influences on businesses

• ethical considerations


  • labour in developing countries
  • product development
  • employee welfare
  • buying fairtrade products
  • trade off between ethics and profits
• benefits of being ethical


  • marketing - can advertise based on this and helps develop a good public image and increases sales
  • employee motivation and culture - if employees are treated in a fair and honest way, they're more likely to be motivated and stay
  • stakeholders - some are more likely to invest in an ethical company as it gives them a moral purpose
• environmental issues 


  • traffic congestion
  • careless waste disposal
  • air and noise pollution
  • poor choice of materials
  • lack of encouragement of public transport use
• businesses can be more sustainable by...

  • using renewable energy sources
• economic cycles 


  the economy is a state of a countries production and consumption of goods and services. the economy goes through cycles of booms and recessions
• booms 


  when the economy is growing significantly and the businesses in it are doing generally well
• recessions 


  economic output falls and because of this businesses usually experience a fall in demand for their products
• factors indicating the state of the economy

  • unemployment - the unemployed have less disposable income, meaning less people buying goods and businesses revenues and profits will fall
  • consumer spending - decreased income, reduced customer confidence (if people are more worried about the future, they're more likely to save in case they loose their job)
• changes in income and businesses

  reduced income means more money spent on necessities and less spent on luxury products. some firms may benefit from this and others may not
• globalisation


  the process where people, businesses, governments and markets around the world become more connected
• benefits of globalisation 


  • single global market(can access more consumers)
  • reduce costs (can import cheaply from other countries where rent / labour costs may be lower)
• drawbacks of globalisation


  • increased competition
  • high UK wages
  • ethical issues (working conditions, sweatshops)
  • fluctuating global economy
• how do businesses compete internationally

  • better designs
  • high quality products at a reasonable price