WHAT IS A BUSINESS?: Unit 3

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What are PESTLE factors?
political, economical, social, technological, legal and environmental
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Example of political factors?
Government policies and extent of government intervention
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Example of economic factors?
Income levels; interest rates; exchange rates; inflation; employment levels; EU membership
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Example of social factors?
Demographic factors; ethical issues; impact of pressure groups
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Example of technological factors?
New products and processes; impact and cost of change
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Example of legal factors?
Legalisation (laws)
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Example of environmental factors?
Environmental issues; fair trade
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What factors influence business costs and demands for goods?
Competition; state of economy; impact of changes in interest rates; change in demographic
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Factors affecting demand?
Price; tastes and fashion; price of other goods; marketing and advertising; seasonal factors; government action (e.g. sugar tax).
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Why is competition good?
Improves efficiency, cost-effectiveness and quality of goods and services
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Disadvantages of competition?
Product quality can be sacrificed; huge resources that could be used elsewhere devoted to competition; can force businesses out of market
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What are interest rates?
The cost of borrowing money and the return for lending money.
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What demographic factors could affect demand?
Ageing populations, ethnically diverse populations, size of households
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What environmental issues can affect demand?
Customer concerns for ethnically friendly products.
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Other cards in this set

Card 2

Front

Example of political factors?

Back

Government policies and extent of government intervention

Card 3

Front

Example of economic factors?

Back

Preview of the front of card 3

Card 4

Front

Example of social factors?

Back

Preview of the front of card 4

Card 5

Front

Example of technological factors?

Back

Preview of the front of card 5
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