1.5 - Understanding External Influences on Business Flashcards
What are the 7 main stakeholders?
Owners/shareholders
Employees
Suppliers
Local community
Customers
Government
Which is the most important stakeholder and why?
Owners - they decide what happens to the business and could make a profit. They usually want high dividends and shares.
What do employees want from a business?
- job security
- promotion prospects
- decent wages
- good working conditions
- may benefit most when objectives are based on profitability, growth and ethics
What is a pressure group?
It is an organisation that tries to influence what people think about a certain subject.
What does e-commerce mean?
Buying and selling online.
What are the impacts of e-commerce?
- 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
What are the new payment systems that have come about due to technology?
- online payment
- chip and pin
- contactless payments
Why would a firm want to invest in good technology for payment systems?
- 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
What are the 5 ways a firm can communicate digitally?
- websites
- mobile apps
- live chats
- video chats
What can websites be used for?
- communicate with customers by posting blogs or providing customer service
- used to publish reports to shareholders
What can firms use many communication methods for that would improve their business?
- share information quickly about the work
- give customer service easily
What can businesses use social media for?
- provide customer service
- advertise their products
- promote local events
What can new technology influence?
- a firms costs
- a firms sales
- a business’ marketing
How can technology influence a firms costs?
- 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
How can technology influence the sales of a business?
- increase them because they can reach a bigger market
- modern payment systems can be easier and faster
How can new technology impact a businesses marketing?
- 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
What is meant by employment law?
It describes the many different laws associated with the relationship between employers and employees.
What are the employment laws?
- businesses have to pay staff a minimum amount (NMW or NLW)
- recruitment laws
- discrimination laws
- health and safety laws
What is the consumer rights act?
It sets conditions for products.
What does the Consumer Rights Act state?
- The product should be fit for its purpose.
- The product should match its description.
- The product should be of satisfactory quality.
What positive impacts does high levels of unemployment have on businesses?
- lower staff wages
- more possible employees
What negative impact does high levels of unemployment have on businesses?
- people have less money to spend
What is tax?
Money that goes to the government.
What are the three main impacts that inflation has on a business?
- consumer spending
- cost of labor
- global competition
