Internal & external factors Flashcards
Describe internal factors
Influences within the control of the organisation which will affect how it operates.
Identify all internal factors
Availability of finance
Human resources
Current technology.
Explain the influence that availability of finance has on a business
If a business has a lot of finance available, then this means it will be able to hire the most qualified employees.
Explain the influence that human resources may have on a business
If employees are highly skilled then this means they may be able to produce a higher quality product.
Explain the influence that current technology may have on a business
If an organisation has up to date technology/ICT , it will be able to produce products to the highest specification.
Describe external factors
Influences outwith the control of the organisation which will affect how it operates.
Identify all external factors
(PESTEC)
Political
Economic
Social
Technological
Environmental
Competitive.
Explain the influence that political factors may have on a business
If the government increases the National Minimum wage, this will lead to the business’ wage bill increasing.
Explain the influence that economic factors may have on a business
If interest rates increase, it will become more expensive for a business to borrow money from the bank.
Explain the influence that social factors may have on a business
Changes in customer taste over time could lead to a increased/decreased demand for your product.
Explain the influence that technological factors may have on a business
Increased use of E-commerce by a business’ competitors may lead an organisation to launch its own website with selling capability.
Explain the influence that environmental factors may have on a business
Pressure from government to meet pollution targets could lead businesses to invest in greener technology in production.
Explain the influence that competitive factors may have on a business
If a competitor opens up in new locations, it may lead a business to have to offer special deals/promotions to prevent customers from going to competitors.
