topic 1.5 Flashcards
What is a business stakeholder? Give examples.
A business stakeholder is a person or organisation that has an interest in a business. Ttakeholders have an interest in how the business operates and whether or not it is successful. These can include:
Owner
Managers
Employees
Suppliers
Pressure groups
The government
Customers/consumers
Shareholders
Name the three main internal stakeholders explaining their main interest(s
Owners: Main goal is profit
Employees: Main goal is job security and promotions
Managers: Main goal is extra manager promotions
Name six main external stakeholders explaining their main interest(s)
Suppliers: To receive payment from the business
Customers: For the product to be cheap and available
Shareholders: To receive dividends from their shares
Local community: No pollution from the business
The government: To receive taxes from the business
Pressure groups: For the business to be ethical
Why may there be conflict between suppliers and owners of a business?
They have differing interests
The owner wants high profits and so requires a low cost
The supplier wants more money and so wants to charge more
What are the four main ways businesses use technology?
E-commerce: Selling online
Digital communication: Communicating digitally I
guess?
Social media: Social accounts online
Payment systems: Systems such as paypal that guarantee security for the customer
How does technology affect the cost and sales of a business?
Sales:
Will increase as social media means more promotion,
Payment systems means customers trust the
business more,
Digital communication means better reputation,
E-commerce allows the business to reach more
potential customers
Costs:
May originally be higher during installation, however usage of technology in place of employees reduces this cost.
When it comes to legislation, what are the three principles of consumer law?
As described: The goods supplied must match any
description or samples shown to you at the time of purchase.
Fit for purpose: The goods should be fit for the purpose they are supplied for/specific purpose you made known to the retailer at time of purchase
Of satisfactory quality: Goods shouldn’t be faulty or damaged when you receive them, and should last for a reasonable amount of time
What are the pros and cons of e-commerce?
+ Reach more customers as you are online
+ Use traffic data for market research
- Costs to produce website
- Customers can easily compare prices meaning they may choose other businesses over you
When it comes to legislation, what are the three principles of employment law?
Recruitment: no discrimination in this process on age, race, gender, religion etc.
The national minimum wage: The minimum amount workers are required to be payed.
Health and safety: A right to work in places where risks to their health and safety are controlled properly and employers who are responsible.
What costs do a business face due to legislation?
Legislation requires businesses to:
- Training staff
- Protection equipment for staff e.g. hairnets or googles
- Cost of paying NMW
These cost higher amounts reducing their profit
What consequences can a business/individual face for not meeting regulation?
fines
imprisonment
disqualification
How does a change in unemployment affect a business?
An increase in unemployment would lead to less disposable money for the general public
This means businesses will have to provide more cheap products to meet the customer needs
There will be a wider-range of people to recruit
Luxury good retailers will suffer
How does a change in consumer income affect a business?
Lower consumer income will mean there are less purchases of luxury products (More needs rather than wants)
Businesses will have to adapt to provide products that meet lower costs and may reduce quality as a lower one is demanded
How does a change in inflation rate affect a business?
If inflation goes up, consumers will feel poorer and reduce their spending, reducing business revenue.
How does a change in exchange rates affect a business?
A weaker pound will mean that a businesses pay more for supplies from foreign countries (Higher exports lower imports)
A stronger pound means businesses will pay less for supplies from foreign countries (Higher imports lower exports)
The pound being stronger means it has more worth. For example a the pound is stronger when £1 = €2 than when £1 = €1.50
