Using the company in which you work, one you have visited or the one in task 3, evaluate the importance and effects of external factors on the business’s operation. The most straightforward approach is to use a real company so that you have access to published financial data (such as share prices and trading figures) and other economic data.
You are looking to evaluate what happens if for example:
n the Bank of England base rate changes
n conflict between countries increases or is resolved
n climate change and carbon footprint issues increase
n raw material prices change
n the supply chain for strategic materials changes.
n changes in demand for products or similar products
n new materials
n other external factors?
Analyse the importance of external factors using suitable business tools (e.g. SWOT, PESTLE or other tools)
Write a brief report that evaluates external factors in terms of their importance and possible effect or impact on an engineering company
External factors are those influences, conditions, or situations over which a firm has no control and impacts the business decisions made by the business owner and stakeholders. Several external elements might have a direct influence on your company's capacity to fulfill its strategic goals.
For example, if the government changes the regulations governing the types and quantities of items that may be imported and importation prices rise, the profitability of your online business may suffer.
It is critical to monitor the macro variables that frequently impact your business and industry and respond to them in a way that is acceptable for your firm.
These external macro variables can affect your company's prospects while also posing possible threats:
Economic circumstances, such as employment rates and trends, interest rates, and developments in disposable income
Technological advancements, such as changes in how customers use and acquire products/services, such as the usage of devices/tablets to purchase stuff, and how technology affects how businesses source and deliver commodities
Cultural and socioeconomic influences, such as a growth in the number of women in the labor market, have had a beneficial impact on internet purchases.
Changes in work health and safety rules and regulations, for example, might influence how businesses operate.
Seasonal/climatic variables, such as firms selling seasonal products such as ski gear or swimwear, are likely to be influenced by weather patterns.
Environmental considerations, for example, customers may conduct research and evaluate choices when purchasing alternative energy sources.