Topic 1.5 Understanding external influences on business Flashcards
what are stakeholders?
individuals or groups who can affect or are affected by the actions of a business
what are all the examples of stakeholders?
-owners (shareholders)
-managers and other employees
-government and local authority
-customers
-local communities
-pressure groups
-suppliers
-banks
define e-commerce
Sale or purchase of goods and services using the Internet and online transactions.
what are the advantages and disadvantages of e-commerce?
ADVANTAGES:
-ability to trade 24/7
-can reach customers on a global level, anytime of day or night (wider customer base)
-receive payments immediately in most/all cases
-cheaper than running a physical cost because reduced overhead costs
DISADVANTAGES:
-more competitors globally. therefore harder for the business to get noticed
-employees may need training on new skills or may need to hire IT specialists
-procedures required for how products will be delivered + processing returns (time consuming)
-can be expensive to update and maintain technology e.g computers
-most e-commerce giants have a commission fee
How businesses use social media
SALES AND MARKETING-Social media is a relatively cheap way to advertise in a visual or written form. It can be used by both large and small businesses to attract a target audience that is interested in the products and services being promoted or sold. Business can encourage people to follow their activities and promotions. In this way, businesses can gain loyalty.
INTERACTING WITH CUSTOMERS-Businesses can use social media to see what customers are saying about their products and services. Additionally, customers can ask questions, or express their views, about the products and services of a business. These customer interactions need to be handled carefully, as inaccurate or inappropriate responses can be shared quickly and easily, creating bad
publicity for the business.
COMMUNICATING WITH STAKEHOLDERS-Social media platforms, such as LinkedIn, can be used to make contact with other businesses and network with relevant people and organisations. Many businesses now use social media as part of their recruitment process, not just for advertising vacancies but also to gain an insight into any applicants by looking at their social media activity. Closed (private) social media tools are sometimes used by some businesses for informal or internal communication
with staff
what are advantages and disadvantages of using social media to a business?
ADVANTAGES:
-accessibile to majority of the world, as it is so prevalent in today’s world
-can be used through ambassadors or other famous people who have supporters that become customers of a business
-they can use it to communicate with customers. e.g comments, questions etc. this can build customer loyalty
-Cheap,quick,effective
DISADVANTAGES:
-Time Consuming- Effective social media management requires consistent effort and time investment. Businesses must create and curate content, respond to messages and comments, and monitor their online presence regularly, which can be resource-intensive
-Could create bad publicity which could lead to falls in sales due to bad brand image
Define social media
Any form of electronic communication that enables users to share ideas, content, information and messages
Define digital communication
Digital communication involves sending and receiving such information electronically
Examples of digital communication
-email
-phones
-websites
-social media
-QR codes
-conferences
what the advantages and disadvantages of digital communication?
ADVANTAGES:
-Offers a cost-effective alternative to traditional communication channels e.g. The use of WhatsApp in customer service means customer service employees can work from anywhere and the business does not necessarily need to hire expensive premises
-Offers businesses new channels for reaching customers and closing deals e.g the use of email marketing
DISADVANTAGES:
-Information can be leaked (meaning the business is vulnerable to hackers)
-Exclusionary Effects: In regions or communities with limited access to banking services or digital technologies, reliance on electronic payment systems may exclude certain individuals or businesses from participating in the economy.
how can businesses use digitial communication with customers?
-promotional emails/text messages
-confirmation emails
-notifications (mobile/desktop)
What do businesses use digital communication for?
To communicate with customers, suppliers, government agencies etc
What types of technology influence business activity?
-Social media
-E-commerce
-Digital communications
-Payment systems
Payment system
A vital way of transferring funds from customers to businesses
