analysing external change Flashcards
what type of market is the EU
single market
benifits of being in the EU
free trade- no tax
freedom of movement inbetween EU countries
product regulations - reduce r&d costs
what does the competition act 1998 do
sets out laws on what unfair business practices.
role of the CMA (competition and markets authority)
prevents companies form breaking the laws- will fine or prosecute those who do
competition law means you cant …
fix prices
limit production so there is a shortage and prices go up
a business is dominant if they have …
at least 50% market share
what is a monopoly
when a business has complete control over the market, there is no competition and only one company to buy from, customers will have to pay any price for it.
how does law protect environment
environment agency regulates waste outputs into land and water, and pollution rates
effects on finance
have to account for the cost of complying with the laws, materials and process may be more expensive but have to be done to avoid fines.
laws effect the way the business makes decisions
laws can also protect customers and consumers eg
trade description act - no false advertising
data protection act - don’t misuse data
egs of labour laws
fair treatment
equality act 2010- protects discrimination for protected characteristics
types of discrimination
direct - treating someone less favourably because they have protected characteristics eg paying a woman less that a man for the same job
indirect- everyone is treated the same but it has a it has a bad effect on one specific group- eg cant wear head coverings in the job discriminated against some religions
discrimination laws affect…
recruitment - can’t use discriminatory language
must be able to justify why they picket a certain candidate
pay- must be equal for men and women
doing the same job
promotions - everyone must be given the same opportunity to get it, and cant deliberately pick staff who are older to make redundant
employment contract
a legally bunding agreement between employer and employee about duties and rights. eg pay, hours
tribunals
if employees feel they have been treated unfairly they can make a claim, they may get compensation or their job back
why do government policies encourage enterprise
enterprise benefits the economy - increase productivity- creates jobs
government policies to increase enterprise
government schemes - borrow money at low interest offer tax incentives
national insurance is reduced
infrastructure
uk’s is physical things like transports eg trains and railways across the country.
improvements make businesses more productive, things can move about faster, therefore services and products can work with minimal disruption to production. it also provides jobs.
what is WRAP
waste and resources action programme
wants to achieve a circular economy and reduce waste by using things for as long as possible
GPD
gross domestic profit is the total market value of goods and services within a period of time
measures economic growth
GPD consists of
customer spending+ +business investment +government spending +value of exports - the value of imports
it ignores inflation
benifits of economic growth
increase revenue
profitability for a business
economies of scale
if there is sustained growth a business may decide to grow
what is rapid growth followed by
recession
what is a recession
income starts to go down and demand goes down , business confidence goes down and thins slow down.
what is a boom
GDP is high, production reaches a maximum capacity, shortages in stock, prices increase, wages rise
what is a slump
GDP is low, businesses close factories and redundancies are made, unemployment is high, bankruptcy is high
what is a recovery
production increases, employment increases, people have more money to spend.
how much a business is effected by the growth cycle depends on…
income elasticity of demand - is the product elastic or inelastic
