Unit 1 - C&D Flashcards
What is PESTLE analysis?
A business tool that looks at how successful or not the business will be based on the external marker and factors
Why is PESTLE analysis used?
To review the external environment of a business
What doe PESTLE stand for?
P - political
E - economic
S - social
T - technological
L - legal
E - environmental
What does political mean?
Government support, grants or promotion, trading communities
What does economic mean?
Fiscal policy, tax, monetary policy, supply side policy, exchange rates
What does social mean?
Attitudes to savings, spending and debt, social responsibility requirements, change, tastes and preferences
What does technological mean?
Technological change, automation, improved communication, robots, social media
What does legal mean?
Laws and legislation must be followed or will be fined/punished
What does environmental mean?
Ethical, carbon emissions, waste, recycling, can benefit the business
What is meant by external environment?
How a business is doing compared to others, looking at the bigger picture
What is a trading community?
Related to retail, health, publishing, tourism, catering. Provides networking opportunities, advice, news and opportunities to buy or sell equipment, services, training
What is government support?
Monetary grants or promotions, encourage the increase or introduction of new businesses/markets
What is a trading bloc?
Gives creditability, seen as exclusive, pay to be in it
e.g. EU
What is a fiscal policy?
Government controlled policy, dictates levels of taxation based on the cost of the borrowing, how the government generates its income and decides its budget, changes can’t be ignored
What is the supply-side policy?
Aim to improve productivity and produce economic growth, controlled by the government, Bank of England and MPC
What is economic growth?
Striving to frow the economy so the UK doesn’t return to a recession, to take in more money than what’s going out, investing in areas to encourage growth
What are exchange rates?
Can fluctuate greatly, influence UK’s purchasing and selling power globally depending on other countries, inflation and stock exchange can change it
What is the monetary policy?
Value of currency and interest rates determined by the government, decisions on how to meet expectations are controlled by the Bank of England and Monetary policy committee
How can attitudes to saving affect the social environment?
Banks and government rely on people saving money which is used to boost the economy, interest rates are low so its difficult to save money
How can spending and debt affect the social environment?
Changes to spending habits influences the types of businesses that can start up and expand
No borrowing means businesses profits decreases which puts the economy down
What are social responsibility requirements?
Encouraged to consider ethical matters and consequences, be sustainable
e.g. charity shops are more popular now and help money last longer for people
What are demographics?
Identify customer needs of individuals
e.g. where you live, age, gender, house type, income, marital status
How can change affect the social environment?
Diversity of ethnicities can lead to new businesses due to trends changing
How can consumer tastes/preferences affect the social environment?
Customer needs changing and things becoming obsolete
e.g. food industry influenced by foreign foods/recipes