1.1.5 Understanding External Influences π₯ Flashcards
What are the 8 stakeholders of a business?
Employees- want good pay and working conditions
Customers - want value for their money
Managers - want bonuses and business success
Suppliers - want business success do you can pay your bills and build goodwill
Shareholders - want dividends and business success
Local community- want investments and limit pollution
Pressure groups- want to influence business decisions
Government- want business success to provide jobs and good economy trough though tax payment
Wants low unemployment and competitive markets
How could conflict between the local community and managers ?
Managers could be importing lots of raw materials which could cause noice pollution and congestions on the roads . This will delay the local communities way of life , leading to complaints and a negative reputation, leading to low sales as most customers view your business as rude
What conflict could occur between managers and customers?
Customer may argue that price is too high for your products whereas you think itβs a fine price - lead to them going to rivals as they view your business as too overpriced, not meeting their customer needs of price
How may conflict occur between a manager and an employee?
Employee may complain that working conditions and pay are too low to live off. You may disagree and think that the minimum wage is fine . This may lead them to go to court and sue your company which may lead to a bad reputation, deterring any customers from purchasing your products
What are the 7stake holders key interests?
Stakeholder- profit and dividend
Workers - job security
Customers- fair price
Managers- profit growth and power
Government - tax revenue and competition
Local community- jobs and clean environment
Pressure groups - socially responsible behaviour
What are the conflicts between share holders and managers?
Share holders want more dividends whereas managers want more profit to invest in growth
Whatβs the conflict between workers and customers?
Workers want a good pay whereas customers want a lower price
What are the positives of having stakeholders?
Shareholders get return on their investment
Local area get development from business
Government- gets tax payments to reinvest in the country and grow the economy
What are the 4 types of tech that may influence business activity?
Digital communication- eg video calls QR codes
Social media - promotion and market research- eg. Customer feedback
E-commerce
Electronic payment
How can electronic paying systems effect business π©πΏβπΌ activity?
Increase convenience and customer satisfaction less time than someone manually queuing for a cashier
How can tech reduce costs ?
Machinery - no breaks compared to humans - increases productivity and efficiency
How can tech increase sales ?
Innovates products with latest tech increase demand and boost sales
How can tech influence the marketing mix?
Lowers cost of product
Makes promotions easier through social media
Allows customers to purchase anywhere at any times through e-commerce
What are the 4 legislations businesses have to follow ?
Consumers right act- customers cannot be lied to about a product
Discrimination act- no discrimination in the workplace
Health and safety- employees should have good training and a safe working environment with breaks
Minimum wage act- employees should be paid above or just this to ensure they can make a living
What are the positives of using legislation? 4)
Less likely to be fined or sued
Gain good reputation of professional and caring , increasing customer loyalty
Improves relationship with shareholders
Good publicity
What are the negatives π of using legislation in businesses ?
Businesses have to keep up to date with laws
Laws may restrict business actions
Changing products to comply with laws may be costly
Could gain bad publicity if laws are not followed
Consumers can sue
What are the principles of consumer law?
Terms and conditions have to be fair
Consumers have the right to rejects or return goods
Should be installed safely
Good standard and quality
What are the impacts of using the employment law ?
Meeting them may be costly
Paying national living wages may be costly
If you do not may lead to law sues
What are the benefits com complying with the employment laws?
Increased motivation
Less employees leaving - less recruitment laws
Get good rep of a good employer
How does the increase or decrease in demand change the business risks ?
More demand, risk is reduced
Less demand , risk is increased
How may interest (financially) effect demand?
If interest for loans are increased, less businesses will opt for a loan πΈ leading to a decrease in business competition
Opposite is decrease , more people would be opening loans
How may the level of economic activity effect demand?
If there is a global recession, people will not be paid as much and the increase of product prices will deter customers
Decreasing demand
How would customer income decrease demand?
If customers have lots of disposable income , they will be spending more but if not they wonβt
How may the change in taxation effect demand ?
Excise duty- deters customers from products like cigarettes π¬ or booze πΈ
How could exchange rates effect demand ?
If pound gets weaker, foreign purchases and demand will increase
What are the impacts of high demand and economic activity? 4) and opposite?
Consumer income rises - more disposable income
Inflation may rise - keeps product on shelf - is there are high demands that cannot be met, produces prices are increased to keep demand going - may lead to to flying out of control as demand rises, the prices are on higher causing consumer incomes to rise and so on
Unemployment may fall
Interest rate rises
Pound becomes stronger
OPPOSITE IF IT WERE TO FALL
What may high levels of unemployment lead to businesses trying to recruit?
More easier as they may go for lower pay π° as there are no other places to get employed
What may low levels of unemployment lead to consumer needs to be ?
Low demand for products as they cannot earn of get disposable income
What will happen to the Economical activity if there is low unemployment?
Economy will fall as revenue will decrease
What is inflation?
A price of an product increases at a high rate
What is the impact inflation?
Cost of production to rise - too expensive- less sales revenue
What are the impacts of the rising of interest rates ? )
3
Businesses in VC may struggle to Repay
Small business less likely to borrow and expand
Customers less likely spend - decrease in customer spending
What may be a threat to a business?οΏΌ 2)
New competitors in the market
A fall in the economy
What may be an opportunity of an external influence?
A rise in economy
New tech that lower production costs
How may A business respond to external influences?
Cut costs
Lower prices
