1. 1.71.7 External influences on business

2. 1.7 External influences on business Types of external influences  Technological changes  Business competitors  Economic conditions  Environmental constraints All these influences can affect the way a business operates.

3. 1.7 External influences on business Technological Change  Technology changes quickly  New technology replaces old products e.g. Cassette replaced by CD. CD replaced by MP3’s  Businesses need to embrace technology to be competitive and survive.

4. 1.7 External influences on business Advantages of technological change  New products  consumers want latest features  more sales  Less workers needed  less costs  If first to market then business or brand has competitive advantage

5. 1.7 External influences on business Disadvantages  Expensive to research  Loss of sales if do not embrace technology  Workers need training

6. 1.7 External influences on business How do you think Technology can be introduced successfully?  Involve workers in the process – ask them how to get most out of machines  Inform workers that they develop new skills and receive training  New products  job security

7. 1.7 External influences on business Try Activity 5.1 p.81

8. 1.7 External influences on business Business competitors Competitors may:  Raise/lower their prices  Introduce more advanced goods/better service  Move into the area  Offer additional facilities, eg open later. If they gain customers, this increases their market share.

9. 1.7 External influences on business Economic conditions  Interest rates  Price changes  Exchange rates The Government aims to keep these stable to help business planning.

10. 1.7 External influences on business Environmental constraints  Laws and regulations on the environment affect business activities  Many organisations have environmental policies  Key areas are reducing pollution and wastage

11. 1.7 External influences on business Types of pollution  Air pollution – affects air quality  Noise pollution – unwanted noise which harms or irritates  Water pollution – through hazardous substances or pollutants

12. 1.7 External influences on business Social Responsibility – which is right?  Making cheap products but pollute environment OR  Make more expensive but environmentally products

13. 1.7 External influences on business  Pressure Groups - A group of people who try and persuade others to share their views on something. EG Friends of the Earth and Greenpeace. There actions may be - writing letters to businesses, government and newspapers, organising marches and protests and gaining public support. Pressure Groups

14. 1.7 External influences on business Summary  External influences affect business activities  Some are unpredictable  External influences change regularly  Businesses must take action to cope  Best action will vary, depending upon the business