24 terms

Influences in the business operating environment and nature of business

Learn the key concepts from Unit 1 Nature of business
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External influences types
Economic, financial, geographic, social, legal, political, institutional, technological, competitive situation, markets
Internal influences types
Products, location, resources, management and business culture,
Business environment
anything that affects the operation of the business
Economic cycle
the predictable long term pattern of changes in the national income measured in GDP
Social influences
Changes in attitudes, values and beliefs of society that affect their behaviour.
Legal influences
Framework of laws and regulations that govern the operation of a business
Political influences
Different ideas that are implemented by the different political parties
Institutional influences
Framework of regulatory authorities and other organisations that influence the operation of a business. Eg Dept of the environment, trade unions.
Technological influences
Changes in technology that influences the way products are produced and marketed and how businesses operate to decrease costs and improve productivity.
Competitive situation
Factors that influence a business' competitiveness are ease of entry into the market, number of competitors, local and foreign competition and marketing strategies employed by competitiors.
Market influences
size of the market, size of the business, number of competitors, nature of the product, and changes in markets.
Location factors
Proximity to support services, visibility, cost, proximity to suppliers, proximity to customers
Resources
Things like finance, employees, physical resources like equipment, raw materials, and information resources.
Management and business culture
The values, ideas, expectations and beliefs shared by the staff and managers of the business.
Stakeholders
Any group or individual on whom the business actions impact like the society, managers, employees, the environment, owners ( shareholders) and customers.
Internal stakeholders
Owners, managers, employees
External stakeholders
Customers, Suppliers, unions, government, society
External environment
includes those factors over which the business has little control, such as government policy, technology, economic conditions and social attitudes.
Internal environment
includes those factors over which the business has some degree of control, such as products, location, resources, management and business culture.
Phases of an economic cycle
Upswing, boom, downswing, recession
PEST Analysis
Analysis of political, economic, social and technological factors
Product influences
Type of good or service, range of products available, and size of the business.
Evidence of a contracting (declining) economy
Less consumer spending, cost cutting by businesses, business profits falling, prices falling and more people unemployed.
Evidence of a expanding economy
Rising prices, more business profits, more employees required, increased confidence and spending by consumers.