Business - External Business Environment

• what are macro factors that can influence a business - economic conditions


  a set of influences that relate to economic activity. e.g interest rates, wages, unemployment, inflation, and exchange rates.
• Legal and government regulations

  the laws and regulations made by parliaments and courts which can influence how a business operates and behaves.
• Global issues/consideration


  the pressures that arise as a result of businesses competing in a worldwide market on a global scale
• what are some laws and regulations that a business needs to know before opening a business

  • a business name must be registered with the Australian Securities and Investment Commission (ASIC) before establishing a business. Apply for a tax file number (TFN) and an Australian Business Number (ABN)
• what are some laws and regulations that a business needs to know before opening a business?

  The Occupational Health and Safety Act 2010 (Victoria) - the main legislation for occupational health and safety. E.g safe operation of major facilities and mines, training for high-risk activities, and having licenses for specific activities.
• what are some laws and regulations that a business needs to know before opening a business?

  The Equal Opportunity Act 2004 - this law states that it is unlawful to discriminate against employees based on attributes such as age, race, disability, gender, sexual orientation, etc.
• what are societal attitudes and behaviors?

  societal attitudes are the ideas, values, and beliefs held in a particular society. Societal attitudes and behaviors affect how individuals live, work, and consume products. How businesses operate and how stakeholders view the businesses they have an interest
• What are interest rates?


  interest rates are the price charged or paid for the use of money
• Higher interest rates


  reduce the likelihood of a business making a large profit, which can influence the business owners planning. Consumers aren't spending as much - too busy making repayments on their loans. Customers not spending as much money can result in laying off workers, longer trading hours, etc.
• Lower interest rates


  result in business loans becoming more affordable. Consumers have extra money to spend after repaying their loans. This extra money to spend can result in increased sales, and hence, more profitability for businesses.
• What is globalisation?


  globalization is the ability of businesses to operate worldwide, making the whole world a single market. This is done through technology, transport, and unrestricted trade rules between country to country.
• three points to consider in our global world?

  exchange rates - one currency expressed in terms of another currency. Protection of intellectual property - what is protected by the law. e.g., copyright, trademark, and copyright. Online sales - sales made through digital platforms so buyers and sellers don't need to meet physically.
• what is CSR?


  when the managers of owners of a business take steps beyond what is ensured by the law to take employees, suppliers, consumers, and the environment into consideration
• socially responsible decisions a business will have to make

  treat employees honestly, fairly, and with respect. minimise waste and pollution. protect the health and safety of all consumers. work with suppliers with socially responsible decisions put in place. avoid conflicts of interest.
• what is competitive advantage?

  competitive advantage is the ability of a business to develop strategies to ensure it has an edge over rival businesses
• how to gain an advantage over competitors?

  offer cheaper and better quality goods/services. cater to more specific needs. increasing brand awareness through marketing. accessing new technologies
• why must businesses monitor their competitors?

  Competitors are the businesses/individuals who offer the same goods/services as you. Monitoring competitor behaviour (new and existing) ensures you don't fall behind