External influences

• Economic

  • he economy goes through periods of expansion (growth) and contraction (decline). For example in a period of recession unemployment is rising and consumer spending is low reducing the sales and profit of a business. 
• Financial

  Deregulation is the removal of government regulation from industry, with the aim of increasing efficiency and improving competition. Banking sector becomes freer (more banks) therefore more access to loans, and saving options for businesses. 

   -As interest rates become higher, businesses will become more cautious in relation to taking on extra debt. On the other hand, as interest rates drop, then business will take on more debt. When interest rates rise businesses are less likely to boom.  
• Geographic

  -Two main geographical factors that have affected Australian businesses include our Asian-pacific location and the growth of our neighbouring countries (China with a 1.4 Billion population)

  -Globalisation has also influenced businesses. Due to technological advances in transport and communications geographical distance has become less of a barrier. Businesses can sell food, fashion, education, entertainment and equipment and many other consumer goods globally not just nationally. 
• Social

  Environmental: 

  -May face consumer backlash if customers find out they are not stocking or using environmentally friendly resources. Rewarded for good environmental practises by gaining more consumers

  Family-friendly workplace: 

  -Makes staff happier therefore more productive and committed to their jobs

  -May conflict with costs to employers if the workers' hours differ to assist all employees' needs.  

  Workplace diversity:

  -Better chance at attracting and retaining staff 

  -Increased morale, creativity, and productivity, also giving the business a competitive edge.
• Legal

  -REGULATIONS are rules and laws or orders that businesses must follow.

  -The new legislation includes laws on taxation, industrial relations, work health and safety, equal employment opportunity, anti-discrimination and protection of the environment.

  -Eg. Under the Public Health Act 210 (NSW) the NSW Head Minister was granted very broad powers to take necessary measures to deal with the risk and consequences of COVID -19. 
• Political

  In a labour government, social policies such as: (works socially minded)

  -Flexible work hours

  -Increased penalty rates

  -Environmentally friendly actions may occur.

  In a liberal government ; perhaps businesses may face lower taxes on profits. (favourable qualities towards businesses)

  Current political issues:

  -Taxation (GST, company tax cuts)
• Institutional

  -Government: 

  Federal (Tax laws)

  State (Condition of roads)

  Local (Zoning, who can set up where) 

  -Regulatory: 

  EPA: (Environmental planning authority) supervises environmental compliance and makes demands. 
• Technological

  • Technological: 

  High-Tech Robotics: Eliminates boring, repetitive tasks/ jobs, continuous work (don't require lunch breaks etc), consistent in quality, and reduces operating costs in the long run.

  Communications technology: (Fibre - optic cables allow all to take place)E.g teleconferencing/video conferencing, e-mail, cloud computing (allowed virtual meeting), speeds up communication and allows flexibility in communication style, allows remote working / WEH (Working from home).
• Markets

  Financial/capital(money):

  With the help of technology and globalisation, money now flows very easily, across national borders and between companies. Funds are lent, borrowed and exchanged very quickly

  Labour markets:

  Labour moves between countries also - sometimes freely, sometimes not. Recent travel and immigration restrictions have limited foreign labour in Australia

  Consumer markets:

  Countries tend to specialise in producing goods and services in which they are more efficient producers. China is a large supplier of consumer goods to the rest of the world. 
• Competitive situation

  Every business wants to be a market leader in order to gain customers and increase profits.They all want to have a sustainable competitive advantage, ensure that they have an edge over their competitors.

  Market Concentration: Refers to the number of competitors in a particular market. There are four main types of market concentration.
• Competitive situation

  Monopoly-Complete concentration by one business in the industry e.g aus post

  Oligopoly-Small number of businesses dominate the market

  Monopolistic competition-most common type in Australia

  Perfect competition-businesses sell lots of the same products and compete in price e.g fruit and veg growers