1.5 - Understanding External Influences On Business Flashcards
Stakeholders, Technology and Business, Legislation and Business, The Economy and Business and External Influences
What are business stakeholders and their different objectives?
-An individual or group that has an interest in a business.
-Shareholders=want the business to be financially successful.
-Employees=want job security and financial reward
-Pressure groups=want business to act ethically
-Customers=want the product to fulfill customer needs.
How do stakeholders impact business activity?
-A business needs a happy, motivated workforce.
-A business cannot ignore pressure groups as it will develop a bad reputation for the business.
What are possible conflicts between stakeholders?
-Owners want costs to be at a minimum but employees want a wage thats as high as possbile. Both objectives cannot be met.
What are the different types of technology used by the business?
-E-commerce
-Social media
-Digital Communication
-Payment Systems
How does technology influence sales of the business?
-The business can use e-commerce to sell to a much wider market.
-The business can also use technology to be innovative with tis products.
How does technology influence costs of the business?
-Firms that sell only on the internet save on their costs.
-Use of technology in automating the production process means less money for employees wages.
How does technology influence the marketing mix of the business?
-Product=more innovative products.
-Price=Cost savings allow price to be lowered.
-Promotion=using digital channels to promote products.
-Place=Lots of businesses are choosing to locate online.
What are the principles of the consumer law?
-Products should be fit for purpose.
-Products must be of satisfactory quality.
-Products should be as described.
What are the principles of the employment law?
-Discrimination=A business musn’t discriminate againist employees (because of age, gender, ect).
-Pay=all employyees are entitled to minimum wage.
-Health and Safety=All employees have the right to work in a safe environment.
What is the impact of legislation on cost?
-Additional costs inorder to be in line with legislation.
What is the impact of legislation on consequences of meeting or not meeting these obligations?
-Bad reputation for the business.
-Negative impact on future recruitment.
What is the impact of the economic climate on businesses?
-Employment=less disposable income, less sales
-Changing levels of consumer income
-Inflation=less disposable income, increased costs for business
-Changing interest rates=If theres an increase in interest rates, businesses are less likely to borrow money.
-Exchange rates=If theres a decrease in the value of £, it will cost more to import.
What are some possible responses to changes in technology?
-Businesses should invest in research so that they can tailor their products specific to customer needs.
What are some possible responses to changes in legislation?
-They may need to stop selling products and modify that product using research.
What are some possible responses to changes in the economic climate?
-If theres a rise in economic climate, the demand will also increase.
-If theres a decrease in economic climate, the demand will also fall.
