The Three Types Of Business Environment

Political factors refer to the legal activities and political rules that may influence the business in some way. However, ASDA will continue to face many changing in the business for better or maybe worse when it comes to changes in government laws, for example, taxation and unemployment. The government is encouraging business to create or provide different jobs for the consumer this may affect or puts pressure on ASDA as they have to meet the all the government rules and regulation while continues to run the business according to the law (Worthington & Britton

Businesses are affected by the economy and sometimes the economy can have a dramatic drop in countries causing issues for some business mainly due to 4 factors. These factors are inflation, Economic growth, Exchange rates and unemployment.

A business does not operate in a vacuum.It has to act and react to what happens outside the factory. These factors that happened outside the business are known as external factors or influences.

1. Macro environment analysis: the major externals which affect company’s decision making, marketing strategy and performance. It includes:

External environmental factors are the macro environment affecting a business; they are factors outside the company and which they have no control over (Kotler & Armstrong, n.d.) these external factors bring about impacts to the company thus a company should always be prepared to react.

Economic factors – which include interest rates, economic growth, exchange rates, inflation and taxation changes (Nieman, G; 1998). The change the economy can have a major impact on the behaviour of the business. For example: inflation may cause a higher wage demand from employees (Herrigton, Kew & Kew; 2009).

Macro environment or macro forces consists of the larger societal factors that have the potential to affect an organization’s strategies. According to Phillip Kotler, these variables include demographic, economic, natural, technological, political, and cultural outside forces. (“Josbd”, n.d, para. 7)

Macro environment are the external and uncontrollable factors that influence an organization’s decision making and affects its performance and strategies.

Social influence regards to any aspect where people interact and discuss ideas. For instance, Document B is a quote by Adam Smith from the Wealth of Nations in 1776. A summary of the quote is that if we, as a society, can buy a product cheaper than making it, we should do that. This was an idea in 1776 and it is still utilized today by many companies. This document has affected economies socially because it relates to trade. When trade occurs, different regions and countries meet up to interact and trade goods. This has influenced economies because societies will be spending less money for goods and will be selling them for a higher value which gives them more money and profit. It influences economies on how they spend their money and how they are going to receive money back. In addition, Document G is an agreement by GATT about trade with the governments of many different countries around the world.GATT is the General Agreement on Tariffs and Trade. This document is related to economics socially because it brought many countries together. These countries were brought together by common goals with tariffs and trade. It influences economies on what tariffs and trade rules should be established in different countries. This will affect the trade of that countries which will also affect the profit of the society. As seen from these two documents, social factors have influenced modern day economies of the

External environment refers to external aspects of the surroundings of business enterprise, which have influence on the functioning of business. The external environment can provide both facilitating and inhibiting influences on organizational performance. Key dimension of the external environment principally consists of a micro environment and a macro environment.

In this term of our discussion we’re talking about business environment. It’s like an overview of the whole business environment. Simply environment of a business means the external forces including the business decisions. They can be forces of economic, social, political and technological factors.

In today's world, no business operates in isolation without interacting with the environment where it operates. Irrespective of the nature of business whether public or private organization; manufacturing; service industry; local or international firm, its operations are inhibited by the environment in which it operates.

Macro environment consist of those major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies.

Factors that happen in the external environment are known as external factors or influences. These will affect the main internal functions of the business and possibly the objectives of the business and its strategies. The main factor that affects most business is the degree of competition - how fiercely other businesses compete with the products that another business makes. The other factors that can affect the business are:

The features of economic environment have direct relationship with economic activities .Income and wealth is the components of the economic environment.