Business context 2 - business environments

Capital Gains - tax on the profit of selling a non-investing business asset


Business environments

Business to customer (B2C)

  • the business sells its products/services directly to customers eg restaurants, retail

Business to Business (B2B)

  • the business sells its products/services directly to other businesses to help them function eg supplying raw materials, transport etc

Business to many

  • when a business provides both B2C and B2B 

Key factors that influence the Business Environment

anything that involves the government can have an effect on the business environment

Political Factors

  • Government policy - Governments can change the way businesses have to function, as well as influencing the economy, this happens when the government introduces new legislations, or lowers/raises taxes/spending
  • Foreign trade policy - changes in policies can make it easier or harder to trade internationally, these policies can include things such as tariffs, or subsidies for local producers eg farmers or fishers, to help them compete better with international competition
  • Tax policy - Changes in taxes such as income tax, VAT, corporation tax can change the way in which a company uses its money
  • Cross party focus and agendas - this is where multiple parties join together to solve and issue, these cross party groups can change legislation and governmental policies

Economic factors

  • these factors can change how a company chooses to spend its money, the value of its assets, and consumer demand
  • interest rates - an increase in interest rates means that the company will have to pay more to borrow, this will reduce investment, as there is also more of an incentive to save money, it may also increase overhead costs
  • exchange rates - these will have and impact on businesses that trade internationally, as if the value of the pound lowers comparatively, then international demand will be higher, as it costs them less of their currency, but buying internationally will be more expensive
  • consumer trends - what products and the quantity a customer will depend on the state of the economy for reasons such as wages, employment, and inflation
  • Periods of recession - can affect purchasing attitudes of customers, meaning businesses may need to cut down on production



mini test 
1 - intergenerational social mobility is where the change happens from on generation to another, intragenerational social mobility is where the change happens during ones lifetime
2 - socio economic aspect can influence the business environment as if people have lower incomes, then the demand for products can reduce, lowering B2C
3 - health and safety regulations, consumer laws, and employment laws are legal factors a businesses operation
4 - governmental policies can influence business environments as it can increase income/corporation tax, this means the business can get less profit, so has to scale down production, tariffs can also be introduced, lowering the incentive to provide exports to the company
5 - caron footprint is the total amount of CO2 created by an organisation/individual per year, it can be lowered by doing things such as using renewable energy, reducing travel by using online communication, improving infrastructure, to reduce traffic, and therefore road emissions 

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