Socio Economics Impacts of Business on COnsumer, Suppliers, and Investors

Stakeholders

• Parties who have an interest in the business organization.

• It may stem from their ability to affect or be affected by the firm.

Types of Stakeholders

Internal

External

Internal stakeholders

• are directly or financially part of the businesses' operations.

External stakeholders

are outside parties who affect or are affected by the firm's business decisions.

Impact of Businesses on Consumers

Businesses affect their consumers by convincing them to purchase their goods and services.

Consumer's Behavior

• Understanding how consumers think and behave is important for firms to help them formulate strategies.

Providing Value to customers

Connecting Emotionally

Offering Social Responsibility

Excellent Consumer Service

Influencing Consumer's Behavior

Providing Value to customers

• This can be done by offering the lowest prices or by providing the best quality product for a good price.

Connecting Emotionally

• Consumers also take their emotions into consideration when making choices.

Excellent Consumer Service

Another approach is to provide the best experience by offering excellent customer service. This is in the hopes that it builds a customer’s loyalty to a brand.

Offering Social Responsibility

• Consumers whose principles align with the social movements that firms promote are more likely to patronize their products.

Impact of Businesses on Suppliers

Another stakeholder that firms may impact is their suppliers. These suppliers provide the raw materials or input of the business

1. Price

2. Reliability

3. Stability

4. Capacity

5. Location

Choosing a Supplier

Price

• The main consideration is the _ that suppliers can offer.

• This is more important for newer businesses that have limited financial resources.

Reliability

• The supplier’s ability to fulfill orders accurately and on time is also a major factor.

Stability

• Longer-term contracts challenge the stability of a supplier.

• Those who are not financially or organizationally stable may cause problems.

Capacity

• For firms that produce at a larger scale, whether or not the supplier has the capacity to meet their needs is also important.

Location

• The geographic location of a supplier is also important.

Firms need to take into account lead time and shipping costs when producing their output.