QCAA Business Competitive markets

Answers could include:

Currency fluctuations:

• refers to changes in the exchange rate of a currency relative to another currency; these fluctuations can result in an exporter losing money
• exchange rates are determined by the supply and demand of a currency in the foreign exchange market
• factors that influence the supply and demand of a currency include a country's economic and political conditions, interest rates, inflation and market expectations.

Non-payment of monies:

• refers to a situation where one party fails to fulfil its obligation to pay money to another party
• can have significant financial consequences for the party owed money, especially if they rely on the payment to meet their own financial obligations
• to avoid non-payment, it is important to establish clear payment terms and conditions upfront, including deadlines, methods of payment, and consequences for non-payment.

Answers could include:

E-commerce:

• involves the use of websites where potential customers can view and purchase inventory
• allows a domestic business to enter global markets without having a physical presence in a target country
• the growth of e-commerce and the use of mobile devices have enabled better communication between staff, customers and suppliers around the world.
  Examples:
• customers can customise a business's website with a chosen currency and language to enhance their shopping experience
• businesses can use social media to sell their products online, allowing them to access a global market.

Distribution of products:

• technology can be used to communicate directly with customers globally through email and websites
• technology can be used to help track inventory and automate distribution in global markets
• technology in transportation will aid the transfer of products from domestic to international markets.
  Examples:
• GPS technology can be used to track data in real-time, making tracking faster and more efficient
• increased access to data and collaboration in supply chains using technology such as Zoom or Teams to assist.

Answer(s) could include:

• A patent can give Smoothex exclusive rights to manufacture and sell any device, substance, method or process that is new, inventive and useful. When Smoothex expands globally it can apply for a patent in countries individually. This might be a good option if it only sells in a few countries.
• Alternatively, Smoothex can register a patent in multiple countries under the Patent Cooperation Treaty (PCT).
• The PCT is administered by the World Intellectual Property Organisation (WIPO), of which there are 148 participating countries. If the WIPO approves the patent, the intellectual property (IP) is protected in the countries that are members of the treaty. A patent is maintained if annual fees are paid. Patents must also be updated if there are any changes to the device, substance, method or process. In addition, Smoothex would have to file individual patent applications in the countries that are not members of the PCT.
• If Smoothex does not register for a patent, it is at risk of others stealing or using its idea, creating a loss of income and competitive advantage.

Answer(s) could include:

Corporate social responsibility:
Corporate social responsibility requires Smoothex to achieve its business goals in the context of the broader system in which it operates, thus giving due consideration to the community, society, triple bottom line and environment of a range of stakeholders. For example, Smoothex could support local charities (through donations/corporate sponsorship) in Indonesia and Malaysia. This could build positive relationships with the local communities and also help develop a positive business image in these countries.

Environmental sustainability:
Environmental sustainability requires Smoothex to adopt environmentally responsible operations such as use of dyes, recyclable packaging, waste of materials and recycling of supplies where possible. Smoothex could apply these to its operations to develop a positive public image and engender staff loyalty due to the respect demonstrated for their local country and its environment.

Answer(s) could include:

Levels of education:

• This can affect each country's economic environment. Levels of education differ depending on whether the country is more developed or industrialised, less developed, or a newly industrialising or emerging economy.
• Smoothex will need to consider the level of education in the countries to which it intends to export.
• if there is a skills shortage in a country, Smoothex will need to base employees overseas and use financial packages to attract staff. There may be issues in using technology, inability to fill positions or an understanding of how to store or sell Smoothex skincare and cosmetics.

Customs:

• When doing business in another country, Smoothex will need to consider cultural differences that may be presented.
• Cultural differences could include basic customs, mannerisms and gestures. For example, if a salesperson approaches a meeting with knowledge of a custom's cultural background, then his/her words, body language and actions can all be adapted to better suit those of the customers.
• Understanding cultural differences and adapting to these differences will allow Smoothex to be better liked by customers in Indonesia and Malaysia.

Holidays and celebrations:

• Smoothex can use this to provide content to put on their social media pages for marketing purposes, such as Christmas holiday sales or using a celebration as a background to sell products or services for Chinese New Year or Halloween.
• Indonesia and Malaysia have a multi-cultural background and people celebrate a wide variety of holidays.
• Smoothex will need to be aware of the holidays and celebrations in the countries in which it is hoping to do business to ensure its success.

Religious beliefs:

• The main religion of a country can influence the way Smoothex conducts its business.
• Although very few religions influence business activities directly, the impact of religion on human value systems and decision-making is significant. Thus, religion exerts a considerable influence on people's actions and outlook on life, as well as on the products they buy.
• Smoothex will need to be aware of the religious beliefs of Indonesia and Malaysia to ensure that it does not offend its customers.

Business etiquette:

• The formality of address is an important consideration when dealing with colleagues and business partners from different countries.
• Consider if they prefer titles and surnames or being on a first name basis.
• While it can vary across organisations, Asian countries such as Indonesia and Malaysia tend to use formal 'Mr/Ms Surname', while Australians and Americans tend to use first names.
• Smoothex will need to be aware of business etiquette in the countries in which they choose to operate.

Communication protocols:

• It will be important for Smoothex to understand the importance of subtle non-verbal communication between cultures as this can be equally crucial in international business.
• What might be commonplace in one culture – be it a firm handshake, making direct eye contact, or kiss on the cheek – could be unusual or even offensive to a foreign colleague or client.
• Where possible, Smoothex will need to research in advance the professional protocols required with individuals from the Indonesian and Malaysian cultures.
• Staff will need to be perceptive to body language, and when in doubt, to ask. While navigating cross-cultural communication can be a challenge, approaching cultural differences with sensitivity, openness, and curiosity can help to put everyone at ease.

Answer(s) could include:

Economic activity:

• Both Indonesia and Malaysia are countries in the Association of South East Asian Nations (ASEAN) thus having a positive impact on business operations.
• Australia has free trade agreements in force currently with both Indonesia and Malaysia, which promotes economic activity between Australia and both of these countries.
• Low inflation in Australia means interest rates are likely to be kept low, which will allow local consumers to continue to purchase products from Smoothex. This will help maintain or increase revenue from Smoothex to support its investments overseas.
• Consumption patterns and income levels will influence pricing and distribution strategies for Smoothex.
• Indonesia and Malaysia have a growing number of women in the workforce who earn enough disposable income to buy cosmetics from Smoothex, thus improving opportunity for successful business operations in these countries.
• Fluctuations in exchange rates between the three countries have been low, thus, providing attractive pricing of products and making them more attractive to potential customers.

Discretionary spending:

• As the economies of countries develop there are people earning acceptable wages in stable employment. Therefore, consumers may have more discretionary income.
• The stimulus material states there is 'growing number of females who are becoming a part of the workforce in those countries'. So 'there is likely to be a high demand for Smoothex skin care and make-up products'. This is due to the increased discretionary income.
• An increased discretionary income in Indonesia and Malaysia could impact Smoothex in a positive way, as it could lead to increased sales.
• If the discretionary income is reduced, then customers are less likely to buy products from Rani and they are more likely to spend their income on essentials such as food rent, clothing or education. The current global economy could cause customers in Malaysia and Indonesia to have reduced discretionary income. This would impact Smoothex in a negative way.

Answer(s) could include:

Financial gain:

• An increase in satisfied customers can lead to an increased market share, sales and repeat customers. Innovation can also lead to creating a delay in the decline stage of the product lifecycle resulting in greater profit for Matilda.
• Product innovation occurs if Matilda sources new and/or more products to sell. This may increase interest, sales and, in turn, profit.
• Process innovation occurs if Matilda is able to improve her processes through new technology. She could see productivity gains and better customer satisfaction, resulting in increased financial gain.

Expansion of global market presence:

• Innovation can be a driver of business growth. Therefore, Matilda expanding into the European market will enhance her global market presence.
• Innovation can give Matilda a competitive edge over her foreign competitors.
• Matilda's innovation can lead to her successful expansion into Europe and ensure that she is competitive in global markets through her business being new and different.

Increased market share:

• Innovation can assist with producing more appealing/innovative products and, therefore, increase market share for Matilda when she expands into the European market.
• Innovation can create a competitive advantage. A new product can create a consumer demand for the product, resulting in more products being sold and Matilda's business' market share increasing in the European market.

Answer(s) could include:

Timing:

• Timing can have an impact the success of innovation in terms of how it relates to customer purchasing cycles.
• Matilda has just read an ecommerce report in 2020 stating that European shoppers are spending more time shopping online. This means the timing is right for her to expand to Europe.
• It would be a good idea for Matilda to innovate her product, process and service while online marketplaces in Europe are attracting significant online traffic and high visitor engagement. This should lead to increased sales, thus success at this time is likely to be high and worth her investment in the innovation.

Cost:

• Investment in innovation, whether it is product, process or service, is costly.
• Money needs to be spent on research and development and can be significant. Therefore, it requires appropriate financial resources.
• Matilda has stated that she is willing to invest money into her business operations, so she has the best opportunity to be profitable.
• Matilda has seen a surge in online sales in 2020 and 2021. Therefore, she has income available to spend on innovation.
• If Matilda spends too much money on research and development, and innovation, and does not receive increased sales through the European market, she may be at risk of business failure.
• Matilda's financial investment in innovation may be important to her standing out from competitors in the European market, and be an important contributor to her success.

Answer(s) could include:

• Marketing through social media campaigns – researching and creating social networking sites used in Europe. This will be an easy and cost-effective way for Matilda to expand into the European Market.
• Adopting faster shipping technology. This will be positive for Matilda's business as it will improve customer satisfaction due to timely delivery of orders.
• Implementing safe payment methods – around the world customers are happy and confident utilising payment methods such as PayPal. This will assist Matilda expanding into the European market.
• Applying GPS delivery tracking systems – for both the business and the customer. This ensures the customer is updated via email or SMS, making them confident regarding the delivery of their order.
• Adopting e-commerce procedures. This will enable transfer of monies between currencies and countries instantly.
• Matilda can purchase relevant and reliable hardware and software for the business' needs. She can improve her website capabilities to change the language and/or apply different currencies. This will increase the business' reach to different countries where customers can make purchasing decisions using their own currency.

Answer(s) could include:

Availability of substitutes: Matilda needs to consider:
likelihood that customers will easily switch or use a competitor's product over hers.

• Are there similar products being sold online at a similar price or lower?
• Do the competitors pose a threat to her business' success?
• Are her products new, innovative and of high quality, compared to others on the market?
• Are there better-quality products available?
• Are there products of better value?
• Can she create buyer loyalty in Europe, or will consumers easily change brands?

Bargaining power of buyers: Matilda needs to consider the bargaining power of the buyers in Europe.

• What is the bargaining position of the buyers? Can the customers drive down the price?
• What is the level of quality and service demanded by buyers in Europe?
• What are the buyer numbers in Europe? Europe has a large population, therefore a large number of potential buyers.
• Which countries in Europe will have more buying power? Many parts of Europe have a large middle class, hence the disposable income to purchase Matilda's products.

Advice:
Due to the fact that Matilda is going to be investing in innovation of her product, process and service, the huge population of Europe and the fact that more European shoppers are spending significant time shopping online, there is no reason why she should not trial an entry into the European market. Her product is unique, luxurious and of high quality, thus should negate the issue of availability of substitutes.

The e-commerce report also affirms 'online marketplaces in Europe have attracted significant traffic and seen high visitor engagement that has translated into sales'. Due to the fact that more Europeans are spending time at home and shopping online, it is worth Matilda expanding her business into the European market.

Answers could include:

Greater profits:

• Greater sales of home grown products overseas leads to greater profits for the business and these profits staying in Australia.

Increased employment:

• Greater sales lead to more employment in the home country. This provides residents with more income to spend.

Increase in government revenue:

• Greater profits from increased sales will result in increases in taxation collection. This can be used for essential services, such as schools, hospitals, roads and infrastructures, to benefit the people living in the home country.
• Lower unemployment levels mean less crime, less social welfare and the subsequent increase in the collection of income taxes for the government.

Social benefits:

• Greater opportunity for innovation, such as research and development.

Answers could include:

Government grants:

• provide financial assistance to help encourage export development to other countries
• are used to reduce upfront costs for businesses that want to expand internationally. This makes expansion more financially viable
• examples include Austrade and Export Market Development Grants.

Taxation:

• concessions, such as exports, being exempt from GST
• the Duty Drawback Scheme allows exporters to claim refunds on customs duty they have paid
• tax incentives for research and development expenditure through the Australian Taxation Office.

Answers could include:

• strengthens the broader relationship between Australia and New Zealand
• develops closer economic relations between the member states through a mutually beneficial expansion of free trade between New Zealand and Australia
• eliminates barriers to trade between Australia and New Zealand in a gradual and progressive manner, under an agreed timetable and with a minimum of disruption
• develops trade between New Zealand and Australia under conditions of fair competition.

Answers could include:

Benefits:

• There could be increased profits due to Australian-owned businesses like Jensenze selling more products by exporting internationally, with fewer restrictions.
• Greater market share and access to overseas markets, in this case the New Zealand market.
• The harmonisation of Trans-Tasman food standards through Australia New Zealand Food Authority (ANFA) agreement means lower compliance costs and fewer regulatory barriers.
• FTAs can stimulate economic growth in Australia, reducing unemployment and increasing the country's gross domestic product. Thus, overall there is higher consumer confidence and they are able to spend more money, which is beneficial to small businesses.

Challenges:

• There could be increased competition in Australia from foreign-owned businesses so that Australian businesses like Jensenze, would have more competitors to compete with locally.
• Jensenze's market share in Australia could be reduced due to overseas competitors from businesses that enter the market due to the FTAs.
• Businesses like Jensenze could become less competitive due to there being higher labour costs in Australia.
• This could put pressure on small businesses if they were not prepared to expand globally. Jensenze, in this case, would not feel too much pressure if it expands into the New Zealand market.

Answers could include:

• innovation can change and improve how a business operates and/or manufactures, distributes and markets its products
• can occur when businesses change current processes involving the way they produce or deliver a product
• product innovation can also occur when businesses adopt new ways of producing, for example, using automation instead of hiring people
• innovation in a business's process can increase its efficiency and reduce costs of production, thereby increasing profit levels.

Answers could include:

• innovation can drive business growth and allow domestic businesses to expand into overseas markets, enhancing global market presence
• innovation can give businesses a competitive edge and ensure that they are visible in global markets as they offer new and different products/practices
• innovation can lead to a business's success in global markets when it engages with more technologies, for example to enhance its website/app to ensure a smooth online experience for its customers
• innovation may allow a business to use more technologically advanced methods for e-commerce, distribution/supply change, packaging and payment systems thereby allowing it to have an increased presence in global markets.

Answers could include:

• the way a business manages technology can impact the success of innovation. Management with a strategic outlook and relevant expertise may be able to engage with the innovation process better and ensure its success
• technological development may lead to disruptive innovation and, therefore, create a whole new market and disrupt the leaders in the existing markets
• technological discoveries or inventions may allow a business to do something they could not do before and give them the platform to change their business. The advancement of the internet allows businesses to sell their products online and digitise their distribution process.

Answers could include:

Changes to employment levels in developing countries and developed countries:

• employment levels in developed countries are generally lower than developing countries
• the higher the unemployment level, the greater are the opportunities businesses have of paying lower wages and having more applicants to choose from when they advertise jobs
• low unemployment in most developed countries means that wages are higher and there are less applicants to choose from when jobs are advertised. This drives globalisation towards developing countries, because labour costs are lower.

Global spread of skills and technology:

• technology – communication technology is developing at a rapid rate, including in developing countries. Ease of communication allows businesses in different countries to work together to achieve goals. For example, transport technology (in the form of shipping containers) improved as more goods were transported
• skills – leads to greater sharing of ideas and education. If the required skill sets are not available in a country, the ability to globalise may be hindered.

International cooperation:

• free trade agreements (FTAs), co-productions and strategic alliances to allow for the growth of globalisation
• governments working together through FTAs, negotiations, deregulation and agreed standards
• establishment of positive global working relationships
• greater access to international labour/skills, technology, capital and distribution channels in other countries
• lack of international cooperation can hinder the ability for further globalisation.

Changes in domestic market:

• if a domestic market is flooded with a product or industry type, this may push for businesses to send products overseas or to look for profits in other countries
• domestic businesses might need to decrease the price of their products to compete negatively, affecting their profits. This can lead to cost-cutting domestically, including redundancies.

Tax minimisation, which could include tax havens, and transfer pricing:

• tax haven – is a jurisdiction that has a low rate of tax or does not levy a tax. It offers some degree of secrecy. Tax havens do not share or provide information to other financial institutions or governments
• transfer pricing – is the setting of the price for goods and services sold between controlled legal entities within an enterprise. For example, if a subsidiary company sells goods to a parent company, the cost of those goods paid by the parent to the subsidiary is the transfer price. This allows for the manipulation of profits and the consequent amount of tax paid by the enterprise.

Answers could include:

• there is possible local economic development and prosperity from income and employment opportunities in the home grown business
• increased income to home grown businesses through the sales of their products internationally
• generation of money through local home grown businesses (multiplier effect)
• creation of employment opportunities for home grown businesses in areas such as design, production, sales and distribution of home grown products
• increased awareness of home grown products within the local community in terms of knowledge and pride in Australian home grown products
• recognition of high Australian standards, quality and authenticity
• increased awareness and recognition of high quality Australian home grown products could lead to opportunities and/or innovative ideas to pursue other home grown products.

Answers could include:

Financial assistance, such as grants, to encourage export development:

• government departments such as Austrade provide financial assistance to help encourage export development to other countries. They are used to reduce upfront costs for businesses that want to expand internationally. This makes expansion more financially viable
• a home government incentive for international trade is the Export Market Development Grant (EMDG) which is a key Australian Government financial assistance program for aspiring and current exporters. The EMDG scheme encourages small and medium-sized Australian businesses to develop export markets, reimburses up to 50 per cent of eligible export promotion expenses above $5,000, provided that the total expenses are at least$15,000 and provides up to eight grants to each eligible applicant.

Taxation incentives:

• concessions, such as exports being exempt from the goods and services tax (GST) and the Duty Drawback Scheme, allow exporters to claim refunds on customs duty they have paid. There are tax incentives for research and development expenditure through the Australian Taxation Office
• the Duty Drawback Scheme enables exporters to obtain a refund of customs duty paid on imported goods where those goods will be treated, processed, or incorporated in other goods for export
• the Tradex Scheme – this is a cash flow benefit for importers who intend to export goods. They do not have to pay the relevant customs duty or GST at the time of import. It provides exporters with an upfront exemption from customs duty and GST for goods imported into Australia and then exported within one year.

Answers could include:

• E-commerce enables businesses to access a global market, increasing brand exposure and the potential to increase sales and profits.

• The growth of e-commerce and the use of mobile devices such as phones and laptops has enabled better communication between staff, customers and suppliers around the world.

• E-commerce enables businesses to sell their products/services online over the internet, allowing them to access a global market. It enables business to consumer (B2C), consumer to consumer (C2C) sales and business to business (B2B) buying and selling.

• Businesses are able to use technology such as mobile commerce, electronic funds transfers, internet marketing, inventory management systems and data collection systems to grow their business in a global environment.

• Businesses have been able to take advantage of developments in transportation, communication systems, secure payment systems, 24/7 online shopping and digital distribution of products in order to operate in a global environment.

Answers could include:

Socially aware:

• allows the leader to acknowledge the differences between cultures and respect respective values
• appropriate to build long-term relationships where everyone works harmoniously alongside each other
• helps with addressing and resolving conflicts arising from cultural misunderstandings.

Future thinker:

• allows the leader to anticipate future challenges and opportunities in a global and culturally diverse context. This is an asset in the process of strategic planning for a business
• helps leaders develop strategies that consider long-term cultural shifts and trends
• encourages a forward-thinking mindset to adapt to evolving cultural landscapes.

Self-discipline:

• allows the leader to set a standard for discipline and professionalism for everyone to follow regardless of cultural background. This builds a fair ground for all staff to be treated equally
• a leader with self-discipline earns staff's trust easily and creates a sense of certainty for staff who are culturally different from one another
• tends to result in consistent behaviour and decision-making, providing stability in a culturally diverse environment.

Answers could include:

Autocratic is the leadership style in which leaders make all decisions and direct the group without the input of their employees.

Discussion:

• autocratic leaders have centralised decision-making so the decision-makers have to be culturally sensitive in a cross-cultural setting. Leaders should recognise and respect cultural differences in decision-making processes, communication styles, and hierarchical structures. Leaders should display cultural sensitivity and adapt their style accordingly
• since the autocratic leadership style can be top-heavy, clear communication with staff and stakeholders to overcome language and cultural barriers is needed. Leaders should create a culture where employees feel comfortable in expressing their opinions and concerns
• although autocratic leaders make all decisions, they should make flexible cultural adjustments, considering cultural nuances. Leaders need to be flexible and adaptable in their approach and recognise that what works in one cultural context may not work in another. They need to adjust their leadership style and behaviours based on cultural norms and preferences
• they should attempt to incorporate some employee input, especially in regard to cultural adaptations. Leaders should invest time in building relationships with employees across different cultures. They need to understand their employees' different backgrounds and values and display empathy and respect in all interactions.

Answers could include:

• businesses should be aware of their ethical role in the use of offshore labour, and be aware of the host country's labour regulations and workplace conditions
• through policies and procedures businesses should consider their ethical actions and decisions when operating offshore
• businesses should avoid the use of sweatshops where workers are paid little for their work, are forced to work unpaid overtime or to work with no breaks.

Answers could include:

• deregulation will allow businesses to source funding for their business operations for lower costs in overseas markets
• deregulation makes funding more accessible/less expensive, allowing businesses to expand globally
• deregulation is the reduction of legislation and laws imposed by the government on a financial market. Therefore, deregulation drives global business growth as business processes and procedures become easier and more cost efficient
• deregulation of financial markets allows industries to operate businesses more freely and businesses to make decisions more efficiently since there is a reduction of legislation in the financial markets.

Answers could include:

Employment levels in developing and developed countries:

• employment levels in developing countries are generally lower than developed countries
• globalisation has allowed businesses to have more applicants to choose from when they advertise jobs as they can access an international market
• the higher the unemployment level, the greater the opportunities for global businesses to pay lower wages, thus having the potential to increase profit margins. This also means domestic workers may lose out on job opportunities due to cheaper labour overseas
• low unemployment in most developed countries means that wages are higher and there are less applicants to choose from when jobs are advertised. This drives globalisation towards developing countries because labour costs are lower.

The global spread of skills and technology:

• global spread of skills leads to greater sharing of ideas and education
• e-commerce and improved security and privacy allows for businesses to sell products and services internationally and widen their markets
• if the required skill sets are not available in a particular country, due to globalisation, businesses can choose to employ international candidates, diversifying teams, hence providing a global spread of skills
• communication technology is developing at a rapid rate, including in developing countries. Ease of communication allows businesses in different countries to work together to achieve goals. For example, transport technology (in the form of shipping containers) improved as more goods were transported.

Answers could include:

Financial gain:

• Natasha’s podcasts, use of Freelancer, YouTube channel and website may lead to increased income or new income channels through the creation of a new market,or capture a greater market share
• by adding features such as her podcast on improving the quality of vegetable gardens and the technology used, her customer demand can be maintained or increased.

Expansion of global market presence:

• the competitive advantage created by innovation can be translated into global competitiveness
• innovation could lead to expansion the use of social media, website, podcasts and YouTube channel means more global exposure
• technology such as e-commerce, groupware, cloud computing, distribution and payment systems make the business more likely to be successful in global markets (use of applications [apps], in this case freelancer, website, podcasts, YouTube, social media – Facebook, Instagram).

Increased market share:

• innovation may result in a new way of managing, delivering and creating her vegetable garden business
• Natasha’s business could enhance its public image and, potentially, consumer demand and loyalty, through environmental management innovation such as improved technology to reduce its carbon footprint, reduce waste and better manage pollution and by promoting its commitment to sustainability.

Answers could include:

Timing:

• innovation is more likely to succeed during times of prosperity
• consumers are more likely to try Natasha’s service/product if they have more discretionary income and consumer confidence is high
• if there is potential demand for Natasha’s vegetable gardens, consumers are more likely to invest in her service because of the low risk
• in stronger economic times, Natasha is more likely to take on the risk of dedicating time, money and focus to creating something new.

Cost:

• innovation requires investment of time and money, either from retained profits or from external funding such as loans, shares, etc.
• financing innovation may take time away from her core business of building the vegetable gardens, such as time to develop her website, record tutorials and modules. This can put pressure on the core business
• investment in innovation research and development can be significant, therefore requires appropriate financial resources.

Marketing strategy:

• a business must align its production and marketing strategies
• the marketing strategy will be most impactful if Natasha uses a variety of public relations, advertising and promotion strategies to reflect the innovation (her podcasts and YouTube Channel) to distinguish her brand and service from competitors
• a marketing strategy will need to communicate Natasha’s service quality, value for money, and the benefits of her vegetable garden, horticulture podcast, YouTube channel and website
• marketing strategies may impact success in relation to how well Natasha builds consumer awareness and interest, how well she educates consumers about her service and how well she positions her business in terms of reputation for quality.

Technology:

• technological invention can provide stimulus for innovation
• new technology will enable Natasha’s business to do something it previously could not, and gives it a platform to change the way it does business, such as using Freelancer to launch her business and the use of YouTube, podcasts and her website
• adoption, implementation, maintenance, and development of her own technology skills will assist in her operations. If she is unable to use technology this could have negative impacts on her business success
• a level of investment is required for Natasha, including podcast equipment, development of her website, and the horticulture technology, tools and equipment she uses.

Answers could include:

Strengths (internal):

• recently competed online horticulture course
• previously worked in marketing and public relations – thus has strong
  understanding of marketing a business
• knows she needs to be innovative.

Weaknesses (internal):

• lacks experience in horticulture as she has only just completed a course
• not confident with the financial and legal side of running a small business
• has never run her own business before
• investment of time and money for her website, YouTube, podcast.

Opportunities (external):

• expand her business through social media with her marketing skills
• low barriers to entry
• no necessary qualifications or experience
• flexibility of hours
• great way to test her business ideas, with minimal investment
• development of her website, YouTube Channel and Podcast to gain more clients.

Threats (external):

• competitors
• Freelancer as an app may take a high commission
• income is uncertain
• long-term sustainability of work is questionable.

Evaluation:
The idea for Natasha to start her business on Freelancer is a viable idea due to:

• her recent completion of a horticulture course
• her previous work in marketing and public relations
• the ease of starting her business through Freelancer
• the low barriers to entry
• no necessary qualifications and experience
• opportunities to expand her business using social media.

There is minimal investment, thus it is a good way to test to see if her business would be successful. Her weaknesses can be overcome by starting small and developing her experience and seeking advice and completing research about legalities and financial planning. From the above SWOT analysis there are enough strengths and opportunities for Natasha to give this a business opportunity a go. She can easily overcome her weaknesses through time and experience and her marketing skills will help distinguish herself from competitors. Natasha should use Freelancer to start her horticulture business. She has many opportunities to develop her business and build on her client base through her website membership in the future.

Answers could include:

Control is measuring activities, timelines, and resource consumption; analysing
deviations and correcting processes/outcomes.

Evaluation is the process of evaluating the performance and feeding back information
into decision-making for the next strategic planning cycle.

• Natasha will need to monitor her profile on Freelancer regarding enquiries and
  bookings, and then assess the amount Freelancer charges for commission
• she will also need to evaluate her marketing and pricing strategies to see if they
  are being successful. If not, she will need to create new action plans
• she may want to observe her success on Freelancer, then once developing a
  customer base, just using Instagram and a webpage to market her business rather
  than using Freelancer as a platform
• if she is gaining traction with her podcasts and YouTube channel, she may be able
  to launch her website membership. That could expand her business to be a global
  venture.

Answers could include:

Skilled communicator
This trait enables a leader to effectively encode messages that transcend language
and cultural barriers. The communication itself has to be incredibly nuanced in that it
adheres to the cultural norms of people who receive the message. As well as
adhering to cultural norms, the message itself must be clear enough for a message to
be understood.

Socially aware
Cultures are socially constructed so an effective leader must understand the social
dynamics of a particular type of culture if they are to be able to be accepted within
various cultural groups, such as ethnic cultures and popular sub-cultures. A leader
who understands the way relationships are formed and maintained can help to create
a positive and effective workplace.

Skilled decision-maker
When someone makes a decision, they take action from a series of options. They
assume the implications of each decision and follow a well thought-out and
reasonable rationale as to the decision itself, despite any inherit risk. This rationale
must be in-tune with what is happening on a cultural level within an organisation
because the way in which a decision is made can be the results of one’s own cultural
values.

Future thinker
A leader who is a future thinker is someone who is able to anticipate, predict and
imagine opportunities and challenges. They can do this by investigating trends and
using their intuition to uncover potential areas of business growth. Future thinking can
also enable a leader to establish shared visions among fellow staff. Future thinking
can be the catalyst for motivation in the workplace. Thinking about the future can be
something that transcends cultural boundaries, however, there may also be variations
on the level of importance different cultures place on the future.

Self-discipline
This refers to being able to control yourself in terms of how you feel and act in
particular situations, especially ones in which there is a temptation to do (or not to do)
something else. In a cross-cultural setting this could mean being able to keep your
emotions under control, especially if there is some sort of miscommunication or
misunderstanding between people from different cultures. As a leader, it could also
mean being able to stand outside your cultural comfort zone and be able to make a
determined effort to apply and embrace cultural norms.

Responsible
The ability to be independent, accountable, accept authority and be more aware that
actions have consequences. The need in a new cross-cultural setting to understand
pre-established ideas, to understand where adaptation or new ideas are required, to
demonstrate they can think for themselves, often seeing new perspectives, real
purpose and outcomes.

Motivational
The ability to use psychological forces/motivate people to strive for certain goals
rather than simply act on orders. Leaders need to be aware in a new cross-cultural
setting to provide motivation, direction and support for staff while recognising
differences in intrinsic and extrinsic motivations, rewards and punishments in different
cultural settings.

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• E-commerce is the performance of transactions (buying and selling of products and services) electronically over the internet.
• Money and data are transferred online electronically between buyer and seller. The internet (with e-commerce) has provided an opportunity for local businesses to reach new markets and access a potentially wider geographic market segment.
• Websites/apps can be designed in a way that makes it easy for customers to purchase from mobile devices, as well as laptop and desktop computers.
• Local businesses create dynamic websites that have e-commerce facilities where customers can select and pay for a product/service. Their transaction facilities are usually through credit cards and, therefore, there are efforts by vendors to make these as cyber-secure as possible. As a result, consumers can purchase products and services from anywhere in the world.

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Outsourcing: is the business practice of hiring an outside organisation to perform services or create goods that were traditionally performed by the business's own employees and staff.
Benefits of outsourcing:

• cost effective and more efficient by using a specialist in the nominated field to be outsourced
• allows the business to focus on their core competencies
• lowering costs
• avoid costly investments
• improve customer focus
• able to take advantage of lower pay and conditions in other countries.

Acquisition: when one organisation purchases most or all another organisation’s shares to gain control of that organisation.
Benefits of an acquisition:

• increased customer base that could result in greater market share for the business
• increased financial benefits
• reduced research and development costs
• reduced competition, economies of scale, greater efficiencies, and the potential for increased profits.

Joint Venture: business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.
Benefits of a Joint venture:

• takes advantage of local knowledge of the market or labour expertise
• there could be savings in costs and time with a business that is already established in the market
• increased expertise amongst staff which may generate business ideas.

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Documentation

• documentation can be used to manage risk. Documentary letter of credit and documents against payments can be used to protect against payment default by importers/customers
• documentary letters of credit act as a guarantee from a bank that the payment will be paid in full
• documents against payment occur when an exporter uses their bank to send a bill and any documents that will allow the buyer to collect the goods to the customers bank.

Insurance

• provides protection against risk to exporters selling their products on credit
• types of insurance include export credit insurance, political risks insurance, transit or shipping insurance
• Insurance can prepare for possible bad debts, insure against non-payments and loss or damage to goods or mitigate unexpected losses.

Hedging

• a method used to reduce losses from exchange rate variations
• entails a business making an investment which makes a return that can be used to offset any losses from another investment
• two forms of hedging are forwards and options
• forwards are when the exporter and the customer sign a contract that sets an exchange rate for the transaction. When a payment is made the agreed exchange rate will apply
• options are when an exchange rate is set which can be used instead of the current exchange rate at the time of payment. If the exchange rate is better for the business, it can be used in the transaction instead of the agreed rate.

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Banks

• Offer a variety of deposit, investment and loan accounts to businesses.
• The money collected from depositors and money earned from investment is used to fund loans to customers.

Finance companies

• Provide loans for businesses.
• A finance company gains its funding from banks and other financial institutions at a set interest rate and uses these funds to extend credit to customers.
• A finance company will earn profit by charging its customers a higher interest rate
  than what they are paying, and may charge loan fees and other administrative
  charges.

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• is an internal source of finance
• arise from the internal activities of a business, as opposed to finance from external
  sources
• a source of finance which could help with long-term activities of a business
• is more of a long-term source of finance than short-term.

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Debentures

• Are issued by a company as a long-term loan to the debenture holder.
• These provide a long-term source of finance without the business losing any control.
• Debenture holders do not have a voting right, so a business could raise funds without losing any control of the company.

Share capital

• The funds raised from selling shares in a limited company.
• The funds raised can generate a large sum of finance for a company and is a main source for limited companies.
• Should a company raise funds from selling more shares, the company would increase the number of shareholders to whom profits are distributed.

Trade credit

• Refers to an amount owed to suppliers for goods and services supplied on credit and not yet paid for.
• Could mean ‘free finance’ as the suppliers may not charge interest on the amount outstanding.
• A flexible form of finance as businesses can decide when to pay and is widely available in most industries.

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Currency fluctuations:

• currency fluctuations refer to changes that occur in the dollar value of one currency relative to another country's currency
• this is a source of financial risk as it puts the exporter at risk of losing money with changes to the dollar value
• currency fluctuations are influenced by economic factors, political and legal factors.

Non-payment of monies:

• non-payment of monies refer to when one party fails to fulfil their end of the agreed conditions of trade
• this is a source of financial risk as it puts the exporter at risk of supplying the goods and failing to be paid
• exporters might face challenges in enforcing payment through legal means if there are unfavourable laws or difficulty in accessing local legal systems in the buyer's country.

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Hedging:

• is used to minimise financial risk from exchange rate variations. It entails a business making an investment which makes a return that can be used to offset any losses from another investment
• forward hedging uses forward contracts between a buyer and seller to lock in a price or exchange rate for a future transaction
• option hedging is when an exchange rate is set which can be used instead of the current exchange rate at the time of payment. The exchange rate that is better for business can then be used.

Insurance:

• provides protection against risk for exporters selling their product to overseas markets
• can protect against bad debts, non-payment of monies and lost or damaged goods, for example, shipping insurance
• can assist exporters with ensuring smoother transactions and reducing any potential legal risks.

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Levels of education:

• a country with higher levels of education would mean citizens earn a higher disposable income and will more likely purchase a business's products
• would determine whether the local staff require further training and induction within the business
• a shortage of people with the required education and skills may impact a business's success. A business would then need to attract overseas employees using attractive financial packages.

Holidays and celebrations:

• local holidays and celebrations can have an impact on a business's marketing campaigns. Social media can be used to promote holiday sales or using a celebration as a background to sell products
• there may be opportunities for businesses that operate overseas to create new products and services based on local holidays and celebrations, to gain a larger market share
• businesses need to factor local holidays and celebrations into project schedules and timeframes to ensure success in overseas countries in which they choose to operate.

Communication protocols:

• it will be important for a business to know and demonstrate the correct communication protocols to display professionalism and respect for business partners
• understanding subtle non-verbal communication between cultures will be necessary. For instance, a firm handshake or making direct eye contact could be unusual or even offensive to foreign colleagues
• where possible, businesses should research the professional protocols required when operating in overseas markets and ensure that staff are attentive to body language.

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• when Australian businesses choose to use Australian resources and labour, businesses contribute towards local job creation, supporting the Australian economy
• for example, Australian farmers and manufacturers benefit from businesses demanding locally sources materials
• Australian made products are associated with high quality, safe and ethical standards, thus businesses can leverage the 'Australian Made' logo which appeals to consumers who prefer to buy and support domestic industries
• home grown production and manufacturing reduce reliance on international suppliers which in turn reduces risks from global disruptions such as pandemics, political conflicts and shipping delays. This ensures more efficient production
• home-grown products reduce transport distances supporting environmentally sustainable practices
• Australian businesses can often charge a premium price for locally made products as customers a willing to pay a higher price for Australian craftsmanship
• Australian businesses creating home grown products can sometimes access government incentives such as grants and tax benefits and receive strong community support
• local production can allow businesses to maintain a better oversight of the manufacturing processes ensuring higher quality products, as well as maintaining better treatment of staff.

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A business may consider the following points when making decisions about using offshore labour:

• ethical businesses will ensure there are fair labour practices, ensuring offshore workers receive fair wages and work under safe conditions, avoiding exploitation
• businesses, in their decision making, should choose suppliers or factories adhering to international labour standards to avoid negative publicity
• if business do not consider the role of ethics in their global business decisions, they risk reputational damage. Poor labour practices, such as employing underage workers or unsafe conditions, can lead to consumer boycotts and legal consequences thus making ethical decisions can reduce reputational and financial risks.

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Grant: Export Market Development Grant (EMDG) provided by Austrade

• gives qualifying businesses funding for costs such as market surveys, advertising campaigns, and for attending international trade fairs
• assists small to medium-sized businesses to overcome financial barriers toward international market entry
• aids businesses via its eligible promotional expenses, helping them to expand their market presence globally
• provides financial support in order to develop sustainable export strategies.

Taxation: Research and Development Tax Incentive (R&DTI)

• offers a tax offset for companies conducting eligible R&D activities
• encourages investment in R&D to help a business to grow and innovate, which generates benefits for the Australian economy
• depending on the business' annual turnover, the R&DTI provides either a refundable or non-refundable tax offset.

Customs duty:

• can be claimed on excise equivalent goods (EEGs)
• businesses can claim a refund of some or all the customs duty that they have paid on EEGs in some situations. For instance, if they can prove that EEGs were damaged while they were in customs before delivery into the Australian market
• businesses are not able to claim a refund or drawback on fuel if they are eligible for a fuel tax credit.