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Business-Theme 1 > Topic 1.5 - Understanding External Influences > Flashcards

Topic 1.5 - Understanding External Influences Flashcards

1
Q

List some benefits of a business plan

A
  • increases chances of success
  • makes entrepreneur realise that they lack skills needed for part of the plan - try harder to employ expert
  • if plan is received well by investors, may compete to offer attractive terms for obtaining capital
  • good to get it on paper
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2
Q

List some problems of a business plan

A
  • making a forecast doesn’t make it happen - confuse plan with reality
  • problems arise if plan is too rigid - good to be flexible
  • plans based on high sales will include lots of staff to meet demand - higher risk
  • business success is often about people, not paper
  • over-focus on perfect plan = less time visiting suppliers/customers
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3
Q

What is a stakeholder?

A

A stakeholder is any individual or organization that is affected by the activities of a business

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4
Q

What are the different types of stakeholders?

A
  • owners
  • customers
  • local community
  • suppliers
  • financiers
  • government
  • competitors
  • pressure groups
  • employees
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5
Q

What might customers be interested in when buying goods?

A
  • range of goods offered
  • price and quality
  • opening hours and availability of staff
  • helpfulness of staff
  • overall efficiency
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6
Q

What do employees expect from the business they work for?

A
  • fair pay and treatment
  • good working conditions
  • job security and prospects
  • appropriate range of facilities
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7
Q

Managers share the same expectations as other employees, but have additional concerns. What are they?

A
  • pressure to increase sales

- cut production costs

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8
Q

How do suppliers influence a business?

A

By the quality and price of what the supply as well as the speed at which they supply it

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9
Q

What happens if there are fewer suppliers offering the same product?

A

A supplier will have a lot of power over a business demanding this product and can raise its prices

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10
Q

What happens if there are many suppliers offering the same product?

A

The business has power over the supplier

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11
Q

Who are financiers?

A

Financiers are individuals who invest money in a business i.e. shareholders, or organizations such as banks which lend money to businesses.

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12
Q

Why are financiers interested in a business succeeding?

A
  • make a profit on their investment

- receive repayments on time

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13
Q

How do financiers influence a business?

A

How much money they lend or invest in that business

  • with more capital a business can grow
  • able to close a business or sell its assets to repay debts
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14
Q

What does a local community expect?

A
  • provide jobs and services

- avoid disrupting or polluting area

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15
Q

Why is the government a stakeholder in every business?

A
  • govt wants business to do well
  • people > employment > pay tax
  • more profit = more money govt makes
  • successful business = healthy economy
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16
Q

What is a pressure group?

A

An organised group of people which persuades businesses, and the government, to act in ways that are in line with their particular views

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17
Q

How can pressure group have a big influence over a business?

A

creating negative publicity about the business’s activities

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18
Q

What are the different areas of technology used by a business?

A
  • e commerce
  • social media
  • digital communication
  • payment systems
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19
Q

How is technology managed in a business?

A
  • planning
  • improve customer care
  • increase production
  • manage human resource
  • improve on business communication
  • catalyst for innovation - emerging tech
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20
Q

Benefits of e commerce?

A
  • can trade around the world at any time
  • process order immediately
  • real-time order updates to customers
  • avoid running retail shop
  • easy ordering process
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21
Q

Disadvantages of e commerce

A
  • expensive to keep up with tech
  • customers have security concerns over fraud and account details
  • harder to build relationships with customers, leads them to make purchase decisions because of price not brand loyalty
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22
Q

Benefits of payment systems

A
  • easy
  • fast
  • open 24/7
  • allows people to order immediately
  • trends in sales can be identified
  • can work in different currencies
  • customers expect it, choose not to shop if digital payment isn’t available
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23
Q

Drawbacks of payment systems

A
  • vulnerable to fraud

- additional fees to be paid by business

24
Q

Advantages of paypal

A
  • Easy access linked to product and when set up one click to pay
  • Notification email to say that the transaction has worked.
  • Can cancel payment and get money back before item is sent.
  • Trust, guaranteed against fraud.
  • Send money abroad easily
25
Q

Disadvantages of paypal

A
  • Not a bank does not adhere to the laws banks have to.
  • Does not protect against insolvency
  • Fees
  • PayPal can freeze your account -the standard fee for PayPal accounts is 2.9 percent plus $0.30 for each transaction
26
Q

Advantages of using technology to ensure sales

A
  • Can be sold any time from any location in the world as long as there is internet connection
  • Sales can be made when physical shops are closed such as bank holidays or religious festivals such as Christmas
27
Q

How does technology have an influence on costs?

A
  • Avoiding paperwork use online record keeping
  • real time purchasing through online transactions
  • Real time monitoring of business performance
  • Reducing travel costs - hosting online meetings
  • No need for office or shop as staff can work from home/sales can be made via an e-commerce site
  • Sharing/reading documents online than print out
  • email = communicate with customers than letters/newsletters by post.
28
Q

What is the purpose of legislation?

A
  • protects rights of consumers through law

- protects lights of employees through employment law

29
Q

What are the different rights legislations/Acts?

A
  • consumer rights act 2015
  • trade descriptions act 1968
  • weight and measures act 1985
  • food and safety act 1990
30
Q

What are the areas that employment laws relate to?

A
  • recruitment
  • pay
  • discrimination
  • health and safety
31
Q

Employers can legally expect their employees to:

A
  • meet terms of contract
  • co-operate in meeting objectives of business
  • comply with health & safety regulations
32
Q

Employees can legally expect to be:

A
  • paid according to contract
  • provided with safe working environment
  • appropriately trained
  • permitted to join trade unions
  • allowed access to any confidential records kept on them as employees
33
Q

When an employee signs a contract of employment they are expected to abide by its terms. These include:

A
  • express terms

- implied terms

34
Q

What is express terms?

A

terms which are expressly stated in the contract of employment

35
Q

What are implied terms

A

terms which are not written down but are taken to be agreed, usually because they are obvious

36
Q

What is the Health and Safety at Work Act 1974?

A

all employers have towards their employees, and those that employees have towards themselves and others.

37
Q

Under the law, all permanent employees also have a right to

A
  • twenty days’ paid holiday a year min
  • paid sick leave
  • redundancy pay (for two or more years’ service).
38
Q

What are trade unions and staff organisations?

A

organizations which act to protect and promote the interests of employees

39
Q

What is the Working Time Regulations Act

1998?

A

restricts the number of hours most employees can work in the UK

40
Q

What are employees entitled to under the Working Time Regulations
Act?

A
  • 20 mins break min for 6hr working day
  • 11hrs off between each working day
  • 1 day off per week
  • 20 days of paid holiday per year
41
Q

What are the laws that protect against discrimination?

A
  • The Equal Pay Act
  • The Sex Discrimination Act
  • The Race Relations Act
  • The Disability Discrimination Act
  • Employment Equality (Age) Regulations.
42
Q

What is the Equal Pay Act of 1970?

A

men and women must receive the same pay for work of equal, or equivalent, value

43
Q

What is the Sex Discrimination Act 1975?

A

illegal for one employee to be treated less favourably than another because of their gender or marital status.

44
Q

What is the Race Relations Act 1976?

A

illegal for an employee to be discriminated against on the grounds of their race, colour, nationality or ethnic origin

45
Q

What is the Disability Discrimination Act 1995?

A

aims to protect employees with disabilities from discrimination in recruitment, training, promotion and dismissal

46
Q

What is the Employment Equality Regulations

A

an employer cannot discriminate against an employee because of their age, unless they can show that the discrimination is justified

47
Q

How is business affected by unemployment?

A
  • fewer potential employees they can hire
  • put up their wages to attract potential employees to work for the business
  • People’s income is higher, more money to spend on products as they are in work+receiving wages
  • employee = happy - more secure
48
Q

What is inflation?

A

Inflation is the increase of prices over time

49
Q

How can low inflation benefit a business?

A
  • amount that it pays its suppliers should remain low
  • employees = less likely for pay rise
  • employers give small pay rise -cost of living not increasing very much
50
Q

What 3 areas is the British economy affected by?

A
  • interest rates
  • prices
  • exchange rates
51
Q

What is the base interest rate?

A

Fee that the Bank of England charges customers for borrowing money

52
Q

How does high interest rate impact borrowers?

A

Borrowers pay more money to borrow

53
Q

What happens when there is an increase in the value of the sterling?

A

£1 buys more dollars

- £ has gone up and stronger

54
Q

What happens when there’s a fall in £?

A

Become weaker

55
Q

Who benefits from fall in £?

A

U.K. exporters

56
Q

Why are higher interest rates better?

A

Higher interest rates make it more attractive to save in a deposit account because of the interest gained

57
Q

What happens if inflation in the UK is higher than elsewhere?

A

UK goods will become uncompetitive leading to a fall in demand for UK exports

Business-Theme 1 (6 decks)

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