LO3 - Know the impact of the economic environment on businesses

1. Unit 01 Y/502/5408 THE BUSINESSENVIRONMENT LO3 - Know the impact of the economic environment on businesses

2. LO2 - Assessment Criteria

3. Assessment Criteria P5, M2, D2 • P5 - Learners could write a report for the management team of an organisation. They should describe the influence of two contrasting economic environments upon business activities within the selected organisation. • M2 - Learners will need to go on to consider changes in demand and supply on the business, and analyse the impact of those changes. • D2 - Learners will need to evaluate the extent to which a business is likely to be affected by changes in the economic environment. • In earlier learning outcomes, learners were required to focus on two businesses. In learning outcome 3 they just need to be concerned with one. Learners need to understand that any business does not exist in isolation but is affected by a range of possible economic factors. • They could undertake a group task where the key economic variables that can affect a business are identified and researched. Learners should then use the data that they have obtained and look for changes in the behaviour of businesses using examples from newspapers or news websites. Each group could then be asked to present their findings

4. LO3 - The impact of the economic environment Focusing on ONE of the businesses selected during LO2, you need to provide evidence for the following 5 tasks within this case study: • Economic Environments • Business Demands • Supply for the Business • Comparing Economic Environments • Evaluate Economic Environments Focusing on one of the businesses selected from the two selected during ao2 Task 1 (P5.1) – Focusing on a business, describe the influence of two contrasting economic environments that impact a business, based on: • Ownership of Business • Business Operations - Functionality of Businesses Activities • Movement of Capital

5. LO3 - The impact of the economic environment – Business Demands The demands placed on a business influence (dictate) the performance of the business by acting on the needs of the customers: - Click on the links below for additional information • Influenced by affordability • Competitive Pressures – such as emerging markets from abroad or new entrants to markets (e.g. Supermarkets selling electronics or clothing) • Availability of Substitutes • Level of Gross Domestic Product (GDP) • Needs and Aspirations of Consumers Task 2 - P5.2 – Based on the two contrasting economic environments selected describe the influence of customer demand for the product/service – focusing on:

6. LO3 - The impact of the economic environment – Elasticity of Supply Supplying a service/products to the consumers from the business plays a big part in business supply chain - Click on the links below for additional information • Influenced by availability of Raw Materials and Labour • Logistics • Competition for Raw Materials – such as the cost of electricity, sometimes related to oil/gas etc • Ability to Produce a Profit • Government Support– such as limitations on taxation, importing and exporting of products/services • But these wax and wane with the economy. Elasticity of supply is how companies react to the change in conditions. Task 3 (P5.3) – Based on the two contrasting economic environments selected describe the influence of supplying the product/service to the business and customers – focusing on: -

7. LO3 - The Economic Environment - Comparison Task 4 - M2.1 – Based on the TWO contrasting economic environments selected analyse and compare the impact of changes in demand and supply on a selected business. • Consider the market they are in, what they exist for and the size of the business • Consider the structure - Tall, wide, small, big departments ... • Strategic plans for the future to achieve the aims of the business • Inter Dependencies of the departments • Consider the departments your organisation has, why they exist and what they perform – how are they affected by the departments that exist () • Changes in the Supply Chains of Operations

8. LO3 - The Economic Environment - Evaluation • Business Activities– How the business operates (dealing with suppliers / customers) • has it forced your company to downsize, change its ethos, change its plans or way of dealing (like going purely online) • Business Strategy– business changed and impact it has on the business operations • Internal Structures – organisation structure • Would they  hire more or less? / retrain or lay people off? • Would they find a different way of doing things like training staff to do multiple jobs or cut our one section of their company altogether? • Functional Activities– department function / link together (how would the change) • Stakeholders– change in the focus and/or management of the business • Task 5 - D2.1– Evaluate to what extent a selected business is likely to be affected by changes in the economic environment

9. Assessment Tasks Assessment Outcome – P5 Task 1 - P5.1 – Focusing on a business, describe the influence of two contrasting economic environments that impact a business, based on: Task 2 - P5.2 – Based on the two contrasting economic environments selected describe the influence of customer demand for the product/service – focusing on: Task 3 - P5.3 – Based on the two contrasting economic environments selected describe the influence of supplying the product/service to the business and customers – focusing on:

10. Assessment Tasks Assessment Outcome – M2 Task 4 - M2.1– Based on the TWO contrasting economic environments selected analyse and compare the impact of changes in demand and supply on a selected business Assessment Outcome – D2 • Task 5 - D2.1 – Evaluate to what extent a selected business is likely to be affected by changes in the economic environment