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Unit 1 the Business Environment P5

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Unit 1 Exploring Business Activity Assignment 3 P5

In this essay I will be describing how three external factors are impacting upon the business activities and stakeholders of John Lewis and Oxfam.

The first of the three external factors I have chosen is the credit crunch. The credit crunch is a decline in the availability of loans or a tightening of conditions required to take out a loan from banks. It also means that there are reductions on the interest rates set up by banks for saving. Credit crunches are normally caused by a period of careless and risky lending to people who don’t necessarily fit the exact requirements, these careless decisions lead to no return and leave the banks losing a lot of credit.

Impact in …show more content…

Impact in business activity

John Lewis

The entrance of new competitors for John Lewis puts a lot of pressure on them to keep original customers. They have to introduce ways of keeping them coming back to their store and not the new competitors who have just set up. They could do this by creating a club card which gains points for every purchase they use, the higher the purchase the more points they get to spend in store in return for products as a reward. If they do not come up with a decent strategy to keep customers coming back then they will more than likely loose many customers to their new competitor which could prove fatal to the financial statement figures. There is also an increased pressure to just reduce prices for a set period in order to calm the hype of a new store being opened in the area. More advertising will also have to be done to compete and to try and fade the other store out of the market.

Oxfam

Although you wouldn’t expect charities to have competition, they do. A new competitor for Oxfam would result in fewer donations as the new charity will without doubt have marketing strategies to persuade people to donate to them. The public cannot afford to donate to every charity out there therefore it increases pressure on Oxfam to make sure that they are the charity receiving the donations. In order to

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