External and internal factors Flashcards
Explain the advantages of political factors
The government can introduce new health and safety law. This means a safer work place with fewer accidents
The government can decrease taxation levels. This means customers will have more disposable income so sales will increase
Explain the disadvantages of political factors
The government can reduce spending in education. This means reduced sales for suppliers of educational products
The government may increase the minimum wage. This means you may have to make staff redundant as you cant afford to pay extra wages
Explain the advantages of economical factors
There is a decrease in interest rates. This means its less expensive to borrow money so business is more likely to expand
There is a high level of unemployment. This means a larger choice of people to employ so you can employ the very best of staff
Explain the disadvantages of economical factors
There si a decrease in exchange rates. This means less tourists in the country as its too expensive.
There is a low level of unemployment. This means its difficult to recruit those with high skills as they already have a job
Explain the advantages of social factors
There are changes in trends and fashion. This means you can now produce products that are in high demand and make high profits
There are chnages in beliefs and values suhc as businesses become more family friendly. This means an increase in the number of employees who apply for a job.
Explain the disadvantages of social factors
There are changes in trends and fashion. This means a business will have to conduct market research which is costly
There changes in the demographics of a country. As a result it is expensive to set up a whole new branch in an area
Explain the advantages of technological external factors
New technology becomes avilable. this means production levels may increase as they cna produce faster than humans
There is a growth of s-commerce. this means an increase in the number of customers who can access
Explain the disadvantages of technological factors
New technology becomes available. This means technology is expensive to purchase and maintain
There is growth of s-commerce. This means the business will have to train staff how to use the software which is timely
Explain the advanatges of environmental factors
There is increased pressure to recycle and become environmentally friendly. This means a socially responsible image will be given to customers so sales will increase
There is a natural disaster such as a storm. This means it may increase the demands and therefore sales of some products
Explain the disadvanatges of environmental factors
Increased pressure to recycle and be socially repsonsible. As a result its expensive to purchase recycling facilities
There is a natural disaster such as a storm. This means you may deliver products to customers late
Explain the advantages of compeititon factor
Competitors may reduce their prices. This means your business has an increase in sales as competitors products will be viewed as low quality
Competitors may introduce a new product. This means it could give you an idea for a new product also
Explain the disadvantages of compeititon external factor
New competitors enter the market. This means you may lose customers to the new competitors.
Competitors may reduce their prices. This means you may also have to reduce your prices
