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1.5 - Coggle Diagram

- - - - Impacts on the business
        
        The business must invest in quality control to make sure that a product is of a suitable quality for use e.g a chair allows you to sit on it
        
        Consumers have the right to send back products if they are faulty before 30 days therefore the business must have practices in place to facilitate this
        
        The business must keep their physical and online descriptions of products up to date (e.g via marketing management) to reduce miscommunications and therefore returns.
        
        The business must have efficient logistics so that they can deliver products within the allotted 30 days
  - - - Impacts on the business
        
        Recruitment- the business must have an unbiased recruitment process whereby all candidates are measured upon their skill and acumen alone.
        
        The business must offer alterations to the workplace to allow those who are less able or have religious requirements to work freely and as they need. (e.g a prayer room)
        
        All of the below will give higher employee costs to the business
        
        Pay- The business must pay all employees equally when performing the same tasks
    - - Impacts on the business
        
        Staff training- the business will need to invest in greater staff training (more frequently) to introduce new procedures
        
        The business will need to regularly invest in new equipment e.g hard hats
        
        The business will need to focus on its safety procedures and safety of the workplace and make alterations where necessary e.g removing asbestos from insulation.
- - - - Benefits: Reduces the business marketing costs which is useful in small business therefore they can charge a competitive price whilst gaining maximum market penetration / they can also better invest in other business operations to improve the launch e.g the shopfront.
      - Drawbacks: Social media requires constant monitoring and updating to retain viewers' interest therefore a social media manager may need to be employed / If the business controversially posts something offencive its brand prestige is damaged for a prolonged period.
    - - Benefits: Allows for more convenient payments for the customer alongside a third party whom they can advertise with, therefore the business possibly charge a premium for the convenience of their service.
      - Note: Payment methods can also include physical transfers e.g Chip and pin/bank cards
    - - Benefits: Makes purchasing more convenient for the customer / Overhead costs are reduced as E-tailers do not need physical outlets therefore cheaper prices can also be issued.
      - Drawbacks: The business connects itself to the global market therefore increases the competition it faces as well as reducing its relative market share (making the business overall less attractive to competitors) / Increased staff training costs as the business needs to regularly maintain and improve its website
  - - - Product(ion)
        
        Automation can make production processes more efficient and improve productivity, therefore the business can create a larger amount of products and benefit from economies of scale etc.
        
        Automation improves the products consistency e.g quality therefore increasing the business' brand loyalty as customers know what to expect each time they purchase.
      - Price
        
        Economies of scale allow for the business to reduce its costs therefore charge a lesser price for its products and be more competitive
      - Place
        
        E-commerce/Tailors are more convenient for customers therefore the business can differentiate and fulfill another need (increasing market share)
        
        The business can also access more international customers via one connected global market
      - Costs
        
        The business has reduced production costs via Economies of scale (due to automation)
        
        The business may have reduced overhead costs as it can solely operate as a E-tailor and therefore have no need for physical stores
        
        The business will have reduced marketing costs as viral advertising on social media is cheaper than other traditional methods
      - Promotion
        
        More customers can easily access the business' activities via social media, therefore more potential customers can be lured in and deterred away from competitors.
    - - Costs
        
        Social media requires constant viewing and maintenance which could lead to further staffing costs.
        
        Autonomy will initially have high set up costs for production
      - Place
        
        The business faces greater competition being part of a connected global market therefore needing to invest more in market research (e.g specific to each region (glocalisation))
- - - - Shareholders- The owners/ shareholders of a business who are directly involved in their finance and fund the businesses operations
        
        Impacts- Shareholders want profit to maximised so that there share value will increase, they therefore want the business to be successful. (They have the biggest impact compared to all the shareholders)
        
        Conflicts- Employees/managers vs Shareholders as redundancies or reduction in fringe benefits could be more profitable but decrease employee wellbeing.
      - Managers- The individuals involved in the business low level operations, managing different spans of employees and aiming to maintain the business' performance
        
        Impacts- Managers want to maintain their position and thus productivity of their span of control e.g via motivating and/or empowering employees in order to gain revenue for the business.
        
        Conflicts- Managers and employees can have conflicts if employees are less productive (typically managers will need to deliver uncomfortable news), managers and owners may have conflicts as they have different views on how their span of control should be ran.
      - Employees- The operatives of the business, they are involved in the business' runnings and customer relations (to produce a satisfactory product/service)
        
        Impacts- Employees want the business to succeed as they are employed and wish to retain their job or progress in their career (to keep employees satisfied they should have good career opportunities for development and employee benefits.
        
        Conflicts- Employees normally suffer either reductions in fringe benefits, redundancies or reduced working conditions if the business is in financial difficulty therefore their well being is sometimes les valued and disregarded. - leading to a lack of motavation
    - - Local Community- The area surrounding a business
        
        Impacts- The local community will wish for the business to benefit the local economy alongside causing minimal disruption to local services.
        
        Conflicts- If the business negatively impacts the community (either by reputation or by practices e.g polluting local water supplies) conflicts may arise- the local community holds a high amount of power as they typically commerce with the business therefore can cause a decrease in sales.
      - Government- The institution of a country acting in the best interests of the people to maximise the economy/economic growth.
        
        Impacts- The government want the business to remain profitable as they can pay taxes and help benefit a countries economy.
        
        Conflicts- Pressure groups usually wish to instigate change in laws for the government to implement change therefore the government and pressure groups may disagree on moral issues if they will damage the economy. / The government and owners may also disagree as new legislation may reduce share value or a business' profit(ability).
      - Suppliers- The business which procures/obtains and sells the raw materials for a business to use and sell.
        
        Impacts- Suppliers want to retains the business' custom therefore maintain a good relationship with the business- this may mean that they offer deals/promotions or wholesale advantages for the business exclusively purchasing with them.
        
        Conflicts- If owners want to save capital then they may ask for a cheaper wholesales price of their raw materials therefore damaging the relationship if the supplier is unable to facilitate.
      - Pressure groups- Activist/Charity organisations looking to influence or change a business' practices.
        
        Impacts- The pressure groups look to change a business' practices therefore wanting the business to (usually) behave more ethically- this may cause the business' profit to be impacted as either the business loses sales from pressure groups deterring customers or increased costs from more ethical practices/products.
        
        Conflicts- The owners and pressure groups usually have conflicts as they aim to find an agreement on profitable ethical practices.
      - Customers- The people/market who purchase from the business
        
        Impacts- The customers want the business to satisfy their needs and fulfill their requirements- therefore the business will look to be market driven in order to maximise sales
        
        Conflicts- Owners and customers can have conflicts if the business looks to reduce its range/costs and therefore remove customers' favourite products- this is risky though as customers can choose competitors instead, decreasing revenue and market share.
- - - - If Unemployment is high then the business may have to reduce prices due to reduced consumer income therefore profits may fall for business trading in luxury markets. (opposite is true- a business' profits will increase if they trade in lower value goods.
      - If rates are high then the business will have greater access to staff as there are more job seekers therefore they can reduce potential wages and obtain personnel cheaply when needed as the business will be supporting those in need.
    - - Recession- If the economy is in recession then unemployment rates will be high as businesses will need to cut staffing costs and force redundancies. Therefore consumer incomes will be low and saving high (profits of luxury goods business will decrease etc.)- Interest rates will also be High
      - Boom- If the economy is in Boom then unemployment rates will be low therefore high consumer spending, consumers will be more willing to make expensive purchases as they can borrow more and repay less interest due to low interest rates.
      - Inflation- If inflation is high the business will expect rapid growth in costs due to high interest rates and less consumer spending on "wants". This may mean the business will need to cut costs e.g via selling assets or redundancies although borrowing is risky as interest rates are high
      - Interest rates- If high then consumers are more likely to save and borrow less as repayments would cost more (less luxury goods purchased) whereas if low then consumers are more likely (to purchase etc.)- Businesses will wish to borrow when rates are low
    - - Examples:
        
        VAT- the government adds tax on non-essential items
        
        Income tax- When a sole trader etc. is taxed on the revenue they make
        
        Corporation tax- When a Ltd, PLC etc. is taxed on the profits they make (therefore contributing the net profit rather than gross).
        
        NIC (national insurance)- An employer will need to make a contribution to national insurance to pay for certain benefits (for employees) therefore they will pay more in relation to the number of employees
      - All taxes will decrease the business' net profit and therefore reduce the capital the business retains- this will increase the business' prices so that they can remain financially secure making them less competitive.
    - - Strong pound- SPICED, if a business imports goods then they will benefit from a strong pound as the costs of produce per item decreases therefore they can lower costs or increase their profit gained. However export costs are higher therefore the business will have a larger selling price in foreign markets decreasing competitiveness abroad.
      - Weak pound- WPIDEC, the opposite is true for a weak pound therefore the business' profits will fluctuate based on each market (the local and (other) nations) and how valuable their currency is.
      - Key terms:
        
        Appreciation- Is where the pound becomes stronger against other currencies e.g £1 = $1.20 --> £1 = $1.30. (typically occurs during UK economic boom)
        
        Depreciation- Is where the pound becomes weaker against other currencies e.g £1 = $1.20 --> £1 = $1.05 (typically occurs during UK economic recession)