INTERNATIONAL BUSINESS ENVIRONMENT The international business environment can be defined as the environment in different sovereign countries, with factors exogenous to the home environment of the organization, influencing decision making on resource use and capabilities. The business environment is the sum total of all external and internal factors that influence a business. One must keep in mind that external factors and internal factors can influence each other and work together to affect a business success. For example, a health and safety regulation is an external factor that influences the internal environment of business operations. Normally the external factors are beyond an organizations control. These factors are often called external …show more content…
It means that firm has only one customer. If because of some reason their relations get soured, the supply of goods will stop and in that case the closure of that firm is certain. This clearly indicates that the customers do influence business. Therefore, a firm should make efforts to have different kinds of customers, (ii) Suppliers: Like the customers, the suppliers also influence business. If a business has only one supplier and he gets annoyed because of some reason, the supply of goods can be stopped and the very existence of the business can be threatened or endangered. Hence, efforts should be made to have various suppliers. (iii) Competitors: The competing firms can influence business in a number of ways. They can do so by bringing new and cheap products in the market, by launching some sale promotion scheme or other similar methods. (iv) Public: Public has different constituents like the local public, press or media, etc. The attitude or behaviour of these constituents can affect business units. For example, the local population can oppose some established firm whose business is excessively noisy. Similarly, if the media gives some favourable report about a particular company the price of its share can register an increase on this
| The customers would be influenced because if the company are financially struggling the customers are there only hope to stay profiting. If the company was to go bust it means customers will no longer be able to shop there. The customers would be an external stakeholder, they can get information by advertisements and even check their annual report on the businesses website.
Suppliers who want the business to continue to buy their products. The supplier wants to make profit.
A business does not operate in a vacuum.It has to act and react to what happens outside the factory. These factors that happened outside the business are known as external factors or influences.
External environmental factors are the macro environment affecting a business; they are factors outside the company and which they have no control over (Kotler & Armstrong, n.d.) these external factors bring about impacts to the company thus a company should always be prepared to react.
Re-location of employment in globalised world. E.g. Call Centre customer convenience across time zones, or pressurised workforce?
External environment consists of forces that directly or indirectly influence organization’s business activities. The actors and forces outside marketing that affect management’s ability to build and maintain successful relationship with target customers.
2.1) Internal and External influence is essential to any organisation that wants to be successful. The internal environment of an organisation refers to events, factors, people, systems, structures and conditions inside the organisation that are generally under control of the company. The external environment are those that happen outside of the organisation that cause change inside organisations and are, for the most part, beyond the control of the company.
* Customers – Customers is external stakeholders for all organization or firm. Without any customers a company cannot be process. Customers have power to choose their necessary service and products. Seller and marketing cannot force customer to purchase product and service. Example, insurance customers have many choices when they need to purchase insurance. That mean consumers can buy insurance in different company like Tesco Bank, Lloyd Bank, HSBC and other company.
External environment refers to external aspects of the surroundings of business enterprise, which have influence on the functioning of business. The external environment can provide both facilitating and inhibiting influences on organizational performance. Key dimension of the external environment principally consists of a micro environment and a macro environment.
A businesses environment creates many opportunities as well as problems for prospering businesses. The environment determines what a business can do by shaping and channeling its development. Businesses function within an environment by allowing entrepreneurs to raise capital and create profits freely. The supply of money available within a business as well as the economic stability through times of growth and recession have strong effects on businesses. Not only is the physical environment, including natural resources, pollution and energy as discussed previously, important, but many other
In this term of our discussion we’re talking about business environment. It’s like an overview of the whole business environment. Simply environment of a business means the external forces including the business decisions. They can be forces of economic, social, political and technological factors.
Business environment consists of external and internal factors. Internal environmental factors are events that occur within an organization. An organization's internal environment is composed of the elements within the organization, including current employees, management, and especially corporate culture (that defines employee behaviour). Although some elements affect the organization as a whole, others affect only the manager.
An analysis of the external environment includes the factors in a business’s external environment about a business's industry, competition, and political and social environments, and affects the firm’s strategy (Aaker, 2001).
Technological - how the rapid pace of change in production processes and product innovation affect a business.
As the name suggests, “internal” business environment refers to internal factors and resources that affect the running of the business. This primarily includes the workforce where the employees play a vital role in affecting company’s performance. If a company has well trained or motivated employees, that company is likely to get good output from them. However, if the same company recruits unmotivated employees who do not perform well or dig in their heels when a new plan arrived, this will affect that company’s production levels and ultimately hinder its profitability. Another factor to consider is all the capabilities that a company possesses. The tool used to monitor them is the resource based