1.5 Understanding External Influences

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  • Created by: pinkbeer
  • Created on: 27-08-19 15:20
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  • Understanding External Influences
    • Stakeholders
      • Influence the way in which the business operates
      • Shareholders
        • Big influence on a business
        • Being given a share of the profits
        • Make money if they sell their shares
      • Employees
        • Influenced by the businesses performance
        • Way a business treats its employees has an effect on the business
        • Best possible pay and rewards for their job
        • keep their job and to ensure it's secure
      • Customers
        • Big influence as they buy the product
        • Get the best possible service and product
        • Best value for money on product
      • Managers
        • Influence the way the employees act
        • Make sure business succeeds
        • Ensure job is secure
      • Suppliers
        • Big influence as they provide the goods to the business
        • Increase sales and profits
        • Encourage a business to buy from them again
        • Grow their business
      • Local Community
        • Support or object the way in which it operates
        • Look after the local area and the people within
      • Pressure Groups
        • People who join together and try and influence a business
        • Encourage consumers to buy more of a product
        • Persuading customers to stop buying from a product
        • Encourage a business to behave in a more ethical way
      • Government
        • Impacts how a business operates
        • Manages the national economy
      • Stakeholder Conflict
        • Can have a direct impact on the service to customers
        • Business will have to choose which group has biggest influence
    • Technology
      • Changes rapidly and has a huge impact on a business
      • E-Commerce
        • Process of using the internet to carry out business
        • Need to ensure that customers can find the business
      • Social Media
        • Number of channels that influence businesses
        • Allows a business to talk to customers about the product
      • Digital Communication
        • Helped to make work quicker and cheaper
        • Help operate in other countries
      • Payment Systems
        • Easier way to pay for products
        • Quicker methods for both big and small businesses
    • Technology influences on business activity
      • Sales
        • Allows sales to be made 24/7 and from anywhere
        • Increases customers satisfaction
      • Costs
        • Costs are kept low
        • Reduces travel cost
        • Can work from home
    • Legislation
      • Laws of the country that the business has to follow
      • Protecting the rights of the consumers (Consumer Law)
        • Have to provide a product that is of reasonable quality and is fit for its intended purpose
        • Consumer Rights Act 2015
          • Right to reject within 30 days
          • After 30 days have right to repair, replace or refund faulty product
          • Retailer responsible for safe delivery
          • Not allowed to enforce unfair laws
        • Protecting rights of employees and employers (employment law)
          • Relates to the way employees are hired and treated
          • Recruitment
            • Have to do every thing in a fair way
            • Advertising vacancies, selecting candidates
            • Interviewing candidates, offering the job
            • preparing the employee, producing the contract and conducting the induction
            • Different arrangements and any checks
          • Pay
            • Very complex and different laws regulate pay for different roles
          • Discrimination
            • Cannot discriminate against certain groups
            • Cannot rfuse a candidate due to protected characteristic
            • Equality Act 2010
          • Health and Safety
            • Ensures that everyone Is responsible for looking after each other
            • HASAWA 1974
              • Provide safe place to work, maintain and provide suitable equipment
              • Provide training, employees report any accident, report anything that may hurt them
              • Report serious accidents to HSE, ensures safety to visitors and must have public liability insurance
    • Impact of Legislation
      • Legislation changes every year and a business has to change so it complies with it
      • Costs of training, equipment, pay, administration and licenses
    • Economic Climate
      • when employment is high businesses need to put there wages up to attract people. People will have higher income making businesses happier
      • Inflation
        • If inflation is low a business may not feel comfortable but they are able to buy cheaper of suppliers and employees are less likely to ask for a pay rise
    • Interest
      • Bank of England only set a base rate
    • Tax
      • Tax collected for public services affects the amount charged on individual wages
      • Also effects amount poeple have left to spend
    • Exchange Rate
      • Globalisation and technology has caused business to deal with multiple currencies
      • Businesses will have to change money dependant on the exchange rate that day
      • Strong Pound Imports Cheap Exports Dear

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