3.2 - Influences On Business Flashcards
What is e-commerce?
E-commerce describes businesses selling their products and services to their customers over the internet.
What are some new digital methods businesses use to communicate with customers?
- Mobile apps - useful way to interact with customers as they can provide information about the business’ products, about where the business’ stores are located and can sometimes sell their products through an app
- Social media - lets them engage with their customers
- Website - let customers shop but they also let customers interact with a business and learn about their products
- Video conference calls - can allow employees and other stakeholders to hold meetings and have important conversations while in different countries
Why can e-commerce be good for UK companies?
They can reach more global customers
What is an ethical business?
Businesses that operate ethically operate in ways that are both fair and honest. They carefully consider what impact their business has on their stakeholders, the nearby community and the environment
What are some examples of ethical considerations?
- Buying fairtrade products - Businesses have the choice over whether to buy ethically sourced materials for a fair price (Fairtrade products). These can often be more expensive but it means that a farmer in a developing country is more likely to be paid fairly
- Employee welfare - Companies that act ethically will treat their employees fairly, giving them a fair wage, reasonable hours, holidays and a pleasant working environment
- Product development - Product testing is often important in the pharmaceutical industry for developing new drugs. However, many people often have an issue with testing drugs on animals on the grounds of cruelty to animals
- Labour in developing countries - In some developing countries, like China, it is legal for employees to work very long hours for very low pay
Benefits of being ethical
- Marketing - A company acting in an ethical way can often advertise based on this and this helps to develop a good PR and increase sales
- Employee motivation - If employees are treated in a fair and honest way, then they are more likely to want to maximise their efforts for the business. This can increase the productivity of workers
- Stakeholders - Other stakeholders are affected if a company acts in an ethical way and this is beneficial for the business. For example, treating customers in a fair and honest way makes the customer more likely to buy from the company again. Also, some shareholders will be more likely to invest in an ethical company because it gives them a moral purpose
How can companies impact the environment?
- Traffic congestion - Companies can cause traffic congestion because of their staff, delivery drivers or consumers using cars around the company’s offices, warehouses or shops
- Careless waste disposal - Businesses can reduce the impact that they have on the environment by making sure that there is a suitable recycling scheme in place for the waste that they produce
- Air and noise pollution - Noise pollution affects the local community where a company operates. Using renewable sources of energy, as well as more efficient machinery can reduce air pollution too
Ways businesses can improve sustainability
- Using renewable resources - Many of the resources used by businesses to generate energy (coal, oil, natural gas) are non-renewable. Non-renewable resources cannot be replaced once we run out of them on Earth. To be sustainable, a business could use renewable energy, but this may be more expensive and the business may have to invest in new machinery.
- Contributing to global warming - Many of these non-renewable resources release greenhouse gases, which contribute to creating a warmer climate. This could lead to disastrous weather and flooding events for future generations. Businesses in many industries produce a large amount of greenhouse gases and therefore these businesses have a responsibility to help make the planet useable for future generations. Reducing air pollution may increase a company’s costs.
What is sustainability?
Sustainability means acting in a way that means the Earth and all of its resources are fit for use for future generation
What is m - commerce?
Buying and selling products through a mobile
What is a boom?
A boom is when the economy is growing significantly and the businesses in it are generally doing well
What is a recession?
During a recession, economic output falls and because of this, businesses usually experience a fall in demand for their products
What can indicate the state of an economy.
- Consumer spending - A recession can lead to a fall in consumer spending because of:
= Unemployment - If someone loses their job, they will spend less.
= Reduced consumer confidence – If people are worried about the future then they are more likely to save just in case they lose their job. This leads to less spending.
= Decreased income – People’s income may fall during a recession and this leads to less money being spent on goods and services. - Unemployment - A recession leads to high levels of unemployment. This is bad for businesses because unemployed people have less money (disposable income) to spend. If less people buy goods, a business’ revenues will fall and it is likely that profits will fall too
What happens during a rcession?
- Consumers spend less money
- Consumers are more worried about their job security
- There are higher levels of unemployment
What can affect the economy/cosumer spending?
- Income/minimum wage
- Rate of employment
- Tastes/trends
- Rate of interest
- Tax (dispsoible income)
