impact of external influences Flashcards
PESTLE
political, economic, social, technological, legal, environmental
political influences
PESTLE
- can discourage fdi
- members joining/leaving EU
- changes in government legislation
- pressure groups
economic influences
PESTLE
- unemployment levels
- stable prices
- exchange rate
- interest rate
- inflation
social influences
PESTLE
- uk population is ageing
- more people going uni
- increased migration
- more people becoming health conscious
technological influences
PESTLE
- can shorten product life cycle as more replaceable
- replace labour with capital
- can improve communication with customers
legal influences
PESTLE
- level of regulation and taxes
- sugar tax
- ads of alcohol banned
environmental influences
PESTLE
- people are more inclined to buy green goods
- investment in new generation of power could be cheaper in long term
- trends towards recycling is increasing
structure of markets
monopolies and ogliopolies
monopoly
market dominated by a single business
ogliopoly
market dominated by a few large businesses
impact of changing competitive environments
new entrants- keep up with theyre doing eg going online, being price competitive, more innovative
new product - adapting own product or price
consolidation - risks of firms having monopoly power so may want to participate in their own merger or look to diversify products
Porters Five forces
threat of entry (create barriers to entry e.g brand loyalty)
threat of substitute (can be reduced through patents)
supplier power (reduced through vertical integration)
buyer power (competitive pricing)
competitive rivalry
