6.1 External Factors Flashcards
What is meant by political in PESTLE ? And it’s factors ?
Political factors are anything that the government has done to impact or influenced upon your business
E.g ULEZ, Brexit, COVID
Political instability
Change of government
Government initiatives
What is meant by economical in PESTLE? And it’s factors
Economical factors are anything that the economy in which your business operates in
E.g. interests rates and unemployment rates, Inflation, exchange rates, taxation
What is meant by social in PESTLE? And social factors ?
Social factors are those things that influence our lifestyle and way of living, including demographics, income, attitude to work, cultural beliefs etc.
Social factors such as demographic issues i living population figures, age, race, gender etc
What is meant by technological in PESTLE? And it’s factors ?
Technological factors are anything to do with technology within the business.
E.g. new technology like card payments by contactless
Factors such as automation, communication e.g. a floppy disk holds 1.77mb
What is meant by legal in PESTLE? And it’s factors
Legal factors are anything to do with the law that may impact the business and how they run.
E.g employment laws or tax laws for a business
You must comply with the law it’s not optional.
Impact of current legislations on business operations.
Business framework. Companies act, partnership acts
What is meant by environmental in PESTLE? And it’s factors ?
Environmental factors are anything to do with the business impact in the environment.
E.g pollution the business might be causing
Carbon emission
Waste reduction
Changes in economy that affect price and cost of goods and services :
Interest rates
Unemployment
Inflation
Exchange rates
Taxes
How does economic factor internet rates affect the business ?
Cost of borrowing and reward for saving
Set by Bank of England
If low people save less, borrow more
If high people save more, borrow less
How can economic factor unemployment rates affect a business ?
People who do not have a job but are looking for one
If low, more money to spend, more demands for goods
If high, less money to spend. Less demand for goods
How does economical inflation affect a business ?
Rise in average price levels
Period of very high inflation at the moment
How does economic exchange rates affect a business ?
Value of one currency compared to another
£ getting weaker/Stronger
Weaker £ : if importing goods then £ buy less goods
Stronger £ : if importing goods then £ buy more goods
How does economic taxation affect a business ?
Amount paid to government on earnings
Levied by National and local governments
Raise revenue
Discourage certain activities
Social programs
How can the consumer protection act compromise the external business environment ?
