6.1 External influences on business A2 activity

Evaluate the exact proposal, jurisdiction, start date/enforcement, affected cost/revenue/stakeholders and business adaptability. Separate announcement from enacted law; prepare scenarios, compliance, stakeholder communication and strategic alternatives.

Net impact depends on import/export proportions and invoice currency, demand elasticity, debt type, ability to pass prices, confidence, competitor response, scale/duration and policy time lag. Trace one full channel and its counter-effect; consider hedging, sourcing, pricing, finance and timing responses.

A social audit defines stakeholder/social standards, measures evidence (workforce, equality, health/safety, supply-chain labour, community/product outcomes), compares targets/law/commitments, reports gaps and assigns action/review. Independent verification and transparent boundaries reduce selective claims.

Trace the mechanism: R&D creates nanopaint USP → differentiation/first-mover awareness → possible price/sales/share gain; but costly production technology and uncertain demand → high fixed cost/break-even → loss if imitation or adoption is weak.

Decide by strategic/customer problem, expected value and adoption, total life-cycle cost, skills/process/data/cyber needs, integration and downtime, capacity/quality, workforce/stakeholder effects, competitor timing and pilot/contingency. Compare with improving the current process or delaying.

Judge direct overlap in customer need/geography/price, concentration, differentiation/brand, customer and supplier switching costs, substitutes, contract/capacity, input criticality, information and financial strength. A social enterprise may not be able to copy a low-price rival without harming its stakeholder objective.

Example: scale rival lowers price → low-income customers switch → market share/revenue fall → less cash for employee benefits; cutting those benefits may increase turnover and weaken service, so differentiation or cost redesign may be safer than matching price blindly.

MNCs seek market/resource access, predictable law, infrastructure, skills and incentives; governments seek investment, jobs, tax, technology, local supply/exports and standards. They negotiate tax/grants, location, local content/training, labour/environment rules and profit/currency transfer. Competition between countries can grant excessive concessions; unstable policy can deter commitment.

Evaluate an agreement by affected inputs/outputs and tariff share, income/market size, current differentiation/brand, competitor scale, product rules/standards, logistics/currency and ability to adapt. Cheaper imported fertiliser may lower cost while tariff-free rival food reduces domestic sales; net impact is business-specific.

Environmental audit cycle: define organisational/product/supply-chain boundary and baseline → measure material/energy/water/emissions/waste/pollution/biodiversity impacts → verify against law, targets, peers and stakeholder concerns → identify hotspots/risks/opportunities → set specific targets/actions/owners/resources → report transparently → monitor and re-audit. Stakeholders use it to challenge claims, compare progress and influence finance/purchase/employment/regulation.

Judge materiality and stakeholder sensitivity, baseline/target evidence, short/long-run cash and risk, competitor/legal direction and full supply/use/end-of-life effect. Example: local milk may cut transport emissions, but direct-to-consumer delivery and acid-whey/water impacts may dominate; audit the whole system.