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Business A level > LO6- The Factors Which Comprise The External Business Envirnment > Flashcards

LO6- The Factors Which Comprise The External Business Envirnment Flashcards

1
Q

What are social factors?

A

Things that affect our lifestyle like demographic issues, attitude to work, disposable income, social trends, cultural beliefs.

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2
Q

What are external influences?

A

Factors outside of a business that are beyond the owner’s control.

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3
Q

What does demographic issues mean? (Social factor)

A

This refers to the study of population based on age, race,gender, economic status, level of education, income level and employment and etc.

Examples of this are how business will use the fact that over 50 year olds tend to eat out more which can change their approach.

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4
Q

How does attitude to work affect the business? (Social factor)

A

Attitude to work affects the attendance in a business and from surveys from www.gov.uk it shows there is a positive attitude to work in the uk.

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5
Q

What is disposable income? (Social factor)

A

It is the amount of money people have available to spend on good and services. Knowing how much customers have to spend helps the business decide
What type of products to stock or service to provide?
Which pricing strategy to use?
Where to locate the shop?

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6
Q

What is social trends?(social factor)

A

Social trends relate to the value system, beliefs and practices of a population as a whole. They show what our society is like and how it is changing in the long term. Businesses should identify social trends for long term survival.

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7
Q

What is cultural beliefs? (Social factor)

A

This is to understand different cultures as a business. To succeed, businesses must have a thorough understanding of cultural beliefs of their target market. Dunkin Donuts had to apologise and redesign its charcoal donuts as it was deemed to be racist.

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8
Q

What is technological factors?

A

These include machines used to automate the production process in a factory, hardware and software used for communication and more,

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9
Q

What is automation? (Technological factor)

A

This can be easily seen in factories where machines are used for repetitive tasks. The advantages are that it is faster, more accurate, can run for 24 hours a day and more. The disadvantages is that workers aren’t getting paid and less jobs are available.

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10
Q

What is communication? (Technological factor)

A

Communication is vital when running a business.

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11
Q

What is purchasing/sales? (Technological factor)

A

Many businesses have an inventory control system that triggers a need to re stock. This system ensures a continuous supply of stocks to meet demands. Business need to be aware of how technology has changed the game.

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12
Q

What is mobile? (Technological factor)

A

Mobile services are increasing with contactless payment system. Business now have to take it into consideration and adapt to it.

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13
Q

What is economic factor?

A

Changes in the economy that affect the price and cost of goods and services - the level of interest rates, exchange rates, unemployment rate and taxation.

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14
Q

What is interest rate? (Economic factor)

A

This is the cost of borrowing money from a financial institution such as a bank. The rate is set by the Bank of England based on the level of economic activities in the UK.

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15
Q

What is exchange rates? (Economic factor)

A

This is the value of one currency (pound for example) as compared to another (dollar). The impact of changes in exchange rates depends on the type of business activity undertaken.

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16
Q

What is inflation? (Economic factor)

A

This is the rate of increase in the price of goods and services. The rate of inflation is calculated by looking at how the price of hundreds of things have changed over time.

17
Q

What is unemployment? (Economic factor)

A

This is the situation of people who do not have a job but are able to work. When employment is high people generally have less money to spend but when it is low over and if this is a long term thing, business will have to fire employees due to low demands.

18
Q

What is taxation? (Economic factor)

A

This is the amount of money you pay the government on earnings. An increase taxation will mean people will have less money to spend.

19
Q

What is environmental factors?

A

Green or sustainability issues that exist in a business’s surrounding area.

20
Q

What is energy management? (Environmental factors)

A

This basically means saving energy in workplaces but not only to save energy for legal requirements and the planet but also to lower costs.

21
Q

What is carbon emissions? (Environmental factor)

A

This refers to the amount of carbon dioxide that is released into the atmosphere as a result of business activities. To reduce it you have to reduce the use of fossil fuels.

22
Q

What is waste reduction? (Environment factor)

A

You can reduce waste through quality control and by reducing waste in offices and packaging materials.

23
Q

What is recycling? (Environment factor)

A

The process of converting waste into useful materials. This will reduce cost, improve reputation and decrease government tax which will increase profits.

24
Q

What is pollution? (Environment factor)

A

This can take form of air, land, water and noise pollution depending on the nature of the business activity.

25
Q

What is political factor?

A

Political factors are government policies and practices that affect a business.

26
Q

What is political instability? (Political factor)

A

This refers to the chances of the collapse of a government. Unstable countries that have a high chance of riots and strikes can affect business revenue.

27
Q

What is change in government? (Political factor)

A

This is when there is a change in government as there will be new policies and practices which may not favour certain businesses.

28
Q

What is legal factor?

A

Laws that affect how a business is run.

29
Q

What is business framework? (Legal factor)

A

This shows how a business is structured and organised.

30
Q

What are the features of the companies act? (Legal factor)

A

It makes business state their name, place of registration, registered office and registered emails.

31
Q

What are the features of the partnership act? (Legal factor)

A

The minimum number of partners is two and there is no maximum.
Each partner is allowed to participate in management and get equal share of profit.
The partnership dissolves if one dies and you have to start all over again.

32
Q

What is consumer protection act? (Legal factor)

A

Involves ensuring the rights of consumers are upheld. Laws aim to make sure that good supplied by businesses are safe to use, are reasonable quality and etc. They make sure businesses aren’t misleading the customers and giving false info about the price.

33
Q

What is employee protection? (Legal factor)

A

This is a law to help protect employees. This ensures employees are treated equally, the work environment is safe and etc.

34
Q

What are some laws for employees protection? (Legal factor)

A

Equality Act
Health and Safety at Work Act
Working Time Directive
National Minimum Wage Act

35
Q

What is data protection act? (Legal factor)

A 
This is designed to protect personal data kept by organisations for different purposes. It means data should be:
Used fairly and lawfully
Used for limited and stated purposes
Accurate 
Kept no longer than necessary 
Kept safe and secure
36
Q

What is copyright, design and patent act? (Legal factor)

A

This deals with the legal rights granted to the designer and creator of a piece of original work. Only person owning the copyright will be able to use and distribute in anyway.

37
Q

What is ethical factors?

A

Moral issues, doing what is right. This is like not using child labour, pay above minimum wage or even better, a living wage, and having fair working practices like flexible working hours.

38
Q

What are the consequences for a business and its stakeholders of not operating ethically?

A

Loss of customers and sales
Damage reputation
Damage to employee motivation and productivity, especially if it directly affects the working environment or arrangement.

Business A level (9 decks)

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