3.1.3 - Understanding the business operate within an external environment Flashcards
What does PESTLE stand for?
Political, Economic,Social,Technological,Legal and Ethical
Example of Political factors
Competition policy and govt. spending tax.
Example of Economic factors
Interest rates and Economic growth
Example of Social Factor
Demographic change and impact of pressure groups
Example of Tech Factor
Disruptive tech and new tech production.
Example of Legal Factor
Employment law and Min and living wage.
Example of ethical factor
Sustainability and ethical sourcing.
What are indicators of Market Conditions?
Economic growth and Market Demand
Define GDP
The measure of the value of output and the value used to assess changes in economic growth.
What is demand?
How much of a goof or service a consumer wants.
What is Real income?
Measures the amount of DISPOSABLE income available to consumers
Define Interest Rates
The reward for saving and the cost of borrowing expressed as a % of the money saved or borrowed
Name different interest rates.
Mortgages, Credit card interest rates and savings
What happens when interest rates fall?
Business investment should be boosted, more spending.
What happens when interests rates rise?
Bank of England interest rates rises and the cost of borrowing rises.
