Environmental Factors That Affect Bussiness

Environmental Factors that Effect Business

There are various environmental factors which can impact the businesses in an economy. These environmental factors can be categorized into external and internal environment of the businesses. The internal environment of the company includes the factors which are within the company and under the control of company like product Organizational culture, Leadership, and Manufacturing (quality). On the other hand, the external factors are not under the control of the company and include Social environment, political conditions, suppliers, competitors of the company, Government regulations and policies, accounting agencies like accounting standard board, Resources in an economy and demographics of people.
• Social
• Political
• Financial
• QoS
• Product Quality
• Distribution Channels
• Promotional Channels
• Manufacturing
• Employee
• Leadership
• Environmental factors affecting sales
Political factors: These refer to government policy, such as the degree of intervention in the economy. What goods and services does a government want to provide? To what extent does it believe in subsidizing firms? What are its priorities in terms of business support? Political decisions can impact on many vital areas for business such as the education of the workforce, the health of the nation and the quality of the infrastructure of the economy such as the road and rail system. Economic factors: These include interest rates, taxation changes, economic growth, inflation and exchange rates. For example, higher interest rates may deter investment because it costs more to borrow a strong currency may make exporting more difficult because it may raise the price in terms of foreign currency inflation may provoke higher wage demands from employees and raise costs higher national income growth may boost demand for a firm's products Social factors. Changes in social trends can impact on the demand for a...