1-5-2-Technology-And-Business

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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

Types of technology commonly used by businesses

Infographic detailing types of technology: e-commerce, social media, digital communications, and payment systems, with examples like Amazon and PayPal. — **Using these 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

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 (opens in a new tab) 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

Examiner Tips and Tricks

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

Business GCES EDEXCEL