Knowing how internal and external environmental factors affect your company can help your business thrive. The Economy In a bad economy, even a well-run business may not be able to survive. High interest rates on credit cards can discourage customers from spending. Managers have to be good at handling lower-level employees and overseeing other parts of the internal environment.
Share on Facebook Businesses large and small are affected not only by their own internal factors, but also by environmental factors over which they have little if any control. To ignore the outside factors is to set yourself up for failed marketing and lost revenue that can, in turn, affect the health of your entire brand.
Economic Factors Local, national and global economies are perhaps the greatest environmental factor to be dealt with for any small business. When times are good, sales are up. When times are bad, the focus on your marketing strategies and promotional methods should multiply many times over.
Both local and national economies can influence marketing decisions by determining how much expendable income your consumer base has to spend and how much fear they may have about spending it.
Businesses that deal with necessities are less likely to be seriously affected by downswings, although a reassessment of the product line and its price point may be in order.
Businesses who cater to an industry driven by elective purchases can see far more serious negative effects from an economic downturn.
|What Are Environmental Factors in Business? | vetconnexx.com||Internal factors are those factors which exist within the premises of an organization and directly affects the different operations carried out in a business.|
Laws and Government Changing laws affect all aspects of business, marketing included. New taxes on business can affect your bottom line and require a reduction in the amount of marketing you produce. New laws governing consumer age limits, licensing requirements or any number of other factors can place limits on the consumer and hinder your opportunities to sell.
In some cases, new laws can be directed at controlling your marketing efforts directly. For example, privacy laws may remove valuable access to consumers and cause a change in marketing strategy altogether. Supply Lines Product supply lines are affected by factors such as weather, natural disasters and the cost of fuel.
When your product supply is affected, so is the way you market your products. If supply costs suddenly double due to political issues abroad, you may have to change your marketing from a price-focused approach. You also may have to put major marketing initiatives on hold until the supply becomes more reliable or costs level out.
On the other hand, if supply costs suddenly drop due to cheaper labor and a struggling job market, your marketing may be able to shift focus to the great deals to be had.
Consumer Trends Market trends can change the entire direction of your businesses marketing with very little notice and to great effect. Trends can be the result of endorsements, fads or any sudden change in consumer preference or buying habits on a large scale.
When trends change, your marketing must respond to position products and the brand itself in a new light to remain a valid option for the consumer and not fall out of favor.
For example, you have been touting your brand of widgets as the most stylish available for the past 10 years but the market suddenly trends strongly toward high-tech over style when it comes to widgets.Knowing how internal and external environmental factors affect your company can help your business thrive.
Six Microenvironmental Factors That Affect Businesses ; What Environmental Factors in. How can environmental factors affect business?
From the sound of it, it may seem that environmental factors have very little to do with business. On the contrary, though, environmental factors can affect many different important aspects of business.
Environmental Threats to Business Growth.
Some of these factors represent environmental threats to business growth. An economic crisis, for example, can affect customers' purchasing power. As a result, people may not be able to afford your products and services anymore. In . Social factors affecting business include buying habits, education level, and religion.
Businesses choose an environmental analysis depending on the nature of operations. neighbors and the media are social factors. These factors can affect our attitudes, opinions and interests.
So, it can impact sales of product and revenues earned. The.
(Learn how to build loyal customers for your business) In conclusion, there is a bunch of contributing factors the success of the company which comes from both outside and inside a business.
Either outside or inside factors are of utmost importance for the development of the company. Businesses large and small are affected not only by their own internal factors, but also by environmental factors over which they have little if any control. Marketing decisions must take into account these environmental factors to create an accurate picture of the marketplace and the company's.