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Business > 1.5: Understanding external influences > Flashcards

1.5: Understanding external influences Flashcards

1
Q

What are some examples of stakeholders and what they want

A
  • Managers: bonuses & success
  • Pressure groups: influence
  • Employees: good pay & conditions
  • Customers: value for money
  • Local community: Local investment & little pollution
  • Government: low unemployment & competitiveness
  • Suppliers: regular orders
  • Shareholders: profits and good returns
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2
Q

What are some technologies that influence business activity

A
  • E/M-commerce
  • Social media
  • Digital communication (emails, QRs)
  • Electronic payment systems
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3
Q
A
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4
Q

What can technology influence

A
  • Costs (expensive in short-term, efficient & saves in long-term)
  • Sales (tech innovation can up sales, new ways to sell)
  • Marketing mix (tech influences all parts of it: lowers costs, easier promoting, e-commerce)
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5
Q

What is consumer law

A

It governs all of how a business interacts with customers, its purpose is to protect consumers

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6
Q

What are some principles of consumer laws

A
  • Consumers can return/reject goods
  • Goods should be delivered & installed safely
  • Contracts are fair
  • Services should have reasonable care
  • Full disclosure on product information
  • Products sold should be good standard
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7
Q

What are some drawbacks of consumer law

A
  • Business need to be up-to-date
  • Restrictive
  • Changing products to comply can be costly
  • Bad publicity if not followed
  • Consumers can take legal action
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8
Q

What are some benefits of consumer law

A
  • Complying -> less fining/suing
  • Complying -> professionalism & more customer loyalty
  • Improved stakeholder relations
  • Following makes good publicity
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9
Q

What is the name of the consumer protection law in the UK

A

The Consumer Rights Act 2015

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10
Q

What is employment law

A

It governs all aspects on how businesses interact with their employees, used to protect employees

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11
Q

What are some principles of employment law

A
  • Wages should be minimum wage or higher
  • No discrimination
  • Redundancy should be fair
  • Discipline and grievances should be fair
  • H&S requirements should be met
  • Recruitment process should be fair
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12
Q

What are some drawbacks of employment law

A
  • H&S can be costly
  • Paying minimum-wage or higher is costly
  • Not following->unhappy workers, low productivity & legal action
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13
Q

What are some benefits of employment law

A
  • Compliance->respected
  • Higher retention rates
  • Lower recruitment costs
  • More motivation->higher productivity & better customer service
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14
Q

What are some examples of employment law

A
  • Health and Safety at Work Act 1974
  • Equality Act 2010
  • National Minimum Wage Regulations 2017
  • Employment Relations Act 1999
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15
Q

What is the economic climate

A

The level of demand and spending in the economy

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16
Q

What might alter demand

A
  • Economic activity
  • Interest rates
  • Exchange rates (SPICED, WPIDEC)
  • Consumer income
  • Taxation changes
17
Q

What is impacted by demand/economic activity

A
  • Consumer incomes
  • Inflation
  • Unemployment
  • Interest rates
  • Strength of the pound
18
Q

What is unemployment

A

When people who want work can’t get it

19
Q

What are some impacts of unemployment

A
  • Easier to recruit, but over time less skills in business
  • Lower demand (for most businesses, some like Aldi or Ryanair would likely get more)
  • Less sales revenue
20
Q

What does a rise in interest rates do

A
  • Better to save, worse to borrow
  • Businesses can struggle to repay
  • Less loans used
  • Fall in consumer spending
21
Q

What does a fall in interest rates do

A
  • Better to borrow, worse to save
  • Better cashflow
  • Loans can be used for expansion
  • More consumer spending
22
Q

What would a fall in the pound’s value do

A
  • Good for UK exporters
  • Good for tourism, as cheaper for tourists
  • Good for UK businesses, as imports are dearer
  • Bad for UK importers, as imports are more expensive
23
Q

What are some external influences that are opportunities

A
  • Rise in economic activity
  • New legislation that the business already follows
  • New tech that lowers production costs
  • Lower interests rates for easier borrowing
24
Q

What are some external influences that are threats

A
  • New competitors
  • New legislation that makes you illegal
  • Fall in economic activity
  • New tech that makes your products obsolete
25
Q

What are some potential responses to external influences

A
  • Cut investment
  • Stop producing and obsolete product
  • Change company policy
  • Lower prices
  • Recruit new employees
  • Invest in new tech

Business (11 decks)

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