miss duddigan-external influences

Question 1

what does pestle analysis look into within a business

Answer 1

external influences on a business

Question 2

political

Answer 2

governments policy on taxation
e.g may reduce tax for smaller business to help them grow
may give them incentives to start up business
may put tax on unhealthy products e.g cigarettes to make healthier nation
disavenatge-reduced profits for those selling these products

Question 3

economic

Answer 3

changes in consumer spending interest and exchange rates
strong economy-high empolyment rates meaning people have higher incomes meaning can spend more on unessential goods
weak economoy-unemployment levels high, less income so more likely to save rather then spend
exchnage rates influence overall final price
e.g leaving EU makes raw meaterials more expensive from abroad

Question 4

social

Answer 4

social trends affect demand
e.g people wanting to be more healthy and being less sugary, decrease demand for sugary drinks making those businesses who sell them to reconsider their design mix

Question 5

technological

Answer 5

can influence decision making
new technology may be too expensive leaving them disadvantage to the newest technology
may mean products that werent avaliable, now will be with latest technology
business then may therfore have to recosider their design mix

Question 6

legal

Answer 6

chnages in law can have impact on business activities
global concern over enviorment effects of pollution
introduced legal deadlines for the banning of petral
reduced demand and puts petrol businesses in bad position
instead focus on hybrid cars

Question 7

enviormnetal

Answer 7

people becoming more aware of protecting enviroment
to not lose customers,businesses make changes to reduce enviormnetal impact

Question 8

SWOT analysis

Answer 8

can be applied to any business
Strengths
weaknesses
opportunities
threats

Question 9

what type of factors are strength and weaknesses

Answer 9

internal factors
factors that the business can influence

Question 10

opportunities and costs are what type of factors

Answer 10

factors that are beyond the control of the business
these factors link to PESTLE

Question 11

advantages of swot analysis

Answer 11

can help business make strategic and tactical decisions
mangers will think about how to manage threats, amke weaknesses into strength and focus on opportunities to build business
can easily be redone
competititive advantage to rivals

Question 12

what are all the stages of porters five forces model

Answer 12

barriers to entry-how easy it is for new firms to enter market
buyer power-buyer wants lowest possible price
supplier power-suppliers want as high price as possible
threats of subsititutes-how likely customers will buy alternatives
rivairy-how much competition there is

Question 13

barrier to entry

Answer 13

how easy is for new firm to come into market
-high start up costs may stop new firm
strategies to raise barriers to entry
-threatning new entrants with price war.large businesses more liekly to be acheiveing economies of scale so can reduce their price (predatory pricing)
however, against EU competieion law

Question 14

buyer power

Answer 14

buyers want as low price as possible
buyer can be more demanding over price or quality

Question 15

supplier power

Answer 15

suppliers want to get as high price as possible
strategies to influence supplier power
businesses can tie buyers with long term contracts to male it harder for them to switch suppliers
businesses could devlopm new product. will be only ones selling the product so will be able to charge more premuim prices