The social environment

Question 1

what is demography?

Answer 1

-Demography is the study of changes in the populations characteristics

Question 2

how is the UK population changing?

Answer 2

-its growing
-its an ageing population- due to fall in death rate

Question 3

what are the implications to businesses of the UK population change?

Answer 3

-larger population= more demand
-young and old people demand different types of goods- need to adapt to this
-ageing workforce- retirement age is increasing- can’t claim pension
-ageing population means more people with leisure time as they aren’t employed

Question 4

what is the expected Global population change?

Answer 4

-it is expected to rise steadily but not evenly across all countries
-much growth will be in Africa and parts of Asia
-Europe’s population will grow more slowly and will age

Question 5

what is Chinas population change?

Answer 5

-introduced 1 child policy to dramatically decrease population
-created a new social norm so fertility rates are now 1.6
-now trying to increase this but it is not working so they have an ageing population with 1.5 workers per pensioner and spending on education, healthcare and pensioners increased dramatically
-economic growth is declining

Question 6

what is migration?

Answer 6

-Migration is the movement of people between regions or countries

Question 7

what is migration like in the UK?

Answer 7

-there has been a net rise in migration

Question 8

what is migration like in the EU?

Answer 8

-in the EU there is free movement of citizens across the 27 member states. This means firms in the EU have access to a huge workforce
- many migrants move to countries with higher incomes

Question 9

What are the opportunities and threats of an ageing population?

Answer 9

opportunities:
-more older markets
-more spending on leisure activities
-work longer so less replacement so decrease R and D costs

Threats:
-older workforce- less efficient
-increase competition in old age group markets as the market grows

Question 10

What are the opportunities and threats of Migration?

Answer 10

Opportunities:
-decrease wage rates
-new skills and ideas
-diverse workforce
-sell new/ expanding markets

Threats:
-increased competition as more businesses attracted by growing market

Question 11

What are the changes in consumer lifestyle due to technology?

Answer 11

-using tablets/ smartphones to control domestic appliances from outside the home
-using technology to monitor health eg distance walked
-using tech to find out more about products and companies, firms have to protect their image more- people want to buy more ethically.
-UK annual spending on ethical products surpasses £100 Bn for first time.

Question 12

what are the changes in consumer behaviour based off health and well being?

Answer 12

-health and well being is becoming increasingly important- more money spent on healthy food, sport clothing and equipment , gym memberships

contrasting: there has been a growth in adult and child obesity

Question 13

what are the changes in consumer lifestyle due to single person households?

Answer 13

-increase in the number of single person households in the UK
implications for businesses:
-strain on housing market- flats, apartments
-more utilities demand
-less income- more demand for inferior goods- 1 income
-increase demand for electrical appliances , furniture ect
-less demand for family holidays
-possibly a more flexible workforce

Question 14

What is consumer confidence like in the UK at this point?

Answer 14

-currently a cost of living crisis
-high inflations means less affordability so less consumer confidence as wages don’t keep up with inflation
-interest rates increased to help control inflation
effect on businesses:
-less spending, more saving, less demand revenue and profit
-less demand for luxuries
-more demand for inferior goods
-increased raw material costs so supply decreases and profit margins fall

Question 15

What is happening with the growth of online businesses?

Answer 15

-online businesses are predicted to kepp growing
-USA and China dominate the e-market
M-commerce: mobiles share of online sales is rapidly rising.

Question 16

what are the trends in E- commerce?

Answer 16

-retailers are increasing availability across multiple channels
-companies expand to amazon, Ebay, Facebook, Pinterest rather than just their own website
-other sectors are developing an on-line presence:
-buying flight or train tickets on-line
-on-line broadcasting
-product review websites

Question 17

what are the pros of the growth of online business?

Answer 17

-less rent costs
-growing market
-can reach more customers widespread which increases demand
-24/7 access
-less start up costs for businesses
-less employee costs
-can become ‘click and collect’ points for companies like amazon for small retailers
-market research data can be collected online and buying habits tracked

Question 18

what are the cons of the growth of online businesses?

Answer 18

-decrease demand for workers so get redundant- bad rep
-can leave bad reviews
-global competition
-less impulse buying
-small businesses don’t have finance to develop an online presence so becomes less competitive
-if there are less people on the high street shopping, firms like cafes and coffee shops suffer

Question 19

How has Primark developed an online presence?

Answer 19

-have some products but not all online for click and collect only because they want to be on the online market but can’t have online delivery as the costs would go beyond what customers are willing to pay. There is still impulse buying and returns are early to the store

Question 20

what is corporate social responsibility?

Answer 20

-The duty that a firm has towards its stakeholder- beyond what the law expects

Question 21

what are two businesses who have not been socially responsible?

Answer 21

-Mattel- cardboard from rainforest- green peace protest
-Volkswagen- mislead customers and regulatory bodies about their cars environmental impact

Question 22

what are two companies who have been socially responsible?

Answer 22

-M and S- plan A- 100 commitments
-Unilever- by 2030 will refuse to do business with any firm that does not pay at least living wage to its staff

Question 23

What are two companies that have been socially responsible but suffered financially for this?

Answer 23

-Warren Evans- award winning ethical furniture maker with sustainable timber went into administration in 2018 due to low economic state and low profit margins
- Boston tea Party- banned single use cups in 2018 and lost 25% sales of takeaway coffee

Question 24

what is greenwashing?

Answer 24

• greenwashing is making people believe that your company is doing more to protect the environment than it really is
  Risks:
  -if greenwashing rules are broken, firms can be fined and their image will be ruined

Question 25

What is a case study of a company who greenwashed?

Answer 25

-Asos, Boohoo and Asda George all had a misleading range that suggested sustainable practices like' George for good' but didn't provide adequate information. Certain Images and Names suggested it was more eco friendly than it actually was

Question 26

What are the benefits of CSR?

Answer 26

- good reputation -charge a higher price -can cut costs using less energy/ waste increased sales -easier to access new markets due to a good reputation -more motivated workforce -easier to recruit -better relationship with suppliers -avoidance of fines eg for harming the environment

Question 27

What are the drawbacks of CSR?

Answer 27

-financial costs of dong this -including paying employee more, loss of productivity short term if production methods are changed to be greener

Question 28

what are the pressures for socially responsible behaviours?

Answer 28

- CSR created a pressure for firms to be more socially responsible -consumers are better informed about the actions of firms due to the rise of social media. Firms want to avoid bad publicity

Question 29

what is the shareholder concept?

Answer 29

-shareholder concept: managers are solely responsible to the owners of the organisation and should therefore maximise profits to increase share prices and dividends.

Question 30

what is the stakeholder concept?

Answer 30

stakeholder concept: the business attempts to satisfy the needs of all stakeholder groups

Question 31

what are the advantages of the stakeholder concept

Answer 31

- the firms image will improve and it should receive favourable media coverage so increased sales -if successful, it should increase long term profits -may attract investors seeking a socially responsible investment

Question 32

what are the advantages of the shareholder concept?

Answer 32

-it may improve short term profits as funds are not used for social responsibility -it avoids conflicting objectives- managers only take decisions in the interest of shareholders

Question 33

what is the middle way/ Enlightened shareholder view?

Answer 33

- This is pursuing shareholder wealth with a long term focus that seeks sustainable growth based on being responsible to all stakeholders -it is now a legal requirement in the UK

Question 34

What is Carroll's CSR Pyramid?

Answer 34

1. economic responsibilities 2. ethical responsibilities 3.ethical responsibilities 4.Philanthropic responsibilities

Question 35

what are the key features of Carroll's CSR Pyramid?

Answer 35

-CSR is built on the foundation of profit- Profit must come first -then comes the ned for a business to ensure it complies with all laws and regulation -before a business considers its philanthropic options it also needs to meet its ethical duties

Question 36

What are the strengths and weaknesses of Carroll's CSR Pyramid?

Answer 36

Strengths: -the model is easy to understand -simple message- CSR has more than one element -Emphasises on importance of Profit Weaknesses: -perhaps too simplistic -should ethics be at top should legal be at the bottom

Question 37

What is a corporate social report?

Answer 37

-this is a document that sets out a business's CSR targets, policies to meet these targets and the extent to which previous targets were met

Question 38

what are the pros and cons of Corporate social reports?

Answer 38

pros: -identify CSR issues that the firm may not be meeting( so the firm can then improve ) -improve the image of the business Cons: -it isn't a guarantee that the firm is socially responsible: policies have to be carried out and any problems identified by the auditors have to be resolved quickly - not all the reports analyse the supply chin, meaning the firms suppliers may not be socially responsible