external factor Flashcards
types of external factors:
political, economic, social, technology, environment, competition
what is a political factor and give the impact:
legislation and government policy. eg government can increase the minimum wage, which has a negative impact as it will result in a lower profit for the year.
what is a economic factor and give the impact:
recession (boom and burst), in boom periods customers demand more so profits increase eg an increase in interest rates makes any loans more expensive.
what is a social factor and give the impact:
is changes in customers tastes which has a negative impact as extensive market research must be carried out which costs money and time
what is a technology factor and give the impact?
it is how developments in technology affects the firm, having a wider range of technology can mean you have a high standard of social media being used which enable the firm to keep in touch with customers and raise their profits.
what is a environmental factor and give the impact
includes climate change and weather. harsh weather has a negative impact on the firm as it can slow down transport networks across the UK leading to customer needs not being met.
what is a competition factor and give the impact:
what competitors are currently doing, if there is a lot of competition it can mean you need to reduce prices to attract customers or have better after-sales service thqn competitors
