Mgmt 2001 : Principles Of Assessment Answers

Factors that Determine a Business Market

Introduction

In the contemporary world, the business field has become much competitive. Therefore, any business in the market is required to develop strategies that will ensure its survival and dominance in the business environment. This creates the need for a better understanding of the business environment since it affects the business decisions and the performance (Eruemegbe, 2015). The study of the business environment helps the business to discover new opportunities for investment. It also helps in determining the possible risks the environment poses. As a result, the business develops various plans that will help in coping with the possible challenges. The paper reviews the various factors that affect the business performance. To enhance more understanding the paper references Google Company.

A brief description of Google Company

Google is an international company that deals with technology more so with the creation of a searching website. The company has realized significant growth over the past few years. The company has developed strategies that have ensured its competitiveness in the market, for example, it has developed platforms for business advertisement. This development has made it more competitive compared to other business in the technology field. Google company has a goal to organize the world information and make it accessible and of benefit to it user.

Factors that influence a business market in relation to Google (PESTEL analysis)

Political factors

 The political factors include; political system, government policies on business and the government towards the trade unions. Whenever there is political stability there is significant growth in businesses. The peace present creates a good environment for investments and for the growth of the existing businesses. In addition, governments do enforce laws that affect the business filed. As a result, the business managers have the responsibility to develop strategies that will work best with the rules set by the government (Jankovic & Mihajiovic, 2016). Google has played a great role in shaping the political environments of various countries. The company also comply with the rule and regulation set to control businesses. As a result, the company has received support from the government helping realize its goals. On the other had political instability, high taxes, and corruption within the government result to business failure following losses.

Economic factors

Economic factors do have a great impact on the business performance. They help determine the trend of a business i.e. profits and losses. The factors include interest rates, taxes and the cost of raw materials. For any investor who is willing to join the business, he or she must study the effects of these factors on the intended venture. The study will help develop strategies which will solve the risks posed the factors.  The study also helps the entrepreneur to make a rational decision on the source of capital following the interest rates posted.  Also, business managers are able to determine the source of their development money based on the risks posed banks interest rates (Mwangi & Wekesa, 2017).  Google has developed strategies that result in profits. As a result, the company does not face the risk involved by borrowing. Companies should develop strategies that will enhance income generation by the company.

Social demographic factors

Social demographic factors include business performance and experience, business ownership, gender and education levels of the business stakeholders. Established businesses do have an upper hand in the business market compared to starting a business. This is because they have developed the confidence in their consumers following the efficient delivery of services. The companies are also believed to have more experience. Business ownership determines the cultural behavior of a business organization (Lucas, 2017). This in return determines the quality of service delivery to the consumers.  Businesses that hire skilled employees do realize growth since they produce high quality products that are competitive in the market.  Organizations that observe gender balance do realize success in their fields since they have the necessary workforce to serve any customer. Google has dominated the technology market following its long experience and high-quality service delivery. The company also hires highly competitive employees and offers training to improve their skills.

Technological factors

Technological factors in a business organization include; research and development activities, automation, technology incentives and technological change (Dauda & Ismaila, 2013). Use of technology in production ensures high demand for products since they are of high quality. Involvement of technology helps in boosting the production capability of the firm. This ensures maximum utilization of the business resources to ensure maximum production. Technological innovation in a business opens new business ventures. In addition, technology ensures quality service delivery. Google has used technological inventions to enhance its growth and improve its service delivery. Managers should ensure that there is technology advancement in the business in order to realize business growth.

Environmental factors

Business organizations do operate in an environment where the production and distribution of goods and services take place. The environment determines the organization achievement. The environment provides the raw materials needed for the production within an organization. it also provides the market for the finished goods (Oginni & Adesanya, 2013). The business environment also determines the capability of the business to expand. Managers have the role to ensure that good relations are developed between the business and environment since it plays a great role in its development. Google has developed good relations with its environment by helping solve the community problems of technical communication. As a result, it has developed since there is high demand for its services worldwide (The business environment and its effects on Google, 2011).

Legal factors

In many business environments, there are set rules that govern the business sector. Among the laws include the taxes enacted by the government, the relationship between the banks and the businesses. Also, the government specifies the role of the business unions and enacts tariffs and barriers to businesses.  Failure to observe the set rule results in penalty by the government (the business law section, 2015). It is, therefore, necessary for any business to understand the rules that govern its environment. In the existence of the supportive law, the business field realizes improvement since investors are encouraged to invest in the environment.  Google has been keen to observe the set rules that govern the business society. As a result, it has avoided conflict with the government. This has resulted in its growth.

Opportunities and threats to the business environment

As a result of the competition in the business field, it is necessary for a business to develop strategies that will help it realize its strengths and its weakness in the business environment. This helps in drafting the strategies for business development. It also helps in the discovery of the business opportunities and a threat to the business (Toroujeni, Samani & Shahbazi, 2017). In Google company, frequent research is done to discover the opportunities and threats to the business. Google has taken the advantage of the business opportunities provided to ensure its survival. It also develops a plan that helps it to overcome the threats posed by the environment.

Conclusion:

In business development, there is need to research on the business environment so as to realize the threats and opportunities in the environment. Business entrepreneurs and managers have the responsibility to develop plans that are compatible with the business environment. This helps in the growth of their businesses. They also ensure the survival of business following immense development and technological development in the organization. The managers should also focus on frequent research so that they can initiate the necessary changes in the business environment.

References:

Dauda, A. & Ismaila, Y. (2013). Influence of technological environmental factors on the strategic choice of quoted manufacturing firms in Nigeria’s food and beverage industry. International journal of business, humanitarian and technology, Vol. 3. Issue 8. Pp.159-169

Eruemegbe, O. (2015). Impact of business environment on organization performance in Nigeria: A study of union bank of Nigeria. European scientific journal. Pp. 478-494

Jankovic, M. & Mihajiovic, M. (2016). Influence of external factors on businesses and companies in Serbia. Original scientific Article, Vol. 62(4). Pp. 31-38. retrieved 05 October 2018 from htttp://www.ekonomica.org.rs

Lucas, S. (2017). The impact of demographic and social factors of firm performance in Kenya.  Journal of business and economic development, Vol. 2. Issue 4. Pp. 255-261

Mwangi, N. & Wekesa, S. (2017). Influence of economic factors on organizational performance airlines: A case study of Kenya Airways limited. Journal of humanities and social sciences, Vol. 22 Issue 5. Pp. 8-14

Oginni, O. & Adesanya, S. (2013). Business environmental factors: implications on the survival and growth of business organizations in the management sector of Lagos Metropolis. Business and management research, Vol. 2 Issue 3. Pp. 146-155. Retrieved 05 October 2018 from www.sciedu.ca/bmr 

The business environment and its effects on Google. (2011). Retrieved 05 October 2018 from https://www.eruptingmind.com/

The business law section, state bar of Michigan. (2015). The Michigan business law journal, Vol. 35 Issue 1. Pp. 1-64

Toroujeni, H., Samani, S. & Shahbazi, S. (2017). Strength, weaknesses, opportunities and threats (SWOT) analysis and strategic planning for Iranian language institution development.  Journal of applied linguistics and language research. Retrieved 05 October 2018 from https://www.researchgate.net/publication/3150544133