1.5

Question 1

Question:
What is a stakeholder in the context of a business?

Answer 1

Answer:
A stakeholder in business refers to individuals or groups who are affected by or have an impact on the actions of the business.

Question 2

Question:
Why is it important for a business to consider the needs and interests of its stakeholders?

Answer 2

Answer:
Considering stakeholders’ needs and interests is crucial for a business to operate successfully and ensure long-term success.

Question 3

Who are shareholders in a business, and what is their primary objective?

Answer 3

Answer:
Shareholders are individuals or entities owning a portion of a company’s stock. Their primary objective is to maximize returns on their investment

Question 4

Question:
What are the primary objectives of employees in a business?

Answer 4

Answer:
Employees aim to earn a living, have job security, and be compensated fairly for their work while maintaining a safe working environment

Question 5

Question:
What is the primary objective of managers in a business?

Answer 5

Answer:
Managers aim to meet the company’s goals and objectives by maximizing profits, minimizing costs, and ensuring efficient operations.

Question 6

Question:
Who are suppliers, and what is their primary objective in relation to a business?

Answer 6

Answer:
Suppliers are individuals or businesses providing goods or services to a business. Their primary objective is to sell their products or services and make a profit.

Question 7

Question:
What are the main objectives of customers when dealing with a business?

Answer 7

Answer:
Customers seek high-quality products or services at a fair price, along with good customer service and a positive overall experience.

Question 8

Question:
What is the primary objective of pressure groups concerning businesses?

Answer 8

Answer:
Pressure groups aim to influence the policies and actions of businesses or governments to promote specific causes or agendas.

Question 9

Question:
Why is the local community considered a stakeholder in a business?

Answer 9

Answer:
The local community, comprising individuals and organizations in the business area, is a stakeholder with the primary objective of wanting the business to have a positive impact on the community.

Question 10

Question:
What is the role of the government as a stakeholder in a business, and what is their primary objective?

Answer 10

Answer:
The government is responsible for creating and enforcing laws and regulations affecting businesses, with the primary objective of promoting the public good and protecting citizens’ interests.

Question 11

Question:
What types of technology do businesses commonly use to improve communications, lower operating costs, and enhance their brand image?

Answer 11

Answer:
Businesses have access to various technologies, including e-commerce, contactless payment systems (e.g., Apple Pay, Android Pay), social media, and digital communications tools.

Question 12

Question:
How does e-commerce influence business activity, particularly in terms of sales, costs, and the marketing mix?

Answer 12

Answer:
E-commerce serves as a powerful tool for expanding customer bases and increasing sales. It also helps reduce costs by eliminating physical storefronts. In the marketing mix, it provides new channels for advertising and promotion.

Question 13

Question:
How do contactless payment systems, such as Apple Pay and Android Pay, impact businesses?

Answer 13

Answer:
Contactless payment systems make transactions more convenient for customers, potentially giving businesses a competitive advantage. However, the installation of such systems incurs a cost for the business.

Question 14

Question:
In what ways does technology influence sales, costs, and the marketing mix for businesses?

Answer 14

Answer:
Technology, such as e-commerce, social media, and digital communications, plays a significant role in expanding sales, lowering costs, and transforming the marketing mix by providing new channels for advertising and communication.

Question 15

Question:
How has e-commerce impacted costs and the marketing mix for businesses like Zappos and Amazon?

Answer 15

Answer:
E-commerce has allowed businesses like Zappos to save on operating expenses by eliminating physical call centers. Amazon, through e-commerce, expanded its global market reach. In the marketing mix, platforms like Shopify offer customizable storefronts and advertising capabilities.

Question 16

Question:
How does social media influence sales and advertising for businesses like Glossier and Wendy’s?

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Answer 16

Answer:
Social media, as demonstrated by Glossier, builds relationships and generates leads, increasing sales. Wendy’s has utilized social media as a cost-effective alternative to traditional advertising channels. Social media also transforms the marketing mix by providing new channels for brand awareness and customer engagement

Question 17

Question:
How do digital communications, including email marketing and tools like WhatsApp, impact businesses?

Answer 17

Answer:
Digital communications offer businesses new channels for reaching customers and closing deals, such as email marketing. It provides a cost-effective alternative to traditional communication channels, as seen with WhatsApp in customer service. The marketing mix is transformed with tools like Mailchimp, offering customizable email templates and sales tools.

Question 18

Question:
What does legislation refer to, and how does it impact businesses?

Answer 18

Answer:
Legislation refers to laws and regulations passed by governments that dictate how businesses and individuals must conduct their behavior. While following existing laws is usually straightforward, changes in laws may necessitate significant operational adjustments, potentially increasing costs for businesses.

Question 19

Question:
What are the three key areas of legislation that have significant impacts on businesses?

Answer 19

Answer:
The three areas are consumer protection, employee protection, and health and safety legislation (which can be included under employee protection).

Question 20

Question:
What is the primary aim of consumer protection legislation, and what areas does it cover?

Answer 20

Answer:
Consumer protection legislation aims to ensure fair treatment of consumers by companies. It covers product safety, standard and quality, customer rights in case of dissatisfaction, and required product information. Compliance with these laws increases business expenditure, potentially reducing profitability.

Question 21

Question:
What are the effects on businesses when complying with consumer protection laws?

Answer 21

Answer:
Complying with consumer protection laws results in increased business expenditure, impacting profitability. However, it creates a level playing field for businesses, preventing unfair advantages through shortcuts or false claims about products.

Question 22

Question:
What is the aim of employee protection legislation, and what areas does it cover?

Answer 22

Answer:
Employee protection legislation aims to prevent worker exploitation. It covers pay, working conditions, equality of employment rights (e.g., for marginalized groups), the right to belong to a trade union, and the ability to take industrial action.

Question 23

Question:
What benefits can businesses derive from meeting employee protection legislation?

Answer 23

Answer:
Meeting employee legislation helps businesses avoid unwanted media attention, reduces the likelihood of legal action, and attracts new employees who are likely to be drawn to businesses fulfilling their legal obligations.

Question 24

Question:
What does health and safety legislation require businesses to prioritize, and which stakeholders does it aim to protect?

Answer 24

Answer:
Health and safety legislation mandates businesses to prioritize the physical and mental well-being of employees, contractors, and customers.

Question 25

Question:
What specific areas does health and safety legislation cover for businesses?

Answer 25

Answer:
Health and safety legislation covers aspects such as providing adequate breaks, controlling temperature and noise levels, ensuring safety equipment availability, maintaining hygienic conditions, and preventing stress.

Question 26

Question:
What financial and time costs are associated with implementing health and safety procedures and equipment?

Answer 26

Answer:
Implementing health and safety procedures incurs costs such as staff training, supervision, changes to working hours, provision of manuals and signage, purchase and maintenance of safety equipment, and the creation and implementation of a code of practice.

Question 27

What are the potential consequences for businesses that commit serious health and safety breaches?

Answer 27

Serious health and safety breaches can lead to fines, investigation by the Health and Safety Executive, and in some cases, prosecution.

Question 28

Question:
What does the economic climate refer to, and how is it measured?

Answer 28

Answer:
The economic climate refers to the overall performance of the UK economy, measured by changes in GDP growth.

Question 29

Question:
What are the potential effects on various economic factors when GDP growth is increasing?

Answer 29

Answer:
Increasing GDP growth may lead to rising incomes, increased spending on goods/services, potential inflation growth, and a decrease in unemployment.

Question 30

Question:
What are the potential effects on various economic factors when GDP growth is decreasing?

Answer 30

Answer:
Decreasing GDP growth may result in falling incomes, reduced spending on goods/services, potential inflation decline, and an increase in unemployment.

Question 31

Question:
How do economic changes present opportunities and threats to businesses?

Answer 31

Answer:
Economic changes can offer significant opportunities or pose threats to businesses. Adapting and responding to changing economic variables is crucial for maximizing success.

Question 32

Question:
What economic variables do businesses need to consider and respond to?

Answer 32

Answer:
Businesses need to consider changes to inflation, unemployment, exchange rates, household income, interest rates, and government taxation.

Question 33

Question:
How does changes in household income affect businesses, particularly those selling different types of goods?

Answer 33

Answer:
Rising household income may lead to increased demand for normal goods and luxuries, while falling household income may boost demand for inferior goods.

Question 34

Question:
What is inflation, and how does it impact businesses?

Answer 34

Answer:
Inflation is the general rise in prices in an economy over time. It impacts businesses by influencing costs and pricing strategies

Question 35

What recent trend has the UK experienced regarding inflation, and how has it impacted the economy?

Answer 35

Answer:
The UK has recently seen rapidly increasing levels of inflation, causing disruptions in the economy, with workers striking to secure higher wages.

Question 36

Question:
What challenges do businesses face due to inflation?

Answer 36

Answer:
Business challenges caused by inflation include increased costs, higher loan repayments, changes in consumer spending habits, increased demand for higher wages, rising costs of raw materials, more expensive utilities, and higher interest rates affecting business borrowing.

Question 37

Question:
Why are exchange rates important for businesses, especially those involved in importing and exporting?

Answer 37

Answer:
Exchange rates are crucial for businesses that import raw materials and components and for those that export products, as they influence costs and competitiveness in the global market.

Question 38

Question:
What happens to exporting and importing businesses when the value of the currency appreciates?

Answer 38

Answer:

Exporting Businesses: Sales may fall as products become more expensive overseas. To stay competitive, businesses might need to lower prices, accepting lower profit margins.

Importing Businesses: Costs may fall as overseas raw materials become cheaper.

Question 39

Question:
What happens to exporting and importing businesses when the value of the currency depreciates?

Answer 39

Answer:

Exporting Businesses: Sales may rise as products become cheaper overseas.
Importing Businesses: Costs may rise as overseas raw materials become more expensive. Businesses might seek domestic suppliers to reduce costs.

Question 40

Question:
What does the interest rate represent, and how does it impact businesses?

Answer 40

Answer:
The interest rate represents the percentage reward for saving and the percentage charged for borrowing. Rising interest rates increase loan repayments for businesses, potentially reducing capital investments and customer purchases on credit

Question 41

Question:
How does an increase in interest rates affect businesses in terms of loan repayments, capital investments, and customer purchases?

Answer 41

Answer:

Loan Repayments: Businesses pay more on loan repayments, increasing costs.

Capital Investments: Businesses may be less willing to make capital investments, choosing to save money.

Customer Purchases: Customers are less likely to make purchases on credit when interest rates are high, leading to a fall in sales.

Question 42

Question:
How do changes in taxation impact revenue, costs, and business decisions?

Answer 42

Answer:

Revenue: Increased income tax and VAT may lead to a fall in revenue as disposable income decreases, and products become more expensive.

Costs: Business costs rise with increased taxes, potentially offset by charging higher prices, leading to lower sales and profits.

Business Decisions: Operational decisions may be affected by increases in business rates and employment-related taxes, influencing business improvement, relocation, or employment decisions.

Question 43

Question:
How does the unemployment rate impact labor costs for businesses?

Answer 43

Answer:

Skilled Workers: As the unemployment rate falls, businesses may have to pay more to secure skilled workers.

Unskilled Workers: Similarly, as the unemployment rate falls, businesses may have to pay more to secure unskilled workers.

Labor Costs: Generally, the higher the unemployment rate, the cheaper businesses can secure labor, directly impacting the profitability of the business.

Question 44

Question:
How may businesses respond to changes in technology, legislation, and the economic climate?

Answer 44

Answer:
Businesses have a variety of responses to external influences, including adopting new technologies, adapting to legislative changes, and adjusting strategies based on economic climate shifts

Question 45

Question:
Why do business responses to external influences vary?

Answer 45

Answer:
Responses vary from business to business based on individual circumstances and objectives. Each business assesses external influences differently, leading to diverse strategies.

Question 46

Question:
What is the key to effectively responding to external influences?

Answer 46

Answer:
The key is for businesses to stay aware of external influences and adopt a proactive approach in responding to them. This involves staying informed, anticipating changes, and taking strategic actions to navigate external challenges.

Question 47

Question:
How can businesses respond to changes in technology?

Answer 47

Answer:
Businesses can respond to changes in technology by investing in new technology to improve products, reduce costs, increase efficiency, or expand their reach. They may also partner with tech companies for expertise and resources and train employees to use new technologies effectively.

Question 48

Question:
How can businesses respond to changes in legislation?

Answer 48

Answer:
Businesses can respond to changes in legislation by complying with new regulations, potentially adjusting operations. They may also lobby policymakers through trade associations or directly, seeking legal advice to navigate changes and ensure compliance.

Question 49

Question:
How can businesses respond to changes in the economic climate?

Answer 49

Answer:
Businesses can respond to changes in the economic climate by diversifying products/services to reduce reliance on a single market, cutting costs through staff reductions or operational streamlining, and seeking finance from lenders or investors to weather economic downturns or fund growth opportunities.

Question 50

business stakeholders

Answer 50

owners
employees
customers
government
suppliers
managers
local community
pressure groups

Question 51

e-commerce

Answer 51

trade of goods/services over the internet

Question 52

social media

Answer 52

websites and applications that allow users to create and share content or to participate in social networking

Question 53

digital comms

Answer 53

use of digital technologies to exchange information, ideas, and messages

Question 54

payment systems

Answer 54

technologies used to process and manage financial transitions including credit card payments, bank transfers and mobile payments

Question 55

impacts of employee legislation

Answer 55

compliance costs
higher labour costs
potential penalties and rewards
changing working practices

Question 56

impact of employee protection legislation - changing working practices

Answer 56

• recruitment and selection procedures requires regular review
• working conditions may require improvements to be compliant with the law
• trade unions may need to be accommodated in discussions

Question 57

impact of employee protection legislation - potential penalties and rewards

Answer 57

• fines may be issued and business reputation damaged if employment laws are broken
• businesses that operate legally are likely to retain motivated and productive staff

Question 58

impact of employee protection legislation - compliance costs

Answer 58

• checks on new employees to determine their right to work must be carried out
• frequent training and specialist HR advice may be employed
• legal advice or representation may be needed

Question 59

impact of employee protection legislation - higher labour costs

Answer 59

• businesses must ensure that workers receive the national minimum wage
• safety equipment and provision of rest breaks increase costs
• checks required on new employees may need trained HR staff to conduct