Understanding Buisness External And Internal Factors Flashcards
What are 4 Possible external factors that could affect a buisness
Political
This is any action taken by the government eg government laws to ban
smoking which forced many pubs to introduce outside smoking areas
Economic
This is the current state of the economy that will influence business eg,
if the economy is in a recession, the rate of unemployment, the interest
rate, the exchange rate
Socio-cultural This looks at 2 areas.
1. The cultural trends and buying habits of the market, such as soap
powder companies reduced the size of their bottles as the
average family size was shrinking and so too the size of homes
or kitchens
2. Population trends such as demographics eg if the population is
growing through an increase in birth rate the govt will plan for
a rise in demand schools in 5 years.
Technological This is the latest developments with technology eg the use of CAD in
designing training shoes means it is easy to have a design office in one
country and a manufacturing plant in another country, eg China
Environmental This involves action and laws that promote the upkeep of the
environment eg the need to recycle waste has led to introduction of
bins with separate compartments
Competitive
This is the actions of competitors that force a firm to react eg Tesco
launching the successful self-service tills has forced many other
supermarkets to follow
