External Environmental Analysis Remote Environment Marketing Essay-
Economic factors discuss about the influence of economic that will affect the profitability of companies. From the case, the economic downturn had affected Best Buy’s profit. During economic recessions, consumers have less disposable income. Therefore, their purchasing power is lower. Their consumption pattern will change and prefer to buy necessities goods than discretionary goods. So, it will become a problem for Best Buy that sell discretionary products.
Social factors
Social factors is discussing about belief, value, lifestyle of persons. Cultural is an important element to analyze in social factors. From the case, Best Buy had used customer centricity model to conduct their business. They had study the customer needs and behaviors. Best Buy had focused on certain customer groups such as affluent suburban families and trend-setting urban dwellers. Nowadays, internet purchasing had become a trend and lifestyle among consumers. They intent to spend their time shop around the internet than visit the retail store.
Technological factors
Technological factors discuss how technology change will influence the business. From the case, technology improved will shorten the product life cycles and decrease the prices. As shown as the case, when shorter product life cycle, training cost will increase.
Technological factor also pose a threat to the Best Buy. Online marketplace had become a threat for retail industry. Consumer can buy goods from internet rather than visiting retail store like Best Buy. Furthermore, the consumers are able to compare the product price, quality and getting more information by using the internet.
Ecological factors
Ecological factor always discuss about the relationship between business and the ecology. Best Buy had encourage their customers to recycling their appliances and electronics by launch a recycling program. It is used to reduce waste and reduce the pollution to the ecology. Furthermore, Best Buy also had earn the LEED certification because their store’s design is green and achieved LEED standard (Cheeseman 2009).
