Did you wonder why the business environment affect much to our business? Why do I can not control our workforce? Why do I get more risk? Is that true high risk – high profit? Below is the answer, please keep reading.
There are five main elements in the business environment:
- The economic and legal environment learn here
- The technological environment learn here
- The competitive environment
- The social environment
- The global business environment
Today, Howtonc, we will learn more about three next elements.
The competitive environment
The competition among companies has never been greater. Many businesses try to focus on quality. Their goal is zero defects – no mistakes in making the product. However, it is not enough for your business to stay competitive in world markets. Now, they have to offer both high-quality products and good value – it means outstanding services at competitive prices.
We concentrate on two points:
Exceeding customers expectations
People today want not only good quality at low prices but excellent service as well. Successful corporations have to pay more attention to customers to determine their wants and needs. After that, they adjust the firm’s products, policies, and practices accordingly. We should understand that meeting customer expectation doesn’t mean being able to maintain their loyalty. Therefore, we have to provide repeat business and referrals.
Restructuring and Empowerment
Restructuring here says we should create new business organization forms, find new ways to control or design company, and increase profitability.
Besides, to meet the needs of customers, we must give their frontline workers-for instance, office assistants, front-desk people at hotels, and sales departments -the responsibility, authority, and equipment they need to respond quickly to customer requests. They also have to allow their workers to make other decisions essential to producing high-quality goods and services. The process is called empowerment.
The social environment
Why can demographic shifts create both challenges and new opportunities for business?
Demographic shifts can be a further advantage for some firms but a disadvantage for others. Companies have to adapt to any changes in a country’s population, such as how or where they live, what they buy, how they spend their time, etc. If in a year, the rate of older people increases more, businesses need to change their strategy. For example, they produce more goods or services for more aged health care. There are many more retired employees than in the past, creating new markets. However, some companies find it hard to change the whole operation immediately. So, it is a challenge.
What can a business do when its labor force consists of people coming from different cultures?
It is about managing diversity. Its efforts now include seniors, people with disabilities, atheists, extroverts, introverts, homosexuals, married people, singles, and devout. It also means we have a deal with workers and cultures all around the world.
A business should embrace positive indifference and seek the commonality between cultures. Also, they may make an effort to adapt to the diversity of the workforce, such as changing some signs, brochures, websites, and forms to include other languages. Next one is to respect all the cultures of each worker.
Also, now more and more families consist of single parents who must be a duty on the demands of a job and raising their children.
Managers can implement programs such as family leave (giving workers time off to attend to a sick child or elder relative) and flexible time (allowing workers to arrive or leave at selected times). And they can consider working from home once or twice a week.
The global business environment
The impacts of globalization on businesses:
– The growth of global competition: It can be related to product or service price, target markets, technological adaptation.
– Rise of technology: They use technology to exploit maximum opportunities. A great example is the increasing usage of E-commerce.
– The fluctuation in the price: For example, China produces goods at a much lower cost than other countries. This leads other firms to try to lower their prices to maintain customer satisfaction and loyalty.
Although there is a negative impact of globalization, the positive outcomes outweigh the negative.
Globalization affects individuals:
– create more new jobs
– stimulate continuous learning to be better-prepared well and keep up with global trade.
In addition, corporations today need to take responsibility for the environment. So, we can see many green campaigns to clean the atmosphere from big companies such as Coca Cola, Nestlé, British Airway, etc.
Up to the present, have you got any ideas about the business environment yet? This is a fundamental step to do business.