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Political and Economic Influences

The document outlines four categories of factors that influence businesses: political factors such as regulations and trade policies; economic factors like growth, interest rates, and inflation; social factors comprising demographic and cultural aspects; and technological factors including R&D, automation, and the rate of technological change. These external factors define the rules for businesses, influence customer purchasing power and costs, impact potential market sizes based on social characteristics, and can alter production needs through technology.

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Sushant Nalawade
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56 views2 pages

Political and Economic Influences

The document outlines four categories of factors that influence businesses: political factors such as regulations and trade policies; economic factors like growth, interest rates, and inflation; social factors comprising demographic and cultural aspects; and technological factors including R&D, automation, and the rate of technological change. These external factors define the rules for businesses, influence customer purchasing power and costs, impact potential market sizes based on social characteristics, and can alter production needs through technology.

Uploaded by

Sushant Nalawade
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Political Factors

Political factors include government regulations and legal issues and define both formal
and informal rules under which the firm must operate. Some examples include:

 tax policy
 employment laws
 environmental regulations
 trade restrictions and tariffs
 political stability

Economic Factors

Economic factors affect the purchasing power of potential customers and the firm's cost
of capital. The following are examples of factors in the macroeconomy:

 economic growth
 interest rates
 exchange rates
 inflation rate

Social Factors

Social factors include the demographic and cultural aspects of the external macro
environment. These factors affect customer necessitates and the size of potential
markets. Some social factors include:

 health consciousness
 population growth rate
 age distribution
 career attitudes
 emphasis on safety

Technological Factors

Technological factors can lower barriers to entry, reduce minimum efficient production
levels, and influence outsourcing decisions. Some technological factors include:

 R&D activity
 automation
 technpointsology incentives
 rate of technological change

External Opportunities and Threats

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