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External influences on Business. P - political E - environmental S - social T - technological E - economical C - competition. Business constraints. Limiting factors / reasons why businesses can not do what they would like to . EXTERNAL. Economical. Environmental. Competitors.
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External influences on Business P - political E - environmental S - social T - technological E - economical C - competition
Business constraints Limiting factors / reasons why businesses can not do what they would like to
EXTERNAL Economical Environmental Competitors Political INTERNAL Company’s Aims & Objectives Expertise available Money available Social Technological
However Think... Not all external factors are ‘constraining’. We are going to look at 6 different external factors, for each you need to think if the factors are beneficial to businesses or constraining to businesses, or both?
P Political
P Local Gov. Education services Housing Local Tax Public transport / Parking
P Central Gov. Monetary Policy
P Central Gov. Fiscal Policy
P European Gov. European Union
E Economical • Performance of the economy affects the success of the business. Consider: • Exchange rates (will determine where the products are sold) • A poor performing economy will inhibit sales • The strength of the economy will determine the rate of growth possible for a business
S Social The current trends and tastes of the customer Ethics – consumer’s priorities for business ethics Food - What types of food is popular Clothing - what styles of clothing is popular
T Technological LO: Explain the advantages & disadvantages of technological change.
T Technological How can Technology affect business? New machines = production more efficient New products = (innovation encourages spending) Reduction in costs = usually cheaper (less workers needed) World wide market = (internet) VW http://www.youtube.com/watch?v=46_rhAzJzo4&feature=related
T Technological What are the advantages and disadvantages of new technology being introduced in car manufacturing? x √ VW http://www.youtube.com/watch?v=46_rhAzJzo4&feature=related Honda assembly http://www.youtube.com/watch?v=nvZBtJ-ncEM&feature=related
Exam style Q Analyse how technological change would affect a large food shop. [8 marks] Structure: What is technological change. Technological change is... What advantages would it bring (explain why it is an advantage) However what disadvantages would it bring (explain why it is a disadvantage) Overall, do YOU think technology has benefited the food shop?
What have we learnt? Discuss with a partner before you share it with the class
E Environmental Corporate Social Responsibility – The business considers and acts upon the thoughts of stakeholders other than their shareholders. UK law states that a business must try to make a profit for its shareholders. I know my factory pollutes the environment, but it is expensive to use a cleaner method of production. W e are making a large profit, and that's what are shareholders want We invest a lot of money into cleaner methods of production to help protect the environment, customers prefer a company that are aware of their CSR, which in turn boosts are profits.
E Environmental Read page 83 – Q. Explain the three external constraints that discourage businesses from polluting. [6marks] http://classtools.net/education-games-php/timer/
C Competition Nearly all businesses have competitors, which will undoubtedly affect the way the business is ran
Cost-Benefit analysis A ‘cost-benefit analysis is made by the government to help them decide whether or not to build / expand External costs – these are disadvantages felt by the community External benefits – the community gains in some way from the business activity.
