1.56 External Influences on Business

Technology is a key external influence on business:

  • communication is faster and cheaper
  • products can be designed quicker
  • new ways of communicating and engaging with customers (social media)

New legislation is also an external influence on business:

  • consumer and employment laws
  • regulations e.g. when producing an advert, what claims can the business not make about its product
  • tax laws
  • health & safety laws
  • new pension regulations

Other factors in the economy also impact on a business:

  • unemployment rates – what is the impact on business if unemployment rises / falls?
  • interest rates – what happens if interest rates rise / fall?
  • exchange rates – what happens if the pound £ rises or falls against other currencies?