B2 - Influences On Business

Question 1

What is E - Commerce?

Answer 1

Any form of business activity conducted electronically

Question 2

What are some methods of E-Commerce?

Answer 2

• online advertising
• online auctions
• online bookings
• online purchases
• online shopping
• websites
• mobile apps
• electronic payments
• internet banking
• social networking
• contactless transactions

Question 3

What are some methods of Digital Communication?

Answer 3

• Mobile phone call
• E-mail
• Text
• Video conference
• Social media
• Skype
• Blogs

Question 4

What is Ethics in Business?

Answer 4

Ethics are moral guidelines which govern good behaviour

• Most businesses operate to meet the needs of the owners or shareholders
• Ethical businesses operate to meet the wider needs of their stakeholders, and try to act in a way that is honest and fair

Question 5

What are some ways Businesses can be more Ethical?

Answer 5

• Paying workers higher wages
• Improved working conditions
• Reducing pollution
• Buying Fairtrade supplies/agreeing to pay more to suppliers
• Donations to the community
• Reducing packaging

Question 6

What are advantages of a Business trading ethically?

Answer 6

• Increased sales from their reputation of ethical trading, may mean higher sales revenue, may mean higher profits
• Possibly more loyal and motivated staff

Question 7

What are disadvantages of a Business trading unethically?

Answer 7

• May mean the business is unable to maximise profits for the shareholders

Question 8

What is a trade off?

Answer 8

A trade-off is a compromise between one thing and another

• There has to be a trade-off between making a profit and being ethical so everyone’s happy

Question 9

What are some environmental considerations of a business?

Answer 9

• Traffic congestion
• Recycling
• Waste disposal
• Noise pollution
• Air pollution

Question 10

What are benefits of a business trading with the environment in mind?

Answer 10

• Businesses can use their green credentials to market their products, it can be the unique selling point for the product
• More environmentally product might meet customer needs
• Investing in greener energy can result in a cost saving eventually

Question 11

What are disadvantages of a business trading with the environment in mind?

Answer 11

• May involve more expensive production methods, could mean the goods are more expensive for customers

Question 12

What is “ economic climate “?

Answer 12

The general condition of the economy, the way that the resources and the production and consumption of goods are managed

Question 13

What are interest rates?

Answer 13

The percentage of a loan that’s charged as the price for borrowing

Question 14

How does an increasing Interest Rate affect businesses?

Answer 14

• Cost of borrowing will rise
• Costs for a business may increase
• This could lead to a fall in profits

Question 15

How does an decreasing Interest Rate affect businesses?

Answer 15

• Cost of paying loans

- May lead to an increase in profits

Question 16

What is Disposable Income?

Answer 16

• The personal income that remains after direct taxes and government charges have been paid.

Question 17

What is Discretionary Income?

Answer 17

Amount of an individual’s income that is left after paying taxes and personal necessities

Question 18

How does unemployment affects business?

Answer 18

• Weakens consumer buying as people have less money
• Lower wages costs, a business can pick and choose the candidates as there are more people out of work looking for work, it can also lower the wage rates

Question 19

How does consumer income affect a business?

Answer 19

As consumer incomes rise, demand for better products increases

As consumer incomes falls , demand for better products decreases

Question 20

What is globalisation?

Answer 20

The process by which the world is becoming increasingly interconnected as a result of more international trade

Question 21

What is multinational?

Answer 21

A multinational is a business which trades in more than one country, often shortened to MNC

Question 22

How does globalisation benefit UK businesses through Wider Markets?

Answer 22

Trading on a global level (rather than just the UK) means access to more customers, and opportunities to trade in bigger markets:

Question 23

How does globalisation benefit UK businesses through Specialisation?

Answer 23

• Globalisation can mean that some economies start to specialise at what they are good at

• This makes the country very efficient at producing those goods, they can be better quality and more innovative than other countries, which gives them competitive advantage

Question 24

How does globalisation drawback UK businesses?

Answer 24

• Foreign Competition : competing in a global market can mean that UK businesses will have to compete against foreign imports
• Loss of UK staff : globalisation and migration means that UK staff can be poached by overseas companies

Question 25

What is Legislation?

Answer 25

Legislation is the collective term for laws

Question 26

What is the impact of legislation on business cost?

Answer 26

Meeting all of the consumer, employment and recruitment laws may mean additional costs.
Higher costs may have an impact on the profit of the business

Question 27

What is the impact of legislation on business training needs?

Answer 27

Businesses will need to make sure that all their employees are trained and that the training is up-to-date

• This will make sure that the business is legally compliant
• This way the owners will not face fines or prison

Question 28

What is the impact of legislation on business recruitment?

Answer 28

Discrimination is illegal in UK business, so businesses must be careful to recruit within the equality law

• They must offer equal pay and promotion opportunities for women and ethnic minorities

Question 29

What are the consequences of failure to follow legislation for the business?

Answer 29

Consequences can include; include fines and even imprisonment

Question 30

What is the Equality Act?

Answer 30

The Equality Act 2010 legally protects people from discrimination in the workplace and in wider society.

Question 31

What is the Consumer Rights Act

Answer 31

Products should be : As described, Fit for purpose, Satisfactory quality

Question 32

Consumers have legal rights if the item bought is…..

Answer 32

• broken or damaged (not of satisfactory quality)
• unusable (not fit for purpose)
• not what was advertised or doesn’t match the seller’s description (not as described)

Question 33

Consumers won’t have any legal rights is….

Answer 33

• Item was damaged by wear and tear, an accident or misuse
• Consumer knew about the fault before they bought the item
• Consumer has just changed their mind

Question 34

What is a Trade Descriptions Act?

Answer 34

Trade Descriptions Act carries criminal penalties making it an offence for a trader to apply a false trade description to any goods or services

Question 35

What is a market?

Answer 35

A market is a meeting of buyers and sellers who trade or exchange goods or services.

Question 36

What is a Dynamic market?

Answer 36

A market where supply and/or demand factors are constantly changing

Examples : Designer clothes, Laptops , Mobile Phones

Question 37

What is Competition?

Answer 37

The rivalry between businesses to gain sales from customers.

Competition, causes businesses to develop new products, services and technologies, which would give consumers more choice and better quality products

Question 38

What is a Competitive Market?

Answer 38

A competitive market is where a large number of sellers are selling to large number of customers.

Businesses cannot charge high prices because customers have lots of substitute choices and can shop somewhere else

Question 39

What is the impact of competition on business?

Answer 39

• Have lower sales as there are lots of alternatives
• Have less profits unless the business reduces costs and possibly quality
• Find it harder to get customers, they may need to heavily promote and advertise

Question 40

What is a Business Risk?

Answer 40

Business risk is the possibility a company will have lower than anticipated profits or experience a loss rather than making a profit

Question 41

What is Uncertainty?

Answer 41

Uncertainty is when businesses are unable to predict external shocks or future events