WEBVTT 00:00:00.500 --> 00:00:03.955 Welcome to GCSE Edexcel Business revision. 00:00:04.105 --> 00:00:08.712 Unit B U S 5: Understanding external influences on business. 00:00:11.367 --> 00:00:16.951 A stakeholder is a person or group with an interest in, or affected by, business activity. 00:00:17.101 --> 00:00:22.626 A shareholder owns shares and is one type of stakeholder, not a synonym for every stakeholder. 00:00:25.300 --> 00:00:30.078 Owners and shareholders may seek profit and an increase in the value of the business. 00:00:30.228 --> 00:00:34.222 Managers may seek targets, career progression and secure employment. 00:00:36.900 --> 00:00:41.284 Employees may want pay, security, fair treatment and safe conditions. 00:00:41.434 --> 00:00:45.492 Customers may want value, quality, choice and reliable service. 00:00:48.167 --> 00:00:51.239 Suppliers may want repeat orders and prompt payment. 00:00:51.389 --> 00:00:57.381 The local community may want jobs and useful services without excessive noise, waste or traffic. 00:01:00.033 --> 00:01:04.663 Government may seek tax revenue, employment and compliance with legislation. 00:01:04.813 --> 00:01:10.422 Pressure groups campaign for particular causes and may influence customers or public opinion. 00:01:13.100 --> 00:01:15.701 Business decisions affect groups differently. 00:01:15.851 --> 00:01:21.962 A factory expansion may create jobs and supplier orders but increase traffic for nearby residents. 00:01:24.633 --> 00:01:31.783 Stakeholders influence decisions through purchases, work, investment, supply agreements, campaigns or regulation. 00:01:31.933 --> 00:01:36.423 Their influence depends on their resources and the business's dependence on them. 00:01:39.100 --> 00:01:49.359 Conflicts arise when objectives differ: higher wages may increase employees' income but raise costs and reduce owners' profit unless productivity or revenue rises. 00:01:52.033 --> 00:02:00.235 Fictional case: extending a café's hours can improve customer convenience and sales but require staff changes and concern neighbours. 00:02:00.385 --> 00:02:05.091 A justified decision considers all three effects and possible compromises. 00:02:07.767 --> 00:02:11.229 E-commerce lets customers browse, order and pay online. 00:02:11.379 --> 00:02:18.128 It can extend the market and opening availability but needs effective delivery, website maintenance and support. 00:02:20.800 --> 00:02:25.865 Social media can promote products, gather feedback and allow customer interaction. 00:02:26.015 --> 00:02:30.943 Negative comments can also spread quickly; managing the channel takes staff time. 00:02:33.600 --> 00:02:37.737 Digital communication includes email, messaging and video meetings. 00:02:37.887 --> 00:02:45.117 It can speed coordination and reduce travel, but unclear messages or too many notifications can reduce effectiveness. 00:02:47.800 --> 00:02:51.539 Payment systems include card, contactless and online payments. 00:02:51.689 --> 00:02:59.399 They can make buying easier and reduce some cash-handling tasks, but transaction fees and system failures affect costs and service. 00:03:02.067 --> 00:03:06.973 Technology can increase sales by reaching more customers or improving convenience. 00:03:07.123 --> 00:03:12.445 It can lower some costs through automation while adding equipment, subscription and training costs. 00:03:15.100 --> 00:03:24.422 The marketing mix may change: digital promotion reaches targeted groups, online place expands access, and comparison sites can increase pressure on prices. 00:03:27.100 --> 00:03:31.972 Staff skills, reliable systems and customer preferences affect the benefit. 00:03:32.122 --> 00:03:37.177 Technology is useful when it meets a business need, rather than simply because it is new. 00:03:39.833 --> 00:03:43.591 Fictional case: a takeaway introduces online ordering. 00:03:43.741 --> 00:03:51.270 Fewer telephone errors may improve service, but kitchen capacity must increase if extra orders otherwise cause late deliveries. 00:03:53.933 --> 00:03:57.206 Legislation sets rules that businesses must follow. 00:03:57.356 --> 00:04:04.629 At GCSE, focus on the principles of consumer and employment protection and the effects on decisions and costs. 00:04:07.300 --> 00:04:15.651 Consumer protection covers the quality and suitability of goods and services, accurate descriptions and customer rights when something goes wrong. 00:04:15.801 --> 00:04:20.483 A business cannot treat misleading claims as an acceptable promotion strategy. 00:04:23.133 --> 00:04:30.171 Handling legitimate complaints, repairs or refunds takes time and money, but can preserve trust and repeat purchases. 00:04:30.321 --> 00:04:34.029 Prevention through reliable products can reduce later costs. 00:04:36.700 --> 00:04:41.989 Employment protection concerns recruitment, pay, discrimination and health and safety. 00:04:42.139 --> 00:04:47.524 Businesses must treat applicants and employees fairly and meet relevant legal obligations. 00:04:50.200 --> 00:04:56.844 Meeting requirements can create costs for appropriate pay, training, safe equipment, procedures and record keeping. 00:04:56.994 --> 00:04:59.447 These costs must be included in planning. 00:05:02.100 --> 00:05:06.665 Compliance can improve staff confidence, customer trust and reputation. 00:05:06.815 --> 00:05:10.352 It may reduce accidents, disruption and the cost of disputes. 00:05:13.033 --> 00:05:20.990 Non-compliance can result in enforcement, compensation or penalties, depending on the breach, as well as lost trust and disruption. 00:05:21.140 --> 00:05:24.221 Consequences are not identical for every offence. 00:05:26.900 --> 00:05:30.934 Fictional case: a workshop trains staff in safe equipment use. 00:05:31.084 --> 00:05:39.541 Training has an immediate cost but may reduce injury, absence and interrupted production; legal duties still apply even if sales are low. 00:05:42.200 --> 00:05:48.129 Unemployment is the number or proportion of people seeking work who cannot find it under the measure used. 00:05:48.279 --> 00:05:55.382 Rising unemployment can reduce household spending and make recruitment easier, although suitable skills may still be scarce. 00:05:58.033 --> 00:06:01.007 Changes in consumer income affect demand. 00:06:01.157 --> 00:06:09.902 When disposable income falls, customers may cut discretionary purchases or switch to cheaper alternatives; essential goods may be affected less. 00:06:12.567 --> 00:06:18.026 Inflation is a sustained increase in the general price level, not just one product's price. 00:06:18.176 --> 00:06:23.635 Rising input costs can squeeze margins if a business cannot raise its selling prices. 00:06:26.300 --> 00:06:33.221 Higher interest rates can raise the cost of variable-rate borrowing and reduce spending funded by consumer credit. 00:06:33.371 --> 00:06:37.185 The effect depends on debts, contracts and what the business sells. 00:06:39.867 --> 00:06:44.869 Taxation can affect business costs, profits and consumers' disposable incomes. 00:06:45.019 --> 00:06:51.184 Distinguish a change in business taxation from a tax that directly changes what households can spend. 00:06:53.867 --> 00:06:57.171 An exchange rate is the price of one currency in another. 00:06:57.321 --> 00:07:07.089 A stronger pound generally makes foreign-currency imports cheaper in pounds, but can make U K exports dearer to overseas buyers if pound prices are unchanged. 00:07:09.767 --> 00:07:16.869 A weaker pound generally makes foreign-currency imports more expensive and U K exports cheaper to overseas buyers. 00:07:17.019 --> 00:07:21.687 Contracts, competitors' prices and demand influence the actual outcome. 00:07:24.367 --> 00:07:28.422 Worked example: equipment costs 1,200 euros. 00:07:28.572 --> 00:07:38.469 At 1 pound equals 1.20 euros it costs 1,000 pounds ; at 1 pound equals 1.50 euros it costs 800 pounds . 00:07:38.619 --> 00:07:43.791 The stronger pound reduces the pound cost by 200, pounds ignoring fees. 00:07:46.467 --> 00:07:50.334 Economic changes create different effects for different businesses. 00:07:50.484 --> 00:07:59.347 A budget retailer may gain customers trading down while a luxury retailer loses sales; avoid claiming every business benefits or suffers equally. 00:08:02.000 --> 00:08:06.537 External influences originate outside the business's direct control. 00:08:06.687 --> 00:08:13.704 Technology, legislation and economic conditions can change its costs, demand and available opportunities. 00:08:16.367 --> 00:08:22.691 A response to new technology might be adopting online ordering, training employees or changing the product. 00:08:22.841 --> 00:08:27.155 Consider cash, skills and competitors' likely reactions before committing. 00:08:29.833 --> 00:08:37.363 A response to legislation might be changing working practices, improving product checks or updating recruitment procedures. 00:08:37.513 --> 00:08:41.939 The business must meet duties, not choose whether compliance is convenient. 00:08:44.600 --> 00:08:49.560 A response to falling income might be a lower-cost product range or smaller packs. 00:08:49.710 --> 00:08:55.158 These may protect sales, but lower prices and extra stock can reduce margins or cash. 00:08:57.833 --> 00:09:04.039 Supplier negotiation, efficiency improvements and revised finance may help with rising costs. 00:09:04.189 --> 00:09:09.821 Cutting quality can damage reputation, so a short-term saving may create longer-term harm. 00:09:12.500 --> 00:09:18.771 Compare alternative responses using evidence about the target market, finances and capacity. 00:09:18.921 --> 00:09:23.541 State what the result depends on and why one response fits this business better. 00:09:26.200 --> 00:09:32.877 Fictional judgement: a café facing ingredient inflation could reduce waste before raising every price. 00:09:33.027 --> 00:09:40.898 If waste is already low, a modest price increase may be necessary; the decision depends on customer sensitivity and competitors. 00:09:43.567 --> 00:09:47.021 That completes Understanding external influences on business. 00:09:47.171 --> 00:09:50.517 Revisit the notes and test yourself on the revision website.