Influences on Business

External Influences

Political Factors

Economic Factors

Social Factors

Technological Factors

Environmental Factors

Legal Factors

Competitive Environment

Global Influences

Political Factors

factors refer to how government actions and policies impact businesses

Government Policies

These include taxation, subsidies, grants, and spending programs

Regulations and Laws

Employment laws, health and safety regulations, and environmental laws

Trade Policies

Policies regarding trade tariffs and agreements.

stable

Consistency in government policies and leadership can provide businesses with a ____ long-term planning and investment environment.

Economic Factors

include economic growth, inflation, interest rates, and exchange rates.

consumer spending

A strong economy can boost business by increasing _______________

Inflation

Rising prices can increase costs for businesses and reduce consumer purchasing power

investment

High interest rates can increase borrowing costs, reducing business ________

Exchange Rates

Fluctuations can affect businesses involved in international trade

Social Factors

encompass demographic changes, cultural trends, and consumer behavior

Demographics

Changes in population size, age distribution, and income levels

Cultural Trends

Shifts in societal values and lifestyles

Consumer Behavior

Preferences and spending habits of consumers.

skilled labor

The level of education in a population can influence the availability of _________

workforce

Higher education levels can provide a business with a more skilled ______, leading to increased productivity and innovation.

interact

The rise of social media has changed how businesses ______ with customers and manage their reputations.

Technological Factors

involve advancements in technology that affect how businesses operate

Innovation

Development of new products and processes

Automation

Use of automated systems to increase efficiency

Digital Transformation

Adoption of digital technologies

Research and Development (R&D)

Investment in ___________ can lead to new innovations and competitive advantages

Environmental Factors

pertain to ecological and environmental aspects such as climate change and sustainability

Resource Availability

Access to natural resources can affect production and operations.

Corporate Responsibility

Businesses’ efforts to reduce their environmental footprint and contribute positively to their communities

Legal Factors

include laws and regulations that affect business operations.

Employment Law

Regulations regarding minimum wage, working conditions, and employee rights

Health and Safety Regulations

Requirements to ensure workplace safety.

Consumer Protection Laws

Laws to protect consumers from unfair business practices

Intellectual Property Laws

Protection of inventions, designs, and artistic works

Data Protection Regulations

Laws governing the collection and use of personal data.

Competitive Environment

involves the analysis of competitors and market conditions

monopoly, oligopoly, perfect competition

Different types of market structures

Barriers to Entry

Factors that prevent new competitors from entering the market

Substitute Products

Availability of alternative products that can replace a business’s offerings.

Brand Loyalty

Customer preferences for specific brands that can affect market share and profitability

Global Influences

refer to the impact of globalization and international factors on business operations

Globalization

Expanding into international markets

Global Economic Conditions

Economic trends and conditions worldwide

Cultural Differences

Variations in cultural practices and consumer preferences in different countries.

Geopolitical Risks

Political instability and conflicts that can disrupt global supply chains and business operations

Ethical Considerations

involve the principles and values that guide business behavior.

Corporate Social Responsibility (CSR)

Engaging in activities that benefit society and the environment.

Ethical Sourcing

Ensuring products are sourced responsibly

Transparency and Accountability

Being open about business practices and accountable for actions

Fair Trade

Supporting fair wages and conditions for producers in developing countries

Ethical Marketing

Honest and transparent marketing practices that build trust with consumers

Organizational Culture

The values, beliefs, and behaviors that characterize an organization

Internal Influences

Organizational Culture

Leadership and Management

Operational Efficiency

Financial Resources

Human Resources

motivation, productivity

 A strong, positive culture can enhance employee ______ and _________

Leadership and Management

The style and effectiveness of leadership and management within a business

Management Skills

Skills required to plan, organize, and control organizational activities

Operational Efficiency

The ability of a business to produce goods and services efficiently

Financial Resources

The availability and management of financial resources

Human Resources

The skills, abilities, and motivation of employees

Business Objectives and Strategy

Goals and plans to achieve them.

Business Objectives and Strategy

Long-term plans to achieve competitive advantage

Operational Objectives

Short-term goals to support strategic objectives.

Resources and Capacity

The assets and capabilities available to a business

Operations and Processes

Activities and procedures used to produce goods and services

Production Methods

Techniques used to manufacture products.

Quality Control

Processes to ensure products meet customer expectations.

Technology Adoption

The integration and use of technology within a business

IT Infrastructure

The hardware, software, and networks used to support business operations