External causes of business failure

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  • Created by: noe
  • Created on: 02-03-20 10:16
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  • EXTERNAL CAUSES OF BUSINESS FAILURE
    • Market conditions (markets are dynamic)
      • Consumer tastes might change
      • Failure to set up online operations can make a business struggle as there has been a huge growth in online shopping
      • Some industries decline and are replaced by others
    • Competition
      • They might bring out superior products, charge lower prices, better marketing campaign...
    • Economic
      • A financial crisis, recession, a cut in government expenditure.
        • If taxes are increased and wages lowered, disposable income will decrease resulting in lower demand for non-essential goods.
    • Exchange rates
      • A business which relies heavily in exports will suffer if exchange rates rise as they will have to pay more for the goods
    • Interest rates
      • Business with debts would suffer
    • Government regulations
      • They can have a negative impact on businesses if they limit the companies' ability to do business, reduce subsidies or cut expenditure.
    • Supplier problems
      • If they fail to deliver orders on time
    • Natural phenomena
      • Weather or disease

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