Impact on external influences

Question 1

PESTLE

Answer 1

Political
Economic
Social
Technological
Legal
Environmental

Question 2

External influences

Answer 2

Factors outside of a business can affect its operations by influencing its activities, choices, determine its opportunities and risks

Question 3

Political factors

Answer 3

1. Government policy
2. Tax policy
3. Trade restrictions
4. Environmental laws

Question 4

Economic factors

Answer 4

Interest rates
Exchange rates
Inflation
Disposable income of consumers
Employment levels

Question 5

Social factors

Answer 5

Population growth
Age distribution
Change in trends and distribution
Ethical concerns
Environmental concerns

Question 6

Technological factors

Answer 6

New ways of producing/services
New ways of distributing goods
New ways of communicating with target markets
Developments in computers and the internet
Machines replacing people

Question 7

Legal factors

Answer 7

Health and safety
Equal opportunities
Advertising standards
Consumer rights and laws
Tax laws and VAT rules

Question 8

Environmental factors

Answer 8

Fair trade
Slavery acts

Question 9

Porters 5 forces

Answer 9

Threats of new entrants
Bargaining power of suppliers
Bargaining power of customers
Threat of substitute products
Degree of competitive rivalry

Question 10

Barriers of entry

Answer 10

Investment costs
EOS available for existing firms
Product differentiation
Access to suppliers

Question 11

Bargaining power of suppliers

Answer 11

Having power causes suppliers to;
-exercise that power
-sell products at a higher price
-squeeze industry profits