External factors Flashcards
What are external factors
Factors outside a business’s control
What are examples of of external factors
Supplier problems Market crash Weather Lack of lorry drivers Cost of diesel Brexit Trends Cost of shipping
What does pestec stand for
P olitical- government policies
E conomic- changes in the economy
S ocial- how people act and think
Technological- inventions and innovations
E nviromental- impact of weather, climate
C ompetitive- what are the rivals doing?
What are political factors
UK and EU law
Political decisions by local and national government
Taxation rates
Terrorism
What are economic factors
Inflation Exchange rates Interest rates Recession Boom period Unemployment Money people have to spend
What is economic impact
Economy not doing well- less people spending
So business sells less product
Business makes people unemployed
Though business can keep wages down
What are social factors
Demographic changes- the rise and fall in size and distribution of the population
Socio cultural changes- population distribution, age or family size, increased number of women working
The population is ageing
Obesity more prevalent
Health conciousness
Drinking and smoking
What is the social impact
What is trendy
What is in fashion
What sort of people make up the population
Examples: Trendy grandparents, gym monkeys
What are technological factors
New technology used for:
Communication- email and internet
Marketing and sales- e-commerce and internet
Production- CAD/CAM
What effect does technology have
Your product Your customers Customer service Market research and customer feedback Your operations
What are environmental factors
Storms
Floods
Pollution
Noise
What are the impacts of environmental factors
Transport costs increase
Traffic jams slow down delivery times
Damage to stock
Customers short of money due to house floods or damage
What are competitive factors
Domestic and foreign competition
Actions of competitors may force an organisation to change the way it operates
