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Economics Assignment:外部因素在企业经济学中的意义

时间:2018-05-25 08:53来源:www.ukassignment.org 作者:cinq 点击:
Social factors and their significance when it comes to business-economics
Legal and Political Legal and Political Factors in the SLEPT analysis
Economic factors and their influence on business economics
Technological factors and business economics
Introduction 简介
Maintaining the current market share, or being capable of growing in terms of market share, in this continuously changing world means that businesses cannot afford to stand still. In order to keep ahead in the face of increasing global competition, companies must closely follow developments in their external environment, which consists of: society, legal systems, economic factors, These factors are interrelated and are capable of significant change.
The industry chosen in order to analyze these factors and to which extent firms should take these factors into account is the airline industry. The external environment in which airlines operate is particularly volatile and difficult. All the factors mentioned above have a great impact on the airline industry in particular. Therefore the airlines industry is deemed to be an adequate proxy for the analysis.
In an attempt to analyze the external factors in order to evaluate how and to which extent companies should assess these external factors the SLEPT method will be used, i.e. an investigation of the Social, Legal, Economic, Political, and Technological influences on a business. Furthermore the reactive and anticipatory approaches will be discussed to evaluate which is more useful. In this report the following airlines will be used to explain the theory supplied: United Airlines and Virgin Atlantic. These were chosen, because of the differences in size and ways of operating.
Social factors and their significance when it comes to business-economics 社会因素及其在企业经济学中的意义
Social factors consist mainly out of cultural factors and social trends, namely health consciousness or consumer lifestyle. They also consist out of demographic factors, for example age distribution and population growth.
Every culture has different wants and needs, so when a business just focusses on only one culture or group of people, other cultures might feel left out and they will be less attracted to the company its service or product. For this reason a business needs to modify its business strategy to a large variety of cultures. To achieve superior customer service Virgin Airlines has done research into cultural diversity and they offer their staff training in cultural awareness. This way they are able to identify every cultural nuance affecting customer satisfaction.[1] This suggests that businesses have to put a substantial amount of effort into focusing on cultural diversity as they can increase customer satisfaction when they do that.
It is crucial that businesses make their customers feel save when they use their products or services. Businesses can lay emphasis on their safety in order to attract more customers. When businesses are struggling to guarantee safety they attract fewer customers; the 9/11 attacks had a sizable impact on Virgin airlines and United Airlines, as the public was frightened to travel by airplane as there was a serious terrorism threat. Especially US domestic flight revenue decreased enormously right after these attacks, but when the threat decreased the revenues increased again.[2] This shows that security has a significant effect on business economics.
When a lifestyle of a substantial amount of consumers shifts into a new phase, a company might suffer a severe drop or a sudden surge in market share depending on how the company focusses its product or service. For instance; Virgin Airlines offers the option to hire an extra seat for extra personal space. This is a great opportunity for couples who want some privacy during a flight, or families who demand extra space for their children. There are also certain shifts that cannot be influenced, but have a large influence on business-economics, For example the increased popularity of traveling abroad has been very beneficial for British Airways and Virgin Airlines, but they have not had any influence on this sudden shift in lifestyle, so lifestyles of consumers have a large impact on business economics
A business can focus its services and products on people that have a certain amount of health consciousness, but it can also alter its products so they are attractive for any customer regardless of their health consciousness. For example; Virgin airlines and British airways have to account for obese customers that might take more room and more fuel. To remain profitable, they are obliged to either induce a so called fat tax, where customers have to pay more when their weight is above a certain level, or sell the customer a second seat because they do not fit in a single seat.
As we have demonstrated, every single one of these factors has a major of impact on business-economics. They are also essential for the success of businesses since the lives of customers revolve around these factors. A business should adapt its strategy proactively to these factors in order to increase its profit and market share.
Legal and Political Legal and Political Factors as external factors 睡眠分析中的法律和政治法律和政治因素
Political and legal factors (which are closely related to each other) heavily affect businesses, profoundly influencing their modus operandi. When new laws and regulations are approved, companies and corporations are forced to change their business strategies, sometimes with considerable effects, sometimes with almost any consequence. In the following paragraphs, some example of laws and regulations affecting businesses are being analyzed.
Tax policies
Tax policies can seriously change the amount of profits that a firm is able to make. It is well known that each country applies a different tax policy, thus offering endless possibilities for a firm to choose its headquarters location, considering the pros and cons of each single situation. Firms having strong relationships with their national government, might be able to get tax exemptions and improve their competitiveness towards their international rival; In fact, in the Russian Federation, in 1997, the flag carrier Aeroflot enjoyed a tax exemption by their government on the purchase of four Boeing aircrafts. This for sure reduced the operating costs for Aeroflot and increased their competitiveness towards the other Eurasian companies who may not have enjoyed the same privilege. Another example of tax policies affecting the businesses is the tax increase on the airlines industry that occurred through the years, especially in the US. It is shown in table 1 that taxes have considerably gone up, thus increasing the ticket price and losing some customers who cannot afford a flight ticket to certain destinations anymore, often deciding to switch to train travel.
Trade Unions
Trade Unions are a great achievement conquered by the working class in the last two centuries but a sometimes, unpredictable danger for companies. If not handled carefully, working class leaders, especially in western countries where concepts of democracy hold, can seriously damage a company performance. Companies need to engage into a stable relationship with them in order to avoid sudden stoppages of their services, which can lead to serious profit losses. For example in 1985, United Airlines experienced a 29 days long strike which resulted in huge losses in revenues. The company negotiators were able to restore the firm normal functioning only after multiple discussions and trade-offs with the workers’ representatives. This of course could have been avoided with a proactive behaviour, making sure that working conditions were optimal, or moving the company to a country where trade unions are easier to manipulate. Wars and changes in international relationships
For companies operating outside their national borders, good and stable relationships between countries are crucial. A war or a diplomatic misunderstanding can turn into a forced exit from some markets or in a loss of revenue. Before deciding to operate in a certain foreign country, a firm should deeply analyze the on-going relationship with its government. Moreover, once they decide to be in business with this hypothetical country, they should be ready to react to any possible event modifying the national political situation. This can turn extremely necessary for companies operating in unstable countries like Southern American, or Eastern European countries. For example, with the recent outbreak of a serious protest in Venezuela, potential airlines passengers may think twice before deciding to travel there. This change in public opinion has for sure reduced the revenue of many companies, including United Airlines, which provides flights from the US to the capital city, Caracas.

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