Business Environment

All businesses are affected by their immediate environment. Many factors influence them, for example, availability of labour (that is, how easy or difficult it is to find workers); labour cost (how much it costs to employ people) and availability of raw materials, such as oil and wood. The amount of money a company has to pay the government in taxes is another factor. Businesses are also affected by the state of the economy. In a period of economic recession many businesses suffer, their profits fall and they have to make cuts. In this climate there will be a rise in unemployment.

These factors can affect sales and prices and change the trendor direction they move in. So it is not easy to succeed on the market. Let's consider the sample of IKEA company. It is the Swedish furniture giant. It's continuing to do excellent business. IKEA has a global presence with stores in around 30 countries and it is continuing to expand opening new stores every year. IKEA's products are designed by IKEA Sweden, but manufactured all over the world. IKEA has suppliers in 65 countries. And its success depends on these local suppliers, so before opening a store in a new market, IKEA establishes a link with a supplier in that market. It chooses carefully; criteria for selecting suppliers may include proximity to raw materials, reliable access to distribution channels and low costs. So we can see the wise strategy of the company leads to success.

Any business is highly competitive. To measure competitiveness we are using an index. According to statistics the USA is at the top of this special index. It is because of continuous economic growth. Singapore comes in the second position as the most technologically advanced economy. Netherlands is the best competitor in Europe and takes fourth position, and this is because of successful economic restructuring.

There are some negative factors that can have an impact on business environment of a company. For instance, Germany has just 14th index as a result of a re-unification process. Brazil as well as which is very, very expensive, Greece and the Czech Republic finds itself in 37th position having problems with infrastructure. Ranking the index some other points are important. They are political stability, inflation, international trade, foreign investments, technology etc. So as you can realize many factors influence and business environment and can cause both positive and negative changes.

Дата добавления: 2015-08-03