External Influences

Interest Rates

Interest rates are effectively the price of money. Interest is charged on any money that people borrow and this is paid to lenders.

Interest payments

When consumers or businesses borrow money, they usually pay back more than they borrowed. This extra amount is called the interest payment.
The interest rate is the percentage of the loan that is charged as the price for borrowing.

Saving vs borrowing

When people save money, they get paid interest by the bank.
Therefore, the higher the interest rate, the more expensive it is to borrow money and the better it is to save money.

Impact on loans

When interest rates are low, more companies will borrow money because it is cheaper to do so.
This is likely to lead to more investment and higher growth for businesses.
When interest rates are high, the opposite is true.

Impact on consumer spending

When interest rates are low, consumers are less likely to want to save because they get less money in return for saving.
This means that the demand for goods and services goes up as people spend more of the money they earn on goods and services.
When interest rates are high, people have more of an incentive to save money. But the interest rates on their mortgage payments also rise.

Businesses Face Constantly Changing Environments

Every business is affected by the external environment that it operates in. The business environment is characterised by:

Technological advancements

Advances in technology can affect every aspect of a business. If there is a technological advancement in the capital used by a company, they may be able to produce the same products and services at a lower cost per unit.
- In the industrial revolution (1780 - 1850), advances in technology reduced the cost of cotton cloth (used in your clothes) by 85%.

The economy

The economic situation describes how well the country and world’s overall economy is performing.
- For example, in 2008 there was a financial crash which led an increase in unemployment in the UK and other countries. Because of this, the customers of most businesses began to spend less money. Customers had less money to spend on luxury products like Gucci handbags or expensive holidays.

Legislation

Some industries are heavily impacted by laws (also known as pieces of legislation).
When legislation (the law) changes, businesses can be forced to change their practices.
For example, the UK government changed a law and forced cigarette companies to sell their products in plain packaging.

Environmental expectations

In today’s business environment, businesses have to change the way they operate to meet environmental expectations.
For example, in 2018, the supermarket Iceland promised not to use plastic packaging in their supermarkets by 2023.
Automotive (car and lorry) companies may be pressured to make electric vehicles instead of those that use petrol (or diesel) fuel.

1Enterprise & Entrepreneurship

1.1The Dynamic Nature of Businesses

1.1.1The Dynamic Nature of Businesses

1.1.2Risk & Reward

1.1.3The Role of Business Enterprise

1.1.4The Role of Business Enterprise 2

1.1.5The Role of the Entrepreneur

1.1.6End of Topic Test - Dynamic Nature of Business

1.1.7Grade 9 - Dynamic Nature of Business

1.2Spotting a Business Opportunity

1.2.1Customer Needs

1.2.2Market Research

1.2.3Market Segmentation

1.2.4The Competitive Environment

1.2.5Primary & Secondary Market Research

1.2.6End of Topic Test - Business Opportunities

1.2.7Application Questions - Business Opportunities

1.2.8Exam-Style Questions - Market Segmentation

1.3Putting a Business Idea into Practice

1.3.1Business Aims

1.3.2Business Objectives

1.3.3Business Revenues & Costs

1.3.4Costs - Calculations

1.3.5Revenue - Calculations

1.3.6Business Profits & Break-Even Analysis

1.3.7Profits & Losses - Calculations

1.3.8Interest - Calculations

1.3.9Cash & Cash Flow

1.3.10Cash & Cash Flow 2

1.3.11Cash Flow - Calculations

1.3.12Sources of Business Finance

1.3.13End of Topic Test - Business in Practice

1.3.14Grade 9 - Business in Practice

1.3.15Exam-Style Questions - Business in Practice

1.4Making the Business Effective

1.4.1The Options for Start-Up & Small Businesses

1.4.2Limited Liability

1.4.3Franchising & Not-For-Profits

1.4.4Business Location

1.4.5The Marketing Mix

1.4.6Business Plans

1.4.7End of Topic Test - Effective Business

1.4.8Application Questions - Effective Business

1.4.9Exam-Style Questions - Business Plans

1.5Business Stakeholders

1.5.1Business Stakeholders

1.5.2Technology & Business

1.5.3Legislation & Business

1.5.4Legislation & Business 2

1.5.5The Economy & Business

1.5.6External Influences

1.5.7End of Topic Test - Business Stakeholders

1.5.8Grade 9 - Business Stakeholders

2Building a Business

2.1Growing the Business

2.1.1Business Growth

2.1.2Finance

2.1.3Changes in Business Aims & Globalisation

2.1.4Ethics & Business

2.1.5The Environment & Business

2.1.6End of Topic Test - Growing a Business

2.1.7Application Questions - Growing a Business

2.1.8Exam-Style Questions - Business Growth

2.2Making Marketing Decisions

2.2.1Product

2.2.2Product Life Cycle

2.2.3Price

2.2.4Pricing Methods

2.2.5End of Topic Test - Product & Price

2.2.6Grade 9 - Product & Price

2.2.7Promotion & Advertising

2.2.8PR & Sales Promotions

2.2.9Sponsorship & Product Placement

2.2.10Promotional Mix

2.2.11End of Topic Test - Promotion

2.2.12Application Questions - Promotion

2.2.13Exam-Style Questions - Promotional Mix

2.2.14Place & Wholesalers

2.2.15Direct to Consumer

2.2.16E-commerce & M-commerce

2.3Making Operational Decisions

2.3.1Job Production

2.3.2Batch & Flow Production

2.3.3Working with Suppliers

2.3.4Effective Supply Chains

2.3.5Just In Time & Just In Case

2.3.6Managing Quality

2.3.7Total Quality Management

2.3.8The Sales Process

2.3.9End of Topic Test - Operational Decisions

2.3.10Grade 9 - Operational Decisions

2.3.11Exam-Style Questions - Managing Stock

2.4Making Financial Decisions

2.4.1Gross Profit & Net Profit - Definitions

2.4.2Gross Profit - Calculations

2.4.3Net Profit - Calculations

2.4.4Rate of Return

2.4.5Rate of Return - Calculations

2.4.6Research & Financial Data

2.4.7Marketing Data

2.4.8Percentage Change - Calculations

2.5Making Human Resource Decisions

2.5.1Organisational Structures

2.5.2Organisational Structures 2

2.5.3Recruitment

2.5.4Effective Recruitment

2.5.5Training a Workforce

2.5.6Motivating a Workforce

2.5.7End of Topic Tests - Human Resources

2.5.8Application Questions - Human Resources

2.5.9Exam-Style Questions - Human Resources

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