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The business environment (Globalisation and the changing business …

- - - - All the resources and capabilities found within the organisations that influence the organisations ability to act (create outputs)
    - - Consists of all factors outside the organisation that affect its ability to function
        
        Microenvironment
        
        The immediate (industry) environment
        
        Customers
        
        Competitors (the degree of competition faced)
        
        Suppliers
        
        Distributors
        
        Market changes
        
        Change the prospects for the business
        
        Change due to
        
        Competitors
        
        Technologies
        
        Legislation
        
        Evolving customer needs
        
        Macroenvironment
        
        The wider environment
        
        Social influences
        
        Legal influences
        
        Economic influences
        
        Political influences
        
        Technological influences
- - - - Can be major events affecting the whole of the business
        community - EG - Collapse of communism
      - Can be actions just effecting one part of the economy - EG the ban of smoking in restaurants effected the Tobacco industry, minimum price of alcohol effected pubs and supermarkets
  - - - Rise in the cost of raw materials
      - A price cut by a rival firm
      - New taxes or movements in interest rates or exchange rates
    - - All the economic factors that are specific to a particular firm operating in its own particular market
      - Examples
        
        Highly competitive market
        
        Rapidly changing consumer tastes - a designer clothing manufacturer
        
        Constant customer demand - potato merchant
        
        Rapidly rising costs
        
        Constant or falling costs
    - - The national/international economic situation in which a business as a whole operates.
      - Businesses will fare much better in the economy is growing than if it is in a recession
      - Governments will introduce policies in their attempt to steer the
        economy
        
        Taxation
        
        Interest rates
        
        Exchange rates
  - - - Working conditions
      - The length of the working day
      - Equal opportunities for different groups
        
        Ethnicity
        
        Gender
        
        Psychical attributes
      - The nature and purity of products
      - The use and abuse of animals
      - Images portrayed in advertising
      - Social trends
        
        Increase in the average age of the population
        
        Changes in attitudes towards seeking paid employment while bringing up small children
      - Ethical issues
        
        The protection of the environment
  - - - A huge impact not only on how firms produce and sell products
      - Impact on how their business is organised
    - - Changed the nature of work for many workers
      - Information·technology revolution
        
        Created a wide range of new opportunities fro businesses, many of which have yet to be realised
        
        Enabling much more rapid communication
        
        Enabling many workers to
        
        Work from home
        
        Work whilst travelling
        
        Work from another country
        
        The growth of online shopping
        
        Enabled firms to reach truly global markets
        
        Has also presented problems for other high-street retailers
  - - - Firms are therefore taking a greener approach to their activities and trying to find ways of minimising adverse effects on the environment
        
        Cleaner technologies
        
        Better waste management and recycling
        
        Greener products
    - - Can help to drive sales as consumers have become
        more environmentally aware
      - Can provide more finance for firms from the government and those investors seeking to improve their image
  - - - Industrial relations legislation
      - Product safety standards
      - Regulations governing pricing in the privatised industries
      - Laws preventing collusion between firms to keep prices up
  - - - Working conditions
      - Safety and quality of their products
      - Truthful advertising
      - Their attitudes towards the environment
      - Concern for local residents
      - General avoidance of what might be seen as ‘suspect’ business practices.
- - - - Through the internet emails and computer linking, has allowed companies to communicate with their customer, supplier and subsidiaries as easily halfway round the world as it is in the next town
    - - Through the use of plastics rather than metals and the
        use of ever smaller and more powerful computer chips
  - - - Markets around the world tended to become more competitive as domestic firms increasingly face competition from abroad.
    - - Increasing convergence of economies, as interest rates, inflation
        rates and tax rates become more similar from one country to another.
  - - - The EU and the North America Free Trade Association (NAFTA)