What are the external forces in a business environment?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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Competition is the major external force in the business environment.  However, there are many others not listed in the previous answer.  The other external forces include:

  • Social factors.  For example, moral values affect the market for various products, making them popular in one country but not another.
  • Legal.  The level of government regulation impacts businesses.
  • Economic.  A business might be inversely affected (through no fault of its own) by a recession.
  • Political.  There can be political risk, for example, in trying to invest in a country with an unstable government.  The government might, for example, fall and be replaced by one that is interested in nationalizing your investment.
  • Technological.  A change in technology can seriously affect a business.  For example, companies that made film for cameras have had to adapt to a world where that is an obsolete product.