External Enviroment

• What does PESTLE Analysis stand for?

  Political, Economic, Social, Technological, Legal, Ethical
• How does PESTLE Analysis help businesses?

  It analyzes the external environment effectively
• What are some specific features of the external environment?

  • Market Conditions
  • Competition
  • Household Incomes
  • Interest Rates
  • Demographic Factors
  • Environmental Issues
  • Fairtrade
• What are the two key indicators of market conditions?

  Economic growth and market demand
• What does GDP stand for?

  Gross Domestic Product
• What does GDP measure?

  Value of output in the economy
• How does demand relate to business revenues?

  Demand turns into revenues for businesses
• What do real incomes measure?

  Disposable income available to consumers
• What are key factors that affect real incomes?

  • Price Inflation
  • Wage Growth
  • Employment Levels
  • Interest Rates
  • Government Tax Policy
• What was the gross household disposable income per head in the UK in 2013?

  £17,559
• Which region had the highest disposable income in 2013?

  London
• What is an interest rate?

  Reward for saving and cost of borrowing
• What are different types of interest rates in the economy?

  • Savings interest rates
  • Borrowing interest rates
  • Mortgage interest rates
  • Credit card interest rates
  • Government and corporate bond rates
• How do interest rates influence business investment?

  They affect borrowing costs and business confidence
• What happens when interest rates fall?

  Spending power and consumer confidence increase
• What is a potential effect of rising interest rates?

  Higher mortgage payments reduce household income
• What are demographic factors in business?

  • Size and composition of a population
  • Changes in population dynamics
• What is a key implication of an ageing population?

  Greater demand for healthcare services
• What does sustainability in business refer to?

  Minimizing environmental impact and waste
• What are some business benefits of environmentally friendly actions?

  • Lower raw material costs
  • Longer asset life
  • Trading opportunities with green suppliers
  • Improved customer goodwill
• What should businesses consider regarding their environmental impact?

  • Use of raw materials and resources
  • Energy use and climate change impact
  • Waste and pollution produced
  • Impact on local and global communities