GCSEBusinessEdexcelRevision Notes1. Investigating Small Business1.5 Understanding External Influences on Business1.5.2 Technology & Business

Technology & Business (Edexcel GCSE Business)

Revision Note

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Steve Vorster

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Economics & Business Subject Lead

Types of Technology used by Business

  • Businesses have access to a range of technologies which can help improve communications flows, lower operating costs and improve their brand image 

1-5-2-types-of-technology

Using the above technologies can help businesses to be more effective and ensure they remain competitive

  

  • The rise of e-commerce means customers increasingly pay online using credit/debit cards with the result that contactless payment systems (Apple Pay,  Android Pay) are growing in popularity
  • These make life more convenient for customers and so a business with such systems may have a competitive advantage over one that does not. However, installing such systems incurs a cost for the business

The Influence of Technology on Business Activity

  • Technology has had a profound impact on business activity
  • Technology influences sales, costs, and the marketing mix in several ways

 

The Influence of Technology on Sales, Costs and the Marketing Mix


Type of Technology
Influence on Sales
Influence on Costs
Influence on The Marketing Mix

E-commerce

  • A powerful tool for expanding the customer base and increasing sales
  • E.g. Amazon has enabled many businesses to sell their products online and reach a global market

  • Has also helped businesses reduce costs by eliminating the need for physical storefronts and reducing overhead costs
  • E.g.Zappos saved $10 million in operating expenses by closing its call centre and focusing on online customer service

  •  Offers businesses new channels for advertising and promotion
  • E.g. Platforms like Shopify have customisable storefronts, email marketing tools, and search engine optimisation (SEO) capabilities

Social Media

  • A powerful tool for businesses to increase sales by building relationships with customers and generating leads
  • E.g. Glossier has leveraged social media to build a loyal customer base on Instagram with 1.5 million monthly visitors

  • A cost-effective alternative to traditional advertising channels

  • E.g. The fast-food chain Wendy's has increased advertising on their Twitter account, while reducing the advertising expenditure in the national press

  • Offers businesses new channels for building brand awareness and engaging with customers, the marketing mix has been transformed for many businesses
  • E.g. Instagram and Snapchat provide businesses with opportunities for creating visual content and live streaming

Digital communications

  • Offers businesses new channels for reaching customers and closing deals e.g the use of email marketing

  • Offers a cost-effective alternative to traditional communication channels e.g. The use of WhatsApp in customer service means customer service employees can work from anywhere and the business does not necessarily need to hire expensive premises

  • Has transformed the marketing mix by providing businesses with new channels for communicating
  • E.g. Email marketing tools like Mailchimp provides businesses with customisable email templates and sales tools

Exam Tip

Whilst rapid developments in technology have undoubtedly brought many benefits for businesses, a real understanding of the impact of technology - and an opportunity in exams to show evaluative skills - should consider some of the potential costs of introducing new technology. 

You might consider some of the following:

  • Training costs for staff to learn new skills and improve or adapt existing skills
  • Capital expenditure for the initial installation of technology and ongoing maintenance costs
  • Disruption to production during the installation and 'bedding in' of new technology
  • Security issues raised by operating digitally
  • The potential loss of the 'personal touch' with customers

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    Steve Vorster

    Author: Steve Vorster

    Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.