The importance of external factors in

Knowing how your business will operate from day to day is important; however, it is equally important to know how the external environment will affect your day-to-day activities.

The importance of external factors in

Under economic analysis, discuss the types of economic system in the countries the company operates, the amount of government intervention in the free market, the efficiency of the financial markets, infrastructure quality, the skill level of the workforce, labour costs, and relevant factors.

For social analysis, look into the demographics, education, class structure, culture, entrepreneurial spirit, and health and environmental consciousness. The values and attitudes that members of a firm bring to the workplace are derived from sources such as religion, family, and social institutions.

These are attitudes towards change, success, work, risk-taking, use of time, competition, achievement motivation, and authority. SS Many technological innovations have change the way many industries operate.

Those that are too slow to change have no choice but to fold. For example, the MP3 music format has changed the record industry. The sale of music albums have fallen drastically while the purchase of single songs online has proliferated.

The popularity of reading E-books has affected the sales of hard copies.

The importance of external factors in

The PEST analysis is merely a checklist to ensure that you have analysed the salient factors. It is a great help to guide the group through the initial analysis. When the team gets an accurate picture at the beginning of the strategic process, it will lead them to adopt a successful strategy.

Some scholars have put forth other specific forces that will have an impact on business organisations. They include the stockholders, customers, the public, financial institutions, material suppliers, competitors, and labour unions. Management Tips While the office party is a good place to get to know the other colleagues better, employees must take good control of themselves and their behaviour and not be carried away and do something that they will regret later.

The Environmental Domain

This is especially so when there is free flow of alcoholic drinks. When one is drunk, one has no control over what words come out of the mouth. Senior management will have poor opinions of staff who drink too much and pass out at the function. There will be those who want to show that they can drink more than others and yet remain sober.

There is really no loss of face by losing to such challenges. Once I attended a staff dinner with plenty of liquor as the company had many expatriate staff. An assistant manager pretended to be drunk and picked a fight with his manager to settle a score.

Some staff members were sure that he wanted to take revenge on the other party.

The importance of external factors in

The following day, he had to apologise to the manager and pay for the replacement of the lenses. Although no disciplinary action was taken against him, he lost much respect from his colleagues after the incident. We can learn from the success of Spanish company Inditex, which is well known for its Zara brand.

Quoted in the book Growth Champions, Inditex runs a highly integrated vertical supply chain from raw materials supply to its retail stores.

The firm encourages store managers to focus solely on being as efficient and profitable as possible.

Importance of Marketing Environment

The firm has built a culture that encourages autonomy, quick decision-making, continuous improvement, and retaining the services of its best people. Its chief executive officer Pablo Isla says: Everything in our company is bottom-up. This has a lot to do with our entrepreneurial spirit.

The first person with a big entrepreneurial spirit is the store manager.The Importance Of External Factors Affecting An Organisation Commerce Essay Published: November 7, In an organisation there are several factors influence the growth and performance of .

Explain The Importance Of External Factors Affecting An Organisation External Factor Affecting Mnc marketing its brands and the second focus is on the manufacturing of concentrates and syrups used in the production of its beverages.

External forces are factors outside the organization that are beyond a company's control.

Marketing Environment: Explanation, Components, & Importance | Feedough

These factors impact each business and industry differently, which only increases the importance of how. Internal factors that may affect the business organization include innovation, financial and operational factors along with strategic and employee risks.

Menu. You can change how internal and external factors affect your firm. You cannot make the economy grow. But, you can encourage spending. External: Customers and Suppliers. Next to your employees, your customers and suppliers may be the most important people you deal with.

Suppliers have a huge impact on your costs. Key Success Factors: What are the key success factors, assets and competencies needed to compete successfully? How will these change in the future? How will these change in the future? Environmental Analysis: An environmental analysis is the fourth dimension of the External Analysis.

Why Is It Important to Consider External Factors in Your Business Plan? | Bizfluent