Environmental factors for conducting business

If a business wants to be successful in the marketplace, it is necessary

for them to fully understand what factors exert impact on the
development of their company. Once they know about both positive and
negative effects within and outside the company, they can produce
suitable strategies to handle any predicted situation. Therefore,
examining internal and external factors is considered the most important
task for an enterprise before launch any strategic marketing plan.

Business Environment

“Environment” can be acknowledged as the surroundings or conditions

in which a specific activity is carried on. We know that a business firm
is a social entity which is formed by a hierarchical structure where all
necessary items of its own are activated together to reach the collective
goal.
Therefore, it is absolutely that every factor inside or outside a business
organization has a profound influence on business activities.

Environmental Factors Affect Business

Marketing strategy is a very important aspect of making a business
successful. The absence of a clear strategy, setting up meaningful
objectives and goals can be very difficult. While drafting a Marketing
strategy, conducting a macro environment analysis within which the
business is operating will help in determining the outcomes of a strategy.
This analysis includes political, economic, social-cultural, technological,
legal and environmental factors that affect business.
To analyze the six macro factors, we conduct PESTLE
analysis and SWOT analysis. These strategic analysis tools consider all
the factors that may affect the business operations. This is worth
mentioning that PESTLE analysis responds to external factors while
SWOT analysis responds to both internal and external factors to the
organization.
Definition of Environmental Factors
Environmental factors can be explained as identifiable elements within
the cultural, economic, demographic, physical, technological or political
environment which impacts the growth, operations and survival of an
organization. Environmental factors can be both internal as well external
for the business. External factors can include economic and
technological factors whereas; internal factors may include value
system, objectives or internal relationships of a business.
How Environmental Factors Affect Business
Every business, whether large or small, is affected not only from internal
organizational factors but, from several external factors. Company has
no control on external environment. Developing marketing strategies
should include considering environmental factors so an accurate picture
of the market trends and environment can be presented and to
understand as to where the company is standing. Ignoring environmental
aspects is similar to walking on a path where there are unsuccessful
marketing and lost revenues which can ultimately impact the health of
the business brand.
Examples of Environmental Factors Affecting Business
Environmental Policies
Environmental policies are another external factor that can impact the
strategy of a business. Environmental policy is the commitment of a
business to the regulations, laws as well as other policy mechanisms that
are concerned with environmental issues. Environmental policy impacts
businesses because the law implies organizations to change their
operational procedures and equipment so as to meet those standards
which can cost businesses some good amount of money.
Climate Change
Climate change became an insidious threat to businesses as its pace can
be recognized only when it is taken into consideration on the basis of
decade-after-decade. Increasing issue of global warming and adverse
weather conditions in the recent few years, it is difficult for companies
and organizations to operate equally in every type of weather condition.
Businesses that are directly dependent upon adequate water supply e.g.,
field sports or agriculture will be affected adversely if climatic changes
resulted in reduced rainfalls. Even consumers are becoming aware and
keen about this factor and are prone towards those brands which are
saving the environment or supporting this cause.
Green Agenda
Business-related activities impact the environment; however, the
environment also has an effect on businesses and the market
environment. Now enterprises have realized that in order to achieve
business goals, there is a need to draft environmental-friendly policies.
Green agenda is a plan where enterprises manage their operations in
such a way so that there is minimal negative impact on the local or
global environment. In order to be environmentally responsible,
corporations need to devise plans and procedures in their operations and
activities which is beneficial not only company but, for the overall
environment as well.

Pollution
Pollution can also have an impact over business strategies. Pollution
may cause some major environmental events which can result in the
disruption of supply chains or an increase in the cost of raw material.
Organizations need to monitor such events and develop contingency
plans so as to deal with them.
Availability of natural resources
Amongst external environment factors, this factor refers to the physical
environment of a business. Natural resources are very important for most
businesses and many corporations have natural resources as their major
raw material. Lack of natural resources can hinder an organization’s
producing ability and hence its output.
Recycling
Recycling is another aspect of a greener environment. The cost of
dumping waste in landfills is increasing and is resulting in not only
shortage of wastages but, it also provides harm to the environment.
Recycled materials not only results in making the production process
cost-effective but, it also helps the business to save some money and
helping the environment.
Waste Disposal
Although, there has been a positive trend towards recycling of waste
materials, still there are several businesses which dump wastage in
landfills. This not only increases their cost of dumping waste but, is also
harmful to the environment in which the business operates. Businesses,
in order to meet their bottom line, should first look at producing less
waste and use fewer resources which will reduce their production cost
along with making the corporation sustainable.
Examples of How Environmental Factors Affect Tesco
Companies are facing increased pressure by government agencies to
address environmental issues. Furthermore, companies must respond to
these issues in ways that benefit society. Now Tesco encourages its
consumer to shop at tesco.com. Tesco Van Drivers will not only use
fuel-saving routes but also collect unwanted plastic bags from customers
and recycle them.
Also, Tesco is committed to use renewable sources and generate 100%
of its electricity by 2030. The company promises to minimize upto 50%
carbon footprint by 2020.

Conclusion

In conclusion, there is a bunch of contributing factors the success of the

company which comes from both outside and inside a business. Either
outside or inside factors are of utmost importance for the development of
the company. If a business hopes to perform smoothly and successfully,
they need to take all these elements into consideration before making
any decision.