3.1.4 Flashcards
(19 cards)
What are examples of political factors in PESTLE analysis?
- Change in taxation levels
- Change in employment laws
- Banning of certain products
- Brexit
- Emissions regulations
What are examples of economic factors in PESTLE analysis?
- Value of currency
- GDP and demand levels
- Cycle: Boom, Bust, Decline etc
What are examples of social factors in PESTLE analysis?
- Health
- Fashions
- Environment
What are examples of technological factors in PESTLE analysis?
- Machines can be used to make things
- New ways of making payments
- New ways to advertise and sell online
What are examples of legal factors in PESTLE analysis?
- Zero hour contracts
* Equal working rights
What are examples of environmental factors in PESTLE analysis?
- Geographical location
* Weather and climate
What are some features of a competitive market?
○ Large numbers of buyer and sellers
○ Many substitutions for products
○ Business have little control over the price they charge as they would loose out to competition if they increased their price
○ Customers do their research
What are some features of a monopoly?
○ A market dominated by one business
○ They may exploit customers by charging higher prices
○ They may prevent competitors from entering the market
○ The government monitor the activities of monopolies closely
What are some features of an oligopoly?
○ A market dominated by a few businesses
○ Interdependence
○ The action of one business affect the others
○ Higher barriers of entry as large businesses have an established market share, customer base, capital, benefitting from economies of scale etc
○ Non-price competition
What might happen when there are new entrants to a market?
Existing businesses need to consider their position as new firms get stronger
What might happen when new products are introduced into a market?
When new products appear in the market businesses may be forced to adapt
What is consolidation?
The number of businesses in a market falls but some of the existing businesses get bigger
What is an example of consolidation?
Poundshop, ‘£1’ closing down, Poundstretcher and Poundland are the only remaining pound shops
What are Porter’s 5 forces?
- Existing competition
- Bargaining power of suppliers
- Bargaining power of customers
- Threat of new entrants
- Threat of substitutes
What is ‘existing competition’?
- Few companies
- Rivalry has not been defined
What is the ‘bargaining power of suppliers’?
- Large number of suppliers
- Average quality services
- Limited expertise
What is the ‘bargaining power of customers’?
- Demanding higher quality at lowest prices
- Price sensitivity
- Availability of information
What is the ‘threat of new entrants’?
- Decrease in barrier to entry
- Geographical factors
What is the ‘threat of substitutes’?
- New product development
- Research and development
