• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

External Influences - Business Study Notes

Extracts from this document...


ECONOMIC GROWTH Economic growth is an increase in the nation's production of goods and services. It is measured in GDP. * Growth potential of an economy depends on the amount and quality of economical resources available (eg labour and fixed assets). * Also depends on productivity (how hard a nation works) * Governments can make short term growth by lowering tax and interest rates. This makes businesses borrow money for production and make consumers borrow money to spend. = increase in demand in economy What can economical growth do? Businesses - * growth in GDP means higher revenues and higher profits * gives economies of scale * increases confidence in businesses and helps plan for the future * BUT may cause shortages of raw materials and skilled labour due to fast growth Governments - * Higher revenue = more investment in new projects = more jobs = less to pay for welfare benefits * increase revenue through taxation * BUT high rates of growth lead to recessions! governments counter this by keeping growth at a sustainable level yy Environment - * High economical activity can kill off non-renewable resources * Increased pollution due to large economical activity GDP - GROWTH DOMESTIC PRODUCT INDICATES THE SIZE OF A NATIONS ECONOMY IT IS THE TOTAL MARKET VALUE OF GOODS AND SERVICES PRODCUED BY A NATION WITHIN THAT NATION DURING A PERIOD OF TIME gdp = total consumer spending + business investment + government spending + value of imports - value of exports BUSINESS CYCLE - a pattern of regular growth and recession BOOM = * HIGH PRODUCTION * POPULATION REACHES MAXIMUM CAPACTIY WHICH MEAN SHORTAGES AND THEREFORE INCREASED PRICES * SKILLED LABOUR SHORTAGES = HIGHER WAGES RECESSION = * ...read more.


Selling to a larger market is a opportunity of more sales revenue and grow your business 2. Allows economies of scale THREAT 1. Foreign businesses may undercut domestic businesses on domestic markets and abroad BUSINESSES TRADING ABROAD NEED TO BE INTERNATIONALLY COMPETITIVE * INTERNATIONAL COMPETITIVNESS means the ability to compete with businesses abroad * The business has to be competitive in terms of price. The business has to keep costs and prices down - this can be done by a productive workforce and efficiency * Have to also compete in terms of quality * A good public image is useful - e.g. BP tries to show its environmentally friendly by researching into sustainable fuels * Businesses need to market their ideas properly and understand the culture of the country they are trading in. Overseas markets have different tastes and values. The market plan has to account for this otherwise the business may not be successful. * When exporting, firms usually use an agent in the target country to handle distribution. The agent gets the product into wholesalers and retailers THE E.U THE EU IS A SINGLE MARKET SO TRADE BETWEEN MEMBER STATES IS EASY! * No trade barriers between EU member states - this is called a single market. * No tax to pay when importing goods from other EU countries * EU has a customers union, so the same custom duties apply in all EU countries * Single market smoothes out price differences between EU members * Freedom of movement for all factors of production within the EU. Factors of production = raw materials, finished goods and workers. ...read more.


Environment audit shows how a business is affecting the environment Shows if the business is meeting environment targets Shows where they need to change their waste management process PRESSURE GROUPS TRY TO INFLUENCE GOVERNMENT POLICIES AND BUSINESS DECISIONS Their aim is to influence the people who have the power to make decisions They use different methods: ACTION DESCRIPTION LOBBYING Discuss issues with business decisions makers and politicians to influence their thinking DIRECT ACTION Pressure groups organise protests against a specific business (e.g. blockade of shell petrol stations) PUBLICITY Try to make the public more aware of the situation - may prevent them buying the product PETITIONS List of signatures prove that people agree with the group LEGAL ACTIONS Can fight through courts if the pressure group thinks the business is acting illegally LOBBYING takes time! * The pressure group wants the politician on their side, but it takes time * Usually politicians give the people what they want, so the pressure group has to show the politician that the people agree with the group then the politician will change their minds DIRECT ACITON is a very powerful tool against a business * Businesses hate negative publicity. It can lead to lower sales and loss of reputation * Can take in the form of picketing protest outside the factory, a boycott or illegal violent action against a businesses property * Same thing with politicians! If the business thinks the people agree with the pressure group, it may have to give into its demands otherwise it could be bad for the business (loss of sales to competitors, bad public image) ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Structures, Objectives & External Influences section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Structures, Objectives & External Influences essays

  1. The Business Environment Coursework. Describe the type of business, purpose and ownership of ...

    The business structure for culture caf´┐Ż is very simple because they are a small business. As they grow they see what they need to do and what resources they need and try to respond to the growing needs of the business.

  2. Introduction to Business Assignment

    4.2 Even more so large organisations tend to be divided into many departments or functions such as Sainsbury's because with large organisations it can be said that there is no realistic chance of ensuring that the business is running

  1. Btec National Business Level 3 Year 1 - Exploring Business Activity

    as an organisation, to improve Oxfam's awareness of how the organisation is perceived as a customer and to bring about general improvement in working relations between Oxfam and its suppliers. Owners: It may individual owner in a sole trader business or the partners in a partnership.

  2. Free essay

    Business Ethics

    breath for which there is no medical evidence linked to 34million cases. Smoking mother This is another ethical issue the BAT must consider, in order for them to achieve its aim and objectives, for e.g. pregnant women who smoke increase their risk of miscarriage and 3,800 low birth weight babies are born each year, due to smoking mothers.

  1. Applied Business Studies Unit 1: Investigating Business

    o PTQ (4) o Planning (1) o Purchasing (1) o Finance (1) o General Manager (1) o Shop floor (35) * Louth have 16 years experience making smoke machines, originally called Jem before they were bought out by the martin group, Jem kept on as a brand name. * Martin are one of the main manufacturers of security smoke machines.

  2. Unit 29 P4 - External Factors That Can Affect A Business

    appeal, for instance, Primark for competitive prices, Marks & Spencer for quality and Top Shop for style. Barriers to entry- These are obstacles that are considered to block potential entrants or latest associations from profitably arriving in a market. The capacity of existing industries to keep hold of such obstacles will rest on their marketing and financial control.

  1. Investigating Business. Tesco PLC. I will be describing the aims and objectives of ...

    To be a creator of highly valued brands ________________ Their sixth objective is ?To be a creator of highly valued brands? means Tesco?s wants to create more brands just like they have in the past, in which they have been successful at.

  2. Legal influences and their impact on Sainsburys Plc

    The amount of data held should be adequate, relevant and not excessive. 5. The data must be accurate and up-to-date. 6. Personal Data should not be kept for longer than is necessary. 7. An individual should be entitled to: a.)

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work