The Business Environments Flashcards
understand the factors that play a vital role in determining wether each individual business succeeds or fails
Definition of the business environment
Outside factors play a vital role in determining whether each individual business succeeds or fails
What are the different business environments?
Economics, competitive, social, global and technological
Economic environment
the various economic factors that affect how businesses operate and make decisions.
It includes elements like inflation, unemployment rates, fiscal policies, and market conditions that can either support or challenge businesses.
Competitive environment
Competition is intense, no matter in grocery business, streaming business and others. Companies must focus on loyal customers because they are the vocal promoters of their products/services
What’s a competitive advantage and give an example if possible
Hint: in what areas will make a business have competitive advantage?
effectively appealing to particular customers by providing a différenciâted product in the areas of: price, service, quality and innovation.
Examples:
→ Apple’s competitive advantage is the good service (no long wait to talk to the customer service), innovation (take something and make it even better. Like with the smartphone blackberry, they made it into a better smartphone).
→ Samsung’s competitive advantage is that they offer a wide range of products and for a cheaper price.
Speed to market
how quickly a business can take a new idea and turn it into a product that customers can buy. Companies that do this faster often have a big advantage because they can beat competitors.
Leading edge
leading edge businesses create products that are introduced at just the right time, when the market is ready for them, so customers are more likely to buy
Bleeding edge
bleeding edge businesses, on the other hand, introduce products that might be too advanced or ahead of their time. These products often fail because customers aren’t ready for them yet.
example if I need to hear:
Webvan, a grocery delivery service from the 1990s, which failed because customers weren’t yet comfortable with online shopping
What is a technological environment and give an example if possible
Business technology (including any tools that businesses can use to become efficient and effective) that will affect your business.
Example:
self driving cars (on the horizon)
Impact: garage businesses go down, motels on highways go down cuz less tired to drive long term
What is a social environment and why is it important?
The social environment refers to the values, customs, and characteristics of the people who live in a certain area
Businesses need to understand these factors to effectively target their products to the right audience
What is a big part of the social environment?
Demographics
Which demographical characteristics can affect business?
measurable characteristics of a population like aging population, race (diversity), rising worker expectations, younger generations, ethics.
Explain how diversity can affect businesses and give examples
When the population becomes more ethnically diverse (like the U.S), the companies adapt by tailoring their products.
Example: businesses are recognizing the growing Hispanic population. So companies like Coca-Cola and Walmart are investing in the Hispanic market because of its potential for growth
Explain how aging population can affect businesses
creating opportunities for businesses that serve older people (healthcare, pharmaceuticals, and financial services).
Explain how rising worker expectations can affect businesses
younger generations expect more from their employers. They want flexibility in their jobs, meaningful work with job satisfaction and a fair work-life balance
Smart firms are responding to the change in worker expectations
