External Factors of New Zealand Business free essay sample

Different external environment factors include customer demographics and satisfaction, business competition, national and international laws, and the availability of resources, technology and labor. Most of things are not controlled by the organization; they are completely independent factors that affect the prosperity of businesses. Globally, the economy has improved in the last several years; however, most countries are still considered to be in a recession, with unemployment rates remaining high. The resulting affect on New Zealand may be a decrease in tourism. Less individuals are capable of affording expensive trips to this distant islands, so the crucial tourism trade might be in for a tough blow. However, since the recession has started to lift, tourism has started to increase – with ongoing economic stimulus, it may be just as successful as it was in the past. New Zealand has always been a leader in sustainable business practices, and this trend is growing more popular with other businesses around the world. We will write a custom essay sample on External Factors of New Zealand Business or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page New Zealand’s business may see a positive reaction when other companies begin adopting their sustainable practices. At the same time, competition would be on the rise, which would be a terrible threat to New Zealand’s businesses. The external environment will have serious consequences on the success of New Zealand’s businesses in 2012 3 Economic Analysis of external factors: External driving forces are those kinds of things, situation, or events that occur outside of the company and are by and large beyond the control of the company. Examples of external driving forces might be the industry itself, the economy, demographics, competition, political interference, etc. In order for a business to succeed and gain the competitive edge, the business must know what changes are indeed occurring, and what changes might be coming up in the future. I guess you might call this forecasting. Thus, critical to the business is what we call informational resources. It is the collection and analyzation of data. Some examples of critical information might include the following: †¢ Competition (what are they doing? ) †¢ Customer behavior (needs, wants, and desires) †¢ Industry out look (local, national, global) †¢ Demographics (the change populations, there density, etc. †¢ Economy (are we peaking, or moving negatively) †¢ Political movements and/or interference †¢ Social environment †¢ Technological changes †¢ General environmental changes Macro economics factors that effects a business: †¢ Demand and supply: The demand and supply are two principal factors that affect the working of any business model. The demand is the will and ability of consumers to purchase a particular commodity, while supply is the ability of the business to provide for the demand of consumers. Suppose, a mobile phone infused with latest technology is introduced in the market, it will have a higher price because of its demand in the market. Its prices will continue to increase if the supply does not meet the demand, †¢ Marginal and total utility: Utility is the amount of satisfaction, that is derived by consumers from the consumption of goods. It so happens that after continuous and successive consumption of units of the same goods, the satisfaction that is experienced by a consumer starts decreasing. This often results in short-term or long-term fall in sales. Some organizations prepare for the launch of another brand, before the fall in utility and sales is experienced. The launch of new brand ensures that the revenue trend of the business does not fall. Diminishing utility is among the external factors affecting business. 4 †¢ Money and banking: Monetary and fiscal policies that impact the business of banking business and customer benefits. Purchasing power of the currency in circulation or the consumer demand dictates. On the other hand, as a business loan to a banking facility capacity dictates. Investment banking and asset value of the product and the interest rate in effect on the price of a decisive role. Economic activity and inflation in the countrys economic polices are also affected. The whole dynamic process is known as monetary policy transmission mechanism. Economic growth and development: Economic growth and development of the society is the realization of a long-term investment in upgradation of the channel indicates that the volume of the amount of money dictates. Economically dynamic society to meet the needs of a business to have all the economic factors, the development, the most important one. For example, luxury brands, the economic upturn when it is essential to perform much more than the price of production of the company. †¢ 5 †¢ †¢ †¢ Income and employment : Other important aspects of a business operation affects the economy, employment concentration, and the rate of income. Employment rate of per capita income and density requirements demand concentration, and determines the purchasing power of the people. For example, during an economic upturn, people will be able to possess a strong purchasing power of the income and employment opportunities that are there. In contrast, the concentration of employment and income rates go down during a recession, people also end up purchasing power. General price level: Business growth is an important part of the economy is another very important aspect of the product that is the general price level. The cost of raw materials, and paying capacity, production costs, transportation costs and the general price level and, in turn, is the most important element of business profit margin was lower. Inflation: Inflation is not supported by the output of goods and services in the economy means that there is too much supply when an event occurs. There will be a lot of money floating around, the price of the product is also required for the production, which is due to the increase in raw material costs, in order to maintain the growth of the business. A price hike of raw materials, thus, an increase in production costs. 6 Neutralizing External Factors Considering any business the best way to start the business is to start the business after a deep analysis of the current three situations †¢ †¢ †¢ Government policies regarding the business. Financial conditions of the company. Competitive market of that company. In short if a company need to establish the policy holders should first make a SWAT analysis that basically holds all the strength and weekness of that company. This will help them determine the possible external factors which can put great impact on the business. Conclusion Each change in the factors affecting an economys business. Therefore, the company is a foolproof strategy to cope with the dynamic changes in income