Unit 2- Influences on a Business Flashcards
What is interest rates?
The cost of borrowing money or the reward for saving money, expressed as a percentage.
how does a rise in interest rates affect customers
save more, spend less because borrowing will be more expensive
How does a change in interest rates affect the business?
a rise
business that have borrowed heavily, to pay greater sums of interest. This may reduce profits, or threaten business survival.
+ Business which sells items that are bought by consumer’s using loans, may suffer a fall in sales,when interest rates rise.
a fall,
business spending may increase, and those who buy products using loans, will increase sales.
what are the impacts of legislation?
costs
marketing and sales
production
human resources act
influence of ICT on business activity
huge amounts of data can be collected
easier to analyze information faster
using employees effectively
use of e-commerce
when goods and services are sold through the internet.
1. access to more markets
2. allows business growth
3. lower costs, potential higher revenue.
digital communication
social media with customers
improved communication with stakeholders
emails, texts, apps
what are the ethical business behaviors
treating customers ethically
treating employees ethically
treating suppliers ethically
treating local residents and community fair
business activity affecting the environment
polluting land, air,sea
traffic congestion
using non renewable resources
contributing to global warming
adv of being environmentally friendly
products are more desirable
chargers higher prices, profits may increase
employees prefer to work at good reputed places
dis of being environmentally friendly
costs may rise
how does a fall in interest rates affect customer spendings?
save less, spend more, cost of borrowing is cheaper
what is an overdraft
a flexible loan which businesses can use whenever necessary, up tp an agreed limit.
effect of a rise in employment levels
increase wages and increase production costs to attract employees because the avaiavlity of employees reduce.
effect of a fall in employment levels
impacts consumer spendings especially in luxury brands.
lower wages, decrease in production costs.
what is globalization
the trend for markets to become worldwide in scope.
benefits of globalization
access to new markets
rising inward investments(expand)
new and cheaper resources
improvement in production methods
drawbacks of globalization
increased competition
risk of economic external shocks
risk of takeovers
tax avoidance
effects of rising in exchange rates
price of UK exports to other countries increases
sales of UK exports may fall
Uk exporters profits may fall
price of imported resources may fall
Uk businesses will find it harder to compete
fall in exchange rates
UK expo will be cheaper
resources imported into the UK becomes more expensive.
