3.7.6 Analysing The External Enviroment To Assess Opportunities And Threat: Social And Technological

Question 1

5 opportunities that new technology can give a business

Answer 1

• new products.

-improving processes- can improve businesses efficiency and productivity
.
-mass customisation- this can decrease costs and increase revenue.

Reduced barriers to entry- can make it easier for business to go into new markets.

E-commerce- businesses can reach a wider market and sell products 24hours a day.

Question 2

Evaluation of increased urbanisation on businesses

Answer 2

-when there is shortage of labour- businesses struggle to grow. Migrants can help some businesses overcome this and allow them to expand.
-migrants can create demand for certain products which creates new markets.

-however too many skilled people emigrate from a country it can cause “brain drain” businesses in that country will struggle.

Question 3

What is CSR

Answer 3

(Corporate social responsibility)
Is the idea that a company should go above and beyond what is required by law to help society, its workforce quality of life and environment.

Question 4

Advantages of CSR

Answer 4

-improves brand loyalty and attracts new customers through positive publicity.
-people will choose to work for firms with good CSR records over firms with bad ones. Attracts more talented applicants.
-employee morale will improve they will be motivated to stay with the company.

Question 5

What are the four layers of Carroll’s pyramid of CSR?

Answer 5

-philanthropic responsibility: (to be a good corporate citizen)

-ethical responsibility: (to do the right thing and avoid harm)

-legal responsibility (to obey laws and regulations)

-economic responsibility: (to be profitable so the business survives. This is the foundation on which the other responsibilities rest)

Question 6

What is the porters five forces model?

Answer 6

-Shows 5competitve forces that can influence an industry.
-It analyses the state of the market
-helps managers figure out the best strategy to gain competitive advantage, is a decision making tool.

Question 7

What are the 5 different porters forces

Answer 7

1. Barriers to entry (how easy it is for new terms to enter a market, strategies for barriers to entry will be trademarks, price wars mergers
2. Buyer power (selling products at a low price as possible), buy supplier out, business form together to form a buying group.
3. Supplier power (suppliers want to get as high a price as possible) strategies might include develop new products and protecting them with patents, suppliers using forward integration
4. Threat of substitutes( how likely consumers are to buy alternatives), differentiation , target niche markets , make it more expensive for consumers to switch.
5. Rivalry (how competitive they are) strategies: bigger promotional budget, make it easy for customers to switch.