External Influences

External Influences

• New Technology:– New business opportunities– Creation of substitutes– Opening up of new markets– Technical progress in foreign countries– Productivity– Ways of working– Communication– Cost of investment versus return

External Influences

• New business opportunities:– Within the same industry?

(Core business)– Totally new markets/opportunities– Amount of investment needed– Market research – do consumers need the

product?

External Influences

• e.g. Canon – core business, optical technologies: – cameras, photocopiers, scanners, projectors, calculators,

binoculars, digital cameras, printers, projectors

• New markets – Discmans? DVD players? Flat Screen TVs? Plasma TVs?

• Risk versus gain

External Influences

• Threats:– Cheaper alternatives from abroad – CFC

technology, bio-technology, computer and micro-processor technology (especially China?)

– Rivals producing substitutes – PS2, X-Box and Game Cube

• How to react?

External Influences

• Working practices:– Technology and productivity –

impact on workers, morale, motivation?– Implications for ‘old’ plants (e.g. Longbridge versus

Sunderland?– Flexible working – working from home,

hot desking, mobile computing (wireless networks) video-conferencing

External Influences

• Communication:– Faster?– More efficient? – if so why have some firms

banned the use of e-mail at work for any purpose?

– Impact on motivation, morale and worker attitudes

– To what extent does the message get through?

External Influences

• Changing Social Attitudes:– Social ‘class’ – changing socio–economic groupings– Links with behaviour and demand (e.g. growing number of

pensioners; those who smoke or drink certain types of alcohol)– Changing tastes – concern for ‘green’ production, attitudes to fur,

wine versus beer, vegetarians (long term or short term?)

– Changing lifestyles – convenience and fast foods, use of freezers, use of cars, amount of leisure time and how it is used, etc.

External Influences

• Changing income structures– Distribution of income– Regional distribution of income– Impact of government taxation

on disposable incomes– Relative income elasticity of demand for different

goods and services