Business Studies AS Level (External Influences)

PEST analysis: Assessing the likely impact of the political, economical, social and technological factors in the external environment of a business

Political factors:

• governmenr economical policies
• government social policies
• the extent of government
• inervention
• legislation
• membership of the EU

Economic factors:

• the business cycle
• interest rates
• exchange rates
• the level of inflation
• the level of unemployment

Social factors:

• environmental issues
• ethical issues
• the impact of pressure groups
• the influence of different stakeholders
• changing lifestyles

Technoligical factors:

• new products
• new processes
• the impact of change
• the cost of change

Monopoly: Either a single producer within a market but in a practice firm with a market share of 25% or more, However is very rare as if the business has little or no competition, they could charge high prices for poor services and to enter that market, there are owing to high barriers of entry.

Oligopoly: A market dominated by a small number of large firms known as oligopolists. It is very competative but, they usually help each frim out to keep the competition dominant by following the same price standards

Cartel: A group of firms that come together to fix standard pricing and quality standards. They are difficult to detect but if the government catch you out, they fine you 10% of your total revenue

Monopolistic Competition: When there is a large number of firms competing in the market, each having enough product differentiation to achieve in the market and therefore have some control over the price they charge (Easy to enter as it's relativley low to set up)