Sample paper Business Environment
Influence It can have on their dally business operations. These various environments are discussed in business articles giving real life examples of how market forces affect businesses and how businesses adapt to keep a competitive edge in today’s society. The general environment, such socio-cultural, technological and demographic forces are market forces that cause businesses to change their direction either temporarily or permanently. Social Cultural The recent turmoil In Pakistan Is an example of how some companies make decisions as a result of Socio-cultural forces.
In CNN Money, an article entitled “KEF Shuts All Pakistan Restaurants Amid Protests,” states protesting against the anti-LULAS video created In the united States is affecting Kentucky Fried Chicken’s business. Currently, there are twenty franchises in that region. To protect customers and employees, KEF has decided to shut down their restaurants, which will greatly affect their profits and perhaps cause them to rethink their strategy regarding future business in that part of the world (Smith, CNN). Unfortunately, some socio-cultural forces are situations a business can only react to as It happens.
In this situation, thinking of the customer’s and employee’s welfare protects them, as well as the company from any legal issues. Technology Technology Is a general environment that has a major Impact on decisions made by companies. Companies have to stay ahead of technology by thinking of new ways to take advantage of today’s digital society. A CNN reporter, Andrew Keen, explains that the increased usage of mobile devices is causing advertising and marketing companies to rethink their strategy on marketing (Keen). More and more people are using their mobile phones and tablets.
Therefore, to take advantage of this market space, advertisers have to find a way to advertise on smaller screens. A business entrepreneur, Jeff Puller, says “the small screen will disrupt but not kill the advertising Industry”‘ (CTD. In Keen). So as technology changes, businesses will also have to adapt and change their strategies to find ways to make money In these new markets (Keen). Technology is constantly changing and getting better. Indeed, companies also have to make changes and improve their market strategy by businesses optimize technology as a new opportunity, which allows them to have ingenuity in their market space.
Demographics Demographics play an important role in creating new business opportunities. With the success of Backbone, other companies are interested in achieving the same level of success. Saleswoman is a company based in Turkey, which has a large Muslim population. This company believes Backbone focuses on western ideas and not the virtues and values of Muslims. Therefore, Abdul-Baked Nicolay, the Chairman of Saleswoman, states that the company’s goal is to build a new social network centered on “core Muslim values” (Bonn).
With millions of Muslims using Backbone, Saleswoman sees an opportunity to start a new business based off of socio-cultural backgrounds (Bonn). Considering demographics allows a company to find a niche market that allows them to make profits that may otherwise have been missed. The task environment directly influences a business. Unlike the general environment, the task environment affects a business’s decisions because of their contact with a supplier, distributor, customer, or international forces.
Distributors Wall-Mart, a supplier for Amazon’s Kindles, recently decided to Join Target by no anger carrying Kindles in their store in a CNN reports entitled “Wall-Mart Stops Selling Amazon Kindles. ” This recent decision will affect Amazon’s profits tremendously thus causing them to rethink their strategy and perhaps find a new distributor to sell their kindles. (Petition). Wall-Mart’s customers-base reaches individuals perhaps Amazon’s online store cannot reach. Amazon will have to find a new supplier or rethink their marketing to reach out and appeal to those who shop at Target and Wall-Mart.
This example highlights how the decisions oaf supplier can affect a corporation’s strategy. In this example, Amazon now has to change their focus with regards to their suppliers and think of new ways to reach their customers. Suppliers Companies rely on other companies to produce their products. Due to cheaper labor, many of these companies are outside of the United States. An article in The New York Times entitled “China Contractor Again Faces Labor Issue on phones,” states that Foxing needed more workers to meet customer’s high demands for making cables for Apple’s newest phone.
Foxing is a manufacture that produces many Apple cables for the phone product. Unfortunately, Foxing has been in the news tell for labor issues, drawing undue attention to Apple. Foxing hired high school students to make Apple’s phones. This is brings unfavorable attention to Apple and their choice of suppliers. Governments and Labor unions have gotten involved to ensure that the company is following labor regulations. Apple believes suppliers should “follow local labor laws when dealing with interns and other workers” (Barbara).
Conversely, Apple has taken an interest in these labor issues by having the plant’s working conditions audited. They realize labor issues can impact the supply of products to their customers. Therefore, hiring an auditor to review audit caused Foxing to increase wages and reduce their employee’s work hours (Barbara). By Apple being proactive, they are able to minimize problems that can have an effect on their customer’s demands. This news article highlights four different market forces Apple’s leaders addressed –suppliers, government, media and interest forces.
Competitor A competitor’s decisions can impact a company’s future decisions to remain a force in the market. With the recent feud between Google and Apple, Apple removed Google APS from their newest operating system OSI. An article in the New York Times, entitled “Apple’s Feud With Google Is Now Felt on phone,” states “being kicked off the phone has potentially significant consequences for Google, whose Maps services earns more than half its traffic from mobile devices, and almost half of that mobile traffic has been from phone users” (Miller). Now Youth is a choice for Apple users.
Google created a new Youth app which Apple customers can download for free onto their phones. Google’s recent decision to create an app was a smart move. This new App is the “no. 1 free app” on Apple (Miller); Google have yet to dress Apple’s removal of Google maps from the phone. The Apple-Google alliance is no more, and they are rivals. Google has to adjust to its “new rival, along with the loss of valuable phone users” (Miller). The articles states that Apple’s new map function has several flaws, and Google has to create an Apple app for Google Maps.
The example of Google and Apple shows how the decisions of competitor’s can force companies to rethink their strategy. Google will now have to decide if they will create an app for Google maps, which will require them to be approved by Apple, or decide to not allow phones users access to Google maps. Perhaps Google plans to have enough of a following to have phone users leave Apple and turn to Google products to have access to Google maps. In any event, the Google-Apple relationship proves that a competitor’s decision can change a company’s vision and direction.
Strategic Allies Some companies choose to form alliances to gain momentum in a specific marketplace. Verizon Wireless, the largest wireless provider, and Spectrum from Bright House Networks, Compass, Cox Communications and Time Warner Cable who were competitors have now Joined forces to appeal to their consumers creating a in-win situation for both companies. The New York Times in an article entitled “Mobile Services and Cable TV Are Unexpected Allies” states the goal of this strategic alliance is to sell cable packages along with phone and wireless services (Choice).
The cable company plans to market their product in the Verizon store. By doing this they are able to gain new customers without opening their own storefronts. In addition, with the increase in mobile devices and more individuals on the go, having access to cable on these devices are appealing to their customers. Verizon’s President over strategic alliances with cable companies, Tony He-man, says, “this is where the world is going. ” He continues by saying “customers want to take their movies, TV shows, and even files and other things, with them anywhere” (Choice).
Moreover, this alliance benefits Verizon because they will have the ability to use when feasible because it can give companies a competitive edge in their market. In this case, Joining forces instead of competing against each other allows both to increase their business profit margins. Each day we are reminded of how the general environment such as socio-cultural, genealogical, and demographics are important factors that businesses should consider when making decisions.
In addition, the task environmental forces such as customers, suppliers, distributors and competitors can impact a company’s success by having proactive leaders. Business news articles show that companies that stay abreast of the ever changing environment are the ones that have the most long-term success. As future business leaders, it behooves us to read business articles and stay on top of current events so that we can train our thought process to see how hose changes and events factor into future companies we were work for.