Question

Consider a business that you frequent (for example, a restuarant, grocery store, etc.) and review the six aspects of the external environment discussed in the text. Create a list of factors in the external environment that could affect the management of the business you selected.

Answer 1

• Outside influences that can impact a business. Various external factors can impact the ability of a business or investment to achieve its strategic goals and objectives. These external factors might include competition; social, legal and technological changes, and the economic and political environment.
• The global economy is one of the biggest external factors that will, at some time, affect your business. Market fluctuations based on politics, terrorism attacks, wars and currency devaluation eventually trickle down to most commercial enterprises.
• Interest rates, the availability of credit and consumer loans are external factors you rarely can control.
  
• If man could control the weather, vacation resorts would know exactly when to charge the highest room rates. Storms, tornadoes, hurricanes and wildfires are outside your purview of controllable business factors. In addition to the direct impact a storm may have on your ability to open your doors at any given time, widespread weather events often carry a substantial trickle-down effect to a wide range of businesses.
• Zoning laws, highway construction and housing development are particularly important to retail establishments, restaurants, manufacturers and other businesses that rely on a location for success. Changes in the local infrastructure may prove either disastrous or fortuitous to your company.
• Government regulations such as those that affect the environment or communication are beyond your control and could have a direct impact on your business.
  
• Celebrities who become advocates for a cause or decide to boycott a certain business practice can start a trend that could seriously affect your business if you're on the wrong side of the trend.
• Now,external factors effecting a restaurant business could be-
• Consumer Preferences-Ever-evolving preferences involving what consumers want to eat and when they want to eat it pose significant challenges for quick-serve restaurant managers. Trends such as healthier eating habits and a move away from traditional meal times impact aspects of management such as menu choices, hours of operation and staffing requirements.
• Health Issues-Increasing pressure from the federal government and advocacy groups to provide consumers with ingredient, nutrition and calorie-count information means managers must spend more time considering how their food is prepared. For example, addressing concerns about obesity or genetically-modified foods may require managers to change menu items and ingredients to satisfy health-conscious customers.
• Managing Employees-Personnel factors pose a variety of ongoing challenges and issues for quick-service restaurant managers. The low wages typical of the quick-service industry usually translate into high turnover rates and unmotivated employees. Reducing attrition and helping employees get excited about their jobs often requires a flexible and creative approach. To keep workers motivated and make them feel valued, a manager must also come up with different levels of advancement opportunities such as shift manager or crew chief.
• Good location and infrastructure is another factor that has an impact on restaurant business.Having a central location,and abiding by the government laws in owning a legal place also has an impact on business.