ExerciseTwo-Short - Running Head BMG 2 1 Shayne Short...

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Running Head: BMG 2 1 Shayne Short Liberty University BUSI 690-D10 November 22, 2016
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BMG 2 2 External Factors of Demand There are many factors that affect the way a company can function, with one of those factors being external factors. The external environment of a particular organization are factors that can, and will, affect the way an organization can function [SuY16]. These factors can also affect the economic trends and cycles and how the company responds to such things as stated before. Some examples of external factors are things such as: price, customers, government, and competition. Price can influence the way a company decides to change their business model due to the fact that the products or services will all have a different susceptibility to the price changes, both either positively or negatively. The company must find an equilibrium on the price they chose to sell their product or service. If the price is set too low, the consumer might think that the product is cheaply made and not worth purchasing. On the other hand, if the product price is set too high, the product or service might not saturate the market as quickly as hoped. Another external factor that a company can actually influence is their clientele. This is due to the fact that through marketing and advertising, a company is able to influence their customers. The main goal for this factor is to get the consumer to purchase the company product or service.
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