1 Influences in the business environment

Question 1

.Who are external stakeholders in a business context?

Answer 1

External stakeholders are organisations and people outside the business who are affected by the decisions or actions of the business

Question 2

What are the External Stakeholders GemClipstf

Answer 2

Government
Economic
Market
Competitive situations
Legal
institutional
Political
Social
Technological
Financial

Question 3

What does it mean that businesses do not operate in isolation?

Answer 3

Businesses are influenced by their external environment, which affects other firms as well.

Question 4

How do business decisions relate to the environment in which a business operates?

Answer 4

Business decisions are shaped by external and internal factors in the environment.

Question 5

Why is it important for business managers to understand the environment?

Answer 5

It helps managers respond to changes and prepare for impacts on the business.

Question 6

What is the business environment?

Answer 6

The conditions that surround and affect business operations.

Question 7

What are the two broad categories of the business environment?

Answer 7

External and internal influences.

Question 8

What does the external business environment refer to?

Answer 8

Factors outside the business that it can’t control (e.g., economy, laws, tech).

Question 9

What does the internal business environment refer to?

Answer 9

Factors inside the business that it can control (e.g., employees, culture).

Question 10

Why is the distinction between internal and external environments important?

Answer 10

It helps businesses focus on what they can control and adapt to external factors.

Question 11

What is the impact of Australia’s population growth on businesses?

Answer 11

More consumers, higher sales, and increased revenue due to high migration.

Question 12

How does an aging population impact businesses?

Answer 12

Expanding consumer market, increased demand for goods and services as the global population grows.

Question 13

How does proximity to Asia-Pacific benefit businesses in Australia?

Answer 13

Access to fast-growing economies, growing middle class, and quicker import/export with reduced supply chain delays.

Question 14

What are the negative effects of falling birth rates?

Answer 14

Decreased sales, fewer growth opportunities, declining profits, higher international expansion costs.

Question 15

How does climate change and natural disasters affect businesses?

Answer 15

Higher insurance costs, supply chain disruptions, damage costs, lost sales, and potential tax increases.

Question 16

How do geographic changes like climate and weather impact businesses

Answer 16

They can disrupt supply chains, increase insurance costs, and lead to damage or lost sales.

Question 17

What does the upswing phase of the business cycle mean?

Answer 17

Gross domestic product GDP is growing, leading to increased consumer confidence, spending, and business investment.

Question 18

What does the downswing phase of the business cycle mean?

Answer 18

GDP Gross domestic product is slowing, leading to lower consumer confidence, reduced business activity, and higher unemployment.

Question 19

What was Australia’s economic performance from 1992 to 2020?

Answer 19

Australia experienced 28 years of uninterrupted economic growth with an average annual growth of 3.3%.

Question 20

How did Australia’s long period of economic growth affect businesses?

Answer 20

Higher disposable income, strong consumer confidence, increased business investment, and low unemployment.

Question 21

What were the economic effects of COVID-19 on Australia in 2020?

Answer 21

Two negative quarters of GDP, decreased consumer spending, business production, increased unemployment, and reduced investment.

Question 22

What is a recession?

Answer 22

Two consecutive quarters of negative GDP growth, leading to reduced economic activity.

Question 23

What does deregulation in financial markets mean?

Answer 23

Removal of government rules, increasing the availability of funds from investors or borrowers and boosting competition, such as the entry of foreign banks into Australia.

Question 24

How does deregulation affect competition in Australia’s financial markets?

Answer 24

It increases competition by allowing foreign banks (e.g., HSBC) to enter, offering more choices to consumers and businesses.

Question 25

How do skill shortages affect the labour market?

Answer 25

Wages are negotiated higher, and businesses rely on overseas workers, like backpackers or skilled migrants, to fill gaps in industries such as agriculture, healthcare, and education.

Question 26

How do backpackers and Working Holiday Visas address labour shortages in Australia?

Answer 26

Backpackers can work in specific jobs (e.g., farm work) to extend their stay, helping to fill gaps like fruit-picking in agricultural sectors.

Question 27

What is the benefit of global sourcing of staff?

Answer 27

It provides a diverse, culturally competent workforce with skills like language proficiency and cross-cultural understanding

Question 28

What are the negative effects of skill shortages in the labour market

Answer 28

Higher HR costs, competition for local jobs, and potential exploitation of low-skilled overseas workers with low pay.

Question 29

How does the entry of foreign banks into Australia impact the financial market?

Answer 29

It increases competition, benefiting consumers with better rates and services, and providing more financial options.

Question 30

How do tariffs benefit domestic businesses when purchasing imported inputs?

Answer 30

Tariffs reduce the cost of imported goods, lowering production costs for domestic businesses.

Question 31

How do tariffs help domestic businesses in international trade?

Answer 31

Tariffs allow domestic businesses to export more competitively, increasing global revenue and sales.

Question 32

How do businesses take advantage of economies of scale in international trade?

Answer 32

By bulk buying and sourcing from overseas, businesses can lower unit costs per item sold.

Question 33

What are tariffs?

Answer 33

Tariffs are taxes or duties imposed on imported goods, making them more expensive and protecting domestic businesses from foreign competition.

Question 34

What is the competitive situation in business?

Answer 34

It refers to the environment in which similar businesses operate, focusing on factors like product range, quality, marketing, and customer experience.

Question 35

What are key factors that influence the competitive situation for businesses?

Answer 35

Number of competitors, ease of entry, barriers to entry, and changes in competition.

Question 36

How do supermarkets like Coles and Woolworths dominate the market?

Answer 36

Few sellers dominate, allowing them to set prices with limited competitive pressure, and they benefit from economies of scale.

Question 37

How does scale benefit dominant supermarkets?

Answer 37

Larger businesses can buy in bulk, lowering costs and preventing smaller competitors from entering or gaining market share.

Question 38

How does the entry of Aldi into the Australian market affect supermarkets?

Answer 38

It increases marketing costs, forces changes in pricing and product strategies, and leads to potential loss of market share and customer switching.

Question 39

What are legal influences on businesses?

Answer 39

Laws created by different levels of government that businesses must comply with in order to operate legally.

Question 40

What role do regulatory bodies play in the legal environment?

Answer 40

Regulatory bodies enforce laws to ensure businesses comply with legal requirements.

Question 41

What are institutional influences on businesses?

Answer 41

Organisations created to pursue specific actions, such as Government, Regulatory Bodies, and Non-Government organisations

Question 42

What is the role of Government in the institutional framework?

Answer 42

Governments create and discuss laws at the Federal, State, and Local levels to regulate business activities.

Question 43

What do Regulatory Bodies do?

Answer 43

They enforce laws made by the government to ensure businesses comply with legal requirements.

Question 44

What is the role of Non-Government institutions?

Answer 44

They represent or act on behalf of businesses, employers, and employees, such as Employer Associations, Trade Unions, and the ASX.

Question 45

What does the Australian Competition & Consumer Commission (ACCC) do?

Answer 45

The ACCC ensures fair competition, protects consumers, and enforces the Competition and Consumer Act (2010), prohibiting anti-competitive conduct like price discrimination.

Question 46

How does the ACCC protect consumers?

Answer 46

By enforcing consumer protection rights, such as warranties, and ensuring businesses do not engage in misleading advertising.

Question 47

What is the role of the (ASIC)? and what does it stand for

Answer 47

ASIC manages company registrations, enforces the Corporations Act 2001, and ensures consumer protection in financial services. Australian Securities & Investments Commission