Understanding External Influences on Business

What Understanding External Influences on Business covers

Understanding External Influences on Business is examined in Paper 1, Investigating small business (Theme 1). It covers business stakeholders, technology and business, legislation and business, the economy and business and responding to external influences.

The 5 subtopics

Each one has its own page.

• Business stakeholdersStakeholders against shareholders, what owners, employees, customers, suppliers, managers, the community, pressure groups and government each want, and why their objectives conflict.Open →
• Technology and businessE-commerce, social media, digital communication and modern payment systems, how each affects sales and costs, and how technology has changed every element of the marketing mix.Open →
• Legislation and businessConsumer law and the Consumer Rights Act 2015, employment law, the National Living Wage from April 2026, discrimination and health and safety law, and the costs and benefits of compliance.Open →
• The economy and businessUnemployment, consumer income, inflation, interest rates, taxation and exchange rates, how each affects a business, and worked percentage and currency calculations.Open →
• Responding to external influencesHow businesses respond to new technology, changes in the law such as allergen labelling, recessions, interest rate rises, a strong pound and inflation, and why speed matters.Open →

What you need to know

Answer each one before you reveal it.

Take Understanding External Influences on Business further

The same content, four other ways.

Commonly confused

Pairs that lose marks when they are blurred together.

• Stakeholder vs Shareholder

  Stakeholder: anyone with an interest in, or affected by, a business. Shareholder: a person who owns part of a company.

• Inflation vs Interest rate

  Inflation: a general rise in prices over time. Interest rate: the cost of borrowing money, shown as a percentage.

• Consumer law vs Employment law

  Consumer law: rules protecting customers when they buy goods and services. Employment law: rules protecting workers in their dealings with bosses.

Questions from this topic

Each one with the model answer underneath.

1. 1

   What is a stakeholder?

   Model answer

   A stakeholder is any individual or group with an interest in, or affected by, a business. Stakeholders can be inside or outside the business.

2. 2

   What is the difference between a stakeholder and a shareholder?

   Model answer

   A shareholder owns part of a company by holding shares. A stakeholder is anyone affected by the business, so shareholders are just one stakeholder group.

3. 3

   Name eight stakeholder groups.

   Model answer

   Shareholders, employees, customers and managers are stakeholders. Suppliers, the local community, pressure groups and the government are stakeholders too.

4. 4

   What is the main objective of shareholders or owners?

   Model answer

   Owners want the business to make high profits. Shareholders want dividends and a rising share value.

5. 5

   What do employees want from a business?

   Model answer

   Employees want fair pay and job security. Employees also want good working conditions and chances of promotion.

6. 6

   What do customers and suppliers want from a business?

   Model answer

   Customers want good-quality products at fair prices. Suppliers want regular orders and to be paid on time.

What is inside Levo

Six ways to work the same material.

Understanding External Influences on Business revision questions

What does Understanding External Influences on Business cover in Edexcel GCSE Business?

5 subtopics: business stakeholders, technology and business, legislation and business, the economy and business and responding to external influences. Each one has its own page with questions and model answers.

How is Understanding External Influences on Business organised?

By the Edexcel 1BS0 specification, subtopic by subtopic, so it matches the order you are taught it in.