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3.1 (external factors (competition (:check:more consumer choice :check…
3.1
external factors
political, economic, social, technological, legal and environmental
Factors influencing demand such as price,tastes & fashion,price of other goods,marketing & advertising and seasonal factors.
GDP(gross domestic product)-the value of a country's total output of goods and services over a period of time
interest rates can influence, employment,inflation rate,exchange,general spending.
rise in interest rates means costs increase,unit costs go up,reduces sales,saving is more attractive,businesses spend less capital.
Fall in interest rates means reduce unit costs,more sales,more staff needed,increase spending,credit decreases and business become more confident in economy.
competition
:check:more consumer choice :check:quality and price
:red_cross:smaller businesses closed down :red_cross:quality can be sacrificed as competitive on price
Determinants of competitiveness :red_flag:investment in equipment :red_flag:improvements in operational procedures :red_flag:effectiveness of the marketing mix :red_flag:staff skills
shares
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shareholders .... :red_flag:provide financial support :red_flag:gain control of a business :red_flag:to receive dividends :red_flag:make a profit on the share
influences on share price..... : :!:state of the economy :!:performance of the company :!:competition in the market :!:proposed takeovers/merging :!:investors
short term if share price change could mean less willing to invest at given price.In the long term higher price means easier to get capital but low price means harder to invest new investors
business forms
:star:sole trader :star:partnership :star:private limited company :star:public limited company :star:public sector :star:public corporation
unincorporated -owner and business is one in the same. incorporated-legal separate identity. unlimited liability- liable for all debts. limited liability-only liable for capital invested in business.
public sector organisations-owned by government,funded by tax. 3 types, public services,public corporations & municipal services. co-operatives are owned by people and run for benefit of members, exist for the interest of its members. non-profit organisations is where profit isn't the main objective EG benefit community.
private limited-shares cant be traded on stock exchange. :check:easier access to money :red_cross:lots of legal paperwork
public limited-shares on stock exchange :check:growth is easier :red_cross:risk of takeover
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objectives
corporate-goals for the whole organisation,rather than in a department.
functional-goals for each functional areas of a business,people,marketing,finance&operations.
Types of objectives :check:survival :check:profit :check:growth :check:cash flow :check:social & ethical objectives
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incomes Rising incomes=luxury goods see increase in demand,cheaper brands fall in demand. Falling incomes=non essential goods decrease in demand,workers laid off,factories moved abroad.
demographic factors-aging population,ethnically diverse population,size of household,geographical shift.
Environmental-dilemma of low cost production vs environmentally responsible production.extra costs but improve reputation