An uncertain future

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When does uncertianty exist?
When the outcome of a situation is impossible to predict.
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How do markets cause uncertainty?
Marketing tactics, price reductions, romotions. Innovation. New firms enter the market.
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How does the economy cause uncertianty?
Fluctuations in GDP, unemployment which alters consumer spending, inflation makes planning difficult, exchange rates, interest rates change cosumer spending.
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How does the government cause uncertianty?
Taxation affects income and spending, indirect taxation, eg alcohol, goverment spending cuts may impact areas, laws change business freedoms, trade negotiations, EU brings legislation.
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How does geopolitical events cause uncertianty?
Supply can be disrupeted, access to markets can be stopped, protectionism can reduce demand, raw materials can rise in price because is shortages due to war or natural disasters, price of raw materials increases due to demand from elsewere.
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What are shocks?
Unexpected events or changes that happen suddenly and without warning. they can have considerable effects on businesses and the economy.
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What can cuase shocks?
Natural disasters-floords reduce agricultural output. War that disrupts trade. Financial crisis. Macoeconomic change-exchange rates change suddenly
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Why do businesses dislike uncertiany?
Increases risk, disruots planning- assumptions may be made on current conditions, diverts resources aways from core of business- managers give time to deal with problem, costly to cope-investment to keep up with rival, stressful,reduces profitability
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What is the difference between risk and uncertianty?
Something is risky if it might go wrong. Uncertianty is when it is impossible to predict an outcome.
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How can businesses use market research to reduce uncertianty?
More understands make a business better equipped to deal with changes, easier ot target consumers ad become orientated, actions of competitors, trends and oppertunities may be found in advance.
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How can businesses use contingency planning to reduce uncertianty?
Having a plan in readiness, thinking about potential problems, if problems arise they are ready which will save time and expense
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How can businesses use research and development to reduce uncertianty?
Can keep ahead of the competition, new ideas may be found, process and technological innovation.
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How can businesses use economic indicators to reduce uncertianty?
Moniter indicators to predict what will happen, GDP declining and unemployment increasing my suggest economic downturn, rising house prices suggest economic upturn.
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How else can businesses reduce uncertianty?
Diversifying, collaboration, hedging
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What is collaboration?
Competitirs work together to help cut custs like shareing production facilities.
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What is hedging?
Used by importers to reduce risk of interest rate changes. Te axchange rates can be agreed in advance.
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Other cards in this set

Card 2

Front

How do markets cause uncertainty?

Back

Marketing tactics, price reductions, romotions. Innovation. New firms enter the market.

Card 3

Front

How does the economy cause uncertianty?

Back

Preview of the front of card 3

Card 4

Front

How does the government cause uncertianty?

Back

Preview of the front of card 4

Card 5

Front

How does geopolitical events cause uncertianty?

Back

Preview of the front of card 5
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