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.
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