1.Explain the Influence of Internal Environment of Business.

Topics: Economics, Money, Environment Pages: 3 (1184 words) Published: October 11, 2012
1.Explain the influence of internal environment of business. Customers: customers are obviously the key to sales. Managers must monitor customer needs and try to anticipate how these will develop so that they can meet these requirements effectively now and in the future. To help understand their customers firms are increasingly trying to gather information on them through mechanisms such as loyalty cards. By gathering data on shopping patterns and matching this to data on the individual shoppers firms can build up detailed pictures of their buyers and then offer them appropriate deals. Many firms are also trying to develop relationships with customers to help ensure they come back time and time again. Loyalty cards, frequent flyer programmes and frequent shopper incentives are all aimed at rewarding customers who buy a firm's product regularly. Newsletters, email lists and recommendations to online shoppers of what else they might be interested in are all ways of trying to build a relationship with customers. Of course, potential buyers usually have many choices and so may be able to use their bargaining power in relation to firms. The growth of the internet has enabled customers to search quickly for alternatives and compare deals more easily; this puts pressure on firms to provide better value for money or they will lose their customers. Suppliers: can they provide high quality products at a good price? Can they do this reliably in the volumes required? Have they got the flexibility to respond to a firm's demands? What is the bargaining power of these suppliers? How dependent is the firm on them? Does their approach to their staff and resources fit with your ethics? Firms must decide on issues such as who to use to supply them, on the responsibility it takes for these suppliers and on the terms and conditions it adopts. Some firms take quite an aggressive attitude towards their suppliers by trying to push down the prices and delay payments. Others view the...
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