Analysis of the External Environment of Business
-Technological-
A ?business' is commonly defined as an organisation which provides goods or services in addition to transforming input into output. Its objectives can either be profitable or non-profitable. One of the main requirements that must be fulfilled for a business to exist is that it must act and react to activities and occurrences beyond that of the organisation. These factors that happen outside of the business are known as external influences or factors. They have a major influence on a business with respect to the main internal functions and occasionally their objectives and strategies. However, the overriding factor that affects most business is the degree of competition between themselves and another business that provides the same product or service. Other significant influences are social, legal, economic, political and technological factors.
Technology is defined as ?the sum of knowledge of the means and methods of producing goods and services' (Penguin Dictionary of Economics- The Business Environment, Worthington and Britton). It is also ?increasingly science based, encompassing things like chemistry, physics and electronics, and refers to the organisation of production as well as the actual techniques of production itself.' (The Business Environment-Worthington and Britton)
The major technological factor that affects business is technological change, in particular, the rapid pace of change in production processes and product innovation. As a result of this, new products are introduced, adjustments to the organisation and method of production are implemented, alterations to the quality of resources and products are made, and new ways of distributing the product ...