Man is a social animal. Man started earning in different ways to earn his lively hood. He started business to earn benefits. Business earns benefits from the society where it carries out its activities.
A business is an organization or enterprising entity engaged in commercial, industrial or professional activities.
There are various environmental factors that affect the business in an economy, they can be divided as external and internal factors. In the report i will discuss about the external factors of business environment of telecommunication industry in the UAE .
EXTERNAL BUSINESS ENVIRONMENT
External Business environment is a set of forces that are outside the control and influence of a business and can have both positive and negative impact on the business. These forces are referred as the PESTLE factors (i.e. political, economic, socio-cultural, technological, legal and ethical influences). A ‘PESTLE analysis can be used to analyze a firms current and future environment as part of the strategic management process.
EXTERNAL ENVIRONMEMT ON TELECOM INDUSTRY
The development of telecommunication sector is based on various political reasons like government stability, taxation policies and many more policies, Social culture factors like the attitude and lifestyle of the people or behavior, level of education of the people, Economical factors like increase in high disposal income, cheap charges for using a network connection. This growth needs huge resources i.e. Capital and Human Resources. It analyses how the telecom industry manage the Human resource for the development of industry as well the benefits of its employee.
TYPES OF EXTERNAL FORCES
The external factors that affect the environment can be divided into five main categories.
This factor plays the most important role in the success and stability of the business. The part that relates to the government involvement, legal work is done here. It deals with the government activities, both directly and indirectly influencing the business activity. It depends on them whether they like the way the company is working, they can either let it continue or make it stop, and the company has to listen to them.
If the country is not stable, any industry or company cannot be assure or cannot have confidence and thus cannot even give confidence to the users or customers.
Etisalat here considers legality in all their actions. And follow the rules. They make sure that all their services will be useful in response to their social responsibilities.
Politically, Etisalat has tried to be helpful in the society. In fact, the company has established Etisalat Research that supports science and technological advancements.
It is the sum total of a society's beliefs, customs, practices and behaviors every society builds its own social environment, some are similar to other culture some are not.
An industry must adapt to its external social environment, or it will not survive. The company should be aware of the society's preferences and needs and wants. These preferences and needs and wants will be influenced by a population's beliefs ,values, and practices.
Telecom industry is very delicate when it comes to socio culture. Their work is to connect people through telecommunication. In Etisalat, whatever the nationality the employees are they make sure they value each and every opinion of them. Since, the company is competing globally; they take employees from different cultures to be in the company to help in the making decisions. The international managers have been able to create a positive relationship in the local managers. Moreover, the management of the company makes sure to treat all employees equally. the changes the lifestyle every now and then are to be noticed like the social networking nowadays is everywhere the Etisalat makes sure to fulfill
The wants and desires of the customers, for example introducing new social data plans.
Economic factors that affect the business are not in control of any business.
All businesses can be affected by large-scale economic trends. Accounting for trends in the economy makes managers make better decisions. Economic factors that commonly affect ETISALAT include employment, consumer confidence and inflation.
Consumer confidence is an economic indicator that measures the whole consumer optimism about the state of the economy. Confident consumers are willing to spend more money on the services of ETISALAT than consumers with low confidence that means when consumer confidence is high businesses are more likely to prosper.
When there is less employment people are going to spend more on the services of ETISALAT which is good for the growth of ETISALAT
Inflation when all the prices in the economy are rising it is inflation.
And if the prices are high then there will be less profit.
But if there is recession then ETISALAT will have to restructure everything that how they will retain their customers by introducing new offers, calling plans etc.
It is the business's direct competitors. Both want to achieve the target or certain goals. In the UAE there is only one competitor for ETISALAT and that is du
If the signal quality of du is much better than ETISALAT the people wouldn't choose ETISALAT they would hesitate to attain the numbers from ETISALAT.
And also if du thinks that the service of ETISALAT is going down then du can also give people who used to use ETISALAT they would offer them to keep the same number but switch to du and vice- versa.
du will directly affect the sales of ETISALAT.
If there is increase or decrease in the price of any one of them then the other one has an advantage and people will automatically attract to them.
A major environmental change that has taken place is the globalization of business. The world has become like a global village and business has become global in character. Organizations are venturing beyond national boundaries for business opportunities. Idea, building and then selling has all been divided, you think here and it is implemented in another country. Goods and services being sold internationally. It benefits the customers and increases the standard of living.
ETISALAT can deal or have an agreement with other countries and can do things in collaboration which will be beneficial for both of them.
ETISALAT provides connectivity to other telecommunications operators in the Middle East.
ETISALAT also operates in New York, London, Amsterdam, Frankfurt, Paris and Singapore.
ETISALAT has taken over PTCL in Pakistan by 26%
TECHNOLOGICAL FACTORS THAT CAN AFFECT THE BUSINESS OF ETISALAT
A change in behavior is demanded in technological factors with regard to traditional marketing.
Quick reactions are required in the development of technology in order to survive in an emerging competitive environment and keep up with new ideas, innovations, trends and services which other competitors might be offering.
Etisalat achieved a tremendous growth. Highest quality and functions are built in order to provide customer's demands in communication. Herein, the physical resources of the company are being monitored to maintain its efficiency to further enhance the organization's position to be the number one telecommunication industry in the global market
For each industry factors will obviously affect the companies and industries but a few factors will have a more significant influence on some sort of industry than others.
In some industries environmental factors will affect more than socio- cultural and the management of the company needs to carefully consider all the factors while structuring their strategy for the prosperous growth of the business.
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