influences on business

Question 1

define e commerce

Answer 1

E-commerce, refers to the buying and selling of products and services using devices connected to an electronic network, such as the internet.

Question 2

pros and cons of e commerce

Answer 2

pros
- customers across the world, reach larger target audience
- sell 24 hours
- receive payments immediately
- less overhead costs
cons
- more competitors from across the globe
- employees may need new skills, eg website maintenance
- distribution
- need to maintain/update technologies eg security software,
- can be expensive

Question 3

list uses of technology in businesses

Answer 3

• social media
• electronic payments
• email
• apps
• web conferences

Question 4

what is the impact of digital communications on sales

Answer 4

the easier it is to contact a business, the more likely a customer is to trust that business and make a purchase. Using digital communication effectively can therefore help a business to increase its sales.

Question 5

what is the impact of e commerce of sales
positives and negatives

Answer 5

positives
- businesses can attract customers across the world
- businesses can sell 24/7
- well-designed website can help a business look professional, attract customers
- customers can see which items are in stock
negatives
- more potential competition
- logistical issues, delivering orders to customers
- providing customer service to many customers
- customers can compare prices with those of the business’ competitors

Question 6

what is the imapct of social media on sales

Answer 6

• can be used to run sales and marketing campaigns
• regular direct communication builds customer relationships, increase sales.
• Poor responses to social media posts can quickly be shared with other customers, less sales.
• Good responses increase popularity and sales.

Question 7

what is the impact of payment methods on sales

Answer 7

easy and convenient for customers to pay for products and services means that they are more likely to make a purchase.

Question 8

what is the impact of digital communications of costs of business

Answer 8

• incur costs when using digital communications, initial costs will enable longer-term savings to be made
• more employees can work remotely, this can help to reduce costs for businesses,
• communications can be sent more cost-effectively
• more savings may be made where video conferencing is used, removes the costs of travelling to face-to-face meetings.

Question 9

what is the impact of e commerce on costs
positive and negative

Answer 9

• less costs - selling online is cheaper than opening shops
• requires fewer sales staff
• requires fewer and sometimes smaller premises
  can automate tasks such as administration and record keeping
• costs involved in hosting a website
• fees that must be paid for handling online payments
• warehousing and distribution costs for products

Question 10

what is the impact of social media on costs

Answer 10

• quick, cost-effective way for businesses to communicate and interact with customers
• small businesses reach a wide audience for a minimal cost

Question 11

what is the impact of payment methods on costs

Answer 11

• more secure and cost-effective way
• card payments charge a small percentage fee for every transaction.

Question 12

how can businesses treat workers, suppliers and customers ethically

Answer 12

workers
- paying a fair wage
- providing good working conditions
- allowing flexible working
suppliers
- paying fair prices
- having reasonable expectations
- paying bills on time
customers
- putting customers at the heart of everything
- offering excellent customer service, quality products or services
- business thinks about the needs of the customer
- giving clear and accurate product and service information to allow customers to make informed decisions.

Question 13

pros and cons of being ethical/environmentally friendly

Answer 13

pros
- offered grants for being environmentally friendly
- lower costs
- increased sales
cons
- increased costs
- time consuming

Question 14

how does the economic climate affect businesses

Answer 14

• unemployment
• changing levels of consumer income
• changes in interest rates
• inflation
• government taxation
• changes in exchange rates

Question 15

how does unemployment impact businesses

Answer 15

• higher unemployment = less income, less sales
• demand for some products and services will increase when unemployment is higher, cheaper alternatives.
• businesses looking to recruit people may also be able to offer lower pay and still attract new staff

Question 16

how does consumer income impact businesses
(increase and decrease)

Answer 16

increases
- more disposable income means able to buy luxury items
- businesses will expect to sell more of these luxury goods and services, so they will produce more, perhaps employing more staff.
decrease
- less money to spend means fewer goods and services are bought
- buy cheaper alternatives
- businesses will expect to sell less when this happens, so they will plan to reduce the amount they produce, possibly making staff redundant.

Question 17

how does increase in interest rate impact savers and borrowers

Answer 17

savers
Will receive more interest on their savings. spend less so that they can save more.
borrowers
Will pay more back for money that is borrowed. discourage them from borrowing

Question 18

how does increase in interest rate impact savers and borrowers

Answer 18

savers
Will receive less interest on their savings. discourage them from saving, spend money instead.
borrowers
Will have to pay less back for money that is borrowed. This will encourage them to borrow more money to spend.

Question 19

how are businesses affected by changing interest rates

Answer 19

• businesses that sell expensive luxury goods, such as new cars, are the most likely to be affected by changes in interest rates. When consumers have less to spend, they are more likely to need to finance these types of goods through borrowing. As a result, they may sacrifice these purchases completely or replace them with cheaper alternatives, eg a second-hand car.