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Business Environment Analysis Research Paper

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Updated: Dec 10th, 2021

Environmental research is generally considered as the central analysis tool for business activity. The aim of the paper is to analyze the business environment of the corporations such as Microsoft, Google, Apple, HP, and IBM. The analysis will be performed from the perspective of the demographic, sociocultural, political / legal, technological, economic, and global aspects. Considering the fact that all the analyzed corporations are American, the environmental factors will be similar for all the companies.

Demographic

The demographic aspect of the business environment entails several sub-aspects. Originally, these are the aging population and the approaching demographic crisis, as baby boomers are going to retire soon. The aspect of rising affluence points out the necessity of paying attention for more expensive technologies and production of the higher class goods. Nevertheless, the greater disparities in the incomes of the entire population will have to make the companies think of diversification, for satisfying the needs of all the income levels. (Sokuvitz, 2006)

The fact is that the matters of the changing composition of the ethnic background does not play a serious role in business performance, as these corporations have an opportunity to search and suit professionals from all over the world.

Sociocultural

These factors entail the issue of the increased involvement of women into industry. Thus, women become not only managers, accountants, secretaries etc. Considering the specifications of the analyzed companies, women become IT specialists more and more often. (Applbaum, 2005)

The companies often practice employing temporary and outsourced workers for performing temporary (seasonal) assignments. On the one hand it decreases the unemployment rates, on the other hand, the companies have to spend excess financial reserves for training these temporary and outsourced workers.

Another employment concern is the factor of the increased concern for fitness. It is fashionable and popular to be fit, so, companies often resort to encouraging their employees to attend fitness clubs. (Mendenhall, Kuhlmann and Stahl, 2001)

The increased concerns for environmental protection makes companies change the production and industry capacities for more environmentally safe.

Postponement of family formation is positive for employment policies, nevertheless, it may increase the development of the demographic crisis. Thus, when baby boomers retire, the young workers will find this time suitable for creating a family, thus interrupting their work for a while.

The aspects of the political factor generally entail the issues, which are closely associated with the tort reform, the socially oriented legislation and the acts, regulating the employment issues. Originally, these acts create a valuable environment for the employees, as they are more protected. As for the companies, they have an opportunity to get governmental support and tax compensation for employing physically disabled people. (Blenkhorn and Fleisher, 2005)

As for the matters of taxation, it should be emphasized that these rules have become a bit stricter, nevertheless, the analyzed companies have nothing to worry, if they are exemplary taxpayers.

Technological

These aspects are of various natures. The emergence of internet, and expansion of the global network aspects have become the most positive and valuable factors, which promoted the development of business. Along with the elaboration of new materials, the development of computer aided design and manufacturing systems increased the progress, and helped to simplify the efforts by engineers and designers. Nevertheless, the matters of global warming have become the restricting factor, as the increased requirements are issued for the manufacturing norms and standards of the materials.

Economic

Interest rates. The growth of the interest rates is negative for those companies who are closely cooperating with banks. All the corporations, mentioned in the paper, have sufficient autonomy reserves and capabilities for the relatively independent acting.

The problem of the unemployment rates is partially resolved by the practices of temporary workers and outsourcing. These matters have been already described. The related matter of the consumer price index is closely associated with the matters of the increasing levels of income within the population. It is the great opportunity to increase the amount of non budget gadgets and manufactured production.

Trends in GDP and Changes in stock market valuations are the matters of the national economy. These issues encourage the development of production and manufacturing within the analyzed corporations.

Global

The global issues, which are mainly associated with the global trade and expansion of the economics of the eastern countries, encourage the development of the economic and business performance of the regarded companies, and expand the cooperation with India, China, Japan and other countries.

Activities of the organizations like NAFTA, ASEAN, IMF are claimed to regulate the economic relations of the countries with other States and multinational corporations.

Analysis of the Factors

Microsoft Google Apple HP IBM
Demographic
  • Aging population
Negative Negative Negative Negative Negative
  • Rising Affluence
Neutral neutral positive positive Positive
  • Ethnic composition
Neutral Neutral Neutral Neutral Neutral
  • Disparities in income levels
Neutral Neutral Positive Positive Positive
Sociocultural
  • Women in the workforce
Positive Positive Positive Positive Positive
  • Temporary workers
Positive Positive Negative Negative Negative
  • Fitness
Positive Positive Positive Positive Positive
  • Environment
Negative Negative Negative Negative Negative
Political / legal
  • Tort reform
Neutral Neutral Neutral Neutral Neutral
  • Social acts
Positive Positive Positive Positive Positive
  • Employment acts
Positive Positive Positive Positive Positive
  • Taxation
Neutral Neutral Neutral Neutral Neutral
Technological
  • Development of technologies
Positive Positive Positive Positive Positive
  • Global warming and pollution
Negative Negative Negative Negative Negative
Economic
  • Interest Rates
Negative Positive Positive Negative Positive
  • Unemployment
Negative Negative Neutral Neutral Neutral
  • GDP
Positive Positive Negative Negative Neutral
Global
Global trade Positive Positive Positive Positive Positive
Organizations Positive Positive Positive Positive Positive
Eastern economies Positive Positive Positive Positive Positive

Bibliography

Applbaum, Kalman. “Survival of the Biggest: Business Policy, Managerial Discourse, and Uncertainty in a Global Business Alliance.” Anthropological Quarterly 72.4 (2005): 155

Blenkhorn, David L., and Craig S. Fleisher, eds. Competitive Intelligence and Global Business. Westport, CT: Praeger, 2005.

Mendenhall, Mark E., Torsten M. Kuhlmann, and Günter K. Stahl, eds. Developing Global Business Leaders: Policies, Processes, and Innovations. Westport, CT: Quorum Books, 2001.

Sokuvitz, Sydel. “Global Business Communication: The Design and Delivery of MBA Instruction.” Business Communication Quarterly 65.1 (2006): 56

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