external environments

• political factors

  competition policy

  industry regulation

  government spending and tax policies

  business policy
• economic factors

  interest rates

  exchange rates

  consumer spending and income

  economic growth
• social factors

  demographic change

  consumer tastes and fashion

  changing lifestyles

  impact of pressure groups
• technological factors

  disruptive technologies

  new production processes

  big data and dynamic pricing

  adoption of mobile tech
• legal factors 


  employment law

  minimum wage

  health and safety laws

  environmental legislation
• ethical and environmental factors 


  sustainability

  tax practices

  ethical sourcing

  pollution and carbon emmisions
• what is GDP?

  measure of the value of output (activity) in the economy
• what is demand?


  how much of a good or service a consumer wants and is able to pay for
• what is real income?


  measure the amount of disposable income available to consumers
• factors that affect real incomes

  price inflation

  wage growth

  employment levels

  interest rates
• factors that affect spending


  reala disposable incomes

  employment and job security

  market interest rates
• what happens when interest rates fall?


  cost of loans is reduced

  consumer confidence increases

  effective disposable incomes rises

  business investments should be boosted
• what is demography?


  concerned with the size and composition of a population
• key environmental issues for businesses

  sustainability

  minimising packaging

  waste disposal

  carbon emissions
• business benefits of environmental actions

  lower raw material costs and waste disposal charges

  longer life of assets that are recycled or repaired

  trading opportunities with environmentally friendly suppliers