Download 3 Establishing and Sustaining a Business

Current Course
Proposed Changes
COURSE CONTENT
COURSE CONTENT
The course should be studied in an applied manner using current and
relevant business issues and case studies to complement the content below.
There are four compulsory areas of study:
The course should be studied in an applied manner using current and
relevant business issues and case studies to complement the content below.
There are four compulsory areas of study:

the nature of business

The nature of business
20%

key business functions

Key business functions
55%

establishing and sustaining a business

Establishing a business
15%

inquiry into a current business issue.

Inquiry into a current business issue.
10%
(The percentage above refer to a suggested weighting of time
allocation to each section)
1
THE NATURE OF BUSINESS
Business – the big picture:
1
THE NATURE OF BUSINESS
Business – the big picture:

Functions

Functions:

Goals and objectives

economic and social importance of business to the economy

Stakeholders.

Goals and objectives
Current Course
Types of business:

Classification – private/public

Legal structures

Primary, secondary, tertiary and quaternary sectors.
Proposed Changes
Types of business:

Classification of business by:
o size
o geographical spread - local, national, global
o legal structure – unincorporated, incorporated and
franchises.


Factors influencing choice of legal structure
Sources of capital to fund the legal structure – debt and
equity
The business environment
The business environment:

Internal and external environments

Innovation in Australia

The business cycle and economic activity

Changing consumer demands

Diversity and change

Competition

Regulatory bodies

Trade and industry associations, trade unions

Ethics, social responsibility and sustainability.

External influences on business and how changes in these
influences impact on business:
o economic – (including the economic cycle - boom
and recession),
o political (including government policies and changes
to policies)
o legal,
o social/cultural,
o institutional/regulatory bodies – trade unions, ASIC,
ACCC,
o government departments,
o technological (including scientific discoveries/
inventions)
o competitive (– no. of competitors, ease of entry, local
and foreign competition),
Current Course
Proposed Changes
o
o
o
changing consumer demands,
environmental/ecological
pressure/interest groups.

Internal influences on business: product, location,
management, resource management and business culture

Stakeholders in the internal and external environments and
their interests and issues:
shareholders, managers, employees, consumers, community
and society and the environment.
Entrepreneurship

Innovation and identification of opportunities and risk taking

Leadership and management skills (brief treatment only)

Communication skills (brief treatment only)
Ethical behaviour

2.
Ethics, social responsibility and environmental sustainability.
MANAGEMENT OF KEY BUSINESS FUNCTIONS
Current Course
2
KEY BUSINESS FUNCTIONS
The mechanisms by which business achieves its prime functions The role of the entrepreneur:

Innovation and identification of opportunities

Leadership and management

Negotiation

Marketing and research

Risk management

Record-keeping

Working independently and with others.
The role of communication:
Proposed Changes

Overview of the four key business functions and their interrelationship
with one another:
o Operations management.
o Human resources management.
o Marketing.
o Financial management.
(i) OPERATIONS MANAGEMENT


Operations Management (Brief treatment only. To be taught
in context of teaching the other three business functions and
to prepare students to write a business plan).
o
Inputs.
o
Process.
o
Outputs.
Operations strategies to sustain a business:

Communication in business and its relationship to business
objectives and strategies
o
Enhancing the production process by using
technology.

Functions and purpose of communication
o
Adding value to the value chain.

Effective methods of communication
o
Managing quality.

Barriers to effective communication.
(ii) HUMAN RESOURCES MANAGEMENT
Current Course
Proposed Changes
The role of employment relations:

Staffing requirements

Recruitment

Training and development
o
Staffing requirements

Work conditions in Australia
o
Recruitment

Rights and responsibilities of employers and employees.
The Human Resource Cycle

Acquisition

Training and development

Maintenance
o

Monetary and non-monetary benefits
Separation
o
Voluntary and involuntary
Work conditions in Australia, including coverage of:

Types of employment contracts

National Employment Standards
Rights and responsibilities of employers and employees.

Fair Work Act, Equal Opportunity, OH&S,
(iii) MARKETING
Current Course
The role of marketing:

Nature and attributes of marketing

Understanding consumer behaviour and motivation

Market research
o
Determining competitive advantage
o
Feasibility
o
Strengths, Weaknesses, Opportunities, and
Threats (SWOT) analysis

Target market

Marketing mix

Break-even analysis.
Proposed Changes

Nature and attributes of marketing

Marketing planning process:
o
SWOT analysis: strengths, weaknesses, opportunities
and threats
o
competitive analysis
o
product life cycle: introduction, growth, maturity, decline
o
establishing objectives (expansion, diversification,
increasing market share, increasing size of existing
market)
o
identifying target markets (demographic, geographical,
psychographic and behavioural factors)

Market research methods – primary and secondary

Marketing mix:

o
Price
o
Product
o
Promotion
o
Place
Marketing strategies to sustain a competitive advantage:
o
market segmentation and product differentiation
o
positioning, branding, packaging, logo
o
pricing methods (cost-based, market-based, competitionbased)
Current Course
Proposed Changes
o
pricing strategies (price skimming, penetration pricing,
loss leader pricing, price points)
o
promotion strategies (advertising, online, personal
selling, sales promotions, direct marketing, public
relations
o
place and distribution strategies (eg: online, home
delivery)
o
Change in consumer tastes and preference
o
technologies used to enhance marketing.
(iv) FINANCIAL MANAGEMENT

The role of accounting and finance:


Understanding and interpreting financial statements used for
external reporting, including:
o
Balance sheets (statements of financial position)
o
Profit and loss statements (statements of financial
performance)
o
Cash flow statements
Internal management tools, including:
o

Cash budgets
Key uses of financial statements, including:
o
Measures of profitability: Net Profit Ratio and Rate of
Understanding and interpreting financial statements used for
external reporting, including:
o
o
Balance sheets (statements of financial position)

purpose;


components;
link to financial objectives.
Profit and loss statements (statements of financial
performance)

purpose;


components;
link to financial objectives.
Current Course
Proposed Changes
Return on Owner’s Equity
o
Measures of financial stability: Debt to Equity Ration and
Working Capital Ratio
o
Uses of financial statements and key ratios for decision
making

Budgets as planning tools

Importance of cash flow.
o
Cash flow statements



Key uses of financial statements for decision making
including:
o
Measures of profitability: Gross Profit Ratio, Net Profit
Ratio and Rate of Return on Owner’s Equity.
o
Measures of financial stability: Debt to Equity Ratio and
Working Capital Ratio.

Importance of cash flow.

Budgets as planning tools.
o

3
Purpose;
link to financial objectives.
Cash budgets (cash flow projections)

purpose;

components;

link to financial objectives.
Financial strategies to sustain a business
o
Managing debt and overextension of finance.
o
Managing cash flow.
ESTABLISHING A BUSINESS
Current Course
3
ESTABLISHING AND SUSTAINING A BUSINESS
Key business considerations:
Proposed Changes
Students are expected to complete a business plan that will consolidate
their understanding and apply and extend their knowledge and skills on
what they have studied in the first two sections of the course.
 Importance of business planning

The business idea

Options in establishing a business

Business structure and ownership

Executive summary

Location

The business idea

Sources of capital – debt and equity

Business structure and ownership

Legal factors

Operations

Occupational health and safety

Location

Production and distribution network

Resources required

Hiring of staff, including on-costs.

Hiring of staff, including on-costs

Legal factors in establishing a small business
Success and failure – business principles:
 Reasons for success and failure of small businesses
A business plan could include the following:

Rates of success and failure

Marketing plan

Importance of a business plan

Financial Plan

Sustaining a competitive advantage

start-up costs

Managing debt

sources of finance

Managing cash flow

sales forecasts

Managing mistakes

cash flow forecasts

Adapting to change

break even

Utilising technology.

Future prospects
Current Course
Proposed Changes
4
4
INQUIRY INTO A CURRENT BUSINESS ISSUE
Society comprises a wide diversity of organisations, from the small club or
business to the larger international company. Regardless of their size,
ownership, objectives, resources or location they all share one thing in
common - people manage them and in so doing deal with many economic,
legal, financial and moral dilemmas.
INQUIRY INTO A CURRENT BUSINESS ISSUE
<no change>
Current Course
Proposed Changes
ASSESSMENT CRITERIA
ASSESSMENT CRITERIA
The assessment for Business TQA level 3 will be based on the degree to
which the student can:
The assessment for Business TQA level 3 will be based on the degree to
which the student can:
1. plan, organise and complete activities related to the study of
business
1. plan, organise and complete activities related to the study of
business
2. conduct research and acquire business information from a variety of
sources
2. conduct research and acquire business information from a variety of
sources
3. *communicate business information using appropriate formats
3. *communicate business information using appropriate formats
4. *describe business principles, concepts and issues
5. *apply a range of business and financial strategies to business
situations
4. *demonstrate knowledge and understanding of business
principles, concepts and issues
5. *apply a range of business and financial strategies to business
situations
6. *analyse and evaluate business information, data and current issues.
6. *analyse and evaluate business information, data and current issues.
*= externally and internally assessed
*= externally and internally assessed