Business
Environment
Characteristics
Name:______
Business Environment Characteristics
The business environment is the world in which businesses operate.
The business environment is constantlychanging.
All businesses need to keep up to date with events that affect them, and adapt or change their activities if necessary.
What happens if businesses don’t change?
Let’s look at 2 examples:
There are 4 main things that affect the decisions that businesses need to make:
We’ll look at each of these. Starting with markets…
What is a market?
Markets
Types of Market
There are 4 different types of market. Describe each of them:
Mass market:______
Product markets:______
Financial markets:______
Niche markets:______
What are the main markets for this area (Skegness/Alford/Mablethorpe)?
Markets
Why do markets change?
Let’s think about mobile phones.
How has the design changed since the 1980’s?
Why has the design changed?
What other products have changed over the last few years?
Product / What has changed about it?Markets
Market Changes
Type of change / Explanation / ExamplesFashions and lifestyles
Cheap foreign imports
Diversification / To carry out a different activity, instead of (or as well as) the original one / Farmers deciding to run caravan sites
Supermarkets selling banking products
Technological developments
Economic Trends
Employment
FACT!
In the 2008/2009 recession:
12% of businesses planned to cut wages and
58% introduced a wage freeze.
Why?
If lots of people are in jobs (high employment), what are they more likely to do?
If lots of people are not in jobs (high unemployment), what will they do?
Economic Trends
Income
What changes people’s income?
Type of change / List some examplesTax
Bills
Price of goods
Price of fuel
If prices keep going up, what type of income reduces?
(CLUE: it’s the money you have left over to spend on what you want)
Economic Trends
Growth
REMEMBER: Economic growth is the monetary value of all of the goods and services produced in this country. It is measured by the Gross Domestic Product (GDP)
At the end of 2010, the UK’s GDP figure was (-£10.5 billion). What does this mean?
Inflation
The Government target for the rate of inflation is… ______
The current rate of inflation is… ______
Why does the Government want to control inflation?
Sector and Industry Changes
Growth/Decline of Sectors
IMPORTANT TERMS:
Absolute growth/decline – a sector is getting bigger/smaller. Eventually it
will disappear
Relative growth/decline – a sector is doing better/worse compared with
other sectors
What are the 3 different sectors in the UK? Circle whether they have grown or declined?
1. ______Grown/Declined
2. ______Grown/Declined
3. ______Grown Declined
Sector and Industry Changes
Growth/Decline of Sectors
Look at the following graphs…
Write a summary of what is happening in each sector.
Laws (The Legal Framework)
Who makes laws for businesses in this country?
What laws affect businesses?
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