What You Need To Know About External Factors For Business
A business may look perfect on paper but it can take an upside down in reality. A company’s success depends on two factors: internal and external affairs. Sometimes companies fail due to financial, and personal problems. It can be considered an internal factor. Sometimes external factors like government policy and competition affect companies’ development. It is absolutely necessary to understand both internal and external factors to maintain a work culture in the company. The peace has to be there in order to be productive. This project discusses how external and internal factors help to thrive business.
External Factors
External affairs depend on substantive and elusive factors that a company can not control. Mainly government policy affects an organization the most. Knowing external affairs allows businessmen to make adjustments in order to run their organization smoothly. The factors that needed to be considered are:
Economic situation
No external affairs play a more vital role than the economy. An economic crisis leads a company to loss whereas a boost in the economy helps to make money. One can not run a business without money or rotation of money. A country’s economy depends more on the policies of the government. If it suits the business it could be profitable, if not then it might go into a loss or even bankrupt. The present economy of a country decides how the business will go.
Laws
Sometimes the government applies some laws for the betterment of the countrymen. But it does not mean that it can be suitable for an organization to run a business. On one hand, some laws restrict them on the other hand some laws allow them to do business that helps them grow. If the government allows international money to be invested in their local business that could be hugely beneficial for the local business.
Competition
Unless the company produces products that are serving the customer’s needs or there are not many competitors one has to face competition. When the company is new it takes a lot of hard work and dedication to stand out. Companies usually follow the path that the giants have done so far. Companies have to face competition to decide their strategy in order to beat the others. Competition can be good or bad depending on the intent the companies show.
Customers’ demand
Satisfying customer’s need brings fortune to the company. It is a must that every company has to think of. The company will grow as long as the product is fulfilling the customer’s needs. So one has to be very careful about what their customers need and has to take care of that. In order to retain customers’ interest in the product, the company has to change certain things or they can even upgrade its product.
Technology factors
Using new technology in the workspace is very essential nowadays. Technology helps the company to work more efficiently. It allows the employees to work smart and quickly. When the company gives solutions to the customers then the relationship between customers and the company builds well. Technology also helps the company to keep confidential things secret and allow security. It is up to the company whether the technology is going to be a good friend or worst friend.
Social environment
An organization depends a lot on the country’s social structure. The value of an organization depends on how affluent that society is. The social dimension talks about whether the nation values its organization or not.
Discuss Things That Can Impact the external environment
A business can make an impact on the external environment in the following ways:
- If a company is doing well in the business then it is making opportunities for new people to join the business and become a part of the organization. It provides financial stability to people by giving employment.
- If the company is taking care of the environment then it would be beneficial for the outer world. If not then it might affect the company and the outer world even worse.
- Companies try to fulfill their customer’s needs by working hard and trying to build relationships so that the customer stays connected with their products.
- Companies use different technology to make it easier for the customers to get products or services.
- A company has to look after their customer whether they are happy with their products or services and has to act accordingly.
- If a company provides all the taxes in time, it can be used for the betterment of the country’s people.
- If the company earns revenue then it would make a positive impact on GDP growth in the UK. It can help the economic growth of the country.
- Companies get a lot of information about their customers. The company should never reveal this information at any cost as it is confidential.
- If a company can run its organization smoothly without facing any legal issues then it would set an example in front of the country. It might inspire people.
