1.5.5 external influences

Cards (7)

What are external influences?
Economic climate, legislation, competition, technology, society
What are opportunities?
Things that can lead to business growth
What are threats?
the business may have to respond by adjusting their operations
How can a business see an external influence?
As an opportunity or as a threat
What are examples of opportunities?
A rise in economic activity, leading to increased demand.
New legislation that increases demand for a business’s safety products.
New technology that lowers the cost of production.
Lower interest rates, making it easier for a business to borrow money
What are examples of threats?
A new technology that makes a business’s products obsolete.
A fall in economic activity, lower demand.
New legislation that makes a business’s products illegal.
New competitors entering the market
What are responses to external influences?
Cut Investment and spending when economic activity is low,
Stop producing a product line that has become obsolete due to rise of new technology,
Change company policy to adhere to employment or consumer legislation,
lower prices to counteract the entrance of a new competitor,
Increase productivity and recruit new employees when economic forecasts look positive,
invest heavily in new technology in order to gain an advantage over competitors