1. Factors Affecting the Business Environment
What’s Shakin’?
Factors Affecting the Business Environment
Economics
LAP 26

2. Identify types of external factors affecting business environments.

3. External Environment Businesses must respond right!
Must meet customer needs

4. External Factors Ethnic/cultural factors Political factors
Social factors
Economic factors
Technological factors
Competitive factors

5. Ethnic/Cultural Factors
Globalization
Cultural intelligence

6. Political Factors Laws Regulatory agencies Industry associations
Consumer groups
Taxes

7. Social Factors Changing values and attitudes Changing family roles
Lifestyle and fashion trends
Demographic shifts

8. Economic Factors
Customer spending
Business costs

9. Technological Factors
Looking for updated technology
Meeting customer needs

10. Competitive Factors Increased due to globalization
Must stay ahead of the pack

11. Discuss how businesses react to factors affecting their environments.

12. How Businesses React to External Environment
Environmental scanning— gathering information
Determining level of susceptibility
Planning ahead!

13. Keep the Change
Adapting to Markets
Economics
LAP 25

14. Explain why businesses must adapt to changing markets.

15. Forces Driving Market Change
Globalization
Consumer demands
Spending trends
Industry structure changes
Growth of service businesses
Shrinking product life cycles

16. Characteristics of Adaptable Organizations
Flexibility
Cultural intelligence
Strong leadership
Open-mindedness
Agility
Cohesiveness

17. Describe ways that businesses adapt to changing markets.

18. Strategies Businesses Use to Stay Flexible
Proactive management
Innovative management
Competitive aggression
Organizational learning
Market orientation
Slack resources