5. External Influences

• An exchange rate is the price of one currency in terms of another and will impact any business that imports or exports goods or services from other countries.
• Currently: £1 = $1.24, £1 = €1.17, The £ is quite weak
• Strong

  Pound

  Imports

  Cheap

  Exports

  Dear (expensive)

  The pound is stronger when the other currency is worth more than £1 (e.g. £1 = $2.50)
• Weak

  Pound

  Imports

  Dear (expensive)

  Exports

  Cheap

  The pound is weaker when the other currency is worth less than or not much more than £1 (e.g. £1 = $1.20)
• Exporter


  A business that sells goods to another country
• When the pound becomes weaker against the Euro


  • Exports will become dearer
  • Export sales are likely to increase
  • Profits are likely to decrease
• External influences


  • External stakeholders
  • Technology
  • Legislation
  • Economy