Many companies are striving to adopt sustainable business practices in response to climate change. There are numerous criteria that are considered external elements. Among them, some of the most prominent and important factors to be listed are the current economic situation, laws, surrounding infrastructure, and customer demands. Unlike internal factors, external elements are affecting factors outside the company and that are not under its control.
Taking into account the external environment allows entrepreneurs to make appropriate adjustments to their marketing plan to better adapt to the external environment. The four main environmental factors affecting a company are economic, social, political and technological factors. Economic factors include things like interest rates and inflation rates. Social factors include aspects such as culture and demography.
Political factors include things like government regulations and policies. Technological factors include advances in technology or changes in the way people use technology. For example, factors such as customer needs and expectations can help a company improve the quality of its products to adapt them to customers. The environmental factors of a company can range from political factors, social factors, economic factors, technological factors and cultural factors.
No external factor affects companies more than an economic condition, which is the current state of the economy. The economy is one of the most determining factors of a company's success, even if it is an external element. This process is not unique to Fortune 500 companies, but it is particularly important for small and medium-sized companies that do not have the recognizable brand or stable revenues of large corporations and that may be more susceptible to the influence of external factors. Therefore, it is absolutely true that all factors internal or external to a business organization have a profound influence on business activities.
Since operational efficiency directly affects the company's success in the market, an entrepreneur needs to really know the processes of his company and follow them to know if they are being carried out in the right way or not. Instead of waiting to react to the negative impacts of environmental factors, business managers can choose to be proactive and have contingency plans for unexpected environmental factors. Climate change and the ecological agenda can be classified as external factors, while the availability of natural resources and waste disposal are internal factors. Some internal factors of a company include its value system, its mission and objectives, and its internal relationships.
First of all, you should understand that there is a variation in internal and external factors depending on the size, type and status of the company. Examples of environmental factors affecting companies include employees, competition, suppliers, customer needs, landlords, government regulations, market trends, technological advances, social factors, and economic factors. You don't need to dedicate resources to your plan right now, but it's important that you've carefully considered the implications of the onset of one of these external factors.
