Influences On businesses Flashcards
What is e-commerce?
When a business sells their products and services to their customers over the internet.
What are the advantages of e-commerce?
-bigger market
What is a disadvantage of e-commerce?
More competition
What is an ethical business?
Businesses that are ethical, operate in ways that are bothe fair and honest
What are some ethical considerations?
- product development
- employee welfare
- buy fairtrade products
- labour in developing
What are the benefits of being ethical?
- consumers are increasingly making buying decision based on whether a company is ethical or not.
- if employees are treated in a fair and honest way, they are more likely to want to maximise their efforts for the business
How can companies impact the environment?
Careless waste disposal Traffic congestion Not using public transport. Air and noise pollution Poor choice of raw materials
What is sustainability ?
Means acting so that the Earth and all of its resources are fit for future generations.
What is a boom?
When the economy is growing signifacantly and the businesses in it are generally doing well.
What is a recessions.
Economic output falls and because of this, businesses usually experience a decrease in demand for their products.
What is the affect of unemployement?
Bad for businesses because unemployed people have less disposable income to spend.
Why do recessions lead to a fall in consumer spending?
Unemployemnt - less money
Reduced consumer confidence - if people are woried about the future then they are more likely to save.
Decreased income
What is an interest rate?
The percentage of a loan that is charged as the price of borrowing. The percentage taht is rewarded for saving
What is globalisation?
The process where people, businesses, governemnts and markets around the world become more connected.
What are the benefits of globalisation?
Single global market - access to more consumers
Reduced costs - importing
What are the drawbacks of globalisation?
Increased competition
Higher UK wages means that UK companies are less able to compete on price
Ethical issues
Fluctuating global economy
What are the ethical issues with globalisation?
Business outsource labour to many developing countries in sweatshops.
What is an exchange rate?
The value of one currency in terms of the other.
What does strong pound mean?
Imports are cheaper
Exports are more expensive
What does a weak pound mean?
Imports more expensive
Exports cheaper
Employment law
- The Equality Act (2010)
- National minimum wage
- Health and Safety at Work Act (1974)
Consumer laws protects consumers by:
- not fit for purpose - must be able to do what it was sold to do
- trade description
- satisfactory quality
What is the impact of Legislation on Businesses?
- new practices - may have to introduce new practices or change their operations in response to new legislation
- increased costs eg wage rise
What businesses compete on?
Price
Location
Product range
Customer service
Situations with low comptetion
- monoplies
- high invetsment
- when businesses benefit from eeconomies of scale
- patent
How can businesses reduce risks
- competitor and economic research
- technological changes
- market research
- business plans
