Monday, February 4, 2013
Relationship of Technological Economic And Geographic Forces
What is Technological, economic and geographic force
Technological,
economic and geographic forces are the external factors which are
uncontrollable in nature. The changes in these factors are not in direct
control of the company; this is where the Strategic Management helps
the company to incorporate the foreseen changes in the strategies.
Examples:
The
computer revolution, biotechnology, population shifts, changing work
values and attitudes, space exploration, exploitation of mineral
reserves and increased competition from foreign companies are examples
of opportunities or threats for companies. Other external opportunities
and threats may include the passage of a certain laws, the introduction
of new products by a competitor, a national catastrophe, change in
interest rate or currency exchange rates etc.
These
changes across nations create new consumer base that resultant
require/demand different product/ services, thus highlighting the
significance of strategic management. The basis of Strategic Management
is that firms need to formulate strategies to take advantage of
external opportunities and to avoid/ reduce the impact of external
threats. For this reason, identifying, monitoring, and evaluating
external opportunities and threats are essential for success.
Globalization has greatly increased the means through which nationals of one country actively take part in another country’s cultural, economic and political life Most organizations have experienced many changes in their external environment. Trend to achieve economies of scale and technological change in particular have increased the opportunities and threats in the marketplace globally. Technological change is major external influence on businesses and one that develops rapidly. The global market has forced business to focus more on how technology can be used for comparative benefits. Business now operates in an international market, where customers can check prices, products and services from many providers before choosing their supplier. The supplier can be located on the other side of the world, meeting its customers’ needs through effective use of telecommunication, logistics etc. Exposure to new customers, and greater competition has the increased the pressure on organizations to be more creative and innovative, and responsive to emerging global trends.
Globalization has greatly increased the means through which nationals of one country actively take part in another country’s cultural, economic and political life Most organizations have experienced many changes in their external environment. Trend to achieve economies of scale and technological change in particular have increased the opportunities and threats in the marketplace globally. Technological change is major external influence on businesses and one that develops rapidly. The global market has forced business to focus more on how technology can be used for comparative benefits. Business now operates in an international market, where customers can check prices, products and services from many providers before choosing their supplier. The supplier can be located on the other side of the world, meeting its customers’ needs through effective use of telecommunication, logistics etc. Exposure to new customers, and greater competition has the increased the pressure on organizations to be more creative and innovative, and responsive to emerging global trends.
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Author: Mohammad
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