1.5 - Understanding external influences on business Flashcards
1.5.1 - Business stakeholders 1.5.2 - Technology and business 1.5.3 - Legislation and business 1.5.4 - The economy and business 1.5.5 - External influences
1.5.1 - What is a business stakeholder? Give examples.
A business stakeholder is a person or organisation that has an interest in a business. Ttakeholders have an interest in how the business operates and whether or not it is successful. These can include:
- Owner
- Managers
- Employees
- Suppliers
- Pressure groups
- The government
- Customers/consumers
- Shareholders
1.5.1 - Name the three main internal stakeholders explaining their main interest(s)
- Owners: Main goal is profit
- Employees: Main goal is job security and promotions
- Managers: Main goal is extra manager promotions
1.5.1 - Name six main external stakeholders explaining their main interest(s)
- Suppliers: To receive payment from the business
- Customers: For the product to be cheap and available
- Shareholders: To receive dividends from their shares
- Local community: No pollution from the business
- The government: To receive taxes from the business
- Pressure groups: For the business to be ethical
1.5.1 - Why may there be conflict between suppliers and owners of a business?
- They have differing interests
- The owner wants high profits and so requires a low cost
- The supplier wants more money and so wants to charge more
1.5.2 - What are the four main ways businesses use technology?
- E-commerce: Selling online
- Digital communication: Communicating digitally I
guess? - Social media: Social accounts online
- Payment systems: Systems such as paypal that guarantee security for the customer
1.5.2 - How does technology affect the cost and sales of a business?
- Sales:
- Will increase as social media means more promotion,
- Payment systems means customers trust the
business more, - Digital communication means better reputation,
- E-commerce allows the business to reach more
potential customers
Costs: - May originally be higher during installation, however usage of technology in place of employees reduces this cost.
1.5.3 - When it comes to legislation, what are the three principles of consumer law?
- As described: The goods supplied must match any
description or samples shown to you at the time of purchase. - Fit for purpose: The goods should be fit for the purpose they are supplied for/specific purpose you made known to the retailer at time of purchase
- Of satisfactory quality: Goods shouldn’t be faulty or damaged when you receive them, and should last for a reasonable amount of time
1.5.2 - What are the pros and cons of e-commerce?
+ Reach more customers as you are online
+ Use traffic data for market research
- Costs to produce website
- Customers can easily compare prices meaning they may choose other businesses over you
1.5.3 - When it comes to legislation, what are the three principles of employment law?
- Recruitment: no discrimination in this process on age, race, gender, religion etc.
- The national minimum wage: The minimum amount workers are required to be payed. (£7.20/h 25+ on 4/18)
- Health and safety: A right to work in places where risks to their health and safety are controlled properly and employers who are responsible.
1.5.3 - What costs do a business face due to legislation?
Legislation requires businesses to:
- Training staff
- Protection equipment for staff e.g. hairnets or googles
- Cost of paying NMW
These cost higher amounts reducing their profit
1.5.3 - What consequences can a business/individual face for not meeting regulation?
- fines
- imprisonment
- disqualification
1.5.4 - How does a change in unemployment affect a business?
- An increase in unemployment would lead to less disposable money for the general public
- This means businesses will have to provide more cheap products to meet the customer needs
- There will be a wider-range of people to recruit
- Luxury good retailers will suffer
1.5.4 - How does a change in consumer income affect a business?
- Lower consumer income will mean there are less purchases of luxury products (More needs rather than wants)
- Businesses will have to adapt to provide products that meet lower costs and may reduce quality as a lower one is demanded
1.5.4 - How does a change in inflation rate affect a business?
- If inflation goes up, consumers will feel poorer and reduce their spending, reducing business revenue.
- Inflation aims to be around 2% in the uk
1.5.4 - How does a change in exchange rates affect a business?
- A weaker pound will mean that a businesses pay more for supplies from foreign countries (Higher exports lower imports)
- A stronger pound means businesses will pay less for supplies from foreign countries (HIgher imports lower exports)
- The pound being stronger means it has more worth. For example a the pound is stronger when £1 = €2 than when £1 = €1.50