3.1.4 impact of external influences

Question 1

pestle model

Answer 1

political
economic
social
technological
legal
environmental

Question 2

pestle analysis

Answer 2

a business analysis tool
aims to look at external factors and how they may impact the business
aids strategic and tactical decision making
helps a business reach its goals

Question 3

porters 5 forces

Answer 3

bargaining power of suppliers
bargaining power of customers
threat of new entrants
threat of substitutes
rivalry among existing businesses

Question 4

bargaining power of suppliers

Answer 4

limits power of supplies by looking for new suppliers
backward vertical integration and merge or takeover the supplier

Question 5

bargaining power of customers

Answer 5

make it too expensive for a customer to switch
forward vertically integrate

Question 6

threat of new entrants

Answer 6

create barriers to entry to prevent new entrants
heavily advertise to build strong brands

Question 7

threat of substitutes

Answer 7

continuously invest in research and development and develop patents
buy up patents of rivals and shelve to prevent product production

Question 8

rivalry amongst existing firms in the idustry

Answer 8

create a cartel - illegal but commonplace
buy up rivals through horizontal integration
continuously introduce new products to the market
heavily advertise to maintain market share