How does technology change the way a business operates?
The main types of technology used in business (e-commerce, digital communication, social media and automation), and the benefits and drawbacks of technology for sales, costs, marketing and the way a business is run.
A focused answer to AQA GCSE Business 3.2.1, covering e-commerce, digital communication, social media and automation, and the benefits and drawbacks of technology for sales, costs and marketing.
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What this dot point is asking
AQA wants you to identify the main types of technology a business uses and explain how technology affects sales, costs, marketing and the way the business operates, including both benefits and drawbacks.
Types of technology in business
Benefits of technology
Technology can increase sales by reaching customers worldwide through e-commerce, lower costs through automation, improve marketing through cheap, targeted social media, and speed up communication and decision-making. Each type of technology affects a different part of the business. E-commerce widens the market and the trading hours; social media gives cheap, targeted promotion and a direct line to customers; digital communication speeds up coordination with staff and suppliers; and automation cuts the cost per unit in operations. Used together, they let even a small firm compete with much larger rivals, which is why technology is now a central influence on how businesses operate.
E-commerce has transformed retail: a small firm can now reach national or international customers from a single warehouse, with much lower overheads than a chain of shops. The flip side is that traditional high-street shops face fierce online competition and must often adopt e-commerce themselves to survive, which is why this is a frequent exam scenario.
Drawbacks of technology
Technology also brings problems. There are high set-up and maintenance costs, the risk of cyber-attacks and data theft, the need to train staff or face job losses from automation, and the danger that the business depends on systems that can crash. There is also a human cost: automation can make jobs redundant, which harms staff morale and the local community, and constant online availability raises customer expectations of instant service. AQA expects a balanced answer that weighs the cost savings and wider reach against the investment, the security risks and the impact on employees, rather than treating technology as wholly good.
Try this
Q1. State two types of technology a business might use. [2 marks]
- Cue. For example, e-commerce and automation.
Q2. Explain one drawback of using technology in a business. [2 marks]
- Cue. High set-up costs, cyber-attack risk, or job losses, with a brief reason.
Exam-style practice questions
Practice questions written in the style of AQA exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.
AQA 20193 marksExplain one benefit to a small retailer of using social media. (Paper 2, Section B)Show worked answer →
A 3-mark explain question: one benefit developed through a chain.
Social media lets a small retailer reach a large audience at very low cost, far cheaper than traditional advertising like print or TV. The retailer can post offers and product photos that customers share, spreading awareness to new buyers. The consequence is more customers and sales without a big marketing budget, which is especially valuable for a small firm with limited funds.
Markers reward one clear benefit (low-cost reach, targeting, direct customer contact) developed with a consequence. A bare benefit caps at one mark.
AQA 20229 marksA high-street shop is deciding whether to invest heavily in e-commerce. Justify whether the shop should make this investment. (Paper 2, Section C)Show worked answer →
A 9-mark justify question: recommend, apply, weigh the cost.
In favour: e-commerce lets the shop sell 24 hours a day to customers anywhere, not just local high-street footfall, widening the market and raising potential sales. As shopping shifts online, a shop that does not adapt risks losing customers to online rivals.
Against: building and running an online store has high set-up and maintenance costs, brings the risk of cyber-attacks, and needs staff trained in new systems, which strains a small shop's resources. A supported judgement might recommend the investment because the long-term growth in online shopping makes it necessary for survival, perhaps starting small to manage cost, while noting the firm must budget for security and training. Markers reward a clear decision justified against the cost and applied to the shop.
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Sources & how we know this
- AQA GCSE Business (8132) specification — AQA (2017)