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External Business Environment and the Impact on the Business

Ian is a marketing specialist. External Business Environment and the Impact on the Business

Stock Trading Monitor- it is one of the technological Factors affecting businesses

Stock Trading Monitor- it is one of the technological Factors affecting businesses


The Bonjocoffee, being a small business, may suffer from an external environment, which includes the factors affecting the company from outside, meaning that the industry has no control over them.

These factors may either positively or negatively affect the firm, depending on the environment. They can be categorized in the PESTLE form, which lists almost all the external factors that may impact the business.PESTLE analysis focuses on six critical factors That can influence the company, and that includes; Political, Economic, Social, Technological, legal, and environmental factors.

Political Factors

Political factors include how the government intervenes about the businesses and the economy of the nation. The company here mainly focuses on if the policies laid by the government are favoring its productivity and profitability or not. These may include the taxes imposed on the goods being traded in the nation, trade restrictions, and the government's general legislative rules towards the trade of goods and services. For instance, the U.S has political stability meaning the taxes imposed on the products may be favorable. Therefore the Boncoffe company may have higher chances of high profits, and hence the business will be more stable. The U.S government has also laid down favorable rules favoring the growth and expansion of small industries, and therefore this Boncoffe marketing company may be catered for.

Women teamwork (business employ local people to work in their enterprises)

Women teamwork (business employ local people to work in their enterprises)

Economic Factors

Economic factors comprise of how the organization does business and the profitability of the firm in general. This is mainly affected by the country's economic growth, inflation, exchange rates, and the consumers' disposable income, which is mostly affected by the employment rate of the people in the country. The U.S is economically stable, and therefore this business may be highly favored. For example, many of the population is employed, and therefore they have high incomes meaning that the industry will have high markets for their products leading to higher profitability. The U.S also does not suffer from inflation, and hence the business's stability will not be hindered with.

Social Factors

Social factors talk about the culture and the beliefs of the surrounding people. These may comprise the people's attitude, the population growth rate, and distribution that may positively or negatively affect the business. This is because different groups of people have different perceptions over a particular product. Therefore, with a high population having a positive perception over a specific product, its market will increase. The U.S has a high community with a high mortality rate meaning the industry will have a broader market from the population. Many of the population is middle age, which may positively affect the coffee, leading to an increase in demand.

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Technological Factors

Technological factors include the new and trending ways of doing things according to the current generation. This may comprise how the company can come up with new ways of distributing and marketing its products. Technology has also come with new ways of producing goods and services and communicating with the target consumers.U.S is one of the nations with very high and improved technology. Therefore, the Boncoffe company will be much advantaged. It can advertise its products to increase its market and apply modern production methods to improve its quantity and quality.

Legal factors are the rules and the laws implemented that govern the consumer rights, advertising laws, and the health factors of the consumers.U.S government has implemented consumer laws of health and safety; therefore, if the company observes them, it will be favored and will have an opportunity to operate freely and increase its profits and the reverse is true.


Environmental factors affect the company depending on whether the environment of its location favors its availability of raw material or not. It may also include the laid down procedures and laws a firm should observe before starting its operations.U.S have enforced many rules and regulation governing an environment such as avoidance of pollution, which may negatively affect the coffee company's startup.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2020 Ian Muiruri

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