Influences in the Business Environment Flashcards
(20 cards)
Shapes employee engagement & performance. Main elements:
- Values
- Symbols
- Rituals
- Heroes
Internal Influences - Business Culture
Success if management of resources:
Human Resources = employees
Information Resources = knowledge + data required e.g. market research
Physical Resources = equipment, raw materials
Financial Resources = purpose of funds
Internal Influences - Resource Management
Responsible for all business operations
Internal Influences - Management
Factors:
Proximity to Support Services - being near and supporting
Visibility = depending on outputs balance between accessibility and visibility
Cost = urban city locations - higher rent, greater customer exposure, lower cost ones - require strong marketing for customers
Proximity to Suppliers = closer to suppliers benefit - lower transport costs, faster delivery times, better inventory management
Proximity to customers = must be conveniently located for target audience
Internal Influences - Location
- Advanced Product Range + Complexity requires complex supply chains, skilled labour or technology
- Production Methods can also affect everyday systems e.g. mass production to custom
Internal Influences - Product
Internal Influences Acronym
People Lead, Markets Rise, Money + Business Complies
Factors =
- No. of competitors
- Ease of entry into a market
- Competitors marketing strategies
External Influences - Competitive Situation
Knowledge of what market concentration you are in shapes business operations
- Monopoly = complete concentration by 1 enterprise - holds power
- Oligopoly = small number of large firms controlling the market - able to financially overwhelm new competitors
- Monopolistic = large number of buyers and sellers - most common in Aus, outputs are differentiated by branding methods
- Perfect = large number of small firms selling similar outputs - unable to differentiate products - only use advertising to achieve market share
External Influences - Markets
Development of AI & Tech at a businesses disposal plays a key role in the business success
External Influences - Technological
Regulatory Bodies e.g. ACCC
- Businesses have to follow policies set by them
External Influences - Institutional
Changes in Government can lead to policy shifts
External Influences - Political
Consumer & Competition Laws + Acts are in place to protect consumer rights and consumers from misleading business practice
External Influences - Legal
- Identify and adapt to changes in fashions, demographic and culture can lead to success
- Failure to respond can threaten business viability
External Influences - Social
Environmental impact = seasonal demand, weather events can affect supply chains
Trade Availability = coastal areas benefit from international trade access - export + import opportunities
Natural Resources - regions rich in raw materials helps with supply
External Influences - Geographical
Interest Rates
- Higher = more expensive for businesses to take out loans
Exchange Rates
- Strong Aus dollar = imports cheaper, reduces export competition
Inflation
- Rise = increases operation costs (due to inflation prices)
External Influences - Financial
Economic cycles = periods of booms and busts that occur as result of fluctuations in level of economic activity
Economic Cycles affected by changes in all other external influences
A Boom = high employment levels, Inflation prices increase as consumers willing to spend more money,Wage increase
A Bust = Rise in unemployment levels, decrease in consumer spending (consumer sentiment)
External Influences - Economic
External Influences Acronym
Every Famous Girl Sings Like Pink In The Music Concert
Level of spending throughout the economy decrease, as people want to save money, generally during a bust
Consumer Sentiment
The breaking down of economic, political and social barriers between countries to allow flow of goods, services, money and people.
Globalisation
Influences in the Business Environment
No business operates in isolation, businesses have to adapt to an ever changing environment to stay in tune. If a business can respond effectively to external + internal influences it will succeed.
