3.1.4. Impact Of External Influences

Question 1

PESTLE

Answer 1

Political-ie. Leaving EU affected UK. Harder to access EU markets
Economic-economic growth, exchange rate, rate of inflation, rate of unemployment
Social- changed in social attitudes and behaviour related to lifestyle. Like smoking, eating healthy etc.
Technological- allows new ways to make existing products, lowering costs, improve quality, reliability, durability, recyclability
Legal-Passing new laws can disrupt existing industries making it more challenging
Environmental- pressured applied to ensure businesses don’t harm environment

Question 2

Porters 5 forces

Answer 2

Threat of new
entrants

Bargaining Rivalry among Bargaining
Power of existing Power of
Suppliers Competitors Buyers

                       Threat of substitute
                     Products or services

Question 3

Rivalry among existing competitors

Answer 3

When intensity of rivals is low:
Few companies dominate market, branding is very important, little spare capacity, high barriers to entry, no direct competition from abroad
Non price competition on marketing, branding and innovation my more likely.

When intensity is high:
Many competitor of roughly equal size, products relatively undifferentiated, market growth is slow, low barriers to entry, d is rectify faces overseas competition
There’s pressure to maintain low price but still make profit

Question 4

Threat of new entrants

Answer 4

Patents and technical know how of staff
Strong leans identity and customer loyalty
High costs to customers of switching supplier
Substantial network infrastructure
If threats are low, may be able to keep prices high to enjoy strong margins.

Question 5

Changes in buying power of suppliers

Answer 5

Factors affecting supplier power:
-No. of alternative suppliers available
-Uniqueness of suppliers product or service
-Reliance of business on technical support from their supplier