Internal and external influences on business opportunities

Business is like the blood that flows through our anatomies, with out business our lives would be almost impossible. Business plays many different roles inside our everyday lives. Most people either own or be employed by a specific business. Businesses allow the city and even further places such as overseas countries to receive and sell goods and services. A business can be whatever provides goods and services to the community such as corner shops providing customers with goods and sweets plus they may also be larger companies such as Nike selling shoes and clothing all over the world. Businesses allow for our economy to grow and become stronger, with out a strong economy a country can not run as smoothly as preferred. Among the main reasons why companies are so important inside our everyday life is due to the actual fact that businesses provide millions and millions of people with job opportunities. If businesses didn't exist people will not be able to work and earn money for everyday living. There are certain factors that can influence a small business. These factors include internal and external influences.

Internal influences are influences that a business has some control over, such influences include product, location, management, resource management and business culture.

Product influences

These influences affect a sizable majority of the inner structures and procedures of a business.

Depending on the types of goods and services the business produces will rely upon the internal structure.

If the products being produced require certain equipment, these needs must be catered to so the business may go on with its production.

Each kind of business has some other set of product influence, for example a service provider will require less preparation, whilst on the other hand a manufacturer will require more services to create the goods sold.

The size of an enterprise can be dependant on the several types of goods and services produced and also the option of technology. So out of this we understand that the amount of goods and services made by a business depends upon the size of the business.

Poor productivity is seen in the article 'Anger at Vodafone' Sydney morning herald, this impacts on the business because Vodafone is providing very poor services to their customers, therefore tempting the clients to switch to another network, taking business away from Vodafone.

Location influences

One of the most important factors of any business is the location in which that business is positioned in. The location can either make or break the business.

Location is particularly important for retail and service oriented businesses, as they have to be observed and recognized by customers. The business enterprise owner must consider of where he/she chooses to locate their business

The business must be in area with a good image, for eg not a poor suburb, they business must be positioned in a location were customers are consistently walking past and spotting the shop, for eg in the town.

Another important thing is that the business enterprise must be convenient towards the customers, so that they may take the time and effort to check on the place out, if the business enterprise is found in a area which is not convenient the customers may loose interest and go someplace else.

Resource influences
-Basically there are 4 main types of resources available to a business, included in these are

Human resources

Information Resources

Physical resources

Financial resources

Human resources may be considered as the main resource, for they will be the employees that allow for the business to run. Information resources are the actions where the business takes to analyze and learn more about their situation for eg sales reports. Physical resources include all the equipment and tools necessary for running the business enterprise. Money are basically what the business is determined by to buy and help support their business, for example to buy new machines.

Management influences

There is no doubt that as time passes businesses and how businesses are run have considerably changed. Management has been a part of business that has been changed in a powerful way. Before there were many degrees of management and hierarchy in a small business that new ideas and issues had to undergo, however now due to many factors like the pressure of competitiveness from globalisation how companies are run have been altered. These days there are much fewer levels that new ideas and issues have to go through, this will result in quicker and better decisions that over time will allow the business enterprise to focus on the way it runs. This allows businesses to adapt quicker and even more effectively to the ever changing needs and wants of consumers because there are fewer managers in which the procedure for decision making must go through.

Business culture

In reality every business has its type of business culture, these are all the values, beliefs and ideas that are agreed after by all employees and managers of the business. The culture of a business is shown in the way where the business acts and performs. Business culture is usually shown in the guidelines and regulations of an business including the way staff are anticipated to dress and behave. Culture has been proven to be a necessary tool that must definitely be utilized by businesses to attain the best out of its staff members and customers. Business culture is shown to be important in the video Australia's food fight: west farmer's vs. Woolworths. Coles have changed their business culture by undergoing management change, which includes allowed for another type of culture to be employed, and this has shown to be successful because they are now basically ahead of Woolworths.

Internal influences have a fantastic impact on business in Australia. They include every thing from were the business enterprise is situated to how the business is run. The positioning of your business basically is essential for the success of the business, depending on were it is situated, it must be convenient and noticeable to customers. If it's not found in a convenient area customers may well not be able to get to the business and purchase from it. The management of an business is the way in which the business enterprise is run, to be able to truly have a successful business it must be under good management and the required actions must be studied when they are needed, for eg if employees are needed to be cut off, due to insufficient financial sustainability. So basically it is essential for businesses to be influenced by internal influences in an optimistic way.

External influences

External influences are factors a business may have little if any control over, such factors include: Economic, financial, geographical, social, legal, political, institutional, technological, competitive situation and markets influences.

Economical influences

In Australia and all of those other world, the economy experiences monetary cycles. These cycles include booms and busts (recession). Basically during an economical boom the economy encounters higher degrees of employment, they may be so confident in their sales that they could boost the price of items to gain higher profits. Also during booms wages of employees tend to increase as more profit is being made by the business enterprise. However the economical cycle does have its problem, such as when the economy is experiencing a recession period. An unfortunate reality of recessions is the fact employment rates decrease because of the fact that the business enterprise is not making enough sale profits to keep their workers. Another aftereffect of recession is the fact business may well not have the ability to raise the price of the products because people are not purchasing so they could have to even lower prices to continue to compete on the market. The influences of economical factors are shown in the article Petrol price's soar no relief in site. Because of the poor economical status prices are raised and customers might not exactly be able to acquire petrol as of this price. Another ecomical influence is seen in the radio article 'impact of floods on grocery prices' 2GB, Sydney, this impacts on the business because all the crops are being destroyed so that it is impossible to make a profit, with farmers not making profits the economy will suffer and be under pressure.

Financial influences

Financial influences impact a small business in a number of ways. due to deregulation which is basically the extermination of government regulation in an business, Businesses are now in a position to improve competitiveness with each other. Better still, now due to globalisation, Australia is now able to trade goods overseas, further more improving the financial sustainability of the country.

Geographical influences

Geographical influences impact businesses in many ways. Australia is situated in the Asia-pacific region, the economical status's in these surrounding countries are incredibly important in the interest of Australia. Basically if china is doing well, it might be in a position to trade goods and services with Australia creating an advantage for both countries. Another thing is that the majority of Australian companies are found in the Asia-Pacific region, so the countries must be economically successful for the Australian companies to survive. Also the demography of the country has a substantial influence on businesses, for eg Australia must be set you back suit folks of all different cultures, ages and sexes. One major demographic impact on Australia is the ageing population, with an ageing population there has to be centres and facilities created for elders. Also with people retiring, their jobs should be completed by younger people, who might not be as experienced as the retired worker. Globalisation is also an important fact of geographical issues, due to globalisation Australia is not tied down just to trade goods and services throughout Australia, but how ever to do so around the complete world. The impact of globalisation can be seen in the video 'picking up an Aussie apple', we see that Australia is starting to import overseas apples to Australia.

Social influences

Social influences provide an sever effect on the success of a small business. For eg in the future peoples taste in fashion and trends will change. If businesses do not adjust to these changes they might be affected in an exceedingly negative way. In order for a business to make a profit they need to consider all the new fashions and trends on offer. One other major social influence is the influence of of the environment which is basically wearing away day by day, businesses must always consider what is in the best interest of the environment, for eg not offering plastic bags after a sale. One final issue is the issue of family-work practices, as women give birth they need to leave work, which may result in the business losing a worker, affecting in the production of the business. An example of social influences is seen in this article 'Petrol price soars no relief in site', With all the rise of petrol, folks in society may decide that rather than using cars, they often will cut costs by using public transport or riding a bike to work.

Legal influences

Businesses can not only do as they please. There are several legal actions that influence businesses and basically tell them what they can or can't do. With more and more laws being passed onto businesses, the business enterprise must adapt their company to what regulations is telling them to do. Generally the folks of a society expect that businesses may run under the guidelines and guidelines provided by regulations. Businesses must be aware of all laws in order that they might not breach them and pay the penalties.

Political influences

Even though political influences may well not be the most affective factors onto an enterprise, they still have a pretty heavy impact. For eg whenever a new election Is held, the new government may introduce new policies. An insurance plan that was introduced in 2000 was the products and services tax, this was a 10 percent tax on the way to obtain most goods and services used in Australia, this afflicted businesses in a manner that they had to accumulate taxes basically with respect to the federal government. However deregulation has also been introduced in the picture in the past few decades, this is the removal of government regulation in industry, and this takes pressure off businesses and allows for a greater selection of competitiveness.

Institutional influences

Three institutional influences on business are government, regulatory bodies and trade unions and employer associations.


Three levels that are federal, state and local.

Federal government deals mainly with issues such as tax, ensuring the taxes are being paid and also things such as how the companies are running in according to the customs regulations.

State governments deal with lower case issues such as personnel rights and responsibilities such as OHS requirements and making certain companies are abiding by their state laws and trade practices

Local government handles issues such the condition of building and making sure of improvements, parking rules and fire regulations

Regulatory bodies;

These bodies observe and understand just how that businesses deal with certain issues and the way the business treats its community and consumers. Types of regulatory bodies include: any office of fair trading and the Australian competition and consumer commission. (ACCC)

Other institutional influences are Trade unions and Australian stock exchanges, these groups have aims such as increasing working conditions and pay rates.

Technological influences

Technology certainly has had probably one of the most affects on businesses. With new technologies being invented and discovered every day this can only assist in improving productivity and efficiency for businesses. Technology has allowed for robotic machinery to be used in productivity which over time cheapens the price tag on productivity as no employee or must be paid. Robots also help to reduce the amount of boring and repetitive jobs that some humans may have to do. Also communication technology has been enhancing rapidly over the past few years making it even simpler to talk to suppliers and consumers, with out them actually being there. Businesses must strive to use the available technology to the best of their ability in order that they may keep up or even be before competitors.

Competitive situation influences

These influences is quite helpful and beneficial to both consumers and producers, for eg when two companies are competing to be the market leader, they will lower costs of these stock to attract customers. Because of this they will be making more sales and moreover a profit. These competitive situations also benefit consumers because with competition in market you will see a greater selection of goods available for consumption, this allows the consumer to obtain a wider variety of choice when considering the good or service they need. Competitive situations are shown in the video Australia's food fight: west farmers VS Woolworths as these companies are competing with each other to get the most customer satisfaction, It also discus's the way the impacts of globalisation such as Aldi here in Australia also competing amidst the big guns.

Another example of competitive situation is shown in the article Anger at Vodafone, with Vodafone giving such poor services, customers would want to change to another network providing greater coverage.

External influences have a significant impact on our every day lives in Australia, with all different types of factors such as social and technological influences our lives are damaged on a daily basis. If external influences did not exist we would not be surviving in a society were goods and services from all over the world are accessible to us for our very own usage. External influences can be both positive and /or negative for example, competitiveness in the market allows for a variety of options for consumers to choose from but contrasting the effects of external factors such as geographical issues relating to the weather can have a negative affect, for eg flooding in farms or drought seasons.


As mentioned in the executive summary above, business can be compared to the blood in a living organism, it is essential for our everyday survival and living. Business we can live the pleasure's and entertaining lives that we live each day. Internal influences summed up can be named influences that a business can control whilst external influences are those factors that the business cannot control. Internal influences for eg can be explained as factors that a business can use and apply to help determine the success of their business, including the location where they choose to put their business. External can be explained utilizing the exemplory case of a monetary recession, this may affect the business enterprise in many negative ways such as letting employers go. So summed up we can say that business is vital for everyday living and it can be divided into two different kinds, Internal and external, and it can be figured they basically determine how the business enterprise is run and how successful it'll be.

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