glossary terms aos 3

Question 1

define technological developments

Answer 1

Technological developments: are the invention and innovation of tools that solve problems and enhance processes. These developments can act as a source of business opportunity as they improve how businesses create, deliver and update goods and services, such as Apple which has been able to expand the number of products it makes and improve the quality of existing products.

Question 2

define internal environment

Answer 2

involves factors within a business that a business has control over because decisions about internal factors are determined by the people within the business. A business can change internal factors to align with, or respond to external factors which they cannot control, for example, when technical advancements are made a business may replace some of its labour resources with machinery and equipment.

Question 3

define economic conditions

Answer 3

Economic conditions: These are the conditions that exist in relation to the productive performance and financial stability of a nation, or other geographical area and include factors such as interest rates and consumer confidence. A business should launch a business when economic conditions are favorable, and consumer spending is high because it will be more likely to succeed.
- interest rates
- consumer confidence
-employment levels
-tax rates

Question 4

define competitor

Answer 4

Competitor: is a business that operates in the same or similar industry and offers a similar good or service for example, KFC and McDonalds are both fast food outlets that compete for market share of the take-away food market. When planning a business, it is important for a business owner to conduct market research to track the behaviour of both local and overseas competitors in order to establish a competitive advantage.

Question 5

define exchange rates

Answer 5

Exchange rates: are the relative prices at which the currency of one country can be exchanged for the currency of another country (e.g. Australian dollar for the US dollar). Exchange rates are impacted by political and economic conditions and fluctuate daily which means the value of a country’s currency either increases, or decreases compared to another currency.

Question 6

define values and beliefs

Answer 6

Values and beliefs: are the principles, standards and assumptions upheld by individuals or a group of people, which influence how they make decisions. Businesses should constantly research changing values and beliefs to develop products that suit these preferences, such as offering healthier food options to appeal to consumer interests in health and wellbeing.
- Greater awareness of improving physical and mental wellbeing
-wellbeing of employees
- environmental sustainability
- hygiene practices

Question 7

define interest rate

Answer 7

An interest rate is the percentage charged by a lender to a borrower for the use of money, usually expressed annually. It affects how much businesses and consumers pay on loans or earn on savings, influencing spending and investment decisions.

Question 8

Council regulations

Answer 8

Local government rules made to govern businesses operating in a specific geographic area. Business owners must familiarise themselves with council regulations to avoid legal issues.

examples:
Business location is determined by local zoning laws e.g very few business types are permitted to operate in a residential zone.
Business operating hours are regulated to account for issues such as noise level.
Restrictions can be placed on renovating a business premises for example, if they are heritage listed.
Local laws govern when and where businesses can dispose of waste.
Business signage can be restricted, for example, large signage may create a tripping hazard.

Question 9

define environmental lobby groups

Answer 9

Environmental lobby groups: are organisations that advocate for the protection of the environment and promote environmental issues to businesses, the government and the public. Environmental Lobby Groups such as the Australian Conservation Foundation campaign to the government to prevent a business operating in a way that harms the environment; and provide support and advice on implementing sustainability into a business’s operations.

Question 10

define special interest groups

Answer 10

Special interest groups: are organisations or a group of people that seek to influence laws, policies, or behaviours to benefit a specific cause, for example environmental lobby groups such as the Australian Conservation Foundation that advocates for environmental protection. During business planning, business owners should consider that the operating environment can be influenced by special interest groups, such as the ACF that persuades businesses to act in an environmentally-friendly manner.

Question 11

define consumer confidence

Answer 11

Consumer confidence: is a measure of customers’ feelings and expectations about current and future economic conditions. Consumer confidence is high when there is a belief the economy will grow because consumers who believe economic conditions will improve are more willing to spend money as they feel optimistic about their financial and job security.

Question 12

define social trends

Answer 12

Social trend: is a general development in the way a group of people in society behave, for example, an increased reliance on advanced technology. Businesses analyse data to look for patterns and identify trends relevant to their target market so they can plan their products and activities to attract more customers.
- increased reliance on technology
- greater focus and action on achieving gender equality
- increased purchasing of products related to wellbeing and health

Question 13

macro vs operating factors

Answer 13

similarities:
- Both macro and operating factors are part of the external environment.
- Failure to recognise and plan for both macro and operating factors can negatively impact business success.

differences:
- The business has some control over operating factors, but no control over macro factors.
- Operating factors are specific to each business, whereas, macro factors are non-specific and impact all businesses in an industry.

Question 14

define societal attittudes

Answer 14

Societal attitudes refer to the collective values, beliefs, and views held by the general population.
These attitudes influence how consumers behave, what they expect from businesses, and how businesses must respond and plan to stay relevant and competitive.

Question 15

types of operating factors

Answer 15

• Customer needs & expectations
• Suppliers and the supply chain
• Competitors’ behaviour
• Special interest groups

Question 16

Define overseas competitors

Answer 16

Overseas competitors are businesses that are located in other countries that operate in the same industry and offer a similar good, or service. Globalisation has increased overseas competition and businesses must identify the strengths and weaknesses of competitors and how they operate so they can differentiate their offering and develop a competitive advantage.

Question 17

define corporate social responsibility

Answer 17

Corporate Social Responsibility: is the ethical conduct of a business beyond legal obligations, and the consideration of social, economic, and environmental impacts when making business decisions. As society becomes increasingly aware of business activities and CSR considerations, business owners are expected to plan initiatives that demonstrate a commitment to socially responsible operations to remain competitive e.g. taking steps to reduce their carbon footprint.

Question 18

define societal behaviour

Answer 18

Societal behaviour: is the way people act and respond in various situations. Social behaviour can impact business planning, for example, during the COVID-19 pandemic when consumers began panic buying items businesses needed to plan to meet the increased demand, such as employing more staff, or increasing production to raise output.

Question 19

define customer needs

Answer 19

Customer needs: are the essential requirements consumers intend to fulfil with the purchase of a good or service from a business, for example, a product must be fit for the purpose it is sold such as a watch must tell the time. By consistently meeting customer needs a business is more likely to improve customer satisfaction, which can improve customer retention and increase sales.

Question 20

Environmental legislation

Answer 20

The set of laws that aim to preserve the surroundings/ conditions in which we live & operate. Many businesses rely on natural and scarce resources e.g. oil, water, and gas. When these resources are used improperly businesses can negatively impact their environment. Laws are put in place to minimise this negative impact and protect limited resources.

Environmental laws and regulations often relate to:
minimising energy use
reducing water use
reusing, recycling and reducing waste
other matters of national environmental significance

Question 21

define employment level

Answer 21

Employment level: is the percentage of the labour force who are working in paid employment (the labour force includes the number of people aged fifteen and over who are willing and able to work e.g. not full-time students, or retired). The most common indicator of employment levels is the unemployment rate, which is the percentage of the labour force who are currently not in paid work.

Question 22

define external environment

Answer 22

involves the surrounding factors that can impact a business which it has no control over, categorised as macro factors, or operating factors. It is important for businesses to consider both macro and operating factors during planning, as assessing these factors can equip businesses to make more strategic and well-informed decisions e.g. pressure from environmentally conscious consumers drove Woolworths to stop using plastic bags and start charging a small fee to use reusable bags.

Question 23

define macro factors

Answer 23

are social, legal, technological, global and economic conditions that a business operates in and has no control over. Macro factors can impact a business’s internal environment, for example, if economic conditions are strong then demand for a business’s products and services is likely to be higher and the business will need sufficient resources and products available to sell to customers.

Question 24

define unions

Answer 24

Unions: are organisations composed of individuals who represent and speak on behalf of employees in a particular industry to protect and improve wages and working conditions, such as the Australian Nurses and Midwifery Federation. Unions can significantly influence employment laws and negotiate with businesses to increase wages and working conditions, as well as represent and defend employees when discrimination and bullying arise in the workplace.

Question 25

define trademark

Answer 25

Trademark: is an exclusive right granted over a unique aspect of a business, such as a symbol, word, sound, or number, that is used to distinguish the business, or its products. Business owners should consider registering the business’s trademarks during the planning stage, however trademark registration only operates on a country-by-country basis so trademarks must be registered by an owner in every country they seek to operate in.

Question 26

define business associations

Answer 26

Business associations: are organisations that advise and support businesses in a particular industry, such as the Victorian Chamber of Commerce and Industry. They provide advice and information through training programs, seminars, or personal consultations on employer’s rights and responsibilities, as well as a large range of issues that must be considered before starting a business.

Question 27

define law and government regulations

Answer 27

are the laws and rules made by parliaments and governments, as well as decisions made by the courts. These regulations guide businesses to uphold the safety of the community and promote fair competition within industries.

Question 28

define suppliers

Answer 28

Suppliers: are individuals or businesses that provide the resources required to produce goods and services. Suppliers directly affect businesses as they provide the inputs that are used to produce the output, and if trustworthy and reliable can positively impact a business’s reputation, for example, the Body Shop sustainably sources raw ingredients from women living in Ghana, Africa, and empowers them by paying premium living wages to enable them to achieve independent income.

Question 29

define offshoring of labour

Answer 29

Offshoring of labour: involves a business moving its services or processes to another country. A common reason for offshoring of labour is to take advantage of lower labour costs, as hiring workers in overseas countries can be cheaper than employing local employees.

Question 30

define business planning

Answer 30

is the process of establishing a business’s goals and developing strategies to achieve them. The environment a business operates in is unpredictable, and constantly changing meaning it is important for business owners to plan before they begin operating, as well as continuously plan for both internal and external factors through the lifetime of the business.

Question 31

define tax rates

Answer 31

Tax rates: is the percentage of income or spending that is required to be paid to the government by individuals or businesses. The government decides and applies different tax rates to businesses, depending on their structure, for example, a sole trader pays tax at their personal income tax rate, whereas a public company pays tax at the company tax rate.

Question 32

define overseas markets

Answer 32

Overseas markets: are any means by which the exchange of goods and services takes place outside of a business’s own country of operation. Business owners can plan to launch their business in both local and overseas markets to access a larger, more diverse customer base.

Question 33

Industry regulations

Answer 33

The rules specific to a business within a certain economic activity (industry). May require a business to obtain qualifications, registrations, permits, or licences. The Australian Business Licence and Information Service (ABLIS) is a free government service that helps business owners determine what licences, permits, registrations, and approvals are required for their specific industry. Businesses that are involved with children require employees to obtain a Working with Children Check.

Question 34

define copyright

Answer 34

Copyright: is free and automatic protection used on original ideas such as writing, art, sound, films and photographs. In Australia, copyright provides a business with the automatic and exclusive right to control the use of its creative work, such as its website content and photographs.

Question 35

define operating factors

Answer 35

are the primary external factors impacting a business that it has some control over. Operating factors can impact a business’s internal environment, for example, if suppliers experience delays or become unreliable this could potentially decrease the quality and/or quantity of the goods or services a business provides to customers.

Question 36

employment laws and regulations

Answer 36

Rules that govern the relationship between employers and employees, specifically the obligations they have to each other. example: Award legislation protects minimum wages and working conditions. Occupational Health & Safety Act and Regulations promote safety and wellbeing in a workplace. Employment legislation protects against Unfair Dismissal & Discrimination.

Question 37

types of macro factors

Answer 37

- Societal attitudes & behaviours - Technological considerations - Economic conditions - Global considerations - Legal & government regulations - Corporate Social Responsibility considerations

Question 38

define online sales

Answer 38

Online sales: involve buying and selling goods and services using the internet. Businesses must decide whether to establish an online presence in their planning to achieve aims such as reaching a wider range of customers in local and overseas markets, and convenient purchasing for customers 24/7 through a website.

Question 39

taxation requirements

Answer 39

Laws and rules related to the collection of compulsory payments to the government (tax) that apply to all businesses. examples: -Businesses must apply to the Australian Taxation Office (ATO) for a tax file number (TFN) so it is easily identifiable for tax purposes. -Once a business turns over $75,000 per year it must register for Goods & Services tax (GST).

Question 40

define customer expectations

Answer 40

Customer expectations: are the values or benefits that customers seek when purchasing a good or service from a business. Unlike customer needs, customer expectations are not essential requirements, but are things customers anticipate when making a purchase, and will not be fully satisfied unless they are obtained.

Question 41

define patent

Answer 41

Patent: is a licence that provides a business with exclusive rights to use innovative devices, substances, methods and processes. A patent permits the business owner to exclude others from making, using, or selling its invention, but only in the country in which the patent is registered.

Question 42

define supply chain

Answer 42

Supply chain: is the network of individuals or businesses that are involved in producing and distributing a final good or service to customers. Supply chain participants typically include suppliers, manufacturers, wholesalers, retailers and customers.