1.5 Understanding external influences on business Flashcards
define stakeholder
stakeholder is any person or group that have an interest in the business
define internal stakeholder
stakeholders that work within the business
examples of internal stakeholders
owners
employees
mangers
shareholders
define external stakeholder
stakeholders from outside the business who have an interest in it
5 examples of external stakeholders
customers suppliers pressure groups government local community
explain one conflict that exists between stakeholders of a business
conflict can exist between owners and employees, this is because employees want high wages but this is costly for owners and would rather want to increase profit.
define E-commerce
E-commerce describes businesses selling their products and services to their customers over the internet.
advantages of e-commerce
- attract customers all across the globe
- wider range of customers
- sell at any time
- accessed 24/7
- receive payments quicker
- reduce overheads / extra costs compared to running a physical shop
- cheaper and easy
disadvantages of e-commerce
-more competitors from across the globe
-lack of security
-needs maintenance and update technologies
-which can be expensive
intangible - customers cannot feel/touch/smell the item
define social media
a platform which allows the business to communicate with consumers and can be used as advertising
advantages of social media
- to interact and communicate with consumers
- conduct research cheaply
- saves time
- allows business to spot the latest trends
the disadvantage of social media
- damage the reputation of the business from negative feedbacks
- tarnish the brand
- security and privacy policy issues - competitors have access
- need to stay engaged and active
Technology - Digital Communication
emails mobile phones /apps websites social media web / video conferences
Define m-commerce
any business transaction that takes place through mobile phones eg payment via mobile phone or apps
payment methods
contactless payment
chip and pin
How Technology Changes Business Activity Technology can influence business in a number of ways:
sales
cost
production
marketing mix
technology can influence business-sale
the impact of e-commerce: business can sell products easily to customers all across the globe without setting up a physical store, therefore, saving cost
impact of payment methods :
m-commerce making it convenient for customers to pay for the product
eg contactless payments are quick and easy
impact of social media
social media can increase sales for examples having regular direct communication builds customers relationship with the business
technology can influence business-cost
impact of e-commerce
selling online is much cheaper than opening a physical shop not have to spend as much money employing staffs, rent, bills
The impact of social media on costs; provides a quick, cost-effective way for businesses to communicate and interact with customers. It enables even small businesses to reach a wide audience for a minimal cost.
impact of payment methods on costs:more secure and cost-effective way
The impact of digital communication systems on the marketing mix
Product Products can be adapted and accessed easily in a format that is convenient to the customer.
Price Money saved by using digital communication can help a business to keep its prices low.
Place Customers can access services regardless of where they are, eg through mobile banking apps.
Promotion Businesses can email newsletters, track customer behaviours on social media and their website, and advertise online.
the impact of social media on the marketing mix
Product Product information can be shared using video demonstrations where appropriate.
Price Cost savings may enable a business to lower its prices.
Place Businesses can interact with customers around the world, regardless of location.
Promotion Social media is a cost-effective way of targeting promotions at specific groups of customers.
The impact of payment methods on the marketing mix
Product Online payment methods allow digital products to be purchased easily.
Price Any fees incurred through the use of specific payment methods need to be accounted for when setting the price of a product.
Place New payment methods have facilitated the ability to sell products online.
Promotion Businesses can promote the fact that they offer a variety of ways for a customer to pay, eg cash, card, PayPal.
Examples of employment laws:
National minimum wage
The Equality Act
The Health and Safety at Work Act
national minimum wage
ensures that all workers receive a payment above the minimum wage
the benefit to national minimum wage
Paying workers a higher wage may improve motivation and productivity.
the disadvantage to national minimum wage
if the minimum wage increases then it can lead to an increase in costs and because of this, lower profits.
The Equality Act
this protects the people from discrimination in a workplace. business cannot discriminate workers in terms of payment and employment based on race age, gender etc
the benefits of the equality act
This creates a working environment where everybody feels welcome. Sometimes this is called an inclusive workforce.
the act of health and safety
legislation around health and safety is designed to keep employees safe while they are at work
how to improve health and safety regulations
carry out a risk assessment
staff training
safety equipment
first aid kits
benefits to health and safety
Better health and safety conditions do provide a benefit by reducing the number of workplace injuries. This means that workers will spend less time off work recovering from injury and will spend more time at work.
Impact on business - health and safety
costly - supply training safety equipment
getting staffs trained is expensive
define consumers law
These are laws that are designed to protect customers against unfair treatment by businesses. They include laws involving faulty goods, dishonest advertising and warranties.
what are the consumer’s law
- goods must be fit for purpose
- goods must be satisfactory quality
- repair and refund
goods must be fit for purpose
goods must do what they are designed to do
goods must be satisfactory quality
goods should not be damaged or faulty when sold as new
Employment
law
Laws that give standards about how businesses should treat their employees.
The Consumer Rights Act (2015)
Laws that are designed to protect customers against unfair treatment by businesses.
The Impact of Legislation on Businesses
- costly
- new practices
Consequences of meeting and not meeting obligations
- fines
- compnesation
- bad repuation
explain the consequences of not meeting the laws
the business’ reputation could be damaged by bad publicity, which could result in a loss of sales and staff
give 2 benefits of meeting the obligation of the laws
if workers receive a wage above the minimum wage staff are more likely to work harder, which results in the business being more efficient.
health and safety is important because workers are likely to stay working for the business which reduces recruitment cost t
The economic climate affects businesses in six main ways:
- unemployment
- changes in exchange rates
- inflation(the rise in the price of goods and services)
- changes in interest rate
- changing levels of consumers income
- government taxation including national insurance contributions (NICs) and value-added tax (VAT)
the impacts of high unemployment on the economy
a high rate of unemployment would result in lower-income so people are less likely to spend money on products.
but at the same time, people would swap for cheaper goods this could benefit some business to an increase in sales
high to calculate interest rate
total interest / borrowed amount x 100 = rate of interest
impacts on low loans
when interest rates are low business will borrow money because it is cheaper to do so
impact on consumers spending - low loans
when interest is low consumers are more likely to want to save because they get less money in return for saving
