AQA GCSE Business Unit 2 - Influences on a Business

National minimum wage

minimum wage for workers aged 22 and under

National Living wage

minimum wage for workers aged 23 and over

Consequences of not Paying employees correctly

• Large fines

• Bad publicity

• Decrease in customer returns

Equality Act 2010

• recruitment procedures must not discriminate

• employees who do the same work must be paid the same

Health and safety work act of 1974

• firms need to carry out risk assesments to identify possible dangers

• Firms need to train first aiders and keep accident books

• all staff must recieve health and safety training

Consumer rights act 2015

• Product must be fit for purpose

• Product should match its description of size, quantity or properties

• Product should be of satisfactory quality

Consequences of not obeying consumer law

• cost of refunds or replacements

• potential to be sued

• harmed reputatiom

E-Commerce

using the internet to buy or sell products

Benefits of ICT

• computers can do some jobs faster than humans

• easier communication

• reduced cost due to fewer man hours needed

Negatives of ICT

• can be expensive to buy equipment or train staff to use new equipment

Communication with stakeholders

• Email (can be direct or on a large scale)

• Apps (can be used to sell products)

• Websites (can be used to publish reports or answer FAQs)

• Video calls (allow employees in different locations to hold meetings)

• Social media (can be used to advertise or promote local events)

Ways of acting ethically

• write codes of conduct for suppliers and carry checks

• buy fairtrade raw materials

• reward staff fairly

• be honest in advertisements

• dont use animal testing

• dont use toxic materials

Benefits of acting ethically

• firms can market themselves as an ethical company ehich may lead to an increase in customers

• staff are more motivated if theyre treated well

Drawbacks of acting ethically

• higher labour costs

• higher material costs

Ways to reduce environmental impact

• reduce amount of packaging

• dispose of waste carefully

• car share and cycling schemes to reduce pollution

• use quieter machinery to reduce noise pollution

• use renewable energy sources

Pros and cons of acting sustainably

• potential to attract more new customers due to better reputation

• Expensive to buy new equipment and develop new processes

How unemplyment effects businesses

In a place where unemployment is high, consumers have less disposable income and so demand falls

In a place with low unemployment businesses can pay lowe wages and fill jobs quite easily

when prices rise faster than income

businesses that provide income elastic products will suffer however businesses which sell cheap things may see an increase in sales

When prices rise slower than income

When prices rise slower than income businesses which sell income elastic products will see an increase in sales and profits while stores selling goods at a discount price will see a decrease

Interest rates

• added to loans so a business pays back more than they borrow

• added to savings which means the money in an account gradually increases

Lower interest rates

• Cheaper to borrow from the bank

• less interest gain when you save

• spending increses

• overdrafts and loans will not be as expensive

Higher interest rates

• More expensive to borrow from the bank

• more interest gain when you save

• spending decreases

• overdrafts and loans will be more expensive

Competitive markets

• nobody powerful enough to dictate prices

• firms race to develop better products which is costly

• firms rush to fill gaps in the market

Specialised markets

• Little to no competition

• market too small for lots of firms to survive

• hard to enter due to the requirement for specialised skills or lots of money and space

Globalisation

the process by which businesses nd countries aroudn the world become more connected

How globalisation positively affects uk businesses

• bigger market to sell to

• easier to set up factories in places with cheaper labour

How globalisation negatively affects uk businesses

• Higher wages in the uk makes it more difficul to compete with countries that have lower wages

• importing and exporting affected by exchange rates

• Potential bad publicity from having factories in countries wirth low wages

Exchange rates

the price at which one currency can be traded for another

How exchange rates affect imports and exports

• SPICED

  • Strong

  • Pound

  • Imports

  • Cheap

  • Exports

  • Dear

• WPIDEC

  • Weak

  • Pound

  • Imports

  • Dear

  • Exports

  • Cheap

Risks in running a business

• cost of startup could be lost

• change in health of the economy

• unable to know actions of competitors

How to reduce risks faced by businesses

• Make a business plan

• carry out regular maket research