INTERNAL AND EXTERNAL FACTORS

ENVIRONMENT INFLUENCE ON INTERPRISE

The environment includes factors outside the firm, which can lead to an organization towards opportunities or threats. Although there are so many factors but majors can be include into following sectors and also relationship between firm and external forces.

Change in the external environment being changes in the attitude & behavior of customers. Strategies have to remain aware all that and should make strategies keeping in view all that.

ECONOMIC FORCES

The state of economy at present and in the future can affect the future strategy of the firm. Influence and recession caused co mediate changes in buying patterns of consumers since 1980s.

Economic forces include;

o Monetary policies

o Interest rates

o Balance of payment

o Inflationary & deflationary

o Devaluation & revaluation of currency

o Trend in prices

o Stages of business cycle

o Fiscal policies

Each of these above can help in achievement of firm’s objectives. Strategists can never control these factors but they should try to make strategies keeping in view the best interest of the firm.

SOCIAL, CULTURE, DEMOGRAPHIC & ENVIRONMET FORCES

These changes which come from about forces have a major impact upon virtually act;

o Products

o Markets

o Services

o Customers

Small and large profit or non-profit challenge to handle the opportunities & threats come from these forces. These include;

o Changes in population

o Age, shifts in population

o Income distribution of population

o Culture value norms, beliefs

o Natural environment

Following are threats for a firm;

o Attitude programs

o Avg. level of education

o Social programs

o Waste management

o Avg. income

o Govt. regulations

o Attitude towards consumption

o Buying & per capita income

POLITICAL GOVT. LEGAL FORCES

Federal state, local foreign govt. is majors,

Ø Regulation

Ø Deregulation

Ø Subsidizers

Ø Employers and customers of organization

Organization which have to many construct which the govt. these organization have major affects from these forces chaps in,

Ø Govt. officials

Ø Govt. agency

Ø Attending important speech

Ø Meeting with trade

TECHNICAL FORCES

Technical forces represents major opportunities and threats that must be considered in formulation the strategies. Technological advancement is dramatically affecting organizations,

Ø Product

Ø Service

Ø Distributors

Ø Manufacturing process

Ø Marketing practices

Ø Competitors

Ø Competitive poison

Ø Supplier customers

Now it is era of customer-based industries, which leads toward

Ø Low cost

Ø Low wastage

Ø Quality product

Ø Saving of time

Ø Hygienic process

Strategists must cause technological forces, which are playing major role in the developing of industries.

COMPETITIVE FORCES.

Competition is virtually all industries can be desired as intense and sometime cutthroat. Collecting and evaluating information on competitors is essential for successful strategy formulation. Identifying major competitors is not always easy because many firms have decision that compete in different industries and industries do not provide information on division basis due to competitive reason.

Strategists have to consider various questions may be

Ø What major competitor’s opportunities?

Ø What are major competitor’s threats?

Ø What are major objectives & strategies?

Ø How are our products or services positioned relative to major competitors?

Ø To what extent new firms are entering and old firms are leaving this industry?

CONCULION

Wastage of resources if we ignore all these forces also economic loss.