Internal and External Factors of any Company

Question: Write a reportabout the internal and external factors of any company. Answer: Introduction There are many internal and external factors which affect the working of any company. Every company has to consider these internal and external factors while formulating their strategies and goals and have to deal with them accordingly. These factors also have a high impact in the working of every company and is a major entity to be dealt with for of any company. The internal factors include Skills of the employees working for the organization, the quality of the staff who is working for the company as they are the face of any company, the structure of the company, systems of the company, shared values in the company which is erupted by the morals and values of the people in the company. Any company has to make sure these internal factors are properly handled by the company and is used in the best possible manner for the best interest of the company (Brinkman, 2014). There are several external factors also which affect the company like political factors, economic factors, technological factors and environmental factors. In this case study we will study the company Starbucks and understand how these internal and external factors play a major role in the company and how they impact the working of the company. We will understand the possible relevance of these internal and external factors and its current influence and future influence on the co mpany (Lu, 2013). Starbucks is a very well-known brand in the market of coffee makers and is also considered as one of the top preferred coffee brands all across the world. It is also one of the Fortune 500 companies and have develop a large customer base for itself. It deals in both hot and cold beverages. It also deals with snacks like pastries, sandwiches, etc. It is also dealing with sale of beer and juice lately. The company has to deal with many factors which affects its business and has to take necessary steps accordingly. Potential sources of internal influences: Skills: In terms of skills, it is very important that the employees of any company should have adequate skills to carry out their job in a proper manner. It is true for the food and beverage industry. Big names in the food and beverage industry has presence all over the country across different nations. It is very important that the quality of product and services has to be identical and of good quality. To ensure this it is very important that the employees are highly skills in their work and perform their work with total commitment. The margin of error in such sectors is very low. Staff: All of know that the staff of any company is the face of the company. They are the people who directly communicate with the customers and forms an image of the company in the eyes of the customers. Structure: The structure of any company decides how decisions are being made in the company and how effective is the communication across the company. If the company has too bureaucratic structure then the communication takes a lot of time and there are too many layers to cross before taking any decision. Systems: The system which is followed in any company do also hold much relevance in the functioning of the company (Karakowsky, 2015). Shared values: The values of any company do have a high impact on the working culture for any company. It is very important for any company to hold the right values and encourage the employees to follow them. Internal influences and their possible relevance to the organization The factors discussed above do hold a major relevance in the organization Starbucks. For example skills is one of the factors discussed. For Starbucks to maintain a high quality of product as well as service it is very important that the employees are properly trained and skills to perform their tasks with perfection. At the same time, it is important for Starbucks to hire the right kind of staff so that it is easy to train them and they have highest degree to dedication towards their work. Maintaining the brand value is the most important task for the company which are in the hands of the staff working for them. Then comes the structure of the company Starbucks which has a flat one. This helps them to make decisions instantly and to serve their customers in the best possible manner. Their main aim is to give their customers a great experience so they work for providing the best ambience, comfort and best coffee. The system of working in Starbucks also has a very good way of handling their work and maintain the served quality (Wetherly, 2014). The company follow high moral values and imbibe the same in their employees. They have a vision to focus on profit of its stakeholders and carry the objective of maintaining the strongest brand name. They aim to provide the best coffee experience to their customers. External Factors affecting Starbucks Political factors: for any company it is very important to understand the political factors of any region before expanding to any new geographical regions. The political parties of different regions setup different entry hurdles for the companies to do business on their land. The hurdles has to be overcome by the companies if they want to do business on foreign land and for this they need to take care of maintaining a good relation with the political parties of different regions and abide by their setup rules (Leih, 2014). Economic factors: This is yet another important external factor which every company has to keep in account while doing business as this has a direct impact in the sale of the company. For doing business in any sector it is really important for the company to understand the economic condition of the potential customers over there. According to the disposable income of the potential customers, the companies should setup their business and target the customers. This is a very important aspect to be considered before finalizing any expansion strategy by any company. There are various indicators which depicts the clear picture of the economic condition of any land. These factors include FDI, GDP, inflation, taxation system, etc. (Nobles, 2013). These are some of the financial measurements which has to be favorable for the companies before they enter any geography. Social: Another important external factor that needs to be considered by any company for doing business is to understand the social practices and social taboos in any market. There are many entities which form the social factors for any region which includes culture of the people staying over there, social environment of the people, how the society perceives different things and their reaction to new products and brands. The company has to do some market research to understand the reaction of the customers towards their products and services. Technological: Technical advancement is yet another requirement for any company before they enter a new market. The new market should be technologically advanced with new innovation under the belt, including latest technologies, expertise resources in different fields, etc. adding to this, the new market should also be in a position to make the best use of the latest technologies to ensure it is put to use to increase the output of the company (Guay, 2014). Environmental: the environmental factors should also be favorable for any company who wish to succeed in the market. They have to consider the environmental conditions of the market. For example if there is a market which is prone to earthquakes or drought, then the company will hesitate to invest in such an area. The region should not be prone ti natural disasters, natural calamities, etc (Grhan, 2016). Legal factors: Along with political differences, different markets have different legal requirements and the company has to follow those legal commitments and work accordingly. These regulations are setup by the government of the region and all the companies has to follow these guidelines while doing business in the region (Babajana, 2015). External Influence and their possible relevance to the organization (Starbucks) Political factors: The main market for Starbucks is the USA market and they have done a good job to remain aligned with the political situation there. In fact the political situation in USA supports the growth of Starbucks in its States. This factor does hold a relevance for the growth of the company. If the political situation in any region does not encourage foreign investment in food and beverage industry, then it will be an issue for Starbucks but till now the company did not have to face any such difficulty (Qian, 2016). Economic Factors: Starbucks has already a very good presence in the US and European market and they are doing really good as the economic condition in US and Europe is good. They have now started to expand their business to the ASIA region and they are doing a good job here as well as these developing countries have also started to improve their economic factors. The disposable income for the people in the major markets like US and Europe is high and hence Starbucks is enjoying these markets (Zhang, 2015). Social Factors: Again, the social and cultural factors for US and Europe is favorable for the company Starbucks and help them to grow in these markets. The lifestyle, attitude, education and customer preferences of the people of US and Europe makes Starbucks as the best choice for them to grow. Most of the people choose Starbucks as their vendor for buying coffee every day and hence this is a habit which Starbucks has been successful to seed inside their customers. The customers economic conditions and willingness to spend over coffee has helped to grow Starbucks (Loong, 2014). Technological Factors: Well, Starbucks needs to use the advanced technology in the agricultural sector as this is the area which needs improvement so that the quality of the seeds and the time in which we get them gets better. In rest of the areas the company is doing well in using the latest technology and maintaining food Customer relations (Pangarkar, 2015). Environmental factors: There are a lot of natural disasters happening around the globe so the company needs to be careful enough in selecting their target country for expansion (Morais, 2014). Legal factors: The legal rules and regulations in US and Europe is in the favor of the company and they do not have to face much difficulty (Jang, 2013). Future relevance of the factors identified These factors identified also have a future relevance in terms of the company performance as these factors will hold relevant in the times of come as well. The company has to build their future strategies keeping in mind these factors and they have to plan accordingly (WORKS, 2016). For example before extending to a new market in future the company has to keep in mind its political situation, economic situation, environmental status, etc. References Brinkman, J., Navarro, I., Harper, D. (2014). Unlocking the business environment. Routledge. Lu, F. (2013). Enhancing Cross-cultural Competence of Advanced Chinese LearnersStrategies in Teaching Business Chinese at the College Level. Karakowsky, L., Guriel, N. (2015). The Context of Business: Understanding the Canadian Business Environment. 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