Understanding External Influences on Business: A PowerPoint Guide for Students, Study notes of Business

Download Understanding External Influences on Business: A PowerPoint Guide for Students and more Study notes Business in PDF only on Docsity! PowerPoint Guide The news icon is hyperlinked to a related article or website Simply click to access The film icon is hyperlinked to a related clip Simply click to access The discuss icon indicates suggested points to discuss The writing icon indicates written activity or question time. Understanding External Influences on Business Theme 1: Section 1.5.5 External influences Different aspects of the external environment Developments in technology Changes to legislation Changes to the economic climate External influences – Just a minute You have 60 seconds to note down as many examples of external influences that might affect a business and its success Summary of business responses If any of the external environment changes then businesses will need to respond. Some examples are given below: External factor Possible change Possible business response Technology ICT developments Introduce e-commerce for sales and home based working for employees increasing revenue and saving costs Legislation New recycling requirements Costs will increase so cost savings planned for other areas reducing employment and quality of materials used The economic climate Unemployment increases Likely that sales will fall so consider other markets e.g. overseas or reducing production and lowering costs through redundancies Truffle News News article on how TruffleShuffle made use of e-commerce 30 minute talk by TruffleShuffle founder, Pat Wood TruffleShuffle Ltd - Responses Use of technology How TruffleShuffle has benefited Use of e- commerce Widened market, accessible through target age group(s) through smart phones, links easily to web and social media presence Electronic payment systems Allows less staff to be used, convenient for customer as available 24/7, speeds up receipt of payments (and making payments), easy to link to accounting systems and management information Use of social media platforms These have allowed two way communication between the company and its customers. Through social media digital marketing such as online competitions, blogs and information about products has been used creating interest and linking to their website and e-commerce Economic Change hits TruffleShuffle Most businesses will be affected by changes in the economic climate but some changes will particularly impact on a business that sells fashion items and gifts. Explain how Truffle Shuffle would be affected by the following economic changes: Economic Change Effects on Truffle Shuffle An increase in interest rates An increase in taxes on spending such as VAT A fall in the level of unemployment Possible strategies to cut costs Group Activity Note down the potential advantages and disadvantages of each strategy. You may add strategies of your own: Strategy Advantages Disadvantages Introduce self service tills Reduce number of staff Increase prices Increase promotion Reduce opening hours Recommendations They are undecided as to which strategy to choose. You suggest the following options 1) To reduce staffing by opening less hours. This would save money but may lose sales. Your supervisors however say that early morning and late at night there are few customers. 2) Introduce self service tills. This would cost money in the short term to purchase the machinery and train staff how they are used so they can help customers if needed. It would allow less staff in the future however. Your supervisors are concerned they may not be popular with customers. Thinking carefully about legislation and the effects on customer service, which option would you strongly advise them to choose, Justify your answer. TOPIC 1.5 Knowledge Check tutor2u" Anyone who has an interest in the business 1) Which of the following best describes the term stakeholder 2) If the exchange rate appreciates the effect is expensive & imports cheapercheaperimports more expensive become more expensive Answer Exports more expensive & imports cheaper 2) If the exchange rate appreciates the effect is 4) An impact on a business of increased interest rates might be that: expand more easilymoreencouraged to spend more cost will rise The firm’s borrowing costs will rise 4) An impact on a business of increased interest rates might be that: 5) Rising interest rates mean that: expensiveincreaseincome will increase Savings will decrease May be harder to recruit employees with the right skills 6) A potential disadvantage of falling unemployment for a business is 7) The Trade Descriptions Act makes it an offence to productsworkersnot fit for purpose than the minimum wage Falsely describe products 7) The Trade Descriptions Act makes it an offence to 9) An advantage of using digital communication is not workoverloadcan be stored electronically will be received Data and messages can be stored electronically 9) An advantage of using digital communication is 10) A disadvantage of E-payments is of moneyin cashRisk of fraud kept or used