Exploring Business Activity P5
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Exploring Business Activity P5 * Describe how three external factors are impacting upon the business activities of the selected organisations and their stakeholders. I will see therefore that the businesses environment consists of all those things outside the businesses. The businesses need to keep a watchful eye on the environment because it is continually changing, to assist in this process they might use PEST analysis. Political factors: Have a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses. Political factors: include legal aspects (e.g. Microsoft copyright), the general political ethos. Economic factors: Marketers need to consider the state of a trading economy in the short and long-terms. This is especially true when planning for international marketing. to look at: Economic factors include the effect of the economy (e.g. Interest rates) on individuals, and on organisations. Social factors: The social and cultural influences on business vary from country to country. It is very important that such factors are considered. Factors include demographic change (e.g. Oxfam is concerned of changes in proportion of age groups and educational changes.), other changes in social habits (where people go to shop, leisure expectations), National and international laws: International laws are created by international bodies; in particular Britain can be affected by European Union laws. The European Union courts are increasingly important in making judgements which apply across the Union.
Competitive pressures: In Microsoft the competition is one of the biggest influences on business. Business competes through: * Differentiating their product * Price: higher or lower than rivals There are various ways to beat the competition. One of the current trends in competitive strategy is to be the greenest in the business. Globalisation: The creation of Microsoft global goods and global marketing. The same products and marketing and advertising campaigns can be used worldwide. This significantly lowers costs. For example, Christmas advert for Microsoft can be shown on television in hundreds of countries. The creation of global brands and people around the world instantly recognise global brands like Microsoft Window Vista and Office 2007. Labour/supply and demand: There is more and more emphasis on intellectual intelligence and new knowledge workers, such as working in Microsoft IT, can receive high salaries. It can be argued that emotional intelligence is in short supply. Emotional intelligence includes the ability to get on with customers directly, for example service and telesales workers. Labour and their wages are likely to rise. In difference of there are more people looking for jobs than there are jobs available then wages will fall. The number of workers in the UK earning above average salaries has been increasing. Energy prices: The energy costs are important costs for Microsoft.
Outsourcing of functions: These organisations have two main kinds of activities. Examples of activities that businesses outsource today include call centres, administration, delivery and production. * Call centres: Microsoft outsource call centre work to private call centres. The business would establish the routines and patterns of work that it wants the call centre to do for it and will establish minimum standards for the call centre to meet. The centres have many duties handling the work on behalf of the company and also handling consumer complaints to selling products. * Administration: The administration is also outsourced. E.g. Microsoft might outsource work including the photocopying of materials, the word processing of documents, the maintenance of databases, etc and can also outsource work including the setting up and maintaining of websites. * Delivery: The business can outsource work which includes the delivery of company goods, or packaging and storing products. It is rather than a business having the problems and duties of owing Lorries or vans itself but it can cut its costs by outsourcing. Which are cut involve the costs of obtaining, insuring and maintaining vehicles. * Production: The Microsoft outsources the production of their products. Then they can concentrate on core activities such as selling, advertising and marketing goods. For example, the Microsoft sold their software's on PC world or other software stores and is typically produced by firms who are contracted to work either for own or other retailers ?? ?? ?? ?? Anton Prinson Sritharan BTEC Business National Unit 1 1
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