Running Head: INTERNAL AND EXTERNAL INFLUENCE ON BUSINESSES IN NSW

Impact of Internal and External Influences on Business Opportunities in NSW

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INTERNAL AND EXTERNAL INFLUENCE ON BUSINESSES IN NSW
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Impact of Internal and External Influences on Business Opportunities in NSW

Introduction

Businesses form the most integral part of any economy, Australia being not exception.

Despite their essentiality in the economy, the businesses, both large and SMEs are faced with

tremendous challenges that bar them from realizing their full potential. In particular, the

businesses have been experiencing very difficult and compromising conditions especially the

fluctuations that have been perpetrated by both international markets and local economies

(Hogan, 2015). These challenges have been left at the mercy of the businesses to solve;

otherwise their operations will be derailed. It leaves company owners, directors, and senior

management officials with a great responsibility of understanding and embracing the challenges

facing the businesses and identifies new opportunities that will be crucial in realizing business

growth. Therefore, the senior executives of the companies need to exercise greater core

leadership skills if successful navigation through the business challenges is anything to be

realized.

Impact of Internal Business Challenges in NSW

Many Australian businesses are desperate to make profits, owing to the pressures

imposed by stiff competition from more established local and global companies. This has forced

senior management officials in some companies to impose pay-cuts on the employees, and others

laying-off employees to reduce costs. The employee unions are however against those moves.

For instance, Unilever Company decided to use Fair Work Australia, which was implied to

terminate the current enterprise agreement. However, the unions believed that such a decision

will disadvantage the employees through a pay cut of up to 40 percent (Collins & Kennedy,
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2017). They union ended up calling customers to boycott the Unilever products, which would

reduce revenues for the companies, and ultimately their profits.

Small businesses are also faced with numerous challenges, which have considerably

hindered their growth to full potential. According to the Australian Bureau of Statistics, the small

businesses in Sydney make over 90 percent of total businesses, thus greatly contributing to the

Australian economy. Some of these challenges are lack of proper marketing, poor strategies on

how to get new customers, cash flow problems, getting right people for the job, and slow

business growth (Amin, 2017). Lack of proper marketing is perpetrated by the limited resources,

which could inspire proper marketing plans and strategies for their survival. Lack of adequate

financial resources makes the businesses to have limited cash flows and activities, less

experienced workers, and limited number of customers (Valerie, 2012). The result is reduced

revenues and ultimately little business growth, if at all they survive in the highly competitive

environment (Anthill Magazine. 2016).

In additions, issues of stereotyping in businesses have brought cases of discrimination in

workplaces thus compromising the performance of some employees in Australia. The Australian

Human Rights Commission’s report released in 2016 indicated that over 27 percent of

employees aged over 50 years reported experiencing discrimination on the basis of their age

(Nogrady, 2017). This is just the tip of the iceberg as cases of discrimination based on gender,

race, and religion in workplaces are on the rise. The discrimination in the workplaces leads to

lack of motivation and confidence among the discriminated employees. As a result the

employees productivity is decreased, which directly influences the business output.

Businesses are also faced with the challenge of increased competition, technology gap, as

well as lack of confidence in the value of their products. There is considerable increase in the

number of companies producing similar goods for the same market. This has brought

competition, which has greatly hindered growth of some businesses especially the small ones. In

addition, the development of technology and its adoption in many businesses has created a

business gap (Valerie, 2012). For instance, many businesses are currently able to perform

business transactions through online platforms, something what small and poorly established

businesses are unable to fully integrate in their operations. The impact is increased differences in

business growth for various firms, with small and startup businesses being disadvantaged by

competition and technology gap.

Impact of External Business Challenges in NSW

Many businesses in Australia have not been spared by economic trends in the global

market. These trends have had the greatest influence on the domestic firms, especially in terms

competition. Some of these challenges include global financial instability, nuclear proliferation,

global governance, global democratic deficit, cyber-revolution, and food security, energy

security, and climate change among others (Rudd, 2011). The Australian government needs to

undertake necessary measures to protect the local companies from extreme competition from the

more established foreign economies. Through this move, the local businesses will have an

opportunity to grown, and probably become competitive in the global market in future.

There also a number of external challenges that face Australian businesses especially the

startups. These challenges are lack of technical talent, government scholarships/grants, non-

government funding, legal issues, non-technical talent, community support, accounting

difficulties, as well as limited educational resources. The government needs to rise up to the

occasion and support the startup businesses in terms of finances and relaxed policies that

encourage business growth. The resulting opportunity from such move is robust business growth,

and consequently more stable Australian economy (Nicholas, 2015).

In addition, there are external forces such as increase in electricity and oil process, which

have directly increased the cost of production in these businesses. For instance, the price of

electricity increased 8.9% last quarter, according to the latest ABS Consumer Price Index (CPI),

prompting the nation’s peak employer body to warn that businesses are at ‘breaking point’

(Harkness, 2017). The implication is that increase in cost of production will be passed over to the

consumers, who will have to pay higher prices for goods. This directly influences their

livelihoods owing to the fact that their incomes have not increased. The ultimate result is

decreased purchasing power, increased cost of living, and deteriorated standards of living (Alan,

2015).
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References

Alan, O. (2015). Biggest issues Facing Australia Today: Special Report. NAB Group Economics

Amin, G. (2017). Top Challenges Faced by Small Businesses in Sydney. Nirmal

Anthill Magazine. (2016). What is keeping business owners up at night? These are the top 10

challenges small business are facing in 2016. Australian Anthill

Collins, A. & Kennedy, J. (2017). Unions call for summer boycott of Streets ice cream over pay

dispute. Business, ABC News

Harkness, J. (2017). SMEs investment and employment impeded due to electricity price hikes

outpacing inflation. Dynamic Business

Hogan, W. (2015). The Opportunities and Challenges Facing Australian SMEs in 2015. The

Executive Connection

Nicholas, J. (2015). This is the biggest challenge facing Australian startups. Business Insider,

Australia

Nogrady, B. (2017). Age Discrimination: Older Australian Workers Viewed as Slow to Learn.

The Guardian

Rudd, K. (2011). The 10 big global challenges facing Australia: The Sidney Morning Herald

Valerie, K. (2012). The Four Biggest Challenges in Business: The Sydney Morning Herald