test Flashcards
What are internal factors
These are things inside of a business that affects the way it operates
What are the three internal factors
Finance
Human Resources
Technology
How does finance affect a business
Business cannot expand if they do not have the money therefore the objective of growth cannot be achieved
How do Human Resources affect a business
Employees affect how a business works. staff who are poorly trained or may not have the right skills to perform their job well. managers make decisions but with that comes high risk of something going wrong
How does technology affect a business
If there is a lack of technology businesses may be left behind. If it is out of date this can prevent the organisation from fulfilling their objectives
Impact of poor customer Service
Decreased sales
Poor reputation
Poorly motivated staff
Problems with recruitment
Reasons for poor customer service
The business does not have a clear complaints procedure or complaints are on satisfactorily dealt with
The company does not provide all staff with suitable and sufficient customer service training
The business is not listening to customer feedback about its products and services
How to improve customer satisfaction
Providing the latest quality product Having a customer care strategy Having a customer complaint procedure Making sure employees are trained Having an after sales service
Why is customer satisfaction important in a business
If customers are happy to be more to the business which means they return in the future and make my purchases
It gives the business a good reputation
It can help to increase the organisation share of the market
Allows organisations to remain ahead of competition
What are external factors
External factors which affect the way in which it often referred to as PESTEC factors
What does pasta stand for
Political Economical Social Technology Environmental Competitive
What is the political factor
Government can’t affect organisational activities through
taxation
government agencies
grants
What are economic factors
Economic factors refer to anything at encourages people to spend or not and money coming economic influences are levels of employment
recession
interest-rate
exchange rate
What is the social factors
Social factors are those that are concerned about people’s changing beliefs, values, and opinions. Society changer very rapidly and organisation must work hard to keep up with this. Examples of social factors influence a business and how it operates are
Change in taste, in food and fashion
Changing demographics
Increased consumer awareness
What is the technological factor
Technology changes very rapidly and businesses need to respond quickly to these changes if they are to remain competitive in how they operate.
This may mean introducing new machinery or equipment improve the function.
Technology is impacting on how and when this is done e.g use of online shopping, contactless payments
What is environmental factor
Environmental factors focus on the world around us and how these can affect how the business operates examples of environmental factors that may affect the business are
the weather
Push to be green
What is the competitive factor
How are business operates will be affected greatly by the actions of competitors and business must always be able to respond quickly to changes made by competitors to remain as a competitive edge examples are
Lower prices
new products
advertising campaigns
Interest of shareholders
Profits and dividends
Growth of the company
Influence of shareholders
Making decisions on how to run the business
Deciding who to employ
Interest of owners
They will want to business achieving its objectives because their livelihoods depend on their business being successful.
Influence of owners
deciding the overall objectives of the firm. They will also make all the major decisions about the running of the business
Interest of managers
Want the organisation to be successful
They want responsibility and status
Influence of managers
Making decisions regarding hiring staff
Decisions on product portfolio which may or may not be successful
Interest of employees
Will also want job security, better pay and working conditions and good promotion prospects
Inference of employees
Can take or threaten industrial action as striking or working rule, to try and get the business to do as they want. The success of the business depends on their working efficiently
Interest of suppliers
Will want more orders from the business, and to be paid on time.
Inference of suppliers
Changing the prices of goods offered
Offering discounts when you buy their products
Interested Banks
Will want to lend money to businesses but also require assurance that they will be repaid.
Influence of banks
Can charge higher rates of interest on loans to high risk businesses. They may withdraw lending facilities if loan repayments are not made on time.
Interest of customers
Will want low prices, high quality and good after-sales service
Inference of customers
Can stop buying the business’s products itf they don’t like them, or if they feel the business is not being socially responsible.
Interest of government
Will want the business to keep within the law, pay their taxes, and provide employment
Influence of Government
Can introduce laws which affect the way the business is run, and set up bodies to regulate the business (e.g. Offwat)
Interest of community
Will want the business to treat the environment properly, to treat workers fairly, and not to exploit customers
Entrance of community
Can put pressure on firms through pressure groups (e.g. Greenpeace), or by highlighting what they think is wrong (e.g. writing to Watchdog)
