Title: External Environmental Factors in Business | Bizfluent
Headings: External Environmental Factors in Business
External Environmental Factors in Business
Economic
Consumer Needs
Political and Legal
Competition

Content: External Environmental Factors in Business | Bizfluent
External Environmental Factors in Business
Good business management is not only a matter of how an individual deals with the factors they can control but about how they respond to the things they cannot. A wide variety of factors including consumer demand, the overall economy, the cost of raw materials, the political and legal landscape and the actions of competing companies have a direct impact on a firm's bottom line. Economic
The overall economy is one of the most obvious external environmental factors that impacts businesses. No single business has a tremendous effect on the overall economy but businesses must always respond to economic changes. In a strong economy a business can exercise a great deal of flexibility in terms of prices, expenses and hiring. When the economy is doing poorly, incomes are down and unemployment is high. A business must be very careful about how it prices its products and services and exercise caution in terms of expenses. Consumer Needs
Changes in consumer attitudes and demand can also impact business. For example, over the last few decades there has been an increasing demand for environmentally friendly products. Companies have had to respond to this demand in terms of what kind of products they produce, how those products are packaged and how and where they produce those products.