External Stakeholders (SQA National 5 Business Management): Revision Note

Customers

• Customers are the people who buy a business’s products or use its services

• They are crucial stakeholders, because their choices and loyalty ultimately determine whether a business succeeds or fails

  • If customers’ needs are met, they are likely to return and recommend the business to others

  • However, if customers are unhappy with price, quality or service, they can quickly switch to competitors - this can damage sales and reputation

What do customers want?

• Customers look for a range of needs and wants to be met

• Product range

  • A wide product range means customers have many options to choose from

  • It helps meet different preferences, tastes and budgets, making the shopping experience more satisfying

• Quality goods and services

  • Customers expect products that are durable, reliable and safe

  • High-quality goods and good service build trust and encourage repeat purchases

• Fair prices

  • Shoppers want to feel they are paying a reasonable amount

  • Fair pricing doesn’t always mean the cheapest but rather prices that reflect the value and quality of what is being offered

• Prompt delivery

  • Fast and reliable delivery is important, especially for online shopping

  • Meeting or beating delivery expectations improves customer satisfaction

• Value for money

  • This goes beyond fair pricing

  • It means customers feel the product or service is worth every pound spent, balancing cost, quality and usefulness

• Great service

  • Good customer service includes being helpful, polite and responsive

  • Quick problem-solving and a friendly approach leave a positive impression

• Product availability

  • Products should be in stock when customers want them

  • Frequent shortages or long waits can frustrate customers and push them to competitors

• Reliability

  • Customers value businesses they can trust to deliver consistently

  • This could mean dependable quality, on-time delivery or sticking to promises

Banks

• Banks have a significant influence on businesses, as their provider of finance

  • Banks supply loans, overdrafts, and mortgages that businesses rely on for start-up, expansion or day-to-day cash flow

  • They expect repayment, so they want to be sure a business can repay loans in full and on time, with interest

  • By approving or refusing loans, setting interest rates or altering repayment terms, banks directly shape how businesses operate.

Suppliers

• Suppliers are businesses or individuals that provide another organisation with the goods and services it needs to operate, including raw materials, components, stock for resale or equipment

• Suppliers' reliability, prices and quality directly affect a business’s costs, production and ability to satisfy customers

What do suppliers want?

• Suppliers rely on businesses to keep their own operations running smoothly

• They want regular orders, which give them a steady stream of income, and prompt payment for the goods or services they provide

  • If a business struggles to pay on time or reduces its orders, the supplier may face financial difficulties

• A strong, reliable relationship benefits both sides - the business gets consistent deliveries, while the supplier secures ongoing custom

Local community

• The local community includes everyone living in the area around a business

• They may not all be customers, but they are directly affected by how the business operates

What does the local community want?

• Employment opportunities

  • Businesses that create jobs boost the local economy and support families

• A safe and pleasant environment

  • Communities want businesses to avoid causing pollution, noise or heavy traffic that could reduce quality of life

• Strong local services

  • Good transport links, investment in infrastructure and responsible behaviour from businesses benefit the wider area

Pressure groups

• Pressure groups are organisations that try to influence businesses or governments to act in a way that supports their cause

• They often focus on issues such as the environment, human rights, health or consumer safety

What do pressure groups want?

• Change in business behaviour

  • They want companies to reduce negative impacts, such as pollution, unsafe products or unfair working practices

• Awareness of issues

  • Pressure groups seek to highlight concerns and push businesses to act responsibly

• Public accountability

  • They want firms to be transparent about their activities and their effects on people and the planet

Local and national governments

• Government is made up of elected politicians and public officials, at the national or local level, who manage the country for the benefit of its people

• Government plays a major role in shaping the conditions in which businesses operate

What does government want?

• Tax revenue

  • Businesses that make profits pay corporation tax, which funds public services

  • At a local level business rates fund services such as waste collection and maintenance of public spaces

• Employment and prosperity

  • Governments want firms to create jobs and generate wealth in local communities

• Goods and services

  • Many businesses provide essential products and services that the population depends on