Business Environment and Company Elements

Specific Environment of a Company

Suppliers: Businesses need inputs for their production process.
Customer: Recipients of goods and services provided by the company.
Competition: (No description provided)
Financial Institutions: The most common are banks that lend money to companies in exchange for interest.
Government: Municipalities. To open a new facility, it is necessary to apply for a license.
Labor Market:
- Labor Costs: They are a major source of the company’s costs.
- Qualification: This is important in the technology sector and service companies (need for qualified personnel, therefore, be well placed).
Community: Because it has a particular social structure, more or less concern for the environment and individual lifestyle.

Economic: Unemployment rate, inflation, interest rates, etc., determine the wages they pay, the cost of a loan, the development of sales, etc.
Technology: Technical advances in machinery, electronics, and new technologies make the job easier for businesses, reduce costs, and open new business opportunities.
Political-legal: Legal rules on taxes, employing workers, mandatory technical specifications, etc.
Demographics: Population age, sex distribution, income level, etc., influence the location of the company and to whom their products will be directed. Example: Neglect of rural communities has been an opportunity for many companies.
Socio-cultural: Lifestyle, food habits, religion, etc. Factors that influence people’s behavior and, consequently, affect their consumption habits.
Environmental: Damage from pollution, climate change, etc. Companies attempt to minimize environmental impact.

Employees: Labor
Employer: Coordinates and organizes all the productive act. Assumes the risk of corporate act.

Natural Resources: These are raw materials and other resources obtained directly from nature.
Physical Capital: Unlike natural resources, capital has been obtained by the action of individuals.
Intangible Items: Those that have no physical representation (a trademark, a patent).

Creation of Value: New gadgets, mobile, etc.
Social Function: The companies provide the necessary income to live, through wages paid to employees or the benefits that their owners derive. Technology and innovation move.

Maximum Benefit (Income – Expenses)
Growth: Reinvest profits to grow and increase their participation in the market and, so in the future, to have a good position.
Customer Satisfaction: Customers are essential, and we must treat them well so they are satisfied and trust us.
Quality: Not only in products but in the whole process of production and distribution.
Survival: In a period of crisis, in a delicate situation, the company only wants to stay and wait for everything to be normal.

Consumer Products: Aimed at meeting the needs of a personal nature and not integrated into a later production process. Can be long-lasting or direct consumption.
Industrial Products: Are made by companies in order to incorporate them into their production process. They can be raw materials, components, or production equipment.