External business environment factors that would influence the business negatively

Explain five external business environment factors that would influence the business negatively.

  • Social/cultural beliefs of the people if the culture is against the consumption of the product being traded/if product being traded is against the values of the people.
  • Political effect;- Political instability may make business fail/high taxation/un conducive legal systems are not conducive for business.
  • Technological changes;- Failure to adopt high levels of technology may result to poor quality/low quantities.
  • Competition;- Cut throat competition may impact negatively to the business/closing down.
  • Lack of required suppliers – Business may experience shortages/irregular supplies.
  • Economic environment – purchasing power/ inflation/High interest on loans/tariffs by trading partners boast/lower demand for the products.
  • Legal factors – changes in laws/regulation may require new ways of conducting business/adjustments for business to continue/operation.
  • Lack of intermediaries to distribute goods to consumers/may not reach consumers/leading to loss of market.







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