Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

3.7 STRATEGIC POSITION > Analysing External Environment > Flashcards

Analysing External Environment Flashcards

1
Q

What are 4 key areas of focus?

A

Competition Law
Labour Law
Environmental Legislation
Governmental Policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What do I need to know for political and legal change?

A

Need to understand the impacts of different types of legislation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What must businesses adhere to?

A

To ensure a fair and sustainable trading environment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are 3 Scope and effects of competition law?

A

Anti-competitive agreements
Abuse of dominant market position
Merger control

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What are anti-competitive agreements?

A

Stops any collusion or arrangements e.g price fixing, discounts, sharing suppliers or markets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is abuse of dominant market position?

A

Any businesses with 40%+ market share would be considered dominant. Businesses can’t abuse that power

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is merger control?

A

Any mergers or acquisitions will be reviewed to ensure they don’t have a significant impact on reducing competition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Who governs competition law?

A

The CMA and FCA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What does CMA stand for?

A

Competition and Markets Authority

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What does FCA stand for?

A

Financial Conduct Authority

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is a benefit for suppliers of competition legislation?

A

Encourages suppliers to differentiate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is a benefit for consumers of competition legislation?

A

Range of price points

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is an example of employment law?

A

The Equality Act 2010

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are 2 aims of employment legislation?

A

To protect individuals from unfair treatment
To advance equality of opportunity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the national minimum wage’s purpose?

A

Covers young people and apprentices

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is the national living wage’s purpose?

A

Older workers - liveable amount

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is SWOT?

A

Strengths
Weaknesses
Opportunities
Threats

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is PESTLE?

A

a tool that is used to assess/analyse external factors of a business.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Why do core competences make the business more competitive?

A

Hard for competitors to copy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is the idea of Elkington’s TBL?

A

That businesses are responsible to all their stakeholders and to the planet

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is the circular flow diagram?

A

A model that shows how an economy functions. It illustrates how money moves from producers (businesses) to consumers in a endless loop.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is GDP?

A

Gross Domestic Product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What does GDP mean?

A

Measures all of the economic activity of companies, governments and people in a country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What is GDP Growth caused by?
3 points

A

Capital investment
Technological Advances
Population Growth

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

What are 3 measures of UK GDP?

A

Income
Expenditure
Output

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

What does income mean in terms of GDP?

A

Value of income generated mostly in terms of profits and wages

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What does expenditure mean in terms of GDP?

A

Value of goods and services bought by households and government investment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

What does output mean in terms of GDP?

A

Total value of the goods and services produced by all sectors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

What is a benefit to the government by rising GDP?

A

Can increase public spending on public services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

What are 2 limitations of GDP?

A

Unequality
Hidden economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

What 3 impacts does economic growth have on business decision making?

A

Sales
Profits
Employment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Why does sales have an impact on business decision making?
2 points

A

Increase in ‘real’ income leads to higher retail sales
Higher growth in income elastic non-food items

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Why does profits have an impact on business decision making?
2 points

A

Greater demand and sales stimulating profit levels
Increased prices to meet demand boosting profit margins

34
Q

Why does employment have an impact on business decision making?
2 points

A

Higher demand leads to overtime and job creation
Can lead to skills shortages and impact on costs

35
Q

What is the trend against the UK pound and US dollar in the last 5 years?

A

Quite varied

36
Q

What does the weaker pound make British exports?

A

More competivity priced and attracts foreign investors and also boosts tourism by making it more affordable for international travellers.

37
Q

What does it mean if the pound is strong?

A

This tends to mean we are less likely to have European countries buying our products because it costs more money for them

38
Q

What does it mean for exports and imports , if the UK pound goes weak?

A

Exports go up
Imports go down - more expensive for us

39
Q

What can we do with elastic goods if the pound goes weaker?

A

Export more and price remains the same

40
Q

What happens to price of foreign raw materials if the pound goes weaker?

A

It increases so costs increase

41
Q

What can an increase in foreign raw materials impact?
3 things

A

Quality
Reputation
Brand

42
Q

How are free exchange rates (floating) determined by?

A

Market supply and demand

43
Q

What is the exchange rate uncertainity?

A

Exchange rates can change daily, causing uncertainty for export and import businesses due to knock on fluctuations in price achieved from sales.

44
Q

What is the role of the Government in supporting UK businesses?
3 points

A

To ensure competition is fair
Financial support
Reducing barriers to trade

45
Q

What does the government offer in terms of enterprise?
Example of a scheme?

A

125+ enterprise schemes to support businesses
Local Enterprise Partnerships - LEPs

46
Q

What is inflation?

A

General increase in prices within the economy

47
Q

What is inflation caused by?

A

High levels of demand and low interest rates

48
Q

What is CPIH?

A

The most comprehensive measure of inflation

49
Q

What does demand-pull inflation refer to?

A

Instances when demand for goods and services exceeds the available supply of those goods and services in the economy

50
Q

When does cost-push inflation occur?

A

When overall prices increase due to increase in cost of wages and raw materials.

51
Q

What is consumer price index?

A

A price index, the price of a weighted average market basket of consumer goods and services purchased by households

52
Q

What is hyperinflation used to describe??

A

Situations where the prices of all goods and services rise incontrollably over a defined time period.

53
Q

What is deflation?

A

Reduction of general level of prices in an economy

54
Q

What are 2 other impacts of inflation?

A

Consumers become far more aware of spending and look back to cut costs
Exports cost more and become less competitive

55
Q

What does free trade promote?

A

The unrestricted flow of goods and services across borders

56
Q

What do free trade agreements such as the EU aim to reduce and promote?

A

Reduce trade barriers and promote market access

57
Q

What does protectionism seek to shield?

A

Domestic industries from foreign competition by imposing trade barriers

58
Q

How does the government seek to shield industries from competition?

A

Tariffs

59
Q

What are tariffs?

A

Taxes on imported goods or non tariff barriers such as quotas

60
Q

What is fiscal policy?

A

The use of taxation and government spending to influence inflation, unemployment and economic stability

61
Q

List a direct taxation and a indirect taxation??

A

Income tax is direct and VAT is indirect

62
Q

What is fiscal policy aimed at?
2 points

A

Encouraging consumer spending
Paying for government expenditure

63
Q

How is fiscal policy set?

A

By the government to try and control consumer and business spending

64
Q

How is monetary policy set?

A

Set by the Bank of England to control the cost and supply of money as well as interest rates

65
Q

How is growth encouraged during a recession? 2 points

A

By lowering interest rates and introducing QE

66
Q

What is QE? Quantitative easing

A

When Bank of England pumps hundreds of billions of pounds into the economy

67
Q

What does QE aim to do?

A

To support the economy by encouraging people to save less and spend more

68
Q

How does the Bank of England pumps hundreds of billions of pounds into the economy?

A

By buying government bonds

69
Q

What does buying bonds enable the bank to do?

A

To keep interest rates low because they know they will get a good return

70
Q

What are 2 strategies businesses can do to survive a stagnated growth period?

A

Diversification
Focus on Marketing

71
Q

What is a value-added tax?

A

A consumption tax on the value added at each stage of a product’s production and distribution.

72
Q

Why is VAT added on?

A

Because it generates a stable source of revenue as it based on consumption rather than income

73
Q

When corporation tax is frozen at a certain percentage, how does this help a business?

A

Helps a business to invest into the business

74
Q

When income tax is frozen at a certain percentage, how does this help build the economy?

A

Can hope for people to have more disposable income and this influences spending

75
Q

Who controls interest rates?

A

Bank of England

76
Q

When the Bank puts up interest rates, what does this encourage businesses and people to do?

A

To save

77
Q

What does the UK have in terms of population?

A

Aging population

78
Q

Why has population increased from 58.8m in 2000 to 67-69m in 2024?

A

Due to net migration, aging population, globalisation

79
Q

What can net migration bring to the UK?

A

People with new ideas and culture

80
Q

How big is the UK’s ecommerce market?

A

3rd largest

81
Q

What 3 impacts does an aging population have on businesses?

A

Requires more health support
People staying in jobs for longer
Changes in demand

82
Q

Why does urbanisation have an impact on businesses?

A

Many people live in urban areas as it is easier to access employment, healthcare etc

3.7 STRATEGIC POSITION (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions