Topic 2-Influences On Business Flashcards

Question

Define economic climate

Answer 1

The general condition of the economy, the way that the resources and the production and consumption of goods in the UK are managed

Answer 2

Interest rates are the cost of borrowing money or the reward for saving money

Answer 3

If interest rates rise then the cost of borrowing will rise and this will mean that the costs for a business may increase, this could lead to a fall in profits • A fall in interest rates means that the cost of paying loans will fall, which may lead to an increase in profits

Answer 4

If consumers can borrow they can buy; clothes, cars, washing machines, houses, caravans, holidays, and just about everything else • If the cost of borrowing goes up then consumers decide to save instead of spend

Answer 5

The number of people willing to work but out of work and seeking work

Answer 6

% of the working population out of work • Current unemployment rate is 4.7*%

Answer 7

When a worker receives their wages they will have to pay tax and national insurance • What is left is called their disposable income

Answer 8

Now they have to pay all their bills, electric, gas, water, food and rent • What is left is called their discretionary income – they can use this for the cinema or a Big Mac..

Answer 9

If unemployment rises people have no jobs • This means that they have low incomes • This also means that they have little disposable income • Lower disposable income means less spending on goods in the shops

Answer 10

It weakens consumer buying as people have less money to spend in the high street if they are out of work. It encourages entrepreneurship • Many unemployed people start their own business instead of looking for jobs, they become self-employed

Answer 11

As income rises >>>>demand will fall (we don’t buy so many poor quality goods when our income goes up)

Answer 12

– As income rises>>>>demand will rise – As income falls>>>>demand will fall

Answer 13

As income rises>>>>demand will rise (we choose to buy holidays, cars and jewellery when we have more money)

Answer 14

As consumer incomes rise so does demand for different goods and services

Answer 15

Legislation is the collective term for laws

Answer 16

A business will have to meet all of the consumer, employment and recruitment laws • This may mean additional costs Eg: Training staff

Answer 17

Businesses will need to make sure that all their employees are trained and that the training is up-to-date.Making sure the business is legaly compliant

Answer 18

Race, sex, age or disability discrimination is illegal in UK business, so businesses must be careful to recruit within the equality law.Offering equal pay and promotion to all

Answer 19

Consequences can include; include fines and even imprisonment

Answer 20

The recruitment process involves; advertising, selecting, interviewing and hiring the staff needed for the business

Answer 21

The Equality Act 2010 legally protects people from discrimination in the workplace and in wider society.

Answer 22

NATIONAL MINIMUM WAGE or NMW is the legal minimum that can be paid to workers in the UK.

Answer 23

Its the minimum pay for those over 25.It is higher then the national minimum wagw

Answer 24

-Prevent accidents and cases of illness by managing the health and safety risks -Providing clear intructions and information and adequate training -Engage and consult with employees on day-to-day health and safety conditions Implement emergency procedures -Maintain safe and healthy working conditions, provide and maintain plant, equipment and machinery, and ensure safe storage / use of substances

Answer 25

Avoids a fine – Health and Safety is a legal responsibility of business Avoids expensive compensation claims from employees who have had accidents at work Avoids negative publicity Reduces absenteeism

Answer 26

All workers have a right to work in places where risks to their health and safety are properly controlled.

Answer 27

Goods must be as described,fit for purpose,satisfactory quality

Answer 28

The goods supplied must match any description given to you, or any models or samples shown to you at the time of purchase.

Answer 29

A product must do what it is designed for and meet customer expectations.

Answer 30

Goods shouldn't be faulty or damaged when you receive them.

Answer 31

If something’s gone wrong with an item a customer has bought, they may be entitled to a refund, repair or replacement

Answer 32

1.broken or damaged 2. unusable 3. not what was advertised or doesn’t match the seller’s description

Answer 33

The item was damaged by wear and tear, an accident or misuse 2. The consumer knew about the fault before they bought the item 3. The consumer has just changed their mind

Answer 34

a law designed to prevent companies from presenting their goods or services in a dishonest or misleading way

Answer 35

Traders could get an unlimited fine or 2 years in prison

Answer 36

This prevents manufacturers, retailers or service industry providers from misleading consumers as to what they are spending their money on

Answer 37

Italian shoes made in the uk,set of 4 mugs only containing 3,marios saying hes english when hes from cyprus

Answer 38

A Market is a voluntary meeting of buyers and sellers who trade or exchange goods or services.

Answer 39

A dynamic market is a market where supply and/or demand factors are constantly changing

Answer 40

• Designer clothes • Laptops • Mobile Phones

Answer 41

For final goods and services or outputs. Things ready to sell

Answer 42

For factors of production like inputs in manufacturing. Raw materials

Answer 43

People and jobs

Answer 44

This is the rivalry between businesses to gain sales from customers

Answer 45

A competitive market is where a large number of sellers are selling to large number of customers

Answer 46

– Have lower sales as there are lots of alternatives – Have less profits unless the business reduces costs and possibly quality – Find it harder to get customers, they may need to heavily promote and advertise

Answer 47

Provide better quality goods than the competition • Provide a better service than the competition • Offer a unique product • Offer better value for money

Answer 48

Business risk is the possibility a company will have lower than anticipated profits or experience a loss rather than making a profit.

Answer 49

Patent issues • Cyber attacks • Recession, or economic problems • Change in tastes and trends • Employment laws and regulations • Poor reputation • Risk from competition • Financial risks • Political problems and instability Risk of not managing cash flow • Staff training and safety • Weather and other unforeseen factors, natural disasters • Operational risks – break down of equipment • Staff – reliability • Lack of security • Commercial risks, failure of suppliers to supply and customers to pay

Answer 50

A business which has a cyber attack may suffer; loss of data, money, reputation and customers may lose confidence in the business

Answer 51

In a recession or times of economic problems, customers tend to save rather than spend on non-essential items. • This can slow down sales

Answer 52

Consumer tastes change over time which means that a business is at risk if they don’t keep up with current trends

Answer 53

All businesses in the UK must obey the employment laws • For example they must pay the minimum wage or above, if they don’t they are breaking the law

Answer 54

If a business provides poor customer service, or suffers a problem, then it may have a poor reputation • This can lead to loss of sales, loss of revenue and loss of profitability

Answer 55

Running a business can be a financial risk for the owner • The owner may put their own cash and other assets (e.g. a van) into a business • If the business does not do well then the owner could lose their money, which is why many businesses become ltd to protect the owner

Answer 56

Cash flow is the flow of money in and out of a business, many businesses fail because of poor cash flow (or lack of cash)

Answer 57

If the staff are not trained properly and they have an accident they can sue the business and the owners can either go to jail or pay a big fine

Answer 58

A disaster can strike any organisation, large or small. It can arrive in the shape of storm, flood, fire, earthquake and even a tsunami.Can cause a business to close for a long time

Answer 59

When machines break down there is the cost to fix the machine plus the cost of lost production time

Answer 60

Without reliable staff a business will not be able to offer the right level of customer service

Answer 61

If a supplier fails to supply goods or services to a business, this could be critical causing customers to shop elshewhere If customers do not pay on time, then this may cause cash flow problems for the business who will need to pay their suppliers

Answer 62

Too much competition,tax system,rising energy costs,cash flow issues,lack of bank lending

Answer 63

Uncertainty is when businesses are unable to predict external shocks or future events

Answer 64

The process by which businesses start operating on an international scale

Answer 65

A multinational is a business which trades in more than one country, often shortened to MNC

Answer 66

1. Wider markets 2. Economies of scale 3. Labour migration 4. Specialisation 5. Multiplier effect

Answer 67

Trading on a global level (rather than just the UK) means access to more customers, and opportunities to trade in bigger markets:

Answer 68

A UK business which is trading on a global scale can gain economies of scale, and get lower average unit costs

Answer 69

Labour migration into the UK now means a fresh pool of applicants willing to carry out jobs in manufacturing, hospitality, NHS and construction

Answer 70

Globalisation can mean that some economies start to specialise at what they are good at • This makes the country very efficient at producing those goods, they can be better quality and more innovative than other countries, which gives them competitive advantage

Answer 71

This means all the factory workers now have an income which they can spend in the local area; on restaurants, in shops, in garden centres. This is called the multiplier effect.

Answer 72

Foreign competition 2. Loss of UK staff 3. Threat to service industries 4. Diseconomies of scale

Answer 73

Competing in a global market can mean that UK businesses will have to compete against foreign imports

Answer 74

Globalisation and migration means that UK staff can be poached by overseas companies

Answer 75

Globalisation puts pressure on UK businesses to cut costs and outsource as much as possible to low labour cost countries e.g. Indian call centres

Answer 76

As UK businesses trade in these larger global markets they will grow and expand accordingly • As they grow they will start to encounter problems; co-ordination, communication and motivation • This can lead to higher than average unit costs

Answer 77

An export is a product that the UK sells to overseas markets

Answer 78

Pearls, gems, precious metals and coins • Machinery • Vehicles • Pharmaceutical products

Answer 79

International trade is the exchange of goods and services between different countries

Answer 80

An import is a product made overseas and brought into the UK

Answer 81

The exchange rate is the price of one currency

Answer 82

If the pound is strong against other currencies then it becomes more expensive for countries to buy uk goods. Also,If the pound is strong against other currencies then it becomes cheaper to import goods from abroad

Answer 83

Disturbing or excessive noise that may harm the activity or balance of human or animal life

Answer 84

The source of most outside noise is mainly caused by business operations and transport

Answer 85

Air pollution is when harmful gases, dust, or chemicals enter the air, making it unsafe to breathe and damaging the environment.

Answer 86

Higher revenue Improved brand/business awareness and recognition Increased employee motivation and staff retention

Answer 87

Higher costs Danger of building false expectations amongst consumers Bad publicity if business is found to be acting unethically

Answer 88

Products which are bought that ensure fair wages and good working conditions for farmers and workers.

Answer 89

Impact on traffic congestion Recycling Disposing of waste Noise and air pollution

Answer 90

Businesses should seek to source ethical products in a responsible and sustainable way

Answer 91

The increase in esrths average surface temperature due to risking levels of greenhouse gases

Answer 92

An approach to managing businesses in which the interests of all groups in society are taken into account when making decisions

Answer 93

By only sourcing materials from suppliers who follow fair trade and fair labour practices

Answer 94

It can increase employee motivation, reduce turnover, and improve productivity.

Answer 95

Moral principles which are right or wrong

Answer 96

Can be faced with the cost and incovenience of having to refund the customer,bad reputation,can go to court

Answer 97

Quick way in communicating with stakeholders,either on a personal level to respond to costumer querys,or on a bigger scale to employees

Answer 98

To communicate with customers and provide information about the business.They can also be used to sell products and promote special offers

Answer 99

Instant messaging service.To speak to employees from different locations or customers can use them to speak to customer service.

Answer 100

Social networking is using online platforms like Instagram, Facebook, or X (Twitter) to connect with customers.

Answer 101

Can’t pay bills or wages on time 2) May need to take on expensive emergency loans 3) Risk of business failure or insolvency 4) Damaged reputation with suppliers and employees

Topic 2-Influences On Business Flashcards

(125 cards)