1.3.1

External Influences

Test yourself

The Impact of External Influences

External factors impact a business' objectives and strategies. PESTLE is a good acronym for remembering these external factors.

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Political

  • Political factors can affect how a business operates.
  • This includes:
    • Government regulation of industries.
    • The government's competition policies (price controls or anti-trust allowing mergers and acquisitions).
    • The government's fiscal policy (the relationship between government spending and tax policies).
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Economic

  • Economic factors can affect how a business operates.
  • This includes:
    • Interest rates - a rise in interest rates increases the cost of borrowing (cost of debt). This disincentivises investment and consumption.
    • Consumer spending - in a time of recession, consumer confidence may be low, so there will be little consumer spending.
    • Economic growth - in a time of growth, consumer confidence will be high.
    • Exchange rates - if exchange rates are lower, a business' exports can be internationally competitive.
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Social

  • Social factors can affect how a business operates.
  • This includes:
    • Urbanisation - people usually move to urban areas because there are more job opportunities.
    • Migration.
    • Social changes - e.g. the growth of e-commerce.
    • Demographic changes - e.g. the UK has an aging population.
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Technological

  • Technological factors can affect how a business operates.
  • This includes:
    • Mobiles.
    • Big data - this helps businesses gain insights into consumer behaviour.
    • Disruptive technologies - some businesses will have to adapt to new technologies. E.g. how are businesses responding to Netflix.
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Environmental

  • Environmental or ethical factors can affect how a business operates.
  • This includes:
    • The supply chain - ensuring the business does not exploit its workers.
    • Emissions - the business may need to focus on reducing its pollution.
    • Taxes - the business may be unethical by trying to lower how much tax it pays.

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1Exploring Business

1.1Features of Business Organisations

1.1.1Sole Traders & Partnerships

1.1.2Private & Public Limited Companies

1.1.3Types of Liability & Not-For-Profits

1.1.4Purposes of Businesses

1.1.5Purposes of Businesses 2

1.1.6The Different Economic Sectors

1.1.7Multinational Companies

1.1.8Stakeholders

1.1.9Influence of Stakeholders

1.2Organisation of Businesses

1.2.1Organisational Structure

1.2.2Types of Organisational Structures

1.2.3Business Aims & Objectives

1.2.4Business Aims

1.2.5Business Objectives

1.3Business Environment

1.3.1External Influences

1.3.2Political & Legal Change

1.3.3Economic Environment

1.3.4Social & Technological Environment

1.3.5Lifestyle & Technological Environment

1.3.6Corporate Social Responsibility

1.3.7The Competitive Environment

1.3.8Innovation

1.3.9Risk & Uncertainty

1.3.10Porter's Five Forces

1.3.11SWOT Analysis

2Marketing Campaigns

2.1Marketing

2.1.1Setting Marketing Objectives

2.1.2Customer Needs

2.1.3The Market

2.1.4Competition & The Market

2.1.5Consumer Behaviour

2.1.6Market Research

2.1.7Forms of Market Research

2.1.8Market Segmentation

2.1.9Cultural & Social Factors in Marketing

2.1.10Promotional Decisions 3

2.1.11Pricing Strategies

2.2Marketing Mix

2.2.1Marketing Mix

2.2.2Product Life Cycle

2.2.3Pricing Decisions & Price Skimming

2.2.4Pricing Decisions & Price Penetration

2.2.5Promotional Decisions

2.2.6Promotional Decisions 2

2.2.7Promotional Decisions 3

2.2.8Market Mapping

3Business Finance

3.1Sources of Finance

3.1.1Internal Finance

3.1.2External Finance

3.1.3External Finance 2

3.1.4Sources of Business Finance

3.2Financial Planning

3.2.1Revenue

3.2.2Costs

3.2.3Cash & Cash Flow

3.2.4Cash & Cash Flow 2

3.2.5Break-Even Analysis

3.2.6Profits

3.3Financial Statements

3.3.1Balance Sheets

3.3.2Income Statements

3.3.3Liquidity

4International Business

4.1Globalisation

4.1.1Growing Economies

4.1.2Specialisation & Trade

4.2International Business

4.2.1Internationalisation

4.2.2International Trade

4.2.3MNCS

4.2.4Conditions that Prompt Trade

4.2.5Assessment of a Country

4.3International Economic Environment

4.3.1Globalisation

4.3.2Factors Contributing to Globalisation

4.3.3Protectionism

4.3.4The EU & the WTO

4.3.5Trading Blocs

4.4Factors Affecting International Business

4.4.1Global Competitiveness

4.4.2Ethics of Global Business

4.4.3Controlling MNCs

4.4.4Cultural & Social Factors in Marketing

5Principles of Management

5.1Management & Leadership

5.1.1Managers

5.1.2Management Theories

5.1.3Managing Organisational Culture

5.1.4Management Style

5.2Theories of Motivation

5.2.1Motivating & Engaging Employees

5.2.2Taylor's Theory

5.2.3Mayo's Theory

5.2.4Maslow's Theory

5.2.5Herzberg's Theory

5.3Managing Change

5.3.1Change

5.3.2Key Factors in Change

5.3.3Scenario Planning

5.3.4Managing Change

5.3.5Managing Strategic Implementation

6Business Decision Making

6.1Business Principles & Practices

6.1.1Influences in External Environments

6.1.2Product Decisions

6.1.3Competitive Environment

6.1.4Corporate Strategy

6.1.5Quantitative Sales Forecasting

6.1.6Legislation

6.2Quality Management

6.2.1Importance of Quality

6.2.2Measuring Quality

6.2.3Total Quality Management

6.2.4Evaluating TQM

6.3Human Resources

6.3.1Contracts

6.3.2Recruitment

6.3.3Training a Workforce

6.4Documents & Business Decisions

6.4.1Sales Forecasts

6.4.2Managing Strategic Implementation

6.4.3Problems with Strategy

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Business Objectives

Political & Legal Change