External causes of business failure
- Created by: noe
- Created on: 02-03-20 10:16
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- EXTERNAL CAUSES OF BUSINESS FAILURE
- Market conditions (markets are dynamic)
- Consumer tastes might change
- Failure to set up online operations can make a business struggle as there has been a huge growth in online shopping
- Some industries decline and are replaced by others
- Competition
- They might bring out superior products, charge lower prices, better marketing campaign...
- Economic
- A financial crisis, recession, a cut in government expenditure.
- If taxes are increased and wages lowered, disposable income will decrease resulting in lower demand for non-essential goods.
- A financial crisis, recession, a cut in government expenditure.
- Exchange rates
- A business which relies heavily in exports will suffer if exchange rates rise as they will have to pay more for the goods
- Interest rates
- Business with debts would suffer
- Government regulations
- They can have a negative impact on businesses if they limit the companies' ability to do business, reduce subsidies or cut expenditure.
- Supplier problems
- If they fail to deliver orders on time
- Natural phenomena
- Weather or disease
- Market conditions (markets are dynamic)
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