What Are The External Factors Influence Business

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The external factors happen outside of an organisation. They influence functions of internal business, its objectives and strategies. The most important factor that has an effect on most businesses is the degree of competition-how well different businesses compete with products made or services provided by other companies. There are other factors that can influence business. It’s a PESTEL analysis. A PESTEL analysis is a setup or instrument used by to analyse and abserve the macro-environmental (external marketing environment) factors that can have an impact on a business. Political- what kind of influence might governmental changes in their policies have on the business, eg. decisions to sponsor building new homes in the area could have positive impact on local brick businesses. Economic-what kind of influence economy might have in terms of general demand, exchange rates, taxation, government spending, European and global economic factors. Social-what kind of influence consumers, households and communities might have by their behavior or beliefs. For example a change of life style, a rapid growth of pensioners. Technical-what kind of influence might have a dynamical change in product innovation, or production processes. Environmental-what kind of influence might surrounding environment have on the business. For example tourism, farming, agriculture. Legal-what kind of influence might law policies and restrictions have on an organization. An example of such a factor is
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