S4 BM Revision (Internal & External Factors

S4 BM Revision

Internal Factors

Internal Factors

• Human Resources (Employees & Managers)

• Finance

• Current Technology

Multiple Choice

What is/are the missing word(s)? Internal factors are situations that impact a business which arise ???? the organisation

• both inside and outside

• in part of

• inside

• at the top of

Multiple Select

Which of the factors below are regarded as being INTERNAL

• Human Resources

• Technology

• Existing Technology

• Finance

• Competition

Categorize

Options (9)

A company not using AI

Company uses social media

Retained profits from last year

Company takes out a bank loan

Company has poorly trained staff

Company has strong managers

National minimum wage increases

Company uses robotics

Economy is in recession, business loses sales

Sort the following:

HR

Finance

Current Technology

Not an Internal Factor

Internal Factors - IMPACT

• Managers

• Good decision-making can increase productivity, increase profits and grow the business.

• Poor decisions could result in employees losing motivation, production being disrupted and complaints from customers.

Internal Factors - IMPACT

• Employees

• Badly performing employees will result in inferior products being produced and a poor service being offered to customers.

Internal Factors - IMPACT

• Finance

• A business will be unable to hire new staff or buy new equipment if they are working within budget constraints.

• This could adversely affect their growth and success.

Internal Factors - IMPACT

• Current technology

• A business can use existing technology to ensure efficiency and also to boost its profile.

• Savings can be made by having staff using video conferencing technology instead of travelling to meetings.

Multiple Choice

Explain the impact of internal factors on an organisation.

• Finance available can impact a business. If they have very little money then they will be able to easily purchase machinery and hire new staff.

• Current technology can have both a positive and negative impact on an organisation.

• The organisation must ensure they keep up to date with technology. This can increase costs to purchase new technology.

• The quality of staff can impact an organisation. This means they can work harder, producing better quality products.

Open Ended

Explain the impact of internal factors on a business. (3 marks)

External Factors

External Factors

P - Political
E - Economic
S - Social
T - Technological
E - Environmental
C - Competitive

Political Factors

• Laws

• Tax
  

Political Factors - IMPACT

• Government can implement new laws like the National Minimum Wage

• Impacts on profits as the wage costs of the business will rise

Dropdown

A decrease in tax rate, means a business will have​

Select answer

money to spend.

Multiple Choice

Explain an impact of a political factor on an organisation.

• National minimum wage is both a positive and negative impact on the organisation.

• If health and safety legislation changes then the organisation may need spend money on training staff.

• If the economy is in recession then more people spend less, this means that the organisation will make less sales.

• The quality of staff can impact an organisation. This means they can work harder, producing better quality products.

• National minimum wage

Economic Factors

• Inflation

• Exchange rates

• Interest rates

• Recession

• Unemployment

Economic Factors - IMPACT

Inflation

• prices rise

• customers may stop buying luxury goods and focus on essentials

Multiple Choice

Explain an impact of an economic factor on an organisation.

• Inflation can impact an organisation positively or negatively.

• When interest rates are low

  businesses may borrow and invest more. This means that they will have less to pay back in interest.

• If health and safety legislation changes then the organisation may need spend money on training staff.

• If the economy is in recession then more people spend more, this means that the organisation will make more sales.

• Recession - where people spend less.

Social Factors

• demographics

• lifestyles/tastes and trends

Social Factors - IMPACT

• Lifestyles/tastes and trends

• Society is more health-conscious so healthy foods and habits are becoming more important to customers.

• Business will need to look at adapting/introducing new products.

Multiple Choice

Explain an impact of a social factor on an organisation.

• If the government introduce new laws governing social media then organisations may see a decrease in social media use.

• Lifestyle and attitudes can have both a positive and negative impact on the organisation.

• Demographic information is useful for firms who provide products and services for older people

• People are being more health-conscious, this means that organisation may need change food packaging lists to show additional nutritional information

• More electronic products such as pedometers and fitness trackers are being used

Technological Factors

• Firms must keep up to date with new technology or face losing customers, sales and profits

• ICT

  Automation

  E-commerce (online shopping)

  AI (Artificial Intelligence)

Technological Factors - IMPACT

• ICT

• Firms also need to keep their software and hardware up to date.

• If they don’t, they risk being seen as old fashioned by customers and in danger of becoming obsolete.

Multiple Choice

Explain an impact of a technological factor on an organisation.

• Technology can have both a positive and negative impact on an organisation.

• A business using e-commerce is an technological factor. This means that they can increase the number of sales made 24/7.

• The organisation must ensure they keep up to date with technology. This can increase costs to purchase new technology.

• Nanotechnology

  are devices, such as electronic circuits, being built from single atoms and molecules.

• Driverless cars and deliveries by drone on the way which can impact an organisation.

Environmental Factors

• The physical conditions that a business has to deal with, such as: climate change, weather.

• The green credentials of global business, including: recycling, pollution.

Environmental Factors - IMPACT

• Weather

• Good summers mean the increase in sales of ice-cream and sun tan lotion

Multiple Choice

Explain an impact of an environmental factor on an organisation.

• The environment can have both a positive and negative impact on an organisation.

• An environmental factor such as bad weather can cause disruption to deliveries.

• Firms that recycle goods will attract customers who want to buy from companies that are environmentally friendly, this will increase their reputation.

• Causing environmental damage may have a negative impact on a business.

• Many products and services are seasonal. This can impact a firm.

Competitive Factors

• Businesses try to stay ahead of the competition by:

  new and better quality products

  produce more cheaply

  better reputation

  sell more

Competitive Factors - IMPACT

• Businesses can become more competitive by making products that stand out from the competition in terms of price, quality or service.

Multiple Choice

Explain an impact of a competitive factor on an organisation.

• Competitiors can have both a positive and negative impact on an organisation.

• Competitors can establish a strong

  brand image

  for a good or service.

• An organisation may have to create a strong USP.

• A competitor may decrease the price of the product. This means the organisation may have to also reduce their price so they don't lose customers.

• The size of the competitor may also affect a business. Eg,

  a small furniture shop may locate next to a swimming pool

Open Ended

Explain the impact of external factors on an organisation. (3 marks)

Hotspot

Internal Factor - HR

Hotspot

External factor - Competitive

Hotspot

External factor - Economic

Multiple Choice

• Internal Factor

• External Factor

• Neither

Categorize

Options (11)

Employees are poorly skilled

High employee turnover

Lack of training programs

Poor management practices

Low employee morale

Economic downturn

Increased competition

Changes in consumer preferences

Regulatory changes

Technological advancements

Global pandemics

Internal or External Factor?

Internal Factor

External Factor