Analyze the external environment of potters that will influenced their policies formulated and implemented. a) The Political environment b) TheEconomicenvironment c) The Socio-economic environment d) TheTechnologyenvironment e) The legal/regulatory environment
Analysing the external factor is the critical concept in strategic management. Environmental analysis is a process of analysing the external and internal factors which affects organisational goal. A business can control its activity. Some factors in the environmental analysis are uncontrollable which influence the performance of the business.
analysis of external environment of potter that influence the policy formulation and implementation.
It is also known as PESTL analysis which contains where various factors that effects the business environment.
1)The political environment: It contains the political conditions of the country. Which can affect the business activities. If there is a stability in the government policies then a business can run their business smoothly. And unstability in government policy main leads to strict policies formulation and implementations in the business.there are certain factors like:
- Taxes and tariff
- Stability in government policy.
- Entry mode of regulation.
All this factors can affect the policy formulation implementation in the business.
2)The economic environment: Economic factors like:
- Interest rates and exchange rates.
- GDP of a country
- Inflation rate
- Demand and supply
All this economic factor can also affect the operation of the business for example: change in the interest rates main leads to to increase in the cost of capital for the business.
3)The socio economic environment: social factors like:
- Population level
- Age , gender
- Culture, beliefs
- Literacy rate.
All this social factors can affect demand and supply in the business.then a company can change their policies and procedures according to their socio economic factors.
4)The technological environment: every business should adopt new technologies and innovations in order to maintain their customers. There are are various technological factors which effects the business environment like
- Research and development.
- New new inventions.
- Rate of of innovations.
5)The legal environment: legal environment helps in regulating the business activities. There are some legal factors which helps in formulating business policies like:
- Patents and copyrights law
- Health and safety rights
- Employment law.etc
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