Business – External Influences Essay Example

impacts the operation of a business. A growing economy results in more money and greater demand for a business' products. Conversely, a declining economy typically leads to reduced demand for a business' products. Nonetheless, recessions create an upsurge in demand for producers of low-quality goods or services (Potatoes, Public Transport, etc).

The operation of an economy can be influenced by a government's goals. Unemployment is a crucial factor for businesses. When unemployment is low, the labor market becomes tight, as there are few people available to fill numerous positions, potentially leading to wage increases. Additionally, the availability of skilled labor may be limited. Conversely, high unemployment indicates a larger pool of available workers, allowing for lower wages. However, if the product is considered a luxury, demand will inevitably decrease. Inflation refers to a continual increase in the overall price level.

It is important for businesses to be careful about the consequences, as they can lead to higher expenses such as Shoe-Leather Costs, Menu Costs, and Tax Distortions. This can result in decreased buying power and increased borrowing, ultimately leading to a decrease in profit margins. Moreover, this situation may cause employees to demand higher wages in order to maintain their previous standard of living. Croatia (1150% in 1993) and Tajikistan (1500% in 1995) are examples of countries facing significant issues related to these consequences. The Business Cycle serves as a valuable tool for illustrating the economic fluctuations of a nation.

This paragraph explores the impact of changes in Gross National Product (GNP) on the economy. The GNP indicates trends in capital injection and withdrawals, which can influence inflation and product prices for businesses. Furthermore, it notes that governments

typically manipulate their economies to attain particular goals.

These objectives, in the following order, consist of:
1. Maintaining low inflation
2. Maintaining low unemployment
3. Achieving high economic growth
4.

To accomplish these goals, governments employ various policies. One important policy is fiscal policy, which entails utilizing government spending and taxation measures to manage the overall level of demand in the economy. For instance, if the economy needs a boost, the government can raise its spending. This subsequently results in job creation, higher income, and increased demand for other goods.

Tax reductions can stimulate consumer spending, while expenditure can be limited to control inflation and slow down the economy. Additionally, increased income taxes can discourage excessive spending. Monetary policy involves manipulating interest rates and the money supply in order to influence the economy. Governments have the ability to adjust interest rates to regulate borrowing by businesses and thus control the money supply.

They can also limit bank loans by directing banks to retain more funds. Supply side policies focus on enhancing the economy's capacity for production. These policies may involve initiatives to enhance workforce and business efficiency. They encompass anti-inflationary measures, demand-boosting policies, trade and exchange rate policies. However, conflicting policies occasionally arise.

Higher interest rates can control inflation but also lead to unemployment. Additionally, economic growth policies often conflict with anti-inflationary policies. Furthermore, maximum output usually comes at the expense of ecological resources. In these situations, governments and businesses alike need to strive for an optimal solution.

The population of the region where a business operates is important for its success. Businesses regularly review population statistics to identify trends and make decisions to maximize their outcomes. A larger population results in higher demand and

potential sales, as well as a bigger labor force. Immigration also brings people into specific areas.

From a business perspective, it indicates an expanded target market based on age or nationality. An instance of this can be observed with the growing presence of Chinese communities in cities worldwide, giving rise to various "China Towns". Within these specific areas, there is a significant opportunity to promote and sell Chinese products compared to other sections of the city. Emigration results in a portion of the original population relocating to a different place.

The potential consequences of changes in mortality and natality rates are significant. Increased mortality would result in a decreased market, while increased natality would expand the market for baby products. Furthermore, a rise in natality would also indicate a greater demand for products related to the aging population as the Dependency Ratio increases.

Geographical Distribution - The distribution of people in various regions worldwide affects both potential markets and the available workforce. Urban populations would likely respond more favorably to multiplexes compared to rural populations.

Gender Distribution - The growing number of women in the workforce results in higher income and subsequently increases demand for products targeted towards working women. Additionally, an outcome of more women working is that childbirth happens later in life, potentially leading to a temporary decline in demand for certain products.

'Pester Power' is the influential ability of children to irritate their parents into purchasing products. In response, businesses have developed flashy and appealing packaging to attract children. Therefore, businesses require various details about the population in an area to boost sales. However, many firms also harm the ecological environment through

the production of goods. This includes causing air, water, and soil pollution. Air pollution is contributed to by emissions from factories and the use of harmful gases like CFCs.

Industries are a major contributor to Global Warming and related issues. Industries such as breweries, mills, and chemical manufacturers are responsible for water pollution as they conveniently dispose of their waste in water bodies, posing significant health risks.
Soil pollution, primarily caused by chemical manufacturers and agro-based industries (textile, paper, etc.), occurs when harmful substances seep into the ground and then contaminate water supplies.
Another form of pollution is noise pollution, which is caused by machines or even customers at local stores. This type of pollution has adverse effects on humans.
To tackle these problems, governments around the world have implemented legislation to restrict industries from polluting. Violating these regulations results in hefty penalties for the firms.

The examples of laws such as the Clean Air Act and the Environmental Protection Act are upheld by pressure groups who not only ensure their adherence but also advocate for more stringent legislation. In response to this trend, businesses are adopting eco-friendly practices like utilizing cleaner and renewable fuel sources, engaging in tree-planting initiatives, and implementing safe methods for waste disposal. To capitalize on these actions, businesses actively promote their environmentally responsible nature. This approach offers a dual benefit as it not only attracts customers to their products but also puts pressure on other businesses to adopt similar practices, despite the associated costs.

This advertisement can negatively impact a company, as seen with the pesticide issue faced by Coke and Pepsi. The technological environment has brought about a revolution in the industry, eliminating the need

for redundant labor and inefficient methods. Machines now perform tasks faster and more accurately. Technology plays a major role in four key aspects of business: marketing, where the Internet has revolutionized global promotion.

Marketing utilizes captivating and creative visual strategies to establish a brand's identity through advertisements. Technology plays a pivotal role in enabling advertising platforms like TV, radio, and computers. Additionally, technology has made the distribution process more convenient, allowing customers to order products online from anywhere globally with the assurance of successful delivery. This convenience is especially crucial for companies such as DHL and FedEx, as it serves as their operational cornerstone.

Production

The automation of various stages in production has greatly enhanced efficiency in the industry. Robots and other machines now perform tasks that were previously done by humans, from extracting raw materials to final processing. This not only accelerates the process but also enhances accuracy and cost-effectiveness, benefiting businesses. Moreover, it ensures worker safety during the production process. However, a drawback is the resulting job redundancy and rise in unemployment rates. Another significant advancement is Computer Aided Design (CAD), which plays a vital role in shrinking computers' size and increasing their speed, thus benefiting businesses. Furthermore, technological advancements like email and mobile phones have significantly improved communication within human resources.

Interactive communication within and between firms is enhanced, thanks to the use of jet aircraft for faster transport. The impact of this has been significant on sales and productivity. The internet has greatly facilitated recruitment, making it much more efficient.