Business Influences

External Factors: PESTEC
1. Politcal
  1. Influenced by the government
    1. VAT
    2. Minimum Wage
    3. Health and Safety regulations
2. Economic
  1. Influenced by how well the economy is doing
    1. Levels of employment
      1. If many are unemployed they will have less expendable income meaning they will buy cheap commodities instead of luxury ones
    2. Recession
      1. When a country has a low amount of money being spent on goods and services. People spend less meaning less business.
    3. Interest Rates
      1. Set by Bank of England on how much it costs to borrow money.
        Low encourages borrowing, spending and improves the economy
        High puts people off spending and encourages saving.
3. Socio-cultural
  1. People's opinions, beliefs and values influencing their purchasing habits and power.
  2. Fashion can change very quickly affected related business.
  3. Business want to be seen to offer flexible working practices.
4. Envrionmental
  1. Weather affects business: Hot is good for ice cream parlours, Cold is good for warm clothing suppliers
  2. Business need to be environmentally friendly to have a good repututation
    1. Increase recycling of waste products
    2. Reducing their carbon footprint
    3. Increase use of environmentally-friendly products
    4. Decreasing pollution
5. Competetive
  1. Businesses need to consider competitors
    1. Competitors may be cheaper
    2. May offer a better quality product
    3. May be located better
    4. May offer more promotions
6. Technological
  1. Business must stick with the times
  2. Must purchase new technology or face being outdated: bad for reputation and business
Internal Factors
1. Financial
  1. Businesses need money to grow
    1. A wanted machine may not be affordable
    2. Staff can not be paid or more staff employed
    3. Advertising campaign can't be carried out
    4. Loans needed from a bank
    5. Raw materials can not be afforded
2. Human resources
  1. Poorly trained staff will not will not perform well
  2. Underpaid workers may take industrial action
  3. Motivated workers will work harder for longer
3. Current technology
  1. Investing money into current technology can give business the edge over competitors
Stakeholders
1. Internal
  1. Owners
  2. Shareholders
  3. Employees
2. External
  1. Suppliers
  2. Local Community
  3. Local Government
  4. National Government
  5. Customers
  6. Banks
  7. Pressure Groups

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Business Influences

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	Created by Callum McCadden about 10 years ago