1.5- Understanding external influences Flashcards by Lottie Savina

Stakeholder

Individual or group who have an interest in/ are affected by the activities of a business

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Shareholder

Someone that owns a part of a company

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Internal stakeholder

Work within a business

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External stakeholder

Don’t work within a business but are affected

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Stakeholder objectives
Shareholders/owners?
Managers?
Employees?
Customers?

-Business success and profit
-Good salary, career progression opportunity
-Good pay, job security, job satisfaction
-Value for money, reliability

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Stakeholder objectives
Suppliers?
Local community?
Pressure groups?
Governments?

-Payment on time, regular orders
-Offers work, no negative impact on their quality of life
-Any demands they have to be met
-Job creation, contribution to the economy

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Pressure group

Group that tries to influence public policy in the interest of a specific cause

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Potential conflicts between stakeholders

-Employees wanting higher wages, owners wanting lower costs
-Customers wanting low prices, owners wanting high profits
Managers wanting to pay for supplies later, suppliers wanting payment quick

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E-commerce affecting…
Sales?
Costs?

*Reach wider market, sell 24/7
*Fewer staff needed so smaller premises BUT ongoing cost for website

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E-commerce affecting…
Marketing mix?

Product- download digital prints
Price- price comparison site, need competitive
Place- can purchase when/where ever
Promotion- easy to implement offers online

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Social media affecting…
Sales?
Costs?

*Promotional campaigns, build rel with customers
*Cheap, quick to interact with customers

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Social media affecting…
Marketing mix?

Product- information/ demonstrations can be shared about product
Price- lower costs, can lower prices
Place- interact all over world
Promotion- cost effective promotions

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Digital communication..
Def?
Sales?
Costs?

Sending and receiving information to others
*Easier to contact a business, builds trust
*Lower costs, work from home, smaller premises

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Digital communication affecting…
Marketing mix

Product- Can be adapted easily
Price- lower costs so lower prices
Place- Customers access anywhere
Promotion- Email newsletters & advertise

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Payment methods
Def?
Sales?
Costs?

Ways to make payment easier and secure
*Easy and convenient, more likely to purchase
*Need to pay a fee for each transaction

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Payment methods affecting…
Marketing mix?

Product- Digital products easier to buy
Price- Payment fees affect pricing
Place- Ability to sell online
Promotion- Promote variety of methods

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Social media definition

Form of communication to share ideas/content

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Legislation

Laws made by the government to protect stakeholders from business’ actions

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Consumer Rights Act
What must goods be?

-Fit the description
-Be of satisfactory quality
-Be fit for purpose

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3 times the consumer doesn’t have a legal right

-The item was damaged
-Consumer knew about the fault
-Changed their mind

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Consumer laws
Ads?
Dis?

Ads- Improved reputation, increased sales; Avoids bad publicity; Avoids fines
Dis- Increased quality control, Additional production processes, Could require higher quality raw materials
All increase the costs

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4 areas of employment law

Recruitment, pay, discrimination, health and safety

2 key rules when recruiting

-Must be fair, no discrimination
-Must provide clear statement of job description

Employment Rights Act
What does it include and do?

Protects employees in the workplace
Includes all areas from hiring to firing

Employment rights act Ads? Dis?

Ads- Protects employees from exploitation or unequal treatment--> increased fairness--> motivation-->productivity Dis- Costs increase, implementing legislation is expensive and time consuming

Key fact of pay Dif between minimum and living wage?

-All employees must receive standard minimum wage -Employees over 16-> minimum wage -Employees over 25-> living wage

Discrimination Def? Where is could occur?

Unacceptable treatment of any individual or group Recruitment, pay, promotions, dismissal

3 key facts on health and safety

-Must provide training, toilets and water -Employees must wear safe clothing, report risks -Regulations on hours worked

Employee retention What? Good or bad?

Employees staying Good for business

Employee turnover What? Good or bad?

Employees leaving Bad for business

3 advantages of meeting employee legal obligations?

-Staff likely to work harder, more efficient -Better employee retention -Improved reputation, easier to recruit

3 disadvantages of not meeting legal obligations

-Could lead to tribunal, expensive fees -May have to pay fines and compensation -Bad reputation, less sales and staff

Economy What is the wealth of an economy measured in?

State of a country based on the goods/services it is producing/consuming GDP (gross domestic product)

Unemployment

Being available for work but not having a job

Economic slump

A period of poor performance/ inactivity in an economy

Economic boom

A period of rapid expansion, low unemployment, high prices

Recession

A period of temporary economic decline

Inflation

A rise in the general price level, a fall in the value of money

How is employment, demand, investment and confidence in... Recovery? Boom? Slump? Recession?

Recovery- increasing Boom- high Slump- low Recession- decreasing

6 ways the economic climate affects businesses?

Unemployment Changes in consumer income levels Changing interest rates Inflation Government taxation Change in exchange rate

Unemployment Ads? Dis?

Ads- More workers to fill vacancies, lower wages will attract employees Dis- Less demand for luxury products, lower tax revenue to gov

Changes in consumer income Increased income? Decreased income?

Increased income- more money to spend, higher demand for luxury goods Decreased income- less money to spend, higher demand for budget good

Interest rate

Price of borrowing and rewards for saving

Changing interest rates Increased rates? Decreased rates?

Increased- Spend less and save more; Less borrowing, more expensive Decreased- Spend more; Borrow more money

2 impacts of high inflation

Reduces purchasing power Lower consumer spending, fall in sales

Taxation? VAT?

Money collected by government from individuals & businesses Value added tax- tax on consumer expenditure

3 impacts of increased income tax? 3 impacts of increased VAT?

-Workers have lower income, less to spend -Businesses sales lower -Government can help economy *Consumers pay higher prices, reduces purchasing power, inflation occurs

Exchange rate def?

Amount of one currency that can be bought with another currency

Spiced and wpidec acronyms

Strong pound, imports cheaper, exports dearer Weak pound, imports dearer, exports cheaper

Appreciation & Depreciation Pound is..? Value of pound?

Strong pound Increased value of pound Weak pound Decreased value of pound

External influences

Events and factors outside of the business' control

3 business responses to changing technology

1. Increased investment- initial costs of new equip, long term savings 2. Innovation- new product or usp, reach new markets, need market research 3. Marketing- e-commerce to target customers, social media to interact

3 threats of technology

Old products becoming obsolete Redundancies Loss of skills

3 business response to legislation

1. Increase product quality--> increase costs 2. Pay higher wages--> increases costs 3. More safety equip--> increases costs Reduce costs elsewhere to combat these