External Influences | OCR A-Level Business H436 (H436)
External Influences
- 232 questions
- 16 subtopics
- Component 02: Operations, finance and external influences
- Component 02
External Influences is examined in Component 02, Operations, finance and external influences.
It covers demand, supply and the market mechanism, price, income and the drivers of demand, costs, capacity and the drivers of supply, rivalry, market share and competitor behaviour, imports, exports and the case for open trade, trade barriers and trade agreements, exchange rates and the value of the pound, culture, law and politics in overseas markets, the forces behind a globalised market, political stability and the reach of government policy, the business cycle and the state of the economy, interest rates, tax and subsidies, demographics, lifestyle and cultural change, shopping habits, communities and pressure groups, artificial intelligence, automation and robotics and cybersecurity, cloud services and connected devices.
Sample questions from External Influences
Answer each one closed book first, then open the answer.
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Demand, supply and the market mechanism
Who makes up the demand side of a market?
Show the answer
The demand side is made up of the consumers, households and other businesses that buy the product. -
Costs, capacity and the drivers of supply
Define productivity.
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Productivity is output per unit of input, most often measured as output per worker or per hour worked. -
Imports, exports and the case for open trade
How can exporting lower a manufacturer's unit costs?
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Selling abroad raises total output, so fixed costs are spread over more units and the business gains economies of scale. -
Exchange rates and the value of the pound
Sterling moves from £1 = €1.10 to £1 = €1.20. State whether this is an appreciation or a depreciation and calculate the percentage change.
Show the answer
It is an appreciation of sterling of about 9.1%. -
The forces behind a globalised market
Name two developments in transport that have lowered the cost of international trade.
Show the answer
The containerisation of shipping, and cheaper and larger-capacity air freight. -
The business cycle and the state of the economy
What is meant by the trough of the business cycle?
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The trough is the lowest point of the cycle, at which output stops falling and the economy begins to recover. -
Demographics, lifestyle and cultural change
Why do businesses track changes in average household size?
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Smaller households buy smaller pack sizes and different homes and appliances, so product ranges and formats have to be adjusted. -
Artificial intelligence, automation and robotics
What human resource consequences follow from automating a warehouse?
Show the answer
Roles are lost or redefined, so the business must manage redundancies or redeploy and retrain staff into maintenance and supervisory work.
The 16 subtopics
One subtopic is one session. Work down the list.
| Subtopic | What it covers | Questions |
|---|---|---|
| Demand, supply and the market mechanism | Recall questions on markets, demand and supply, how quantity demanded and supplied respond to price, equilibrium price, the effects of pricing above equilibrium, and why businesses forecast demand and study supply in input markets. | 13 |
| Price, income and the drivers of demand | Recall questions on substitute, complementary, normal and inferior goods, how income, expectations, population, promotion and changing tastes drive demand, and the operational problems an unexpected surge in demand creates. | 16 |
| Costs, capacity and the drivers of supply | Recall questions on how production costs, the number of suppliers, capacity, productivity, weather, indirect taxes and subsidies affect supply, why supply responds slowly to price, and how businesses cope with scarce raw materials. | 16 |
| Rivalry, market share and competitor behaviour | Recall questions on calculating market share, how the number and size of competitors affect prices and profits, non-price competition, price wars, barriers to entry, and how competition benefits consumers and businesses. | 14 |
| Imports, exports and the case for open trade | Recall questions on imports, exports and open trade, why businesses export and import and the risks involved, specialisation, trade deficits, finding overseas customers, service exports and licensing agreements. | 14 |
| Trade barriers and trade agreements | Recall questions on protectionism, tariffs and quotas, calculating a tariff, non-tariff barriers and customs checks, trade agreements and customs unions, infant industries, and how protection can harm domestic producers. | 14 |
| Exchange rates and the value of the pound | Recall questions on exchange rates, appreciation and depreciation of sterling, converting prices and revenue between currencies, how a strong or weak pound affects exporters and importers, volatility and hedging currency risk. | 16 |
| Culture, law and politics in overseas markets | Recall questions on adapting the marketing mix for overseas markets, ethnocentric approaches and glocalisation, political instability, differing employment, product and data protection laws, business etiquette, joint ventures and intellectual property. | 15 |
| The forces behind a globalised market | Recall questions on globalisation and the communication, e-commerce, trade liberalisation and transport developments behind it, containerisation, offshoring, global supply chains, global competition and the benefits to consumers. | 14 |
| Political stability and the reach of government policy | Recall questions on how government regulates business through competition, environmental and health and safety policy, the National Living Wage, government as a customer, lobbying, deregulation, and political stability and risk. | 14 |
| The business cycle and the state of the economy | Recall questions on the stages of the business cycle, recession and gross domestic product, how businesses respond to a contraction, employment and tight labour markets, and the difference between nominal and real income. | 15 |
| Interest rates, tax and subsidies | Recall questions on the Bank of England base rate and how interest rate changes affect businesses, direct and indirect taxes such as corporation tax and VAT, government subsidies and their risks, and government spending. | 15 |
| Demographics, lifestyle and cultural change | Recall questions on demographics, an ageing population, urbanisation, household size, lifestyle trends and hybrid working, environmental awareness and greenwashing, multicultural markets, fashion cycles and spotting changes in consumer tastes. | 14 |
| Shopping habits, communities and pressure groups | Recall questions on omnichannel retailing, falling high street footfall, online and physical selling, click and collect and online returns, pressure groups and how businesses respond to them, community relations and social media. | 14 |
| Artificial intelligence, automation and robotics | Recall questions on automation and its benefits, drawbacks and effects on costs and staff, uses and risks of artificial intelligence, drones, robots and quality, electric vehicle fleets, and technology as a competitive necessity. | 14 |
| Cybersecurity, cloud services and connected devices | Recall questions on cybersecurity, data breaches and ransomware, cloud computing and its benefits and drawbacks, commercial uses of social media and influencer marketing, mobile technology and wearable technology. | 14 |
How the guide is worked
Answering a question from memory stores it far better than reading the answer again. The guide runs that as a fixed procedure on one subtopic at a time, about twenty minutes a session.
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Step 1 · Closed book
Cover the answers. Work through one subtopic and write down what you can. Leave blanks where you have nothing.
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Step 2 · Open book
Go back to the top. Read each printed answer and write it out in full, including the ones you had right.
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Step 3 · Closed book again
Same questions, same order, from memory. The gap between pass one and pass three is the session result.
Read the full method, the return schedule and the research behind it.
Nearby topics
OCR A-Level Business H436 Active Recall Guide
Every topic, not just this one. 2,383 questions with their answers.