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Business Studies ­ External Influences ­ Class Notes

International Competitiveness
It measures the ability of business within a country to compete with those from overseas.

Firms aim to be competitive in order to gain / maintain market share. Competitiveness depends upon
price and non price factors.
Price Factors Nonprice Factors…

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Legislation will have an impact

2. To what extent will a British firm protect itself from exchange rate fluctuations by relocating?
If they are producing in the location of their market they will not have to worry about how
exchange rates will affect imports and exports. Therefore they are predicted…

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Increased taxes allows governments more Not all regions get the same economic growth
spending on services / benefits.

European Union and its Implications for UK Businesses
In 1992 trade barriers were removed in the EU and in 2002 the Euro currency was launched.

EU Objectives
Economic
Free movement of goods,…

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The UK should not join the Euro as it would mean a sacrifice of control, which would greatly
disadvantage the UK economy. If we lose control of interest rates we put ourselves in a vulnerable
position. There are also extremely high costs involved in the transfer from the pound to…

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Combine with others e.g. Through Employers Associations
Indirectly through actions e.g. threat to close plans and cut jobs

The success will depend on their access to politicians, the media etc and whether companies believe it is
a waste of time attempting or not.

Privatisation
Privatisation is transferring assets from the…

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Impacts Puts off customers, investors, and Productive and committed employees
employees Cooperative community
Creates poor publicity Reliable suppliers
Satisfied customers
Ultimately damages profits Satisfied shareholders

Creates a positive cycle of profit, Growth that
benefits all.

Time Short term Long term
Scale

Which Model will a Business Choose?
It depends on...…

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BUT LONG TERM BENEFITS!!
Government
Cooperation
Less scrutiny
Investors
Shareholders
Lenders

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