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- External factors: social, technological, environmental, political
External factors: social, technological, environmental, political
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Businesses must watch the world around them. Four big groups of external factors affect their decisions.
Social factors
Changes in population (an ageing population, more single households), lifestyles (healthy eating, working from home) and attitudes (concern for the environment).
These change what customers want to buy.
These change what customers want to buy.
Technological and environmental factors
Technological: new products, faster production, online selling. Firms that do not keep up lose out.
Environmental: concern about pollution, waste and climate change. Firms may need greener products and processes, and customers may prefer sustainable brands.
Environmental: concern about pollution, waste and climate change. Firms may need greener products and processes, and customers may prefer sustainable brands.
Political factors
Government decisions: laws, taxes, trade policy and political stability.
A stable government encourages investment; uncertainty makes businesses cautious.
A stable government encourages investment; uncertainty makes businesses cautious.
An ageing population means more older people. Suggest one business opportunity.
- This is a social factor.
- Older people need different products and services.
Answer: Care homes, health products or travel aimed at older people.
Social (population, lifestyle, attitudes), technological, environmental and political factors all affect business decisions. They create both threats and opportunities.
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