1-5-5-External-Influences

Possible responses by businesses to external influences

• Businesses may respond to changes in technology, legislation, and economic climate in a variety of ways

  • The response varies from business to business depending on their circumstances and objectives

  • The key is to stay aware of external influences and to be proactive in responding to them 

Responses to changes in external influences

Technology

• Businesses can respond to changes in technology by:

  • Investing in new technology that improves the products, reduces costs, increases efficiency, or expands their reach

  • Partnering with tech companies to gain access to their expertise and resources

  • Training employees to use new technologies effectively 

Legislation 

• Businesses can respond to changes in legislation by:

  • Complying with new regulations which may involve changes to their operations, such as increased reporting requirements or new safety standards

  • Lobbying policymakers to influence the development of new legislation through trade associations or directly with policymakers

  • Seeking legal advice to help navigate changes in legislation and ensure compliance 

Economic climate

• Businesses can respond to changes in the economic climate by:

  • Diversifying their products to reduce their reliance on a single market or customer base can help them weather economic downturns

  • Cutting costs by reducing staff, renegotiating contracts, or streamlining operations can help businesses to remain profitable during difficult economic conditions

  • Seeking finance from lenders or investors to help weather economic downturns or to fund growth opportunities