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
What is technological change?
Advancements and changes influence businesses and create opportunities for new ones. Improves e-commerce, digital communication, payment platforms. productivity
What is automation?
More productivity, less mistakes made, reduce costs quicker
How has communication changed because of technology?
Changed the way businesses operate and structure
e.g. working from home, long distances
What is the partnership act?
Can only be dissolved if one person retires or dies, can’t be fired or made redundant, equal share of profits/losses unless legal contracts are in place stating otherwise
What is the companies act?
Code of conduct for businesses to operate to protect the business and its operations, informs company policies and their operations e.g. forming and dissolving businesses
What is the charities act?
To protect the charity and its fundraising activities in line with business expectations, if more than £10,000 earned per year then must register as a charity and have trustees to ensure the charity is operating within the law
What is the competition act?
Prevents domination by any 1 business by addressing anti-competitive agreements, abuse of dominant market positions, reduces price wars which are illegal
What are the benefits to businesses of following laws?
- positive reputation
- ethical
- competitive advantage
What are the disadvantages of businesses following laws?
- can be forced out of business
- fines
- imprisonment
- easy to miss updates
- time consuming
What are carbon emissions and how can this affect the environment?
Pollution, carbon footprint, global warming
Negative reputation, not ethical, impacts business costs
What is waste and how can this affect the environment?
Household rubbish must be sorted, landfill sites are regulated, water and sewage disposed correctly
Costs to get rid of, reduce storage space
What is recycling and how can this affect the environment?
Business must comply with policies for zero waste
Seen as ethical, good reputation
What is pollution and how can this affect the environment?
Impacts, health, buildings, surroundings, demand for reduced pollution is forcing businesses to close
- Air, noise, water, traffic
What are the benefits to businesses protecting the environment?
Seen as environmentally friendly and ethical, monetary rewards, increased sales/profit, able to increase prices
