Internal & Extrenal Factors Flashcards
Lots 3 internal factors that can affect a business
FEMIT
Finance
Employee
Management
Describe the impact of finance on a business
May force the business to look at new more evonimal ways to structure their business
- cost cutting measures
- de layering
- reduction in product development
Describe the impact of employees on a business
If staff do not have expertise or the training and skills then they will have a negative impact on businesses profits and customer satisfaction
Also be demotivated, absenteeism, turnover
Describe the impact of management on a business
Good managers make good decisions and are able to lead and motivate staff to achieve organisational objectives
Poor managers may make decisions that have devastating effects in the business l
List 4 external factors that can influence a business
Political Economic Social trends Technology Environmental Competition
Describe the impact of politics on a business
Influences the laws and policies a business must follow.
Impact:
Businesses will need to implement government policies.
E.g minimum wage
Describe the impact of economics on a business
Strong:
Business will be able to sell more products
Weak:
Business will find it difficult to sell more
What are the main economic impacts that affect a business m
Business cycle (booms and recessions)
Interest rates
Currency exchange
Describe the impact of social trends on a business
Business will need to invest in good information and research to ensure it is aware of to changing trends.
May need to invest in product development to keep up to date with trends
Describe the impact of competition on a business
If rivals have better products, prices and promotions they can steal potential customers.
To respond to this business needs to be able to compete with another business for market share.
Investments in, advertising, product development etc
