• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Business - External Influences.

Extracts from this document...


Business - External Influences - Gautam Kumar Every business is part of an external network called the Environment. This network plays a large role in the way a business functions and is run. The effects of the environment on the business can be both a boon or a bane to the business. The External Environment in which a business operates can be categorically divided into various factors. A few that will be discussed here are : * Competition in the Market * Economic Environment * Political Environment * Population (Sociological Environment) * Ecological Environment * Technological Environment All these factors compose the External Environment. Every business needs to take all these factors into account when carrying out its operations because each one in its own way has a very real impact on the success of a business. However some businesses carry out the less comprehensive but still valuable PEST (Political, Economic, Sociological and Technological Environment) Analysis. Competition in the Market: On setting up and throughout the course of its existence, a business does constant research on the Market Structure of the market it operates within. This is the amount of competition that exists in a market. This is what determines the prices of the business' goods or services. ...read more.


Also economic growth policies generally conflict with anti-inflationary policies. Maximum output is generally at the cost of ecological resources. In such cases, both governments and various businesses must try to come up with an optimum solution. Population (Sociological Population): Statistics about the population of the region (city, country, etc) in which a business operates is vital for optimum outputs . Every developed business looks at these statistics regularly to spot trends and if needed, act on these trends to maximize outputs. Size - A greater population means more demand and potential sales of a firm's goods. It also means a greater labour pool. Migration - Immigration means the influx of people into a certain part of the world. From a business' standpoint, it means a greater market for people of a certain age, or from a certain country. For example, an influx of Chinese people in cities across the world is responsible for each 'China Town'. There is a much greater scope to sell Chinese products in China Towns than in other parts of a city. Emigration means that a certain amount of the previous population has now left the area and gone somewhere else. ...read more.


This improves interaction both within and between firms. Also, transport is faster with jet aircraft. This has had a TREMENDOUS effect on sales and productivity. Recruitment is made much easier through the reaches of the Net. A person in Bombay could do his work on the PC and e-mail it to Tokyo where his company is based. Unfortunately, the arrival of technology means that LOTS of jobs are made redundant. Job insecurity and de-motivation also take place. Finance - Globalisation of money markets through online bank transfers has increased speed, efficiency of payments and sales. Intra-firm and inter-firm transfers can be made, tracked and accepted instantaneously. Accounting has become a breeze (comparatively). Only training to use software is required. This has greatly increased productivity and efficiency. Therefore we see that a business is not a single, unattached entity, but a part of a vast, complex web which makes up the External Environment. The Business Cycle: The business cycle or economic cycle refers to the ups and downs seen somewhat simultaneously in most parts of an economy. They tend to repeat at fairly regular time intervals. The cycle involves shifts over time between periods of relatively rapid growth of output (recovery and prosperity), alternating with periods of relative stagnation or decline (contraction or recession). These fluctuations are often measured using the real gross domestic product (taking into account inflation). ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. external influences

    During booms, there is a high level of aggregate demand, inflation increases, unemployment falls, and growth in national income accelerates. During busts, or recessions, when aggregate demand is low, inflation decreases, unemployment rises and national income falls. In extreme recessions deflation (a sustained fall in the general price level)

  2. Macroeconomic Objectives and their impact on Business Activity

    Intermediate goods are partly finished goods which form inputs to use in another firm's production process, e.g. tyres. There are small discrepancies between the values of GDP using each method, and so in the UK the official measurement used by the government is an average of all three methods.

  1. Toyota Motor Company Limited

    It also grants scholarships to a graduate from one of the area's high schools in Indiana, USA.22 Mr. Yoshimitsu Ogihara, the president of Toyota Industrial Equipment Manufacturing Inc., Indiana, USA said, "These gifts are the ways Toyota can give back to the community that has given us so much."

  2. Retailing In India - A Government Policy Perspective

    of Mexican auto sector, by FDI players introducing innovative financing options in the Mexican market that they probably would not have done without having local production facilities. Foreign Investments Bring Capital, Technology and Skills The positive impact of foreign direct investments in developing countries can be attributed to the combination

  1. An Empirical Investigation into the Causes and Effects of Liquidity in Emerging

    However, the yield increase on US Treasury securities/global interest rates, causes increased liquidity in emerging market bonds, probably as a result of a sell-off in this market, as conditions in the opposing asset class improve. Equation 5.4 - Third Equilibrium y3t = -20.709 y1t - 22.869 y2t + 0.011512 y4t

  2. Discuss the policy options the Australian Government can use to achieve external stability

    Government macroeconomic policy is aimed to stabilize fluctuations in the business cycle. Unwarranted fluctuations in the business cycle can lead to severe levels of inflation in booms, which will mean a blow out in the CAD, and excessive levels of unemployment in recessions as shown in Diagram 1.5, this is why macroeconomic policies are known as counter cyclical policies.

  1. This report will establish the opportunities and threats presented to Sony by the EU ...

    But the production department want the same product to be made for all the EU countries, because they want Sony to benefit from economies of scale and to use more machinery but not having to buy more, because they don't want to train people in producing the different designs that

  2. Free essay

    business aims

    This could result in customers being lost because they would be paying more for their products but if the tax decreased then this will result in more money for good, and the prices in the stores would be lowered, therefore bringing in more customers.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work