Internal and external influences on business
Ambient media (EI)
Refers to the new breed of outdoor advertising.
Business Culture (IE)
Refers to the values, ideas, expectations and beliefs shared by members of the organisation.
Information resources (IE)
Resources include the knowledge and data required by the business. Eg market research, sales reports, economic forecasts, technical material, legal advice.
Regulatory bodies (EI)
Department of Environment, Climate Change and Water. Office of Fair Trading. Australian Securities and Investments Commission. Australian Competition and Consumer Commission.
Internal influences
Things that can be controlled including the Product, location, management, resource management, business culture.
Deregulation (EI)
Is the removal of government regulation from industry, with the aim of increasing efficiency and improving competition. Eg: Pharmaceutical Industry regulations
Monopolistic competition (EI)
Large number of buyers and sellers. Eg Clothing manufacturers Local retailing
Management influences (IE)
Levels of business structure
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Technological Influences (EI)
increase in efficiency, productivity, innovation and new goods / services. EG Uber
Stakeholder (IE)
A stakeholder is any group or individual who has an interest in or is affected by the activities of a business.
Ease of entry (EI)
Ability of a person to establish a business within an industry. This depends on the market concentration.
Economic cycles (EI)
Are the periods of growth (boom) and recession (bust) that occur as a result of fluctuations in economic activity.
ACCC (EI)
Australian Competition and Consumer Commission
ASIC (EI)
Australian Securities and Investments Commission
Monopoly (EI)
Complete concentration by one firm in the industry. Eg Australia post Eg Oil Companies
Oligopoly (EI)
Consists of a small number of large firms. Eg Banks Oil companies Car manufacturers Phone manufacturers
Consumer luxury goods (EI)
Consumers are most likely to cut back on in a recession period
External influences (EI)
Economic, financial, social, legal, political, institutional, technological, competitive situation and changes in the market.
Social Influences (EI)
Environmental movement, Family friendly workplaces, Time poor consumers.
Demographic influence (EI)
Features of a population such as age, sex, income, cultural background and family.
3 levels of Government in Australia
Federal, state and local impose regulations. Eg Taxes, employee entitlements, approve new developments.
Financial resources (IE)
Funds the business uses to meet its obligations to various creditors.
Political influences (EI)
Government policies have a considerable impact on the business environment.
Institutional influences (EI)
Government, regulatory bodies and other groups.
Characteristics of a boom period (EI)
Higher levels of employment, Wages increase, consumer spending increases, Inflation may increase. Eg Growth of China on Australian exports.
4 main Resource of a business (IE)
Human resources, Information resources, Physical resources, Financial resources.
Physical resources (IE)
Include equipment, machinery, buildings and raw materials.
Internal environment (IE)
Includes those factors over which the business has some degree of control.
External environment (EI)
Includes those factors over which the business has very little control.
ACCC (EI)
Monitor misuse of market power, product safety and liability, misleading and deceptive advertising. EG Nurofen
Competition (EI)
Number of competitors, Local and foreign Marketing, Ease of entry. Eg Apparition media
Regulations (EI)
Rules, laws or orders that businesses must follow.
SLEEPT analysis (EI)
Social, legal, economic, environmental, political, technological.
SWOT analysis
Strengths, Weakness, opportunities, threats.
Product (IE)
Type and range of goods, Size of the business.
Characteristics of a recession period (EI)
Unemployment levels rise, Wages are less likely to rise, level of spending decreases, Inflation may remain stable or fall. Eg Global financial crisis
Business culture (IE)
can be revealed officially in the policies, goals, slogans or how people in the business behave. The culture of a business is often evident in its organisational structure. Eg Apparition media.
Location influence (IE)
customer convenience, visibility, proximity to other businesses.
Legal Influences (EI)
laws on taxation, industrial relations, occupational health and safety, equal employment opportunity, anti-discrimination and protection of the environment.
Geographical influences (EI)
location in Asia pacific region, Globalisation and demographics.
Globalisation (EI)
process where people, goods, money and ideas move around the world faster and more cheaply than before. (export and import sales)
Human resource (IE)
the employees of the business and who are generally its most important asset.
Shareholders (IE)
the owners of a business.
Business Environment
the surrounding conditions in which the business operates. It can be divided into internal and external factors.