Definition of environmental factors
Environmental factors in the context of marketing and management refer to the external factors that are privy to a company’s operations and its marketing environment, which influence the decisions adopted regarding emerging external threats (Rogers et al, 2006).
Categorizes of environmental factors
Social factors
These demographic aspects influence a company’s strategy based on culture, consumer purchase patterns, attitudes, diversity, and gender differences.
Economic factors
Are categorized based on monetary terms, and includes anything that relates to expenses, income, and any other resources that affect the operational activities of a company.
Political factors
Refers to the pressure that government officials exact through policy frameworks on the dynamics of a corporation’s strategy process. 2.4 Technological factors Are the innovations and inventions resulting from research in academic fields, especially in applied sciences and engineering.
Competition
Refers to the alternatives provided as items for consumption, with a view of meeting unique market demands.
Apple Inc Company provides a good example of a company with both a global and domestic outlook. As a software design and manufacturing company, it has to strike a balance between competing external demands as a strategy towards achieving its set objectives and goals and improving its market ratings in terms of services. This way, Apple outsmarted its competitors like Google, Micro-soft, and Samsung.
Factors that influence a corporation’s decision-making process
Global economic interdependence and trade practices
Globalization of economies impacts greatly on the competitive aspect of a company as trading occurs beyond the territorial boundaries. This calls for efficient strategies to ensure that a company does not lag behind due to the harsh competitive environment. Trade practices and agreements, for example, the Global Economic on Tariffs and Trade (GATT) and the World Trade Organization (WTO), facilitates member countries to ease access to trade, thereby eliminating trade barriers…Apple Inc Company has branch offices and factories in other countries. This has influenced the company to revise its employment policies to ensure that some labor personnel works from other countries. This has greatly shaped the companies’ cultural outlook (Rodin, 2008).
Demographics and physical infrastructure
A database on age, gender differences, culture, and stance are an important tool for any company that intends to produce the best products and services for its customers. Such information helps a company to establish its priorities of choices. Based on demographics, Apple Inc Company’s board resolved to make smaller computers by manufacturing phones which targeted the majority of young people. This group was viewed as becoming more endeared to the internet through which they could access social network sites.
There was a need to come up with a gadget that would allow internet access everywhere without the problem of portability. It is through this innovation that Apple outsmarted its rivals like Google, Microsoft, and IBM. Physical infrastructure on the other hand influences a company’s choice of transport mode as well as the preferred choice of energy supply.
Cultural differences
In a working environment where there are a blend of varied norms, values, language systems, and beliefs, an organization’s cultural perspective is changed. For example, stakeholders and individual shareholders may inform the way people network in a company. Cultural differences influence policy on ethics of an organization, by defining and providing a guide on acceptable behavior. Apple Inc Company provides a detailed cultural policy framework that guides its cultural outlook with a view of increasing employee performance, even if there are existing divergent cultural viewpoints.
Social responsibility and ethics versus legal obligations
As a matter of law, every trade has to comply with the laws and regulations, a breach of which leads to the imposition of heavy penalties. Social responsibility focuses on the relationship between a company and the surrounding society. The success of Apple Inc Company lays in high ethical standards, integrity, honesty, and observance of the law. This has ensured trust between the company and its stakeholders.
For example, the company has a harassment policy that provides guidelines with respect to the dignity of its employees. It is on this basis that the company recovered patent rights from its rival Samsung. The nature of business ethics will influence how it obliges to legal rules. A company with inadequate ethical standards is likely to face legal suits that may affect its operations.
Political systems and international relations
Government policy both locally and internationally, determine the boundaries within which a company performs its activities. Change in law, for instance, an increase in taxes may cause a company to adjust its budget effectively. A political system that interferes with the stock market causes a company to adopt other business strategies since most of them invest in the stock market. Most companies are local or international invest their business shares in a stock market and usually use the proceeds to improve their business.
Therefore, a political system that sets favorable policies for trading in a stock motivates the investment of companies in such stocks. Apple directly takes part in politics as a way of protecting its interest and that of its shareholders by supporting candidates through its political contribution policy. If a political system adopts a treaty, which affects a company’s activity, then relations with that country may reduce, causing low turnovers in sales in such countries. An affected company may opt for other strategies to counter such threats.
The Foreign Corruption Practices Act of (1977) and local legislation
The Foreign Corruption Practices Act prohibits bribery of foreign officials by companies in exchange for favors likely to improve their businesses unfairly. The Acts anti-bribery provisions are inconclusive and ambiguous causing serious threats to potential investment companies who fear suffering the consequences of its interpretations. Apple Inc Company evades the harsh provision of the Act through its foreign corruption practices policy. Local legislation on the other hand provides the legal framework within which companies conduct their business. It is because of local legislation that Apple Inc Company successfully claimed patent rights against its rival Samsung Company.
Technology
E-commerce has become the ultimate marketing tool for every organization. Ranging from online banking, email, and the latest invention of Enterprise and Resource Planning (EARP), as well Computer-Aided Design (CAD) has ensured that information is accessible to managers at their fingertips, enabling them to make timely decisions without the need of holding board meetings. Apple Inc Company has an online customer blog where reviews and comments on its products are expressed. Such information is useful in correcting and determining the demand for particular goods or services.
References
Environmental Factors That Affect Global and Domestic Marketing Decisions. (2009). Web.
Roger, K. et al (2006). Marketing London Oxford University Press.