Influences on business
What's covered
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Key facts
Competitive environment
Brand loyalty reduces the impact of competition: loyal customers stay with the brand even when rivals offer alternatives.
Consumer law
A consumer has 30 days to reject faulty goods for a full refund under the Consumer Rights Act 2015: the short-term right to reject.
Ethical and environmental considerations
A formal code of conduct sets out the values and standards staff must follow: internal ethical framework, often signed at induction.
Globalisation
A benefit of globalisation for UK consumers is a wider choice of goods at lower prices: more suppliers competing for the same customer.
Green and circular economy
Within a closed loop, products and materials are kept in use by maintaining, reusing, refurbishing and remanufacturing them, with recycling as the last resort before disposal.
Legislation
Breaking employment law can lead to fines or claims at an employment tribunal: financial and reputational consequences.
Technology
Automation may reduce the number of low-skilled jobs in a business: repetitive tasks are often automatable.
The economic climate on businesses
The Bank of England sets the official interest rate to influence the wider economy: Bank Rate.
The impact of globalisation on businesses
After Brexit, UK firms face new customs checks when exporting to the EU: paperwork, rules-of-origin declarations, border delays.
The impact of legislation on businesses
A business buying a registered patent gains exclusive use of that invention, bought patents can be licensed or kept.
Practice questions with answers
A taste of the 103 questions in this topic, answers marked. Sign up to practise the full set with spaced repetition.
What does USP stand for in marketing?
- •undercut supplier pricing
- •unified sales platform
- ✓unique selling point
- •universal supply price
Under the Consumer Rights Act, goods sold must be of what quality?
- •Approved by an independent test laboratory weekly
- •Identical in every measurable physical respect
- ✓Satisfactory quality, fit for purpose, as described
- •The cheapest available across every UK retailer
Which is an example of ethical sourcing by a business?
- •Buying the cheapest goods regardless of origin
- •Choosing suppliers based only on delivery speed
- •Ignoring working conditions in factories abroad
- ✓Paying fair wages to overseas suppliers
Which is a tariff?
- •A limit on the number of imports
- •A subsidy paid to local farmers
- ✓A tax on imported goods
- •An export grant from government
Which circular practice keeps the most value in a product?
- •Burning it to recover some energy
- •Recycling it down into raw material
- ✓Reusing it rather than recycling the material
- •Sending it to landfill at end of life
Which area of law covers fair pay, working hours and dismissal?
- •Competition law
- •Consumer law
- ✓Employment law
- •Health-and-safety law
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