1.5 - Understanding External Influences on Business

Question 1

What are the 7 main stakeholders?

Answer 1

Owners/shareholders
Employees
Suppliers
Local community
Customers
Government

Question 2

Which is the most important stakeholder and why?

Answer 2

Owners - they decide what happens to the business and could make a profit. They usually want high dividends and shares.

Question 3

What do employees want from a business?

Answer 3

• job security
• promotion prospects
• decent wages
• good working conditions
• may benefit most when objectives are based on profitability, growth and ethics

Question 4

What is a pressure group?

Answer 4

It is an organisation that tries to influence what people think about a certain subject.

Question 5

What does e-commerce mean?

Answer 5

Buying and selling online.

Question 6

What are the impacts of e-commerce?

Answer 6

• firms can reach wider markets
• convenient for consumers, all over the world at any time without queues
• firms have to adapt to e-commerce by building websites, employing IT specialists and develop distribution systems for online customers

Question 7

What are the new payment systems that have come about due to technology?

Answer 7

• online payment
• chip and pin
• contactless payments

Question 8

Why would a firm want to invest in good technology for payment systems?

Answer 8

• having safer and easier payment systems can encourage customers to shop with that firm
• faster payment methods can increase the number of sales the firm receives in a given time

Question 9

What are the 5 ways a firm can communicate digitally?

Answer 9

• websites
• email
• mobile apps
• live chats
• video chats

Question 10

What can websites be used for?

Answer 10

• communicate with customers by posting blogs or providing customer service
• used to publish reports to shareholders

Question 11

What can firms use many communication methods for that would improve their business?

Answer 11

• share information quickly about the work
• give customer service easily

Question 12

What can businesses use social media for?

Answer 12

• provide customer service
• advertise their products
• promote local events

Question 13

What can new technology influence?

Answer 13

• a firms costs
• a firms sales
• a business’ marketing

Question 14

How can technology influence a firms costs?

Answer 14

• use technology to carry out processes in place of people
• reduced costs in the long term e.g. fewer hours of work
• however it can be very expensive e.g. the new equipment or training/hire staff to use it

Question 15

How can technology influence the sales of a business?

Answer 15

• increase them because they can reach a bigger market
• modern payment systems can be easier and faster

Question 16

How can new technology impact a businesses marketing?

Answer 16

• e-commerce means that customers have more choice of firms to buy from
• so firms need to change their pricing strategies or promotion to become more competitive

Question 17

What is meant by employment law?

Answer 17

It describes the many different laws associated with the relationship between employers and employees.

Question 18

What are the employment laws?

Answer 18

• businesses have to pay staff a minimum amount (NMW or NLW)
• recruitment laws
• discrimination laws
• health and safety laws

Question 19

What is the consumer rights act?

Answer 19

It sets conditions for products.

Question 20

What does the Consumer Rights Act state?

Answer 20

1. The product should be fit for its purpose.
2. The product should match its description.
3. The product should be of satisfactory quality.

Question 21

What positive impacts does high levels of unemployment have on businesses?

Answer 21

• lower staff wages
• more possible employees

Question 22

What negative impact does high levels of unemployment have on businesses?

Answer 22

• people have less money to spend

Question 23

What is tax?

Answer 23

Money that goes to the government.

Question 24

What are the three main impacts that inflation has on a business?

Answer 24

• consumer spending
• cost of labor
• global competition