This document discusses the internal and external pressures that can impact a business. Internal pressures include new personnel, technology, finances, products, policies and culture. External pressures are categorized by PESTEC: political (e.g. laws), economic (e.g. interest rates), social (e.g. demographics), technological (e.g. internet), environmental (e.g. climate change), and competitive (e.g. market forces). It provides examples of each, such as laws restricting alcohol sales, economic recessions affecting demand, more working mothers impacting business, internet shopping changing consumer behavior, environmental concerns requiring diversification, and stores like HMV closing due to competitive pressures. Students are assigned homework to

1. Learning Intention
Factors affecting a business
Internal Pressures
External Pressures – PESTEC

2. Homework
Homework Booklet
Page 3
Questions 9, 10, 13 & 15 (a & b)
18 marks
Due Wednesday 31 August

3. Internal Pressures
Things within the business that impact
upon the way it operates
• New personnel or management
• New technology (the internet)
• Change in financial position
• New product developments
• Company policy
• Corporate Culture

4. External Pressures
Things outwith the businesses control that impact upon
the way it operates
• Political – legislation, planning, devolved Parliament
• Economic – interest rates, exchange rates, the EURO
• Social – ageing population, role of women, greater
general prosperity
• Technological – email, internet
• Environmental – pressure groups, climate change, social
responsibility
• Competition – market competition, USP
Easily remembered by using

5. INTERNAL PRESSURES
- New personnel
- New technology
- Change in finances
Competitive Environmental
EXTERNAL PRESSURES
PESTEC
External environment changes which can
affect an organisation

6. Political Pressure
• 5 Sept 2007 : SNP moves to outlaw cheap alcohol deals
• Supermarkets off-licence’s face being banned from offering
cut-price alcohol deals under new plans.
• The minister wants to prevent supermarkets and off-sales
from promoting schemes which offer free alcohol, such as
"three for the price of two" and "buy one get one free" offers.
• Stores will also face tough restrictions on how they promote
drink, including separate display areas to make the distinction
between alcoholic and soft drinks.
• The 2005 Licensing Act, due to come into force this year,
outlaws irresponsible promotions in pubs and clubs, but only
in some off-sales

7. Economic Factors
• Credit Crunch
• Booms and slumps in the economy have been
reflected in the changes in consumer demands
BBC NEWS | England | Blackpool visitors down
• Stock Market Mayhem
• Varying Exchange Rates
http://www.bbc.co.uk/learningzone/clips/effect
s-of-varying-exchange-rates/5828.html

8. Socio-Cultural Factors
• Working mothers
• http://www.bbc.co.uk/news/education-
14247472
• Increasing numbers of working mums have
returned to the workplace, has impact on
working practices

9. Technological Changes
• Internet Shopping
http://www.moneyweek.com/investment-
advice/high-street-suffers-as-online-sales-soar
• Reach more consumers as can be done 24/7
but has negative impact on high street shops

10. Environmental Factors
• Climate Change
http://thescotsman.scotsman.com/scotland/The
res-no-snow-on-ski.3277507.jp
• Lack of snow causes businesses to diversify

11. Competitive Factors
• HMV close Megastores
http://www.marketingweek.co.uk/sectors/retail
/hmv-to-close-60-stores/3021963.article
• Due to falling sales and profit levels aims to
reshape its business

12. Independent Study
External Business Environment
• Using the Leckie & Leckie books read pages
25-28
• In jotters take your own notes to help you
describe each heading under P-E-S-T-E-C