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Business > 2. Influences On A Businesss > Flashcards

2. Influences On A Businesss Flashcards

1
Q

Digital communication

A

the transmission of of imformation electronically between computing devices

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2
Q

Social media

A

Methods of online communication such as websites and applications. They share information and help to develop social and professional contacts

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3
Q

Stakeholders

A
  • Individuals and orginisation that are affected by, and affect, the activities of a business
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4
Q

Intranets

A

Communication networks which can only be accessed by an organisation’s employees

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5
Q

Extranets

A

Similar to intranets but can also be accessed by other organisations such as suppliers

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6
Q

E commerce

A

the act of buying or selling a product using an electronic system such as the interent

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7
Q

M-commerce

A

The buying and selling of products through wireless handheld devices such as a smartphone.

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8
Q

Cloud computung

A

A general term for the delivery of specialist computing services, such as the storage of very large amounts of data provided by businesses using the internet.

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9
Q

What are the methods of e-commerce? (11)

A 
Online advertising 
Online auctions 
Online bookings 
Online purchases 
Online shopping
Mobile apps 
Electronic payments 
Internet banking 
Social networking
Contactless transactions
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10
Q

Types of digital communication? (6)

A
  • Mobile phone calls
  • Email
  • Text
  • Video conference
  • Social media
  • Blogs
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11
Q

Ethics

A

Whether a business descision is thought to be morally right or wrong. An ethical descision is made on the basis of what is judged to be morally right.

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12
Q

The Environment

A

The natural world in which we live. It is the landscape and its natural features such as the seas, rivers, forests and mountains

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13
Q

How does a business become more ethical?

A
  • Improve working conditions
  • Reducing pollution
  • Buying fairtrade supplies
  • Donations to the community
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14
Q

Benefits of a business trading ethically

A
  • A business may get increased sales from their reputation of ethical trading (e.g. Body Shop) this may mean higher sales revenue and that may mean higher profits
  • Businesses that trade ethically tend to have more loyal and motivated staff (e.g. Lush cosmetics)
  • If consumers trust a brand to be ethical, this can mean competitive advantage for the businessl
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15
Q

Drawbacks or a business trading ethically

A
  • Having to be an ethical trader may mean the business is unable to maximise profits for the shareholders
  • Moving production into some countries where child labour and poor health and safety are the norm may be very expensive for the business to put right – UK consumers will no longer tolerate these practices in the supply chain (e.g. Primark)
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16
Q

Trade - off

A
  • A trade-off is a compromise between one thing and another

* There has to be a trade-off or compromise between making a profit and being ethical so everyone is happy

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17
Q

What are some environmental considerations businesses have to take?

A
  • Traffic congestion
  • Recyling
  • Waste disposal
  • Noise pollution
  • Air pollution
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18
Q

Sustainibility

A

Sustainability can be defined as; avoidance of the depletion of natural resources in order to maintain an ecological balance

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19
Q

The economic climate

A

The general condition of the economy, the way that the resources and the production and consumption of goods in the UK are managed

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20
Q

What is the relationship between Profit and Interest rates?

A
  • as profit increases - interest rates deccreases

- as profit decreases - interest rates increase

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21
Q

Overdraft

A

A flexible loan which businesses can use, whenever necessary, up to an agreed limit.

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22
Q

Consumer spending

A

The value of goods and services over a time period, usually a month or a year.

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23
Q

The economy

A

Made up of millions of individual consumers, many thousands of businesses and governments. All take descisions on what to buy and produce.

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24
Q

Consumers

A

Individuals who buy goods and services from businesses

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25
Q

Globalisation

A

The process by which businesses start operating on an international scale.

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26
Q

Multinational(MNC)

A

A multinational is a business which trades in more than one country, often shortened to MNC

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27
Q

What is an export?

A

An export is a product that the UK sells to overseas markets

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28
Q

Benefits of globalisation for UK businesse? (5)

A
  • Wider markets
  • Economies of scale
  • Labour migration
  • Specialisation
  • Multiplier effect
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29
Q

Drawbacks or globalisation for UK businesses? (4)

A
  • Foreign competition
  • Loss of UK staff
  • Threat to UK service industries
  • Diseconomies of scale .
30
Q

What is an import?

A

An import is a product made overseas and brought into the UK

31
Q

Exchange rates

A

• The exchange rate is the price of one currency in exchange for another

32
Q

SPICED

A 
Strong
Pound 
Imports 
Cheaper
Exports dearer
33
Q

WPIDEC

A 
Weak
Pound
Imports 
Dearer
Exports
Cheaper
34
Q

Diseconomies of Scale

A
  • As UK businesses trade in these larger global markets they will grow and expand accordingly
  • As they grow they will start to encounter problems; co-ordination, communication and motivation
  • This can lead to higher than average unit costs or diseconomies of scale
35
Q

Economies of Scale

A
  • A UK business which is trading on a global scale can gain economies of scale, and get lower average unit costs
  • This means the goods may be cheaper for the customer
  • This could give UK businesses competitive advantage and higher profits
36
Q

Legislation

A

Legislation is the collective term for laws

• When we talk about legislation in business we are talking about UK laws

37
Q

Impact of legislation on business cost

A

A business will have to meet all of the consumer, employment and recruitment laws

38
Q

Impact of legislation on business training needs

A

Businesses will need to make sure that all their employees are trained and that the training is up-to-date

39
Q

Impact of legislation on business recruitment

A

Race, sex, age or disability discrimination is illegal in UK business, so businesses must be careful to recruit within the equality law

40
Q

Equality Act 2010

A
  • The Equality Act 2010 legally protects people from discrimination in the workplace and in wider society.
  • It replaced previous anti-discrimination laws with a single Act, making the law easier to understand and strengthening protection in some situations. It sets out the different ways in which it’s unlawful to treat someone.
41
Q

The National Living Wage

A

The National Living Wage is higher than the National Minimum Wage - workers get it if they’re over 25.

42
Q

Health and Safety Work act

A

Health and safety laws are there to protect the owners, the employees and the public from workplace dangers.

43
Q

An employer must

A
  • Prevent (accidents, illness etc)
  • Provide (instructions, information, training)
  • Engage (engage and consult with employees day-to-day)
  • Consult (maintain safe and healthy working conditions)
44
Q

Benefits of providing a safe working environment

A

Avoids a fine – Health and Safety is a legal responsibility of business
• Avoids expensive compensation claims from employees who have had accidents at work

45
Q

Consumer Rights Act 2015

A

Goods have to be :

  • as described
  • fit for purpose
  • of satisfactory quality
46
Q

Principles of consumer law: quality

A
  • Refund
  • Repair
  • Money
47
Q

Trade Descriptions Act

A

Trade Descriptions Act carries criminal penalties and is enforced by Trading Standards Officers, making it an offence for a trader to apply a false trade description to any goods or services.

48
Q

A market

A

A Market is a voluntary meeting of buyers and sellers who trade or exchange goods or services.

49
Q

What are the 3 types of markets?

A
  • Goods markets
  • Factor markets
  • Labour markets
50
Q

Goods markets

A

For final goods and services or outputs. Things ready to sell

51
Q

Factor Markets

A

For factors of production like inputs in manufacturing. Raw materials

52
Q

Labour Markets

A

People and jobs

53
Q

Competition

A

This is the rivalry between businesses to gain sales from customers

54
Q

Competitive Market

A
  • A competitive market is where a large number of sellers are selling to large number of customers
  • Businesses cannot charge high prices because customers have lots of substitute choices and can shop somewhere else
55
Q

How can a business can be more competitive

A
  • Provide better quality
  • Provide a better service
  • Offer a unique product
  • Offer better value for money
56
Q

Business risk

A

Business risk is the possibility a company will have lower than anticipated profits or experience a loss rather than making a profit.

57
Q

Uncertainty

A

• Uncertainty is when businesses are unable to predict external shocks or future events

58
Q

Recession and economic problems

A
  • In a recession or times of economic problems, customers tend to save rather than spend on non-essential items.
  • This can slow down sales
  • Luxury items suffer most
59
Q

Change in tastes and trends

A

Consumer tastes change over time which means that a business is at risk if they don’t keep up with current trends – are these heavily demanded products now?

60
Q

Employment laws and regulations

A
  • All businesses in the UK must obey the employment laws

* For example they must pay the minimum wage or above, if they don’t they are breaking the law

61
Q

Poor reputation

A
  • If a business provides poor customer service, or suffers a problem, then it may have a poor reputation
  • This can lead to loss of sales, loss of revenue and loss of profitability
  • This can lead to job losses
62
Q

Risk from competition

A

• If a business faces strong competition it could respond by;
– Dropping their prices, but this will lower profits
– Promote their business more, but this will raise costs
– Improve the product or service in some way, but this will also raise costs

63
Q

Financial risks

A
  • Running a business can be a financial risk for the owner
  • The owner may put their own cash and other assets (e.g. a van) into a business
  • If the business does not do well then the owner could lose their money, which is why many businesses become ltd to protect the owner
  • If the owner borrows money from a bank to finance the business, they still have to pay this back (with interest), even if the business does not do well
64
Q

Risk of not managiing cash flow

A
  • Cash flow is the flow of money in and out of a business, many businesses fail because of poor cash flow (or lack of cash)
  • A business needs more money coming in than going out to survive, and that money also needs to come in on time or they cannot pay their overheads (bills)
  • Being prepared for a cash shortage using an overdraft is a sensible idea for a start-up
65
Q

Staff training and safety

A
  • A business needs to train its staff so that they can; operate machinery safely, work a till, deal with customers or sell products and services
  • Welltrainedstaffcangivethe business a good reputation
  • A business also needs to look after the safety of staff an obey UK laws on Health and Safety at work
66
Q

Weather and other unforeseen factors, natural disasters

A
  • A disaster can strike any organisation, large or small. It can arrive in the shape of storm, flood, fire, earthquake and even a tsunami
  • It may take some time for the business to return to normal operation after an incident
  • Climate change means UK businesses must plan for extremes of weather
67
Q

Operational risks – break down of equipment

A
  • Many businesses have a variety of machines or equipment, including computers
  • Many businesses run their machines 24/7 and cannot afford machines to stop in the event of a break-down e.g. bread factories
  • When machines break down there is the cost to fix the machine plus the cost of lost production time
68
Q

Staff - reliability

A
  • A business will need reliable staff who turn up on time, every day, ready to work
  • Without reliable staff a business will not be able to offer the right level of customer service
  • This can have an impact on reputation, revenue and profit
69
Q

Lack of Security

A
  • If an entrepreneur has a regular job, and they decide to leave that job to open their own business this is a huge risk;
  • They may have a mortgage, a car and other bills to pay
  • Also there may be insecurity of sales with falling consumer incomes
70
Q

Commercial risks, failure of suppliers to supply and customers to pay

A

• If a supplier fails to supply goods or services to a business, this could be critical
• If customers cannot get the product or service they need, they may go elsewhere, especially if there are lots of substitute businesses
selling the same good or services
• If customers do not pay on time, then this may cause cash flow problems for the business who will need to pay their suppliers

Business (6 decks)

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