BTEC BUSINESS UNIT 1 – THE BUSINESS ENVIRONMENT SANJANA SUNDEEP – YR 12
Task D2 – Evaluate how future changes in economic, political, legal
and social factors may impact on the strategy of a specified
organization.
Introduction:
In this task, I will be evaluating how future changes in economic, political, legal and social
factors will impact the strategy of an organization.
Impact of future changes:
Economic: Fluctuation always occurs during an economic change. During such an
economic change, there will be changes in the economic sector: changes in interest
rates, inflation rates and wages rates. A company will have to take risks and develop
their business if the interest rates are low and there is a higher demand in the business.
For example: Siphen does not have a lot of workers/labour, and their labour rates are
quite low. This helps with the profits of the company.
Political: The government and the influence it has is what brings out political changes.
Politics has everything to do with the legal side of a matter, and thus political changes
are connected to legal changes. For example: As ENOC is government-owned company,
the government influences them into implementing certain methods/activities which
will benefit both the parties.
Legal: There are some rules that companies have to abide by, which can increase the
cost of a good or product. This in turn, influences and organization to increase their
costs for a good or service. For example: If a company like ENOC does not follow the
rules and regulations, and there is an extreme amount of goods for shipping, the
company/receiver of the shipment will have to pay extra in order to ship/receive the
goods.
Social: When there is an increased popularity for a product in the society, demand will
increase thus making a huge impact on the profits of a company. For example: In a
company like Siphen, if a product is in high demand, many customers would line up to
buy that product, and the profits of the company will go through the roof, especially if
that product is that of a reasonable price.
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Task D2 – Evaluate how future changes in economic, political, legal
and social factors may impact on the strategy of a specified
organization.
Introduction:
In this task, I will be evaluating how future changes in economic, political, legal and social
factors will impact the strategy of an organization.
Impact of future changes:
Economic: Fluctuation always occurs during an economic change. During such an
economic change, there will be changes in the economic sector: changes in interest
rates, inflation rates and wages rates. A company will have to take risks and develop
their business if the interest rates are low and there is a higher demand in the business.
For example: Siphen does not have a lot of workers/labour, and their labour rates are
quite low. This helps with the profits of the company.
Political: The government and the influence it has is what brings out political changes.
Politics has everything to do with the legal side of a matter, and thus political changes
are connected to legal changes. For example: As ENOC is government-owned company,
the government influences them into implementing certain methods/activities which
will benefit both the parties.
Legal: There are some rules that companies have to abide by, which can increase the
cost of a good or product. This in turn, influences and organization to increase their
costs for a good or service. For example: If a company like ENOC does not follow the
rules and regulations, and there is an extreme amount of goods for shipping, the
company/receiver of the shipment will have to pay extra in order to ship/receive the
goods.
Social: When there is an increased popularity for a product in the society, demand will
increase thus making a huge impact on the profits of a company. For example: In a
company like Siphen, if a product is in high demand, many customers would line up to
buy that product, and the profits of the company will go through the roof, especially if
that product is that of a reasonable price.
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