Analysis Of The External Environment Of Business Essay
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Analysis of the External Environment of Business The Technological Environment
The external business environment consists of four elements, they are as follows: Political, Economic, Social and technological. It would be impossible to analyse the whole environment in one essay, I have therefore decided to focus my essay on the technological environment. I have chosen this area to focus on because as Palmer and Hartley point out, it is one area that is forcing immense change in the external business environment.
The business environment is at present moving through a dynamic and turbulent phase driven by technological change, globalization and increasingly competitive markets' (Palmer and Hartley 2002).
I will be researching and…show more content…
Investment in technology and innovation is frequently seen as a key to the success of an enterprise and has been used to explain differences in the relative competitiveness of different countries. As Worthington and Britton point out:
the development of quartz watches, which allowed Japan to enter the market and compete with Switzerland' (Worthington and Britton 2003)
As this example shows the more Japan invested in technology the more competitive they became with Switzerland.
Technological changes over the last ten years have transformed many business activities and created entirely new ones. Some of the major changes have been in I.T (information technology) which has affected many every day business activates.
Administration is one area that has been transformed by developments in I.T. Due to the drop in cost of computers and the increased use of e-mail as the primary form of communication; many businesses now have networked computers to enable better internal and external communication. Businesses are also able to store data in electric format rather than on paper saving both space and allowing easy access to information. These developments have resulted in significant economic benefits for businesses which have allowed them to invest in other areas such as research and development and human resources both aiding business expansion.
Production is another area that has benefited from advancements in
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A business' is commonly defined as an organisation which provides goods or services in addition to transforming input into output. Its objectives can either be profitable or non-profitable. One of the main requirements that must be fulfilled for a business to exist is that it must act and react to activities and occurrences beyond that of the organisation. These factors that happen outside of the business are known as external influences or factors. They have a major influence on a business with respect to the main internal functions and occasionally their objectives and strategies. However, the overriding factor that affects most business is the degree of competition between themselves…show more content…
A major technological change is the developments that have been made in information technology and the use of computers. These are mainly to improve the efficiency and competitiveness of business, and as the changes in technology are so rapid, there are important implications for businesses. Such developments prompt businesses to transform existing activities within the business in addition to generating new ones. New activities mainly involve the handling, analysis, collection and transmission of data. These advancements have varying impacts on business, such as improvements of goods and services within technological change in production. This is mainly due to computer-aided manufacturing (CAM), computer-aided design (CAD) and computer-integrated manufacturing (CIM). CAM means the computer controls the machinery, CIM is where the computer controls the whole production line, and CAD enables the computer to help design products using computer generated models and 3D drawings. The effects these implementations are having on the different functions carried out by businesses are easily identifiable. For example, the administration of business has been revolutionalised by the introduction of information technology; all records are now computerised putting an end to filing. Other essential functions of a business have also been transformed; Communication is now