VCE Industry and Enterprise cheat sheet

An industry is a group of businesses producing similar goods or services; a sector is a broader grouping such as primary, secondary, tertiary and quaternary.

Enterprise refers to the initiative and risk-taking involved in creating and running a venture; entrepreneurship is the process of identifying an opportunity and mobilising resources to pursue it.

The three factors of production are land (natural resources), labour (human effort and skills) and capital (machinery, finance, infrastructure); enterprise is often treated as a fourth, organising factor.

Value chain: inputs (raw materials, labour, capital) are transformed by processes (production, design, logistics) into outputs (goods or services) sold to customers, with value added at each stage.

Stakeholders of an enterprise include owners/shareholders, employees, customers, suppliers, lenders, the local community and government; each holds different objectives and levels of influence.

Business structures in Australia: sole trader (unlimited liability), partnership (unlimited liability, shared control), company (separate legal entity, limited liability) and cooperative or social enterprise models.

Market structures range from perfect competition through monopolistic competition and oligopoly to monopoly; concentration is measured by market share and the Herfindahl-Hirschman Index (sum of squared market shares).

The external environment is commonly analysed with PESTLE factors (political, economic, social, technological, legal, environmental) and industry forces such as supplier power, buyer power, rivalry, substitutes and new entrants.

Break-even quantity = fixed costs ÷ (selling price per unit − variable cost per unit); contribution margin per unit is price minus variable cost.

Gross profit = revenue − cost of goods sold; net profit = gross profit − operating expenses; profit margin = net profit ÷ revenue × 100.

Labour productivity = output ÷ labour input (hours or workers); multifactor productivity compares output to a combined bundle of inputs.

Cash flow vs profit: profit records revenue earned and expenses incurred, while cash flow tracks actual money in and out; a profitable business can still fail from poor liquidity.

Business lifecycle stages: start-up, growth, maturity and decline or renewal; each stage changes financing needs, staffing, risk and management structure.

Regulation affecting Australian enterprises includes the Fair Work Act (minimum wages, unfair dismissal), Work Health and Safety laws, the Competition and Consumer Act (including the Australian Consumer Law), and the Corporations Act.

A code of practice is guidance approved under legislation; a standard is a technical specification; voluntary codes and industry self-regulation operate alongside statutory rules.

Innovation types: product, process, organisational and marketing innovation; incremental innovation improves existing offerings while radical innovation creates new markets or displaces existing ones.

Social and environmental performance can be assessed with triple bottom line reporting (profit, people, planet) and indicators such as emissions intensity, waste diversion and workforce turnover.