AOS3

• Internal environment

  The business has control over
• External environment

  The business does not have control over
• Macro environment

  Factors entirely separate from the business that impact all businesses within an industry
• Operating environment

  Factors directly outside the business which it closely interacts with
• The business has some control over operating factors but no control over macro factors
• Operating factors

  • Customer needs and expectations
  • Competitors behaviour
  • Special interest groups
  • Suppliers and the supply chain management
• Macro factors

  • Corporate social responsibilities
  • Legal and government regulations
  • Societal attitudes and behaviours
  • Economic conditions
  • Technological considerations
  • Global considerations
• Customer needs

  The essential requirements that customers intend to fulfil with the purchase of a good or service from a business
• Customer expectations

  The values of benefits that customers seek when purchasing a good or service from a business
• Competitors

  Other businesses or individuals who sell rival goods and services to the ones produced by the business
• Special interest groups

  Groups of people who attempt to directly influence or persuade a business to adopt particular policies or procedures
• Special interest groups

  • Lobby groups
  • Business associations
  • Unions
• Supply chain

  The network of individuals or businesses that are involved in producing and distributing a good or service to customers
• Supply chain members

  • Suppliers
  • Manufacturers
  • Wholesalers
  • Retailers
  • Customers
• Corporate social responsibilities

  Pressures on a business to take into account environmental considerations to ensure broader social welfare
• Legal and government regulations

  Laws and regulations made by parliaments and courts which affect how business operate
• Societal attitudes and behaviours

  Factors relating to changes in attitudes, behaviours, tastes and lifestyles of communities on a local, national and international scale
• Economic conditions

  Set of influences that relate to economic activity, including interest rates, wages, employment, tax rates, and inflation
• Technological considerations

  Issues related to the growing use of tools, techniques or systems
• Global considerations

  Pressures that arise as a result of businesses operating in worldwide markets and competing on a global scale
• Businesses must consider legal and government regulations, as they protect the rights of employees, preserve the environment, and direct the business to uphold the safety of the community and promote fair competition
• Types of regulations

  • Employment laws and regulations
  • Environmental legislation
  • Industry regulations
  • Council regulations
  • Taxation requirements
• Interest rates

  The price charged or paid for the use of money that has been deposited or borrowed
• Employment

  When a person works one or more hours in a specified week
• Unemployment

  When a person who, during a specified period, is not employed for one or more hours but is actively seeking work and is currently available for work
• Tax rates

  Percentage of the income or value of a good, service or asset paid as a tax
• Consumer confidence

  A measure of customers expectations & feelings about future economic conditions
• Business confidence

  A measure of business owners' expectations & feelings about future economic performance
• The business cycle

  1. Expansion

  2. Peak

  3. Contraction

  4. Trough
• Impact of imports

  Increased GDP, increased employment, trade surplus
• Impact of exports

  Increased consumer choice and standard of living, lower prices, trade deficit
• Overseas competitors

  Businesses located in other countries that operate in the same or similar industry & offer a similar good or service
• Offshoring of labour

  Moving a business's services or processes to another country
• Exchange rates

  The rate at which the money of one country can be exchanged for the money of another country
• Currency appreciation

  An increase in the value of a currency against another foreign currency
• Currency depreciation

  A decrease in the value of a currency against another foreign currency
• Online sales

  The buying and selling of goods/services using the internet
• It is important for a business owner to consider copyright issues, registering its trademarks, and whether it will be necessary to obtain a patent
• Environmental considerations

  Protecting and preserving the environment
• Social considerations

  Impact on society