External Factors Affecting Businesses

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.
 LOCATION
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

One of the more popular reasons for business owners to decide who they vote for or who they support is because of the economical benefits that come along with that person/party – this could mean depending on who or what party wins the election the tax rates can change due to a new government.
 Competition
Competition in various industries can be good and bad for businesses, it can be good as it can bring a yearning for success which can lead to new innovations or ideas but yet again it could be tragic in some cases, if a small business opens up and the owners invest all of their money into it and a bigger chain store comes along in the area one of the only things separating them from the chain store is price – this can be the major factor for consumers, if the price is too high at one store they will go to the other – for chain stores they can buy things in bulk and for a lower price and therefore sell it cheaper. Various strategies and rules are established in an attempt to make it a level playing field – these include making sure similar businesses cant be too close to each other (exceptions apply) and different companies cannot drive the prices higher or lower to shut down smaller