Topic 1.5 Understanding External Influences On Business Flashcards
Stakeholders
People or a gouge with an interest in the success or failure of an organisation
Stakeholders examples
Shareholders (owners)
Managers
Employees
Customers
Suppliers
Local community
Pressure groups
Government
What stakeholders might want from an organisation
High/low prices, high income/salary, reliable hours, low noice, less traffic, reliable supplies, listen to pressure groups, control
How might the customers, suppliers and employees be affected by the business opening you a new store
Customers will benefit from having more choice about where to shop, but they may remain loyal to existing businesses.
Suppliers benefit from increased orders to equip and stock the new store, which might lead to an increase in their profits but there is a risk that the business will use other suppliers if they can’t keep up with demand.
Employees have increased
job security as a business grows. They could also have opportunities for promotion to new roles.
What impact do stakeholders/owners, customers and pressure groups have on the business activity
Shareholders/owners: Owners have the most impact, as they make decisions about the activities of the business and provide funding to enable it to start up and grow. Shareholders influence the objectives of the business.
Customers: Customers buy products and services and give feedback to businesses on how to improve them. Customers are also able to influence others by recommending the business to friends or by warning them against using the business.
Pressure groups: Pressure groups can improve working conditions for employees and help them to get fair pay. They can also try to influence customers’ opinions of a business.
The owners of a retail business decide to grant permission to extend the business’ opening hours on weekdays. Instead of being open from 8am to 8pm, the business will now be open from 7am to 10pm. What conflicts could this cause
Managers might have to work longer hours
Employees may need to work different shifts, including working later
Some customers may want even longer opening hours, eg 24 hours a day
suppliers could impact their customers by changing delivery routes and times
The local community could be disturbed by increased traffic and noisepressure groups may be unhappy if longer opening hours are against their cause, eg groups promoting families spending more time together or improved work-life balance
The government may require additional resources to monitor the impact on the local area, eg additional policing to deal with any shoplifting that takes place later in the evening
What are the 4 types of technology used in business
E-commerce - selling online
Social media - online communities
Digital communication - communication online
Payment systems - paying for goods and services online
Advantages of: e-commerce, social media, digital communication, payment systems
E-commerce: You can appeal to a wider market/can sell to people that live further away
Social media: You can advertise yourself to a wider market, be aware of the trends
Digital communication: You can communicate with people online so you don’t need to be in the same place
Payment systems: You can collect payment online and get paid, quicker
Disadvantages of: e-commerce, social media, digital communication, payment systems
E-commerce: Reduces the need for people to go shopping and if your shop is a experience or you done have E-Commerce you miss out on customers
Social media: You have to employ people to control and monitor the social media platforms
Digital communication: miscommunication, technical difficulties
Payment systems: can get scammed
How might different types of technology affect sales
E-commerce - business can attract customers and make it easier to sell but there might be more competition and logistic issues
Social media - used in marketing, interact with customers
Digital communication - easier to contact a business, builds trust
Payment systems - easy for customers to pay, business that only accept cash may find it difficult to attract customers
How might different types of technology affect costs of the business
All cost to set up but reduce costs in long term:
E-commerce - fewer sales staff, fewer/smaller premises, lower rent, automated administration and record keeping. But: costs for website, fees for handling online payments, warehousing and distribution costs
Social media - quick + cost effective way to interact with customers
Digital communication - remote working - smaller offices, effective communication - no printing and postage, video conferencing - remove travel costs
Payment system - more secure cost effective way to take payments, no need to hold large amount of cash on premises, payment almost instant. But: card payments charge small percentage fee
How does digital communication affect the marketing mix
Product: can be adapted and accessed easily - convenient
Price: money saved can help keep prices low
Place: services can be accessed no matter where they are
Promotion: newsletters, track customer behaviours on social media, and advertise online
How does e-commerce affect the marketing mix
Product: customers can doubloon digital products immediately after payment
Price: customers can compare prices across online sellers easily - prices need to be competitive
Place: selling online procedure another way for customers to make a purchase at any time wherever
Promotion: promotional offers or ‘flash sales’ are ways to implement
How does payment systems affect the marketing mix
Product: online payment methods allow digital product to be purchased easily
Price: any fees incurred though the use of specific payment methods need to be accounted for when setting the price of a product
Place: new payment methods means business can sell online
Promotion: business can promote their different ways for a customer to pay e.g. cash, card, PayPal
How does social media affect the marketing mix
Product: product information can be shared using video demonstrations where appropriate
Price: cost saving may enable business to lower prices
Place: interact with customers around the world
Promotion: cost-effective way of targeting promotions at specific groups of customers
What is the definition of consumer law
Any piece of government legislation designed to protect consumers from poor-quality product and poor business practices
What are the two UK pieces of legislation that form the basis of consumer rights
Consumer Rights Act (2015)
Consumer Protection Act (1987)
What does the Consumer Rights Act (2015) cover
The product or service
Returns
Repairs and replacement
Delivery
What are the standards for goods and services
Goods must be: described accurately, fit for purpose, satisfactory quality
Services must be: provided with reasonable care and skill, any written or verbal information provided by the supplier is binding, provided in reasonable time, provided for a reasonable price
What is the legislation regarding returns
A customer can return a product for a full refund (excluding digital products) within the first 30 days if the product is not as described, unfit for purpose or not of satisfactory quality.
If the fault develops <6 moths it is business fault unless proven otherwise, >6 months presumed owners fault unless proven otherwise
What is the legislation about repairs and replacement
After 30 days a consume must give a business one opportunity to repair or replace any goods, including digital goods that are not as described, unfit for purpose or not of satisfactory quality. Of the repair or replacement is unsuccessful the consumer can claim a refund or price reduction
What is the legislation about delivery
Within 30 days unless agreed other at the time of sale, business is responsible until it is in possession of consumer. Failure to deliver within 30 days or by agreed date gives consumer the right to cancel the purchase and receive a full refund
What does the Consumer Protection Act (1987) ensure
Product are safe
Makes businesses that produce liable for damage caused by poor quality or defective products
Gives anyone the right to Calvin against the producer of a product for any damage caused by a manufacturing defect
The producer is considered to be an individual or company to puts their name or trademark on a product or has imported it in to the European Union in order to sell it on.
What is employment law
Any once of government legislation designed to protect employees from exploitation
