EXTERNAL INFLUENCES AFFECTING THE FIRM

External Influences Affecting the Firm

External Influences Affecting the Firm

A business has many external influences that can affect its overall mission and functions. Such influences may be political, global, economic, legal, media, medical, and nature in itself. These influences may include government departments, regulators, competitors, and trade bodies making it important to identify these at an early stage (Norwich Union, 2005). Because these external influences affect a business' mission critical process, it is evident there is an influence on the business continuity plan of the company as well. The business continuity plan includes the arrangements and procedures to maintain business functions and minimize interruptions when external influences impact a business' capacity to operate (Region of Peel, 2007). This paper will differentiate the roles and impact of formal and informal stakeholders of externally influencing organizations to a business and the business continuity plan. The selected stories for this paper are:

AOL

Carphone

Halfords

JJB

There are many outside influences which affect businesses, of which the market is just one.

Size of the market: Businesses are heavily influenced by the markets in which they trade. The size of the market influences businesses: whether it is local, national or international will affect the nature of the product they supply, as well as the number of units.

Degree of competition: Markets also vary in terms of the degree of competition. It is true to say that improved communications and methods of transportation have made markets more competitive. Many UK businesses now face competition from European and Asian producers, as well as domestic rivals. Competition has become even more intense since the giant American retailer Wal-mart made a bid for Asda, and was successful.

What are markets?: A market is a place where buyers and sellers meet to establish prices and to exchange goods and services. Markets can take two main forms:

1)      Traditional, geographical markets

2)      Non - geographical markets

Traditional, geographical markets: Consumers can purchase fresh fruit or vegetables at a local street market. Firms wishing to sell these products can take a stall at the market and expect to meet buyers. Thus, the market brings together buyers and sellers. The same is true of a high street in any town or city. Retailers set up stores in these locations and customers know where to find the shops.

Neo-geographical markets: An increasing range of products are bought and sold without buyers and seller ever meeting. It is possible to purchase books, company shares and groceries on the internet using a credit card. Rail tickets and theatre tickets can be purchased by phone. Businesses purchase oil and foreign currencies over the phone. Modern forms of communication hae replaced face to face communication in traditional markets. In general, markets do their job efficiently if information on prices and products is available to buyers and sellers.

Classifying markets: Markets can be classified according to the number of firms trading and the degree of competition. This type of categorisation allows the likely effects on the business to be identified and ...