BUAW 3 Flashcards
PESTLE Analysis stand for
P-Pestle
E-Economic
S-Social
T-Technological
L-Legal
E-Environmental
Political Factors (3)
Taxation
Government Policy
Importing & Exporting
Economical Factors (3)
Interest Rates
Exchange Rates
Disposable Income
Business Cycles
Inflation
What is the 4 stages of the business cycle
Boom-economy growing , low employment, consumer demand is high. Higher taxes
Downturn- inflation rising, downturn of boom, interest rates.
Recession- slow economy, high unemployment and demand decreases.
Recovery- after recession, interest rates low to stimulate growth, employment increase and therefore disposable income increase.
What is demand-pull?
Demand-pull is when the demand for products increase and business are unable to meet this. So prices increase.
What are the causes of inflation?
1) demand-pull
2) cost-push
What is Cost-Push?
When the supply of goods decreases because of the increase in production costs. Therefore may push the price up.
What are the Social factors?
-income level
-religion. culture, language
-education
- age
- occupation / unemployment
-trends
-demographic
What are the Technological factors?
-changes in technology
-data security/protection
What are the Legal Factors? provide 3 laws?
Laws/Regulation in place
1)consumer protection
2) national minimum wage
3) health & safety regulations
What are the main two environmental laws?
1) environmental change + its impacts
2) Sustainably
What is meant by the micro-economic environment?
the factors that affect how prices are set between buyers and sellers for good and services. Key Supply and Demand
Normal Goods are…
The demand for these goods depend on the rate of income.
Inferior Goods…
demand decreases as income rises
Necessity goods….
is a good bought regardless whether income changes
Substitute goods…
multiple versions of a good that carry out the same purpose.
What are complements?
Complements are goods that must be used together
in the supply/demand curve, when there is a decrease what way does the curve move?
Left
What is a barrier to entry?
Factors that prevent or deter a business to enter a new market
What are the barriers to entry?
-legal
-competitors existing
-set up costs
-brand loyalty
-expertise
-location i.e supply of raw materials
