Effect and Influence of Social Factor on Business - Essay Example

? | Word Limit 1000 19/11 Assignment Topic: effect and influence of social factor on businesses Candi number: Candidate Statement I hereby declare that this assignment is my own work and any use of materials from other sources has been referenced accordingly. Candidate Signature: Date: Tutor Statement I hereby confirm that this assignment, to the best of my knowledge, is the candidates own work and they have not collaborated in the production of this assignment with any other person. I also confirm that I have a record of this candidate’s progress tutorial/s. Tutor Signature: Date: Introduction-Environmental Analysis Environmental analysis is a marketing function which includes study of all external factors that may determine the success or failure of a business. It is a systematic process of identifying the environmental factors then assessing and auditing them to find their effect on the business. Relatively qualitative in nature, this analysis involves identifying of environmental variables, scanning them, analyzing and finally forecasting of business situation. Identifying of environmental factors includes knowing the internal areas such as system, strategies, structure and culture that may affect the organization or business. Scanning is the process of distinguishing the factors which affect business the most. The next step of includes analyzing the effect of various environmental variables on different levels of business. The last step of forecasting analyses the past information and based on this information predicts the future. Environmental Analysis - Its significance to business Environmental analysis is significant for a business to survive and grow. This analysis helps in identifying the probable opportunities and threats to a business. It opens new avenues for business activity expansion and also provides opportunities for discovering and exploitation of business. Environmental analysis of a business keeps business enterprise alert in its activities and approaches. Through proper analysis of environment the problems and prospects of business can be understood and faced confidently thus providing the opportunity to gain maximum benefits out of available options. Environmental analysis keeps business dynamic and flexible in accordance with the changes in environmental forces (Doole, Lowe and Doole 2008). It enables business and organizations to understand future problems and face them boldly. This analysis helps organizations in expanding their business while contributing towards social groups and causes. Environmental analysis keeps guiding the organizations from time to time about changes in socio economic conditions at the same time enabling them to take benefit of technological developments, government policies etc. Apart from providing various opportunities environmental analysis also helps business in identifying threats from competitor and other sources. Threats are uncontrollable and can put survival of organization or business at stake. Environmental analysis overcome organization’s threat and also helps in identifying competencies of business. Identification of one PEST factor PEST analysis is an acronym for “political, economic, social and technological.” Its purpose is to conduct analysis and identify various external factors that might affect business and also to help in market research. Out of all the factors from PEST analysis I am considering Social factor for discussion about how it affects business. Social aspect of PEST analysis includes factors such as age distribution, income level, education, diet and nutrition, religion, population growth, consumerism, social class, and expectation of society from business. It also includes buying trends, change in lifestyle, cultural aspects, ethics, publicity factors, advertising, media, career attitudes, health consciousness and emphasis on safety. Social trends to a great extent affect demand for a product (Miller 1992). Industry considered Considering apparel manufacturing industry for discussion, this industry transforms fabrics by means of sewing, knitting, weaving, tufting materials such as leather, fabrics and furs into finished products which keep consumers in style. The chain in garments and textile industry starts from production of raw material through yarn spinning, weaving of fabric, dyeing and finishing, sewing of garments, trimming, labeling, packaging and finally delivering the finished product. The various elements of this supply chain involve different partners who are geographically dispersed. The apparel and textile manufacturing industries with growing international competition are modernizing rapidly with ever increasing investments in automation and information technology. The past decades have witnessed numerous changes in trends and fashion. Firms in order to compete with today’s competition need to check the effect of these trends before proceeding with their plans. Through development of new product and services also some firms are responding to this competition (Bohdanowicz and Clamp 1994). The effect of chosen PEST factor on one businesses or industry The social factor from PEST analysis may have various effects on business. The market size and customer needs usually get affected by demographic and cultural considerations. A demographic map shows the change in composition of different age group people which affects the manpower supply. If a product is launched without proper strategic planning then due to cultural factors it may prove to be a failure for product and business. A particular product may have achieved great success in a country but in another country the product may be considered as taboo. That is why strategic planning of social factor is very important for a business or for business supplying same type of product (Miller 1993). Career attitude and age distribution is yet another social factor affecting business. Countries with increasing population of young working people would call for more industries and business. Population growth rate is another social factor which affects the business. Proper updated information on this social factor may help the business in deciding the future course of action. In a scenario of rapid drop in birth rate, it would be wiser for a business to look after nations with high birth rate (Rodiek 2008). PEST factor creating threats or opportunities at a global, national level The social factor from PEST analysis has created various opportunities at a global, national and international level. These opportunities are in the form of new emerging markets needing expansion of business nationally and internationally, product and service expansions, takeovers, new products creating its own brand, expansion of customers etc. The social environment of a business gets influenced by mood and demographics of population. Social factors and trends affect the demand for a product which ultimately affects business. These factors play an essential role in influencing buyer’s decisions and can be segregated under various groups namely reference groups, relatives, immediate family members, role and status in society (What Is The Impact Of External Environment In A Organization, Give The Latest Examples 2012). Summary The above discussion is about environmental analysis showing its significance to business. It is a systematic process of identifying the environmental factors then assessing and auditing them to find their effect on the business. The role of environmental analysis in identifying opportunities and threats to a business has also been stated. The discussion contains a factor named “Social factor” from PEST analysis which has been discussed in context of a specific business or industry i.e. apparel manufacturing industry. The effect of various social factors on business has been explained along with the opportunities which come for business on global, national and international level. References Bohdanowicz, J. and Clamp, L. 1994. Fashion Marketing. UK: Routledge. Doole, I., Lowe, R. and Doole, I. 2008. International Marketing Strategy: Analysis, Development and Implementation.UK: Cengage Learning EMEA. Rodiek, C. 2008. External Environmental Analysis - The U.S. Television Manufacturing Industry. USA: GRIN Verlag. Miller, K.D. 1992. A Framework for Integrated Risk Management in International Business. Journal of International Business Studies, 23, 2. pp. 311-331. Miller, K.D. 1993. Industry and Country Effects on Manager's Perceptions of Environmental Uncertainties. [Online]. Available at: http://docs.lib.purdue.edu/cgi/viewcontent.cgi?article=1072&context=ciberwp&sei-redir=1&referer=http%3A%2F%2Fscholar.google.co.in%2Fscholar%3Fq%3Dsocial%2Benvironmental%2Bfactors%2Baffect%2Bon%2Bbusiness%26btnG%3D%26hl%3Den%26as_sdt%3D0%252C5#search=%22social%20environmental%20factors%20affect%20business%22 [Accessed, November 21, 2012]. What Is The Impact Of External Environment In A Organization, Give The Latest Examples. 2012. [Online]. Available at: http://environment.blurtit.com/q244496.html [Accessed, November 21, 2012]. Read More