The composition of the population in any given area
Important demographic issues that businesses will need to monitor
Population Size
Population Composition
Population Location
Wealth
Education
Health
Population growth/decline
Result of a combination of factors, including birth rates, death rates, immigration and emigration
Population composition
Often relates to the age of the population, which is usually affected by the relative sizes of the birth and death rates
Economic growth
Often results in higher disposable incomes for a population, leading to increased demand for goods and services
Educated workforce
A key driver of economic growth. Increasing standards of education not only mean that consumers are more discerning, but also allows the expansion of high-tech businesses that need skilled staff
In many western countries, the population is becoming increasingly overweight, placing greater demands on healthcare providers
Social trends
How society changes over time
Key ways in which social change occurs
Social structure
Values
Attitudes
Tastes
Social class
A group of people who have the same social, economic or educational status. Changes in social structure can have a significant impact on organisations
Social values
The accepted behaviors and norms that help to bind a social group together
Attitudes
Represent a person or group's like or dislike for something. They are positive or negative views of a person, place, thing or event
Taste
An individual's personal preferences or patterns of choice. On a social level, tastes may be linked to the social group that an individual belongs to
Social influences that should be monitored according to Johnson and Scholes
Population demographics
Income Distribution
Lifestyle Changes
Consumerism
Social Mobility
Levels of Education
Examples of government policy responses to social and demographic change
Population structure - tax advantages and financial incentives to encourage more children
Housing - plans for new housing developments
Employment - demand for childcare services and after-school clubs
Health - bans on tobacco advertising
Environmental factors
How an organisation affects or is affected by the world around its physical environment
Ways a business can affect or be affected by its physical environment
Business effects upon the environment - Pollution, Wastage of resources, Destruction of natural habitats, Loss of plant and animal species
Environmental effects upon the business - Changing climate, Lack of resources, Loss of sales, Legislation
Ways businesses can limit damage to the environment
Redesign of products to use fewer raw materials
Reduction in packaging on products
Recycling
Improving energy efficiency
Careful production planning
Sustainability
Organisations should use resources in such a way that they do not compromise the needs of future generations
Technological changes
Can affect a firm's organisational structures, product developments, marketing, and production changes
Impacts of technological change on organisational structure
Administrative and managerial roles replaced by IT systems
Production roles replaced by robots and automated production lines
Improved communications allowing more flexible work arrangements (WFH)
Resulting in downsizing and delayering
Downsizing
Reducing the number of employees in an organisation without necessarily reducing the work or the output
Delayering
The process of removing layers of management
Outsourcing
Contracting out aspects of the work of the organisation, previously done in-house, to specialist providers
Types of outsourcing
Total
Ad-Hoc
Partial
Project Management
Advantages of outsourcing
Supplier may have specialist skills and knowledge
Fixed fee contract removes uncertainty about costs
Outsourcing may improve business flexibility
The supplier may be more efficient at running the IT function, leading to cost savings
Disadvantages of outsourcing
Difficult to bring IT back in-house at a later date
Outsourcing may lead to the organisation being locked into an unfavourable contract with a poor quality supplier
Outsourcing may allow third party suppliers to gain access to the organisation's confidential information
The organisation cannot obtain competitive advantage from its systems
Technological advances
Allow many products to become increasingly more sophisticated
Emergence of substitutes
E.g. the cinema industry went into decline in the early 1980s as a result of the emergence of the video
Business model completely transformed
E.g. online banking has reduced barriers to entry allowing supermarkets, among others, to move into banking
Customer support
Often provided by call centres in countries where wage rates are lower, but some firms have reinstated call centres into their home countries after concerns over customer care
Use of robots and automated production lines
More efficient scheduling and monitoring of production, resulting in lower inventory levels, higher quality, elimination of bottlenecks and lower costs
Impacts of technological change on marketing
Pricing - monitoring competitors' prices
Promotion - use of websites, viral and banner advertisements
Distribution - selling direct to a wider range of potential customers
Market research - use of customer databases
Impacts of technological change on society as a whole
E-commerce - online advertising, ordering, financial transactions, EDI