external influences Flashcards
factors that take place outside of the business
How do interest rates affect businesses?
Higher interest rates can increase borrowing costs, reducing investment and consumer spending; lower interest rates can do the opposite.
How do exchange rates affect businesses?
They impact the cost of importing and exporting goods, affecting profit margins and competitiveness.
What is inflation and how does it affect businesses?
A general increase in prices and fall in the purchasing value of money, leading to higher costs and pricing adjustments for businesses.
Name two types of legislation that impact businesses.
Employment law, consumer protection law, health and safety law.
How can environmental factors affect businesses?
Regulatory compliance, sustainability practices, and consumer preferences for eco-friendly products.
How does technological change impact businesses?
It can lead to innovation, improved efficiency, new product development, and changes in competitive dynamics.
What is meant by ethical business practices?
Conducting business in a way that is morally right, including fair trade, corporate social responsibility, and sustainable practices.
What is globalization in the context of business?
The process by which businesses operate on an international scale, creating interdependence among economies worldwide.
How does competition affect businesses?
It drives innovation, improves quality, and influences pricing strategies.
How do social trends impact businesses?
Changes in consumer behavior, demographics, and cultural trends can influence demand for products and services.
