External Factors Affecting Business

713 Words3 Pages
There are three major internal and three major external issues which affect businesses – these are location, management, culture, economic & political factors and competition. All of these factors can affect the business’ success or failure.
The location of business can be a major factor and can determine how successful it can or will be – the location can be broken down into five components; employees, customers, suppliers, finance and competitors. The two components that make a business are the employees and customers – without these there is no business. The location of the business can either work as an advantage or as an disadvantage to the business – if a high quality business is situated in a low quality area the potential customers wouldn't be as high as if it was in a high quality area; this also works for low quality or smaller businesses, they would be more successful in a lower cost area where the people cannot afford to buy the highest quality products. As this only affects the consumers in the area the other side can be the staff – the location can be a major factor when deciding whether to operate at a particular business or not,
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Poor management in business can lead to a decrease in profit and the morale of the workers – this will further lead to poor performance and attitude which no business wants. The supervisor/manager of the business or section of the business can be described as having poor management skills if they are loud, intimidating and make poor decisions but on a larger level are things such as executive decisions which could affect the shareholders or workers. If the management level stays poor for a considerable amount of time there will be consequences to the business and could lead to a loss of their consumer base, staff and/or relations with people in the
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