Major factors affecting the business world
Today’s world is being run by shrewd business men and women like Bill Gates, Steve Jobs and Indra Nooyi, just to name a few. This clever people have found a way of using the knowledge business has to offer to be successful. Business can be defined as organized efforts and activities to provide goods and services with the aim of making profit in return. All this depends on the market and the main market is the consumers. There are a myriad of factors that hinder the growth of business and its activities. They affect the market, consumers and the service providers themselves. This assignment tries to shed some light on some factors facing the business world and its tendencies.
The major cities have come to exist more so because they have been a trade center. Business and economy can be crippled by a wide range of elements. The number one activity that affects the operation of a business is the political environment of a country. It is created by a host government, which is capable of altering the economic outcome and value by changing the probability of achieving one’s business objective. The political situation of a country affects its economic structure and the economic environment affects the business world. This is due to factors such as taxes and government spending. For instance, the business world in Nigeria works in a vigorous political environment open to multiple risks like taxation, currency devolution, campaigns against foreign goods, kidnappings, terrorism and civil war. Measures taken by the government such as: legal frame work and political changes may decrease business income and act as a wall to new investment because there will be a lot consider. It is there for safe to perceive that political instability is out of any manager’s hands. Multinational companies are crumbling because of the economic states of a country. For example, it is hard for an entrepreneur to consider putting a huge investment in a country like Somali which is home to war and terrorism. However, there are some causes of an unstable and risky political environment that are nongovernmental like coup d’état and extortion which all have an effect on the business world.
Secondly, natural calamities such as earthquakes, floods, tsunamis, hurricanes and the most recent one the corona virus tend to do so much damage to the economy. For business firms, natural disasters destroy valuable asserts such buildings and machinery as well the skilled human labor in return hindering the production capability of a certain business to its optimum. In some adverse cases this effects on the firms maybe so severe that will drive them to close down. It is inaccurate to say that some natural calamities like earthquakes and floods help in a positive way. According to a research done after the Kobe earthquake, firms located inside the affected area had a larger investment than firms located outside the affected area.
Demographic factors influence a number of elements, such as the underlying growth rate of the economy, structural productivity growth and even living standards. This are factors can be used to determine product preference by consumers. Firms and marketing companies accomplish this by targeting consumers with advertisements and promotions to lure them into liking their products. Another demographic factor that has an influence on business is the income. It is evident that a company’s product with high end premium products like Versace appeals to a group of people with higher income there for making people who are sensitive to prices with lower income prefer products with discounts. However companies reach the lower income people through discount retailers and wholesalers and attract the high end customers in their specified retail shops like the Versace shops in the States.
How social and cultural factors affect the business world? One of the main reasons to why it affects a business so much is: a clothing company must constantly be aware of the changing preferences when coming up with a new product or it will be quickly outdated and the company will go at a loss. Another example is. ( Walsh & Winsor 2019). Two decades ago firms and companies wanted their products to be marketed on TV and radio stations but the emergence of iphones and mobile cells and the birth of social media, consumer preference has changed and to reach them companies have to find new ways to develop mobile marketing strategies.
In the new era socio-cultural factors have had their hand in other things. At the beginning most of the companies and firms were majorly “boy’s club” and any female in the company didn’t have a say and awful sexual harassments were on a high. In the current era it is no longer acceptable to have a wrong attitude towards the female employees, be it by the boss or their male colleagues. Business leaders in this era who still practice the unfair treatment of women risk so much not only breaking the law but risk putting their brand and reputation on the line which will be ultimately damaged.
Physical and technological factors; It might not direct how technological advancement affect business but it has a huge part it plays in terms of helping a brand get to the final consumer who might be miles away.( Haseeb, Hussain, Slusarczyk & Jermsittiparsert2019) Think about the machines printed on the shirts, names and faces of famous people printed on the shirts, the computer calculators, internet connectivity, security in cryptography, how you can create a website that people from all over the world can learn about your product to the fuel and electricity used to power cars and trains. Technology has played a huge part in terms of how the business world communicates to its people in matters of even seconds. The automation of many unskilled tasks can allow companies to replace human production with machinery and improve on the quality.
It is safe to say that the modern world heavily relies on the business world to help its development hence it has become an integral part to the day to day life human kind. The world leaders now try hard to have a good business relation with almost every country to help its people. Recently Kim Jong-un’s North Korea was willing to put aside some of its political measures to mend its relation with the United States to get trade freedom from the trade treaties that will be signed showing how valuable business and trade is.
Haseeb, M., Hussain, H. I., Slusarczyk, B., & Jermsittiparsert,K. (2019). Industry 4.0: A solution towards technonology challenges of sustainable performance. Social Science, 8(5), 154
Walsh, J., & Winsor, B. (2019). Socio-cultural barriers to developing a regional entrepreneurial ecosystem. Journal of Enterprising Communities: People and Places in the Global Economy.