1.5 Understanding external influences on business

What are stakeholders?

An individual or a group that has an interest in and is affected by the activities of a business.

Who are some stakeholder and what are their objectives?

Shareholders(owners) - want profits and a return on their investment.

Employees- want good pay and working conditions.

Customers- want value for money.

Managers - want bonuses and long-term success.

Suppliers - want regular orders.

Local community - want local investment and limited pollution.

Pressure groups - want to influence business decisions and actions.

Government - want low unemployment and competitive markets.

What is a possible problem of having multiple stakeholders?

Stakeholders may have different perspectives and interests causing conflict in the business.

How may stakeholders impact business activity?

Negotiation - suppliers may try to negotiate better terms and conditions.

Voting - stakeholders may be invited to vote on business decisions.

Refuse to co-operate - employees may go on strike if they’re not happy with changes.

What are types of technology used by businesses?

E-commerce

Social media

Digital communication

Pavement systems

How does technology influence costs of a business?

Can be a huge investment from businesses.

In a long term it can help improve efficiency and reduce costs.

How does technology influence sales of a business?

Innovating products with latest technology can increase demand for customers and boost sales.

How does technology influence marketing mix of a business?

Lowers costs of products

Makes promotion easier through social media

Allows customers to purchase products anytime from anywhere through e-commerce

Purpose of legislation in consumer law?

Protect consumers.

What are some principles of consumer law?

Products sold to consumers should be of a good standard and quality.

Consumers have right to reject or return goods.

Businesses should disclose full information about products and services.

Purpose of legislation for employment law?

Protect employees.

What are some principles of employment law?

All employees pay should be fair and meet minimum wage.

Groups of people such as disabled people should not be discriminated against.

Health and safety requirements in the workplace should be met.

How does legislation impact a businesses costs?

If a business meets legal requirements it’ll suffer additional costs.

Consequences of not meeting legislations?

Fines and damed to your reputation.

Economic climate factors that will change demand?

Changes in consumer income

Changes in interest rate

Changes in taxation

How may businesses respond to changes in technology?

Invest heavily in new technology in order to gain advantage over competitors.

How may businesses respond to changes in legislation?

Change company policy to follow employment or consumer legislation.

How may businesses respond to changes in the economic climate?

Cut investment and spending when economic activity is low.

Increase productivity and recruit new employees when economic forecasts look positive.