unit 7 - strategic position

• What does monetary policy involve?

  Interest rates and changes to money supply
• Who controls monetary policy in the UK?

  Bank of England
• What is the main objective of monetary policy?

  Keeping inflation low and stable
• What are the tools used in monetary policy?

  • Altering interest rates
  • Controlling the money supply
  • Manipulating the exchange rate
  • Quantitative easing and forward guidance
• What is an interest rate?

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

  • Savings account interest rates
  • Borrowing interest rates
  • Mortgage interest rates
  • Credit card interest rates
  • Government and corporate bond rates
• What happens to consumer spending if interest rates rise?

  Consumer spending may fall
• How does rising interest rates affect people with loans?

  They have less discretionary income
• What are the main macroeconomic objectives of the government?

  • Steady GDP growth of 2-3%
  • Inflation at 2% annually
  • Low and stable unemployment
  • Balanced current account
• What are the three main taxes in fiscal policy?

  • Income tax
  • Corporation tax
  • VAT (value added tax)
• What are the main areas the government spends taxes on?

  • Health
  • Education
  • Social security
• What is a budget deficit?

  Spending more than revenue from taxes
• What is fiscal policy?

  Use of government expenditure and taxation
• What is expansionary fiscal policy?

  • Cutting taxation
  • Increasing government expenditure
  • Aims to boost public sector borrowing
• What is contractionary fiscal policy?

  • Reducing government expenditure
  • Increasing taxation
  • Aims to reduce budget deficit
• What is Corporate Social Responsibility (CSR)?

  • Success while respecting stakeholders
  • Ethical and moral business practices
  • Balancing business actions with societal needs
• What is the bargaining power of suppliers?

  Suppliers' influence over pricing and terms
• How can consumers affect supplier power?

  By switching between different companies
• What is the threat of substitutes?

  Availability of alternative products
• What does the threat of new entrants refer to?


  Risk of new competitors entering the market
• What are the implications of high supplier power?

  • Increased costs for businesses
  • Reduced profit margins
  • Limited negotiation power for buyers
• What is Porter's Five Forces model used for?

  • Assessing competitive environment
  • Determining industry profitability
  • Analyzing market dynamics
• What is competitive rivalry?

  Competition among businesses in the same market
• What defines a dominant business?

  Substantial influence over market prices
• What are the key government organizations supporting small businesses?

  • Department for Business, Innovation and Skills (BIS)
  • British Business Bank
  • Small Business, Enterprise and Employment Act 2015
• How can governments support economic growth?

  • Achieving full employment
  • Securing financial markets
  • Regulating industries
  • Investing in infrastructure
• What is the role of regulators?

  • Monitor key industries
  • Protect consumers and the environment
  • Promote fair competition
• What are ways to measure business performance?

  • Sales volume
  • Market share
  • Employee retention
  • Customer satisfaction
• What is a core competence?

  • Unique capability of a business
  • Provides competitive advantage
  • Difficult for competitors to imitate
• What are criticisms of core competencies?

  • Over-reliance on outsourcing
  • Difficulty in identifying uniqueness
  • Risk of complacency
• What is the Competition Act 1998?

  • Prevents anti-competitive practices
  • Targets collusion and price fixing
  • Enforced by the Competition and Markets Authority
• What is the Equality Act 2010?

  • Combines anti-discrimination laws
  • Protects against unfair treatment
  • Covers age, gender, and disability
• What does the Employment Relations Act 2000 establish?

  • Contract requirements within 8 weeks
  • Rights to reasonable notice and childcare
  • Rules on dismissal
• What is the Health and Safety Act 1974?

  • Outlines employer and employee duties
  • Enforced by the Health and Safety Executive
  • Violations can lead to fines or imprisonment
• What is the role of trade unions?

  • Represent employees for better conditions
  • Negotiate pay and working conditions
  • Can be voluntarily or statutorily recognized
• What are the pros of the EU for businesses?

  • Free trade without tariffs
  • Greater worker rights
  • Easier access to skilled labor
• What are the cons of the EU for businesses?

  • Unequal development among member states
  • Increased tariffs post-Brexit
  • Tax complications for UK businesses
• What are the three components of Elkington’s Triple Bottom Line?

  Profit, people, planet
• What does a firm's bottom line traditionally refer to?

  Their profit figure
• How does the Triple Bottom Line model measure business performance?

  Through finances, environmental impact, and social responsibility