Friday 30 November 2018

5 External Factors of Business

External factors that can influence the business. Different external factors can influence business or investment capacity to achieve its strategic goals and objectives. These external factors may include competition. Which can be social, legal and technological changes, and economic and political environment.

List of 5 External Factors

  1. Society

  2. Technology

  3. Economy

  4. Regulatory Policies Government regulations

  5. Political

    1. Society [#1 Factors of Business]

      Social environment is one of the five basic aspects of the business environment. Businesses must not only meet the needs and wants of consumers. But also be aware of certain issues that affect society. Because consumers respond to either companies that contribute or give back to their communities.

    2. Technology [#2 Factors of Business]

      As we know, technology never stops developing. Products like mobile phones and laptops are continuously upgrade with the latest software and features. Companies need to know when this technological advancement will come and continue. To be updates and one way is to keep what consumers want through marketing research.

    3. Economy [#3 Factors of Business]

      economy can have a big influence on the company. People tend to have more income as the economy increases. While the economy is sluggish, many people lose income to make the market more conservative, so buying activity declines. Some companies may consider lowering prices to keep spurring sales. But a wise leader must still consider to maintain quality.

    4. Regulatory Policies Government regulations [#4 Factors of Business]

      also subject to change. Includes mandates on what information should be include in food packaging products. How companies can advertise products such as tobacco. To certain safety standards for retail employees or workers. Whatever the case, companies must abide by these rules and develop marketing strategies around them.

    5. Political [#5 Factors of Business]

      Elements that are not less important is the political situation. The company operates in a more global society today. Even and events such as trade embargoes from abroad can hinder sales overseas. Some countries may also have major resources such as oil for example. Disruptions or conflicts in inter-state politics can have a drastic impact on the price of goods. Even and force consumers to pay more for certain goods.

Conclusion on External Factors

Fun to build a business and develop a company's strategy to make a profit. Do not forget to pay attention to various external aspects that directly or indirectly affect your internal company. Some aspects outside your business can affect your sales, profits, and business strategy. But savvy leaders know how to make use of these elements when developing or changing their business plans.

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