hygiene practices


  • COVID has increased need to be hygienic
  • Businesses put hand sanitiser in stores, face masks, gloves
• Societal trends


  General development in the way a group of people in society are behaving, found through analysing data and looking for patterns
• Increased reliance on advanced technology

  • Businesses offer wider range of devices to meet consumer needs
  • Search for upgrades in technological products to ensure they have the latest advancements
• Greater focus and action on achieving gender equality


  • Businesses implemented workplace policies to achieve gender equality
  • Closing gender pay gap
• Increased purchasing of products related to health and welling


  Businesses creating products to cater for customers interested in health and wellbeing
• Economic conditions


  Conditions that exist in relation to the productive performance and financial stability of a nation or other geographical area
• Interest rates


  • The price paid for money that has been borrowed, expressed as a percentage
  • If an interest rate is low, loans are less expensive and loan repayments are easier to manage
• Employment levels


  • Measured as the percentage of the labour force who are working in paid employment
  • Includes number of people over 15 who are willing to work
  • Opposite is the unemployment rate = percentage of the labour force who are unemployed
• Employment levels


  Can indicate the availability of workers and influence the wages a business needs to offer
• Tax rate


  • The percentage of income or spending that is required to be paid to the government by individuals or businesses
  • For unincorporated businesses, the ATO treats the money earned as the individual income of the owner, then it is taxed as personal income tax
  • Incorporated businesses must consider their type of tax rates when determining their business structure
• If consumer confidence is low


  Consumers are pessimistic about the future
• Technological developments


  Invention and innovation of tools that solve problems and enhance processes
• Incorporating new technology


  Can improve a businesses productivity and effectiveness
• Common technology


  • Automated production lines
  • Eftpos
  • Online presence
• Advantages of technology


  • Websites can provide consistent information to customers
  • Remove repetitive and unsafe tasks for employees
  • Production can run 24/7
  • Technology can reduce labour costs
  • Customers can purchase online at their convenience
• Disadvantages of technology


  • May develop a poor reputation if they keep replacing employees
  • May loose their jobs, be replaced by technology
  • If tech breaks down, it can halt production
  • Time consuming to develop and maintain technology
  • Training employees to operate tech can be time consuming
  • Technology has high initial set up and maintenance costs
  • Researching products can be expensive
• Business owners must monitor, understand, and adopt the latest technological developments to remain competitive within the market
• Globalisation


  Process where governments, businesses and people across the globe are becoming more interconnected, allowing for increased international trade and cultural exchange
• Differentiation


  Involves a business distinguishing its goods and services form competitors that are selling similar items in the market
• Overseas competitors


  Businesses that operate overseas in the same industry and offer similar goods and services
• Overseas markets


  Markets outside of businesses own country of operation, business owners can plan to launch their business in both local and overseas markets
• Considerations of overseas markets

  • Legal and government regulations
  • Economic conditions
  • Transportation and distribution
  • Communication and cultural barriers
  • Staffing
  • Different customer needs and expectations
• Offshoring labour


  Involves moving its services or processes to another country, taking advantage of lower labour costs
• Exchange rates


  • The relative price at which the currency of one country can be exchanged for the currency of another country
  • Currency appreciation = increase in value of currency against another foreign currency
  • Currency depreciation = is the decrease in the value of currency against another foreign currency
• Online sales


  • Involve buying and selling goods and services using the internet and is also referred to as e-commerce
  • Influences include website development, technical issues, shipping costs, privacy and security, legal regulations
• Copyrights


  • Free and automatic protection used on original ideas such as writing, art, sound, films, and photographs
  • Provides a business with exclusive right to control the use of its creative work
• Trademarks


  • An exclusive right granted over a unique aspect of a business, such as a symbol, word, sound, or number that is used to distinguish the business or its products
  • Business should consider registering the trademarks, so it has the sole right to use it