Sources of Uncertainty

A basic table outlining the issues that lead to uncertainty within an organisation

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Sources of Uncertainty
The Market Marketing tactics price reductions,
Markets are dynamic and constantly promotions by rivals
changing. Business rivals will always be Innovation, rivals will develop new
trying to take away market share. versions or completely new products
New firms enter the market
The Economy The business cycle, fluctuations in GDP
The economy is always changing and change and the growth of the economy affect
in macroeconomic factors will affect the spending
trading environment. Unemployment affects income,
confidence and spending
Inflation makes planning difficult and can
reduce international competitiveness
Exchange rates fluctuate and cause
problems for exporters and importers
If interest rates change, costs may
change and consumer spending may rise
and fall
The Government Direct taxation can affect income and
The government exerts a great deal of spending
control over the economy and the businesses Indirect taxation also affects income and
within it. spending and can also hit some
businesses specifically
Government spending, many businesses
rely on providing products and services
to the government, cutbacks can have a
real impact in some areas
Laws and regulations can restrict the
freedom of a business
Trade negotiations can affect businesses
The EU can also bring in legislation that
affects businesses
Geopolitical Events Supplies of raw materials can be
Events in other countries such as political disrupted
turmoil or even war can affect the UK. Access to markets can be controlled or
Natural disasters such as floods or famine even stopped
have an effect on some commodities. Protectionism can reduce demand
Growth in other economies (e.g. China) can Raw materials and commodities can rise
affect UK businesses. in price if production is reduced by war
or natural disasters
Prices of raw materials can also be
driven up by rising demand from
elsewhere e.g. China

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