PRELIMINARY

BUSINESS
STUDIES

2024 – Mr. Writer

COURSE OVERVIEW
 TOPIC FOCUS:
TOPIC 1: THE ROLE AND
NATURE OF
NATURE OF BUSINESS IN A
CHANGING

BUSINESS BUSINESS
ENVIRONMENT
Throughout Business
we will look at many
case studies!
1. ROLE OF BUSINESS
1.1 Overview
1.2 The nature of a business
We all have something in
common…

What is it?
 We ALL have…

NEEDS and WANTS

So… in order to meet these needs and wants,
what do we rely on?

Businesses!
NOW

◼ List a variety of 10
businesses in your local
area.
◼ Identify what goods and
services do they provide?
◼ What would your local
area be like if these
businesses did not exist?
TASK (in 2’s or 3’s, 5 MINS discussing)
In your opinion, what is business
and why do we learn about
business?

Consider what these terms below

might mean and how they relate to the
question above.
◼ Informed consumer
◼ Informed investor
◼ Productive employee
◼ Successful business owner.
Task cntd…
What is a good/service (a want) you feel you couldn’t live without. E.g.
phone, books, music…

◼ Is this product created by

more than one company?
◼ Despite it being created
by more than one
company, why do you
choose that particular
brand of product.
 This is what business studies will help you to become!
This is what we want you guys to be!
I know what products to buy and
Informed consumer how to avoid scams

I know how to grow wealth from

Informed investor my income

I know how to work and be a

Productive employee valued member of a business

I know how to run an efficient

Successful business business
owner
BRAINSTORM as a class

Contribution of business Importance of business

to society to the economy
Definitions

◼ Business: the organised effort of individuals to produce

and sell, for a profit, the products that satisfy
individuals’ needs and wants.
PRODUCING GOODS AND SERVICES

◼ Distinguish (note the difference between) between a good and a

service. Include an example of each.
◼ A good (pen) is an item that tangible/touchable whereas, a service (haircut) is
something that is done for you and is intangible/untouchable
◼ Finished product: one that is ready for customers to buy and use.
◼ Production: activities undertaken by the business that combine the resources
to create products that satisfy customers’ needs and wants.
◼ E.g. ?
THINK OF BECO@BROOKY
THINK OF BECO@BROOKY (5 mins)
Management
How are the
Production operations Organising
natural, capital
What do managed? and human
resources
they How are they
◼ In 2’s or 3’s answer each of these produce? organised?

questions in your notes. Marketing

◼ products Distributing
How do they G/S
market?
How are they
distributed
Controlling
production Forecasting sales, Planning finances,
What would expenses and
be controlled? profits production and
When would the business needs
most sales be
made?
Who controls this?
Pre-test (10 mins)

◼ This is a formative task that will

help me better understand how
much you already know of this
topic in business studies.
1. ROLE OF BUSINESS
1.3 Other roles of business
Jigsaw activity
INSTRUCTIONS
The image from a jigsaw is only
◼ 1. Each of you will be given a specific role of
complete if all pieces are combined business to summarise
correctly. (15 mins).

◼ 2. Students will then move around the classroom

and teach each other until all worksheets are filled
in. (20 mins).

◼ Think carefully about how you teach these ideas.

Begin with the definition and what’s most
important.

RULES OF THE ACTIVITY

◼ You can only teach the same person once.
◼ During the interaction, the ‘learner’ must ask at
least 1 question.
OTHER ROLES OF BUSINESS (PAGE 9-18 in the TB)
Summary - definition, 2 Example or interesting Symbol to help me
points fact remember the
summary
Profit
Employment
Incomes
Choice
Innovation
Entrepreneurship and
risk
Wealth
Quality of life
Excellent Business Writing
 The DO’S and DON’TS of business writing

❑ Today’s lesson is to learn about what excellent

business writing looks like.

❑ As you enter your HSC years, you will find that

each subject prefers a different style of
writing. This can be one of the hardest
challenges you come across.

❑ Practice these do’s and don'ts in everything you

write for our subject.

❑ You might see some similarities in other

subjects as well.
As a class, let’s complete this activity

1. Read through DO’S and DON’TS

of worksheet together

2. Write a list of synonyms at the

bottom of worksheet

3. Highlight where the paragraph

has included a DON’T of
business writing

4. Rewrite the paragraph changing

the DON’TS into DO’S
Pre test answers
Pre test answers

Try to find the links

between the cause
(business employing
people) and the
effect (society
improving)
 Pre-test feedback
Things done well Things to improve upon

Content knowledge for incomes, profit, goods and Innovation also refers to the improvement of existing
products/processes rather than only the creation of new ones.
services and innovation
Clear language with good handwriting Too much focus on the economy for question 5 rather than focussing
on society. Society refers to more social issues like happiness,
fairness, opportunities rather than economic growth and
unemployment.

Start of explanations were strong Ending of explanations need to be clearer. Must state the effect of
what you are writing about.
E.g.
Businesses give people jobs
OR
Businesses give people jobs which allows them to generate an
income and improve their quality of life.
 INNOVATION
Innovation: creating a new good, service or process, or significantly improving an existing one.
Think of an innovative product (preferably one that you have bought or are interested in) and list 5 qualities of
this product that make it innovative (new / improved)
1. ?
2. ?
3. ?
4. ?
5. ?

BECOME THE INNOVATOR

How would you further improve this product further?
2.TYPES OF BUSINESSES
2. TYPES OF BUSINESS
2.1 Overview
2.2 Classification by size
2.3 Classification by industry sector
MAYBE…
 DEFINITIONS
◼ Market share – the business’s share of
the total industry sales for a particular
product, e.g.?
◼ Micro business – employs fewer than
five people (including the owner), e.g.?
◼ Transnational corporation (TNC)
– a company that has branches in many
different countries, e.g.?
◼ Small to medium enterprise (SME):
firm with fewer than 200 full-time
employees and/or less than $10 million
turnover.
TYPES OF BUSINESS

The four common methods used to classify businesses are:

1. Size
2. Geographical spread (scale) — local, national or global
3. Industry sector
4. Legal structure
CLASSIFICATION BY SIZE:
SMALL, MEDIUM OR LARGE
SME = Small-Medium enterprise
Quantitative factors Qualitative factors
◼ Number of employees A business is an SME if:
◼ The owner makes most of the management
◼ Number of owners decisions, e.g. who to hire, what to produce,
how to advertise
◼ Market share – proportion of total ◼ The owner provides most of the capital
market sales compared to (finance)
competitors ◼ The business has little control in the market,
e.g. price.
◼ Legal structure ◼ The business is independently owned and
operated
◼ The business is locally based (even if it
exports)
CLASSIFICATION BY SIZE (PAGE 23-24)
Characteristics Small Medium Large
Business type
Number of employees
Type of ownership
Most common legal
structure
Decision making
Sources of finance
Market share
Example from local area
CLASSIFICATION BY GEOGRAPHICAL SPREAD

◼ Local: restricted geographical

spread; serves the surrounding
area only; frequently used by
consumers who live nearby, e.g.
newsagent, corner store,
hairdresser, mechanic, pharmacy.
CLASSIFICATION BY GEOGRAPHICAL SPREAD
(CTD)

◼ National: operates within one

country only, e.g. Coles, David
Jones, McGrath Estate Agents.
CLASSIFICATION BY GEOGRAPHICAL SPREAD
(CTD)

◼ Global (MNC): a large company

that has branches in many
different countries whereby
finance, assets, technology,
information, employees and goods
and services flow freely from one
country to another, e.g. Coca-Cola,
McDonald’s, Westfield,Volkswagen.
TASK to be submitted to google classroom
Focus on the cause and effect. A leads to B. Give detail on both
A and B rather than just A as this was a common error in the
pre test.

1. EXPLAIN (relate cause and effect) the global expansion of one Australian
business of your choice e.g. Cotton On, Smiggle, Bunnings, QANTAS, etc.

2. EXPLAIN (relate cause and effect) the expansion into Australia of one global
business of your choice, e.g. Zara
ABC videos on big and small business in Australia

https://www.youtube.com/watch?v=YM6C-Q4Stcg Big business

https://www.youtube.com/watch?v=8Z6jvUHaO3A Small business

2. TYPES OF BUSINESS
2.4 Classification by industry sector
Quick class pre-test. I am silent…

On the board, provide examples and

definitions for the following industry
types.
1. Primary
2. Secondary
3. Tertiary
4. Quaternary
5. Quinary
CLASSIFICATION BY INDUSTRY SECTOR
◼ An industry is the collection of firms involved in making a similar range of items that usually
compete with each other, e.g. the financial services industry or the car industry.

◼ The term industry can be used in different ways but for today we will consider based on
primary-secondary-tertiary-quaternary-quinary.

Contribution to Australia’s Contribution to employment

economy
Primary 11% of GDP 4.5%
Secondary 5.9% of GDP 7.5%
Tertiary 83.1% of GDP 88%
CLASSIFICATION BY INDUSTRY SECTOR (CTD)

◼ Primary industry: businesses

involved in the collection of natural
resources, e.g. farming, mining,
fishing, forestry.
CLASSIFICATION BY INDUSTRY SECTOR (CTD)

◼ Secondary industry: businesses

that take the output of firms in the
primary sector (raw materials) and
process it into a finished or
semi-finished product, e.g. iron ore,
coal and limestone are turned into
steel, which is then used to
manufacture cars.
CLASSIFICATION BY INDUSTRY SECTOR (CTD)

◼ Tertiary industry: businesses

providing services, e.g. dentists,
solicitors, banks, hospitals,
museums.
CLASSIFICATION BY INDUSTRY SECTOR (CTD)

◼ Quaternary industry: services

that involve the transfer and
processing of information and
knowledge, e.g.
telecommunication, property,
computing, finance, education.
CLASSIFICATION BY INDUSTRY SECTOR (CTD)

◼ Quinary industry: services that

have traditionally been performed in
the home (both paid and unpaid),
e.g. hospitality, childcare.
SUMMARY

◼ Primary – collection of natural resources

◼ Secondary – production of finished or semi-finished goods
◼ Tertiary – performing a service
◼ Quaternary – services involving transfer and processing of information and
knowledge
◼ Quinary – services that have traditionally been performed in the home
Classify each business according to their industry type
Business Industry type

1. Fortescue Metals

2. Bega Cheese

3. Jims Mowing

4. Fairfax media

5. Hire a Hubby

6. National Australia Bank

7. Just cuts Hairdressing

8. Huon Aquaculture

9. Coca-Cola Amatil

10. Caltex
Business Industry type

1. Fortescue Metals Primary

2. Bega Cheese Secondary

3. Jims Mowing Quinary

4. Fairfax media Quaternary

5. Hire a Hubby Quinary

6. National Australia Bank Quaternary

7. Justcuts Hairdressing Tertiary

8. Huon Aquaculture Primary

9. Coca-Cola Amatil Secondary

10. Caltex Primary

Australia’s industry mix as a share of total employment (2018-19)

Discuss how this may have changed since 2019…

RECAP TASK. (5 minutes)
Explain (relate cause and effect) how changes in external influences have
contributed to the growth of the tertiary, quaternary and quinary
industries in Australia.
In 2’s or 3’s, brainstorm ONE external influence for each industry above
and state whether it would increase or decrease the growth of the
industry in Australia.The primary industry and secondary industry have
been done for you as examples

◼ Improved methods of farming and mining through technology (cause) has lead to
an increase in the growth of the primary industry (effect).
◼ An increase in the amount of manufacturing conducted overseas in China (cause)
has lead to a decrease in the number of people working in the secondary
industry (effect).
CLASSIFICATION BY LEGAL STRUCTURE
DEFINITIONS
◼ Unincorporated business (sole trader or partnership): the business has NO
separate legal existence from its owner/s. When the owner dies, so too does the
business entity. This is the most common legal structure for small
businesses in Australia (cheap and easy to establish).

◼ Incorporated business (private company or public company): the business is a

separate legal entity from the owner/s. Regardless of what happens to individual
owners (shareholders) of the company, the business continues to operate.

◼ Privatisation: the process of transferring the ownership of a government

business to the private sector.
Definitions

◼ Sole trader - A business that is owned and operated by only one person
◼ Partnership - A legal business structure that is owned and operated by
between 2-20 people
◼ Proprietary (Private) company - An incorporated business usually owned
by 2-50 private shareholders
◼ Public company - An incorporated business whose ownership is available to
the general public

https://www.money.com.au/research/australian-business-statistics

Interesting website for some Australian business stats

 CLASSIFICATION BY LEGAL STRUCTURE (PAGE 33-41
of TB, link on google classroom)

Legal structure Definition No. of owners Example 2 key 2 key

advantages disadvantages
Sole trader
Partnership
Private company
Public company
Government
enterprise

Get a start on the table. Will be checked that you have started it during our progress
check tomorrow.
FACTORS INFLUENCING CHOICE OF LEGAL
STRUCTURE – SIZE
◼ Most businesses begin as small or micro business enterprises, so the most
suitable legal structure is a sole trader or partnership.

◼ As sales increase, further expansion will be necessary and the business becomes
medium-sized, requiring an injection of funds to purchase new plant and
equipment. A partnership or private company may be formed to bring extra
finance, skills and expertise.

◼ As the business continues to grow, it becomes a large national or

multinational corporation, requiring a much larger pool of finances. The
business becomes a public company by issuing a prospectus, listing the
business on the Stock Exchange and inviting the public to purchase shares in the
company (float).
FACTORS INFLUENCING CHOICE OF LEGAL
STRUCTURE – OWNERSHIP

◼ If the owner wants to have complete control and ownership of the business,
then a sole trader is the only realistic option.

◼ If the owner wants to share ownership with other people, a partnership or

private company would be ideal (private company may be preferred due to
the protection of limited liability).

◼ Once a company floats and becomes a public company, ownership will be

divided among thousands of small, individual shareholders and a few institutional
shareholders 🡪 more shares, more ownership. If the original owner wanted
to retain ownership and control of the business, they would need to hold more
than 50% of all shares sold.
FACTORS INFLUENCING CHOICE OF LEGAL
STRUCTURE – FINANCE
◼ Sole traders and partnerships can find it difficult to obtain adequate finance
(especially for R&D) due to their exposure to risk (unlimited liability) and minimal
business assets.

◼ Debt through venture capital: money that is invested in small and sometimes
struggling businesses that have the potential to become very successful. The investors
take an equity position in the business (become part-owners) and provide
supplementary finance. This does not automatically make the business a private/public
company.

◼ Selling equity: To overcome the difficulty of raising finance from banks, the owner may
decide to sell shares in the business, although this does not guarantee that the
necessary finance will be obtained. Once they sell shares, they become an incorporated
business.
Debt vs equity
Debt refers to borrowing finances from external
sources

Equity refers to funds contributed to the

business by the owners. Remember that all
shareholders are considered owners. Even Nick
owning part of of Fortescue metals!

But if Nick lent them his money, why doesn’t that

count as debt finance?
INDIVIDUAL TASK: 7 mins to work + 3 mins to share

1. Research and Identify (Name) an Australian or International business that has

progressed through at least two types of legal structure. Explain (Relate cause
and effect) why the business changed its legal structure for each transition.

e.g sole trader → partnership → public company needs 2 explanations for 2

transitions

ChatGPT is a good start for finding some businesses. Use the following prompt “Can you give me 5
examples of an Australian business that has changed its legal structure twice”
What about a franchises???
WHAT ABOUT FRANCHISES?
DEFINITIONS

◼ Franchise – buying the rights from another business to distribute its product
under its name
◼ Franchisor – an individual or business that grants a franchise.
◼ Franchisee – an individual or business that purchases a franchise.

Let’s identify THREE businesses and determine whether

they are franchises or not.
 RESEARCH TASK individually or in 2’s / 3’s
You can use your business from slide 76 if it is also a franchise.
1. Identify (Name) a franchise that is for sale on the internet and imagine you are going
to open a franchise in your own neighbourhood.
2. List (Name) TWO advantages and TWO disadvantages of becoming a franchisee for
this franchise
3. Identify (Name) the financial costs of setting up this specific franchise.
4. Explain (relate cause and effect) ONE reason why starting a franchise is better than
starting your own business.

Submit to google classroom by Tuesday next week

◼ http://www.franchisebusiness.com.au/

◼ http://www.whichfranchise.net.au/

◼ https://www.business.qld.gov.au/starting-business/starting-buying/buying-franchise (for advantages and disadvantages)

You may use ChatGPT to help you find a franchise

Risks of franchises in Australia

https://www.youtube.com/watch?v=YnL
vT5h_p_I
CASE STUDY – PIZZA HAVEN
◼ Pizza Haven was an Australian and New
Zealand pizza franchise.
◼ Brothers Evan, Louis, Bill, and Gabriel
Christou started Pizza Haven in 1984 with
the aid of a $24,000 mortgage on their
parents’ home.
◼ The first Pizza Haven outlet was at Glenelg,
Adelaide. Employing 12 people, the
Christou brothers were active in the
running of the business.
CASE STUDY – PIZZA HAVEN (CTD)

According to the Pizza Haven Franchise Disclosure Document, Pizza Haven was the
first Australian company to:
◼ Introduce cheesy crust;
◼ Introduce a gluten free pizza base;
◼ Introduce a fully computerised POS (Point Of Sales) system.
CASE STUDY – PIZZA HAVEN

◼ 1993 Ad https://www.youtube.com/watch?v=kqiz9G0txz8
◼ 1996 Ad https://www.youtube.com/watch?v=iDzu7_8Rgus
WHY THE PIZZA HAVEN FRANCHISE CEASED TO
EXIST

Pizza Haven was acquired by Eagle Boys Pizza (which was then acquired by Pizza
Hut in 2016).

Explain (Relate cause and effect) why these acquisitions might have happened. (3
marks)

Recall the do’s and don’ts of business writing. Try to include correct business
terminology here because we have learned many new words recently.
 Extension: TASK
Identify (Name) another successful Australian franchise and describe (Provide
characteristics and features) the factors that have contributed to the success of
household franchise services.

◼ http://www.franchisebusiness.com.au/
◼ http://www.whichfranchise.net.au/
◼ https://www.business.qld.gov.au/starting-busi
ness/starting-buying/buying-franchise
Plus some work on franchises (Topic 3 Business planning: influences in establishing a SME)
 Friday recap / Friday fun lesson

→ 10 min quiz
→ undercover boss
→
CASE STUDY – SUBWAY (We may watch the other ones
another time)

◼ https://www.youtube.com/watch?v=DUpNJS1vgSg – 9 minutes – how subway operates

◼ https://www.youtube.com/watch?v=dq8AF_lnfo0 – 4.5 minutes – training and development at
subway
◼ https://www.youtube.com/watch?v=WJOEZGI50B8 – 9 minutes – international expansion
◼ https://www.youtube.com/watch?v=SRq-U1m2dwg – 4.3 minutes – supply and distribution
◼ https://www.youtube.com/watch?v=G10CSRfV4Oc – 7 minutes – marketing subway
◼ https://www.youtube.com/watch?v=8C6KvtE46UE – 4.3 minutes – sustainability and citizenship
◼ https://www.youtube.com/watch?v=OQrr0DcwalU – 36 minutes – undercover boss
INFLUENCES IN THE BUSINESS
ENVIRONMENT
DEFINITIONS

◼ Business environment: the surrounding (external and internal) conditions in which

the business operates.
◼ External environment: factors over which the business has very little control, e.g.
government policy, technology, economic conditions, social attitudes, COVID.
◼ Internal environment: factors over which the business has some degree of control,
e.g. products, location, resources, management and business culture.
◼ Successful business managers have a good understanding of the environment in which
the business operates so that they can respond positively to changes that take place
and prepare for the impact that these changes will have on their business operations.
EXTERNAL INFLUENCES ON BUSINESS
 External
Influences
Economic Influences
• Business Cycle/Economic Cycle – expansion or
contraction of the economy
• Monetary Policy – Use of RBA to increase/decrease
interest rates
• Fiscal Policy – Government policy conducted through
taxation or spending aimed at stabilising the business
cycle
The Business Cycle
Expansion Contraction

• Decreasing levels of • Increasing levels of

unemployment; unemployment
• Rising inflation • Lowering inflation
• Fast wage growth • Slow wage growth
• More consumer spending • Less consumer spending.
10 BSTAC A2

Sentral
Class Jeopardy!!
1. Scissor paper rock with the
person next to you.
2. The winner must come up to the
front.
3. The losers stay at their seat.
4. Each winner must answer a
question from the class in order to
sit back down.
5. Questions may follow this
structure…
What happens to unemployment during a
contraction?
6. First person with their hand up
gets to guess first. If you guess
wrong, you must answer 2
questions correctly to sit down.
 The Business Cycle (cont.)
EVIDENCE FOR CONTRACTIONS EVIDENCE FOR EXPANSIONS

Rising Falling
Business can
Cost cutting occurs. unemployment, unemployment,
increase
Workers may be decreased increased
production and
retrenched, adding economic growth, economic growth
and stabilising or
will require
to the economic and rising
falling inflation. workers.
problems. inflation.

Consumer
More cautious Increased
Reduced consumer confidence
spending affects
consumers. spending will
Spending and returns and
business as profits increase business
consumer spending
fall. profits.
confidence fall. increases.
 Financial Influences
• Deregulation - the removal of government regulation from industry, with
the aim of increasing efficiency and improving competition.
• Debt Financing - A main source of finance for business is debt finance.
Debt finance is significantly influenced by the level of interest rates. As
interest rates increase, businesses will become more cautious in relation
to taking on extra debt. On the other hand, as interest rates drop, then
businesses will take on more debt.
• Globalisation – impact of foreign markets and investments
• Exchange Rates – cost of exporting goods and the supply and price of
imported goods.
Interest rates
Interest rates are controlled by the RBA (Reserve Bank of Australia).
High interest rates make borrowing money more expensive while
low interest rates make borrowing money cheaper.
The RBA uses these interest rates to influence the economy and keep
inflation, a measurement of price change in the economy, stable/
Higher interest rates → less borrowing → less spending → lower inflation
Lower interest rates → more borrowing → more spending → higher inflation
RBA’s interest rate
RBA’s interest rate

When would you like to borrow

money to start a business?
RBA’s interest rate

Why did the RBA make interest

rates so low?
RBA’s interest rate

Why did the RBA make interest

rates so high?
 How to answer an OUTLINE question

Often, an OUTLINE question is worth two marks is concerned with

the impact of something.
Here are some example OUTLINE questions from HSC papers.

2022

2020

2018
How to answer an OUTLINE question

Formula for full marks.

1/2 marks — Identify your ‘main answer’ in one sentence
2/2 marks — Expand on this a ‘little bit’ in one more sentence
This ‘little bit’ may be a short explanation, description or some extra
information to show that you know the answer in some depth.
 Let’s look at some example answers
(2022)

The first sentence identifies

the main answer: increase
on-costs for businesses

The second sentence expands on what this

means a ‘little bit’
 Let’s look at some example answers
2020

The first sentence identifies

the main answer: trade
unions

The second sentence expands on what this

means a ‘little bit’
 Let’s look at some example answers
2018

The first sentence identifies

the main answer: meet the
goals of business and
customer expectations
The second sentence expands on what this
means a ‘little bit’
 Let’s put it into practice
For your franchise research task
For each of the influences on the mind map below…
Outline (Sketch in general terms) the effect of a real ______
influence on the business.
Submit TWO to google classroom by end of the lesson.

Information on the
other influences
are on the
following slides
 OUTLINE peer review task
We have a worksheet including all of the OUTLINE responses you wrote during yesterday’s lesson.Today
you will go through and review ALL of them in pairs or 3’s.

Provide ONE clear comment on EITHER what the response did well or could improve upon.

This activity is for all of us to help each other, so understand that all feedback has good intentions :)

What to look for

- Correct use of the identify & expand a little bit formula
- Business terminology
- Other Do’s and Don’ts of business writing
- Expanding too little or even too much
Geographic Influences
• Globalisation – trade across borders has become
more open. Australia can buy and sell on the world
market. Access to materials, labour and markets
has increased. (page 54 of textbook → the
influence on business)
• Location – Australia being in the Asia-Pacific 🡪
Trade partners with countries such as China. As
developing countries emerge in Asia, opportunities
for trade increase – especially demand for natural
resources
• Demography – size, age, sex and cultural
background can impact demand levels and the
nature of products.
Social Influences
• Rapid identification and response to
changes in tastes, fashions and culture
can lead to sales and profit opportunities,
and business growth. Failure to respond to
social changes can threaten business
stability and viability.
• Eg 🡪 Environmentally friendly products
(Who Gives a Crap [Toilet Paper]),
family friendly content, health
conscious (No Sugar drinks), diversity,
fashion changes (Yeezy), pop culture.
Legal Influences
• Anti-Discrimination Act 1977 (NSW)

• Privacy Act 1988 (Cth)

• Fair Trading Act 1987 (NSW)

• Disability Discrimination Act 1992 (Cth)

• Australian Securities and Investments Commission Act 2001 (Cth)

• Corporations Act 2001 (Cth)

• Fair Work Act 2009 (Cth)

• Competition & Consumer Act 2010 (Cth) (also referred to as the ACL)

+ ACCC enforces this legislation

Legal Influences
• Businesses must adhere to each of these Acts in order to become and remain an
Australian business.
• As these Acts are reviewed and changed, the businesses need to update their
strategies to ensure they are complying.

• International businesses or businesses that sell their product overseas must adhere to
each individual countries legal acts.
• This can become difficult with language barriers and cultural differences.
Government
Political Influences
Institutional Influences
Technological Influences
• With appropriate technology, businesses can increase
efficiency and productivity, create new products
and improve the quality and range of products and
services.
• The use of hi-tech robotics in many manufacturing
industries is improving productivity, reducing operating
costs and eliminating many boring and repetitive tasks.
• Rapid advances in information technology (IT) have
reduced communications delays and allow suppliers
and customers to interact over great distances.
• E.g. Qantas online check-in.
Competitive Situation
• The competitive situation depends on the number of
competitors a business faces, the relative size of competitors
and the ease with which a business can enter the market.
• Sustainable competitive advantage – refers to the ability of a
business to develop strategies that will ensure it has an ‘edge’
over its competitors for a long period of time.
• Market Concentration – refers to the number of competitors in a
particular market. From least competitors to most competitors;
monopoly, oligopoly, monopolistic competition, perfect competition
10 BSTAC A2

Sentral
Complete by Friday 9am
1. Distinguish between internal and external business environments.

2. Define the business cycle and explain why the level of economic activity fluctuates
over time..

3. Outline the impact of globalisation.

4. Why is the ACCC so important to business in Australia?

5. Explain why it is important for a small business owner to comply with the consumer
protection provisions of the Competition and Consumer Act.
10 MQ feedback
Nikki’s response to Q2
Opening the business to become a partnership would give
Hamburger Heaven more funds to work with to establish another
branch in another suburb. Giving the company another branch
would also benefit Hamburger Heaven by giving its owners a
process to go through before making company decisions. This
weeds out bad ideas and makes it easier for the business to
prosper.
VIDEOS

Cultural differences when doing business overseas. 7;30 minutes

◼ http://www.youtube.com/watch?v=SKjW-ORlFH0
Google business culture 7.49 min
◼ https://www.youtube.com/watch?v=7vPJT5KZLtM
Internal Influences
INTERNAL INFLUENCES ON BUSINESS
Jigsaw activity
INSTRUCTIONS
The image from a jigsaw is only
◼ 1. Each pair will be given a specific
complete if all pieces are combined internal influence to summarise
correctly. (20 mins).

◼ 2. Students will then move around the

classroom and teach each other until all
worksheets are filled in. (25 mins).

◼ Think carefully about how you teach

these ideas. Begin with the definition and
what’s most important.

RULES OF THE ACTIVITY

◼ You can only teach the same pair once.
But there’s a twist for how we teach each other…

The teacher can only respond to

questions from the students.

Questions can not be asking what they

wrote down as well.

Teachers are not able to read directly

from their paper, except for definitions.
 Thinking routine:
Tug of war debate
INTERNAL INFLUENCE VS EXTERNAL INFLUENCE
STEP 1: RESEARCH (15-20 MINS)
With the person next to you play scissor paper rock (1 game
only)
The winner gets to pick to support internal OR external
influences. Internal on the left of the room and external on the
right. The loser must go to the other side.
The debate is whether internal or external influences are more
important to manage for a business..
For your research use
The slides
Your notes
The textbook
Your own research

Find case studies and evidence showing the benefits of your

chosen side.
Gather all evidence in a structured dot point format and share
with others. It is best to have one scribe for the whole group.
STEP 2: PREPARE YOUR ARGUMENTS
(10 MINS)
You have 10 minutes to finalise your research and arguments.
Split your information into 5 concise (10 words max) points.
Include all case studies, examples, evidence, general research
and anything else in your points.
Write down each point in neat LARGE font on the paper
handouts. Coloured pencils are provided for this but must be
handed back.
Rank your arguments from strongest to weakest. It is easiest to
pick the strongest first then the weakest, then 2nd strongest, then
2nd weakest and so on.
Delegate one person to each point as they will need to explain
the point to me during the tug of war.
STEP 3: THE TUG OF WAR (20 MINS)
Each delegate will have to put forward their argument to me in
1 minute starting with the weakest first.
After hearing each delegate there will be an additional 30
seconds to rebut the other side.
I will make an executive decision on which point is best
The next two delegates will then come up
There will be a winner with best out of 5.
BUSINESS GROWTH AND DECLINE
THE BUSINESS LIFE CYCLE SONG

◼ https://www.youtube.com/watch?v=1F7Bp9K7gWQ
BUSINESS LIFE CYCLE

◼ Business life cycle:

the stages of growth
and development a
business can
experience.
1. ESTABLISHMENT STAGE
◼ The main goal is survival.
◼ Need to generate enough sales (income) which will be used to pay expenses and
to generate a positive cash flow.
◼ Main features and challenges:
◼ Sales: normally slow and erratic
◼ Marketing: inexpensive promotion strategies to highlight product advantages.
◼ Customers: establish a customer base large enough to sustain future viability.
◼ High failure rate: 33% fail within first year of trading.
◼ Legal structure: usually sole trader or partnership.
◼ Main problem: lack of money with possible cash flow shortages.
◼ Overcoming challenges requires detailed planning.
TASK

◼ ONEPAGETRIP. Read the article

handout and write an answer to the
question at the end.
2. GROWTH STAGE
◼ The business experiences increasing sales, has established a regular customer base,
develops new products and improves its cash flow.
◼ Goal is to constantly increase the average level of sales, to continue growing through mergers
and takeovers and to diversify business activities.
◼ Main features and challenges:
◼ Marketing: extensive promotional activities, price discounts due to lower production costs.
◼ Costs: decrease due to economies of scale (cost advantages created from increased scale of business
operations).
◼ Employees: increased specialisation of workforce requiring training.
◼ Business entity: private or public company.
◼ Main problems: expanding too quickly, lack of experience.
◼ Responding to challenges: improve competitive edge, e.g. integrate with other businesses
through mergers and acquisitions.
 2. GROWTH STAGE (CTD)

◼ A merger occurs when the owners

of two separate businesses agree to
combine their resources and form a
new organisation.
◼ An acquisition (takeover) occurs
when one business takes control of
another business by purchasing a
controlling interest in it.
TYPES OF MERGERS AND AQUISITIONS
TYPES OF MERGERS & ACQUISITIONS ((CTD)
◼ Vertical integration occurs when a business expands at different but related
levels in the production and marketing of a product.
◼ Backward vertical integration: when a business integrates with one of its suppliers, e.g.
if a bakery acquires a wheat farm.
◼ Forward vertical integration: when a business integrates with a firm it sells to, e.g. if a
bakery merges with a supermarket chain that sells its bread.
◼ Horizontal integration occurs when a business acquires or merges with
another firm that makes and sells similar products, e.g. if a bakery merges with or
is acquired by another bakery.
◼ Diversification (conglomerate integration) occurs when a business acquires or
merges with a business in a completely unrelated industry, e.g. if a bakery merges
with a furniture manufacturer.
Merger or Acquisition?
Merger or Acquisition?
TASK.
You are the owner of Elite Furniture, a
business that makes specialty furniture.
Construct a diagram to show how your
business could expand using:
◼ Vertical (backward) integration
◼ Vertical (forward) integration
◼ Horizontal integration
◼ Diversification/conglomerate
integration
MATURITY STAGE
◼ Goal is to maintain profits at pre-existing levels.
◼ Owners could easily lose energy, enthusiasm and develop a sense of complacency
affecting both staff and management.
◼ Owners must rethink how the business should be operated to guarantee survival
through a more professional approach to planning and more formal organisational
structure but without destroying the entrepreneurial spirit that founded the business.
◼ Main features and challenges:
◼ Sales: rate of growth slows and eventually flattens out; plateauing (same goes for profits).
◼ Marketing: extensive advertising to maintain customer and brand loyalty; market share may
decline due to increasing competition.
◼ Business entity: no change in the beginning, although if the situation deteriorates, the
business may downsize and sell off non-core activities.
Popcorn brainstorm - Thinking routine

◼ How many businesses can we list that would be in the

maturity stage of the business life cycle in 1 min?
◼ The thinkers have 1 minute to silently think of
businesses in the maturity stage.
◼ The thinkers will then have 1 minute to shout out
these businesses.
◼ The writers must try to write down as many of these
as possible during the shouting phase.
◼ At the end we will review and see which ones we
agree and disagree with.
POST-MATURITY STAGE

Three possible outcomes:

◼ Steady state – the business continues to operate at the level it has been during
the maturity phase.
◼ Decline – falling sales and profits ultimately resulting in business failure.
◼ Renewal – increasing sales and profits due to new growth areas.
POST-MATURITY STAGE: STEADY STATE

◼ The business continues to operate at the level it has been during the maturity
phase (the business is neither expanding nor declining).
◼ The business is satisfying customer demand and maintaining profit levels but
ceases expenditure on R&D.
◼ However, a business cannot maintain this position forever – customers’ tastes
change, new competitors emerge with superior or more efficient production
methods and cheaper products.
◼ As a result the business stagnates and eventually loses sales and its
competitive edge. This leads to decline…
POST-MATURITY STAGE: DECLINE

◼ Falling sales and profits ultimately resulting in business failure.

◼ The process of decline is difficult to reverse as it becomes harder to borrow
money, suppliers restrict credit facilities, products become obsolete and
well-qualified employees leave.
POST-MATURITY STAGE: RENEWAL

◼ The decline stage can be avoided by carefully planned strategies that result in
new markets being tapped and satisfying previously unmet demand.
◼ This leads to increasing sales and profits due to new growth areas through
the development of new products and new markets.
◼ This requires a business to be proactive by anticipating and planning for
future changes.
CASE STUDY

◼ Re-Branding – The McDonald’s Strategy

◼ https://www.youtube.com/watch?v=8QTuZ_x0EEo Through history
◼ https://brandsonify.com/case-studies/mcdonalds-2016-rebrand/ More recently
TASK. Submit to google classroom.

1. At which stage of the business life cycle do you think the business needs to
undergo the most radical change? Justify your answer.
2. Using the ‘stages of the business life cycle’ diagram, plot 4 real businesses along
the curve. They can be businesses of any size.
3. Identify 1 business renewal strategy undertaken by another fast food business
like KFC or Subway. Explain why they undertook this strategy.
BRAINSTORM FACTORS THAT CAN
CONTRIBUTE TO BUSINESS DECLINE
 MAIN CAUSES OF BUSINESS DECLINE
(PARTICULARLY FOR SMES)
◼ Lack of management expertise:
failure to plan and keep modifying plans
as the environment changes. Businesses
that fail to plan, plan to fail.
◼ Lack of sufficient money
(undercapitalisation): many small
businesses start out on a ‘shoestring’
budget. Without sufficient capital and a
positive cash flow, the business will not
be able to purchase stock and
materials. This inevitably results in lost
sales and falling profits.
ARTICLES – WHY BUSINESSES FAIL

◼ http://www.huffingtonpost.com.au/2015/09/28/small-business-failure_n_8187166.
html
◼ https://www.smartcompany.com.au//growth/top-reasons-for-small-business-failur
e-study/#
 AVOIDING BUSINESS FAILURE

◼ Manage the cash flow – cash is the

lifeblood of the business. Failing to
monitor the business’s cash flow
situation will ultimately place the
business in a vulnerable position.
TASK. Submit to google classroom by Tuesday 9am.

Pretty Patisserie is a bakery that has been operating for six years in the Northern Beaches in 3
locations. They are known for selling unique cakes and pastries. Sales growth has been slowing and
the customer base has been slowly decreasing as new bakeries and coffee shops are opening up in
the area.
There are currently 2 partners, and they plan to open a new store in Mosman in the next 12
months. The partners are considering becoming a private company and inviting new owners to
invest in the business.
Answer the following questions below:
1. Describe (provide characteristics and features) TWO roles of businesses in society.
(Approx 3-5 sentences each role)
2. Discuss (provide points for and/or against) how becoming a private company will help
Pretty Patisserie maximise its growth. (Approx 6-8 sentences)
3. Propose (put forward an idea/argument) TWO strategies for the business to enter a
path of renewal. (Approx 4-5 sentences each strategy)
CESSATION
VOLUNTARY CESSATION

◼ Occurs when the owner ceases to operate the business of their own accord,
e.g. because the owner wants to retire, wants a lifestyle change, dies (in the case
of a sole trader), or due to business failure (increasing debt and negative cash
flow).
◼ Any assets owned by the business are sold.
INVOLUNTARY CESSATION

◼ Occurs when the owner is forced to cease trading by the creditors (people or
businesses owed money) of the business.
BANKRUPTCY

◼ Bankruptcy: a declaration that a business (or person) is unable to pay their

debts.
◼ The business owner or a creditor applies to a court for a bankruptcy order to
be made.
◼ The court appoints a representative to collect any money owed to the business,
which is then distributed to the creditors along with money raised from the sale
of business (and personal) assets.
◼ Realisation: the process of converting the assets of a business into cash.
VOLUNTARY ADMINISTRATION

◼ Occurs when an independent administrator is appointed to operate the

business in the hope of trading out of the present financial problems.
◼ The administrator’s main tasks are to bring the business and its creditors
together, and examine the financial affairs of the business.
◼ If successful, the business may resume normal trading.
◼ If unsuccessful, the business goes into liquidation.
LIQUIDATION

◼ Occurs when an independent and suitably qualified person (the liquidator) is

appointed to take control of the business with the intention of selling all of the
company’s assets in an orderly and fair way in order to pay the creditors.
◼ Occurs when the business has become insolvent (unable to pay debts as and
when they fall due).
◼ Once the creditors have been paid, any surplus cash is paid to the owners of the
company.
◼ Can be voluntary (creditors) or involuntary (courts).
TASK. Submit to google classroom by Friday 9am 15/3/24

1. Outline (sketch in general terms) how liquidation occurs.

2. Identify (name) Find a recent company that has gone into liquidation in
the smh or some other newspaper.
3. Explain (relate cause and effect) how the company ended up in liquidation.
4. Describe (provide characteristics and features) the impact the liquidation
had on stakeholders (company directors, creditors, employees, shareholders,
customers, society/economy).
 Examine contemporary business issues to:
◼ Discuss the global expansion of one Australian business
https://www.smh.com.au/business/small-business/if-you-re-g
oing-to-do-something-do-it-big-aussie-sugar-free-drink-goes
-global-20181119-p50gwu.html
◼ Discuss the expansion into Australia of one global business
◼ Explain how changes in external influences have
SYLLABUS contributed to the growth of the tertiary, quaternary and
quinary industries in Australia
‘LEARN TO’ ◼ Identify problems that arise for stakeholders when
companies go into liquidation
QUESTIONS
Investigate aspects of business using hypothetical situations and
actual business case studies to:
◼ Distinguish between the different types of businesses
◼ Identify actual businesses at different stages in the business
life cycle
◼ Outline possible business strategies appropriate for
different stages in the business life cycle
Describe the · Marketing: Use promoting and discounts to increase income and customers
challenges businesses
· Employees: Require training to maintain quality
face in the growth stage
of the business lifecycle
· Can expand too far/fast leaving inexperienced owners lost and confused

· Increased revenue: Strategies to manage increasing profit

· Business entity: private or public company

Discuss ONE internal · Customer base: Pia can take advantages of potential customers to maximise sales
and ONE external
influence that Pia must· Location: Consider the target demographic for your product e.g. young Australians
consider if opening a
· Competition: Pia must consider the competition in the area she expands into since customers may already be loyal to
restaurant.
another shop

· Social: Pia should consider the trends online as she has a social media account and her customer base is young
therefore…

Evaluate TWO relevant · Private company: Lower tax rates, does not pay income tax
legal structures that Pia
should consider if · Partnership: simple to manage, can transition to private later
taking on new owners
· Private company: Limited liability, less taxes more formalities
The main challenges or areas to focus on based on the
stimulus

Pia is a sole trader who has operated Pia’s Pizza, a food truck based around Sydney, for 3 years. Pia has had great success
with the food truck and has a social media following of over 5000 followers. Many of her followers have told her she should
open a restaurant, which she is seriously considering.

To fund the expansion, Pia is considering a change to the legal structure of the business and inviting new owners to invest in
Pia’s Pizza.

Pia’s main areas to focus on include:

1. the expansion of making a new restaurant,
2. the change of legal structure
3. bringing on new ownership and,
4. Funding.

Let’s pick answers from the previous slide that link up well with these areas.
Describe the challenges· Marketing: Use promoting and discounts to increase income and customers.
businesses face in the
growth stage of the · Employees: Require training to maintain quality.
business lifecycle
· Management related: Can expand too far/fast leaving inexperienced owners lost and confused.

· Increased revenue: Strategies to manage increasing profit.

· Business entity: private or public company.

Discuss ONE internal · Customer base: Pia can take advantages of potential customers to maximise sales.
and ONE external
influence that Pia must · Location (internal): Consider the target demographic for your product e.g. young Australians.
consider if opening a
restaurant. · Competition (external): Pia must consider the competition in the area she expands into since customers may already be loyal to
another shop.

· Social (external): Pia should consider the trends online as she has a social media account and her customer base is young
therefore…

Management (internal): Pia must consider the new ownership and determine a management structure that is effective and easy to
maintain.

Evaluate TWO relevant · Private company: Lower tax rates, does not pay income tax
legal structures that Pia
should consider if taking · Partnership: simple to manage, can transition to private later
on new owners
· Private company: Limited liability, less taxes more formalities
sales

Select a question which you felt you struggled with in the

assessment
Write a new response which addresses the directive verb correctly, focusses on ONE green answer and a clear link to the
stimulus.

FOCUS ON DEPTH OVER BREADTH WHERE YOU GIVE MORE DETAIL ON THE ONE IDEA.

E.g.
Describe
Answer the question first.
Businesses within the growth phase can find it challenging to effectively manage this growth.
Expand on what the challenge is.
Management involves delegating responsibilities and clearly communicating the goals and strategies of the business to its
employees. This is difficult to maintain and modify during changing business conditions such as increasing sales and rising
production.
Link it to Pia’s situation.
As a sole trader, Pia will not have much experience in managing many employees. Growing businesses, like Pia’s, will need to
employ more people in order to maintain levels of efficiency during the growth stage and the delegation of responsibilities to
these employees is key for sound management. In delegating these responsibilities, it is paramount that Pia use clear forms of
communication, both verbal and non-verbal, to ensure the employees understand the goals and strategies of Pia’s Pizza.
Let’s reflect on this topic. Nature of Business

1. List 2 things you feel you improved upon during this topic.
E.g. writing short answers, note taking, vocabulary.

2. List 2 things you want to improve upon for the next topic.
Can be same as the things listed for previous question too.