Unit 1 - Business Basics
Learning Target 7: I can describe today’s business environment and discuss each key dimension
Up until now, we have learned that for a business to be successful they must produce a good or service of value in order to generate a long-term relationship with the customer which in turn will create long term profits. Everything in this statement has a focus on items the business can control. What about the things businesses cannot control such as a change in consumer preference, technology, etc... These are called externalities and businesses must be aware of their business environment and must be constantly monitoring it or they will fail to exist.
These externalities range from a change in government policies to a change in technology that makes the businesses current product obsolete to a change in consumer preferences. All of these items listed are outside of the control of a business and can be considered an opportunity or a threat to the business. Businesses must be set up to be able to adapt to externalities in order to be sustainable over the long run
The business environment is the sum total of all the externalities that influence how the business functions. These externalities can be grouped into nine general categories called factors. These factors are; customer, competitor, suppliers, government, and the social, cultural, political technological and legal conditions. The business environment is very dynamic in nature and is also extremely unpredictable. Business environments differ from place to place throughout the world.
Watch the following video learn more about business environments. Next consider Pepsi or Cocal Cola and provide an example of each of the factors that impact the business environment for them. Be prepared to turn your paper in and share with the class.
Businesses that continuously monitor and interact with the environmental factors are setup to be more successful than businesses who do not. Businesses interact with their environment by doing the following; determine opportunities and threats, give direction for growth, be continuous learners in order to be update on possible changes set to happen, analyze the competition and formulate their own strategies based on it, and identify the businesses strengths and weaknesses in view of the technological and global resources.
Make The Connection. Select a business of your choice and conduct a business environment scan using the 6 areas outlined in the video.