Analysis of economic factors in a business
The software industry might for example have less to do with environmental and ecological factors than the oil or automotive industry. Economic Factors Affecting Development Economic development is development to raise the average standard of living in the country.
Legal Factors: Although these factors may have some overlap with the political factors, they include more specific laws such as discrimination laws, antitrust laws, employment laws, consumer protection laws, copyright and patent laws, and health and safety laws.
These powers are required for the development of the country and hence will affect the economy and develop it.
List of economic factors
If a country is having good means of transportation it will able to increase the reach of goods or services to consumers and this will result in economic development of the country. Similarly, any policy made by the government will affect the economy. Inflation causes increases in business expenses such as rent, utilities, and cost of materials used in production. Share on Facebook Entrepreneurship tends to focus on identifying and fulfilling consumer needs in specific niche markets, but all businesses can be affected by large-scale economic trends. Consumer Confidence Consumer confidence is an economic indicator that measures overall consumer optimism about the state of the economy. It is clear that companies need to know what is and what is not legal in order to trade successfully and ethically. The investor needs to be prepared for a change in economic factor and its consequences by knowing the impact of economic factors investor can take the right decision in terms of investment. And skill training helps one to develop self which results in high wages and development of the economy. Changing exchange rates might affect how much a company has to pay to its international supplier to satisfy them, which can affect profit margins, as well as take a lot of resources to stay on top of. Exchange rates — Exchange rates are a complicated topic, but they clearly have to apply to those who deal with export or import. Economic factors that commonly affect businesses include consumer confidence, employment, interest rates and inflation. These powers are required for the development of the country and hence will affect the economy and develop it. For example: Economic Factors Affecting Anthropologie Anthropologie targets a wealthy market, so they can afford to take a unique pricing approach which is tailored to that specific economy The rise in global development and worldwide increase in GDP Gross Domestic Product means that their target market is gradually growing On the other hand, this global development might increase labour and material costs in Less Economically Developed Countries where their products are manufactured meaning lower profits You can find an entire PESTLE analysis of Anthropologie here. Technological Factors: These factors pertain to innovations in technology that may affect the operations of the industry and the market favorably or unfavorably. Confident consumers tend to be more willing to spend money than consumers with low confidence, which means businesses are more likely to prosper when consumer confidence is high.
What do you know about how economic factors affect business? These days companies are using modes of communications like mobile, internet etc.
These factors may influence decisions to enter or not enter certain industries, to launch or not launch certain products or to outsource production activities abroad. In your PESTLE Analysis such indicators would only be highlighted so that further investigation could take place before a conclusion could be drawn.
The rate of growth or the market's confidence in the economy could also be significant factors for your organization. Inflation Inflation is the rate at which prices in the economy are increasing.
The company starts its plant or production where labor is cheap.
Social factors affecting business
When unemployment is high, consumer spending tends to be low because unemployed people don't have excess income to spend. Resources can be man-made like biogas and natural resources like petrol, coal, gas etc. Here we discuss the top 10 economic factors that affect the Business and Economic Development along with practical examples. PESTEL Analysis Video Tutorial Social Factors: This dimension of the general environment represents the demographic characteristics, norms, customs and values of the population within which the organization operates. Basically all the influences that a government has on your business could be classified here. Higher interest rates result in higher total business expenses for companies with debt. Each factor will be elaborated on below: Political Factors: These factors are all about how and to what degree a government intervenes in the economy or a certain industry. Economic factors that commonly affect businesses include consumer confidence, employment, interest rates and inflation. It is clear that companies need to know what is and what is not legal in order to trade successfully and ethically.
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