External factors are always making an impact on a company’s performance. One would think that by looking within the company for answers it would be a simple enough solution to understand what is causing the business impacts. However, this is not the case. Looking outside is good too. Environmental factors have just as much influence on a company’s decisions. These include social, legal and political, economic, technological, and competitive factors.
Society can have a large impact on a company. The social aspects that a company should pay attention to are how society acts, what they value, what do they think about certain issues, what are their views on people, places, things, and issues? Society is essentially your software for teaching marketing. Know them!
Like in any aspect of life, there are rules. Laws, regulations, standards, and those running things essentially set the stage for all businesses and their performance. Those who lead a group are faced with the decisions that make or break a business. Companies must ensure they follow the rules when conducting business. If they don’t, there will be negative consequences that can hurt the company.
The state of the economy will affect a business no matter what, whether negaitve or positive. The things within the economy a company must pay attention to are the income of those in its market, the ways in which the state of the economy can play into their consumers’ decisions (bad economy = less buying, good economy = more buying), supply and demand ALWAYS show how much the consumer will be buying the product or service based on what the need of it is.
With the continuous development of technology, there are always new ways it can play in to a company’s means of business. Technology has created a means of fast and easy communication; global at that. Storage of information is still in its infancy, and yet it has become an enormous aspect of top companies worldwide. It can store all sorts of data; on customers, company records, files, plans, documents, and so on. It is up to the company to take advantage of this to make business processes more efficient and cost-effective.
They say keep your friends close, but your enemies closer. This makes perfect sense in the world of business. Knowing who your competition is, what their products are, and how they can affect your product or service. Knowing how they do business (how they set prices, who they do business with, what they produce, the threat they cause) is essential. Not only does this include knowing current competition, but it also deals with knowing the threat of new competition that can come into the market as well. There’s always an opportunity for others to enter. It is the company’s responsibility to keep themselves up to date and prepared.