1.5.5 External influences

• What are external influences on a business?

  Factors outside a business
• Economic influences include changes in interest rates and GDP growth.


  True
• Match the external influence with its description:

  Environmental ↔️ Environmental issues and regulations

  Legal ↔️ Laws governing business operations
• External influences are typically within the control of a business.

  False
• Social influences include changes in consumer preferences, lifestyles, and cultural norms
• Match the external influence with its example:

  Social ↔️ Shift to healthier eating

  Legal ↔️ Consumer protection laws

  Political ↔️ Tax changes

  Environmental ↔️ Climate change policies
• External influences affect both the operations and performance of a business.


  True
• Political influences include government policies, laws, and regulations
• What is an example of an economic influence on a business?

  Recession
• New environmental regulations can increase production costs for a business.


  True
• Key categories of external influences include economic, social, political, technological, environmental, and legal
• What is an example of a social influence on a business?

  Increased use of social media
• Categories of external influences in alphabetical order:

  1️⃣ Economic

  2️⃣ Environmental

  3️⃣ Legal

  4️⃣ Political

  5️⃣ Social

  6️⃣ Technological
• What is GDP growth an example of?

  Economic influence
• What are rising prices for goods and services called?

  Inflation
• Categories of external influences that can impact a business:

  1️⃣ Economic

  2️⃣ Social

  3️⃣ Political

  4️⃣ Technological

  5️⃣ Environmental

  6️⃣ Legal
• Match the economic influence with its example:

  Inflation ↔️ Rising prices for goods

  Interest Rates ↔️ Changes in borrowing costs

  GDP Growth ↔️ Overall economy health
• Technological influences include advancements that affect production, marketing, and communication
• What is the effect of low GDP growth on consumer spending?

  Reduces consumer spending
• Match the external influence with its description:

  Economic ↔️ Changes in inflation and interest rates

  Social ↔️ Changes in consumer preferences

  Political ↔️ Government policies and regulations
• Technological influences can affect production, marketing, and communication
• What is an example of a political influence on a business?

  New trade laws
• What are two key factors in economic influences?

  Inflation and interest rates
• The introduction of AI is a technological influence on businesses.

  True
• Social influences include changes in consumer preferences, lifestyles, and cultural norms
• What is the term for changes in the cost of borrowing money?

  Interest rates
• High inflation can increase production costs for a business.


  True
• Match the external influence with its example:

  Social ↔️ Shift to healthier eating

  Political ↔️ Tax changes

  Legal ↔️ Consumer protection laws
• Economic influences include inflation, interest rates, and GDP growth
• Changes in interest rates affect the cost of borrowing money for businesses.


  True
• A shift towards healthier eating is an example of a change in consumer preferences
• The introduction of automation in production is an example of a technological influence
• What is an example of an environmental influence on businesses?

  Climate change policies
• What is the primary focus of social influences on businesses?

  Consumer preferences and lifestyles
• External influences are typically beyond the direct control of a business
• GDP growth reflects the overall size and health of the economy
• Increased demand for eco-friendly products is an example of a shift in consumer preferences
• The rise of e-commerce has transformed how businesses market and sell their products
• Health and safety regulations ensure a safe working environment
• Changes in corporate tax rates are an example of a political influence affecting business profitability