Environmental Effects on Business

Environmental Forces Affecting Business

Written by: Devon Lemay C02456735

Written for: Mr. Lockwood, Frederick

November 19, 2014

To: Management Team

From: Devon Lemay

Subject: Managerial Environment

In today’s technology based world, companies are embarking on modernistic and unfamiliar tasks and trials. The bulkiest of trials a company is confronted with is keeping pace with the increased innovations in the technology realm. Barnes & Noble, the pioneer of bookstores, was the first to sell discounted books, advertise on television, and open a book superstore; unfortunately the era of consumers purchasing physical books has been superseded by the online market. Today’s perpetual decline in physical bookstores has forced management, employees, and suppliers to adapt and overcome the new challenges. Barnes & Noble refocused from the physical market and geared its business to the online market with the addition of barnesandnoble.com, the iPhone application, the NOOK, and eBooks. This report highlights recommendations and environmental forces that influence the organizational function of today’s businesses. The report focuses on the impaction of environmental forces on the Barnes & Noble business as well as how the real estate industry is shaped by the acting forces and motives why the industry must monitor these forces to remain on the path of a successful business.

External environmental forces that influence Barnes & Noble’s business can be divided into two categories: indirectly and directly; both are interactive forces that steer businesses to success or failure. To identify the forces, businesses utilize a process termed environmental scanning, the scanning collects information about the external environment to identify and analyze trends. Through this process a business can identify their organization’s best response to changing trends. The changes that are brought to light can range from legal forces to technological forces, this report includes: economic, technologic, and the willingness of a business to adapt to new innovations, ideas, and functions.

Economic conditions manipulate consumers, business, and suppliers. Recent economic struggles have forced many Americans to lose their jobs, have wages cut, limit their spending, and causing them to increase household debt. This was a result of businesses trying to remain afloat as they saw revenue decrease and expenditures increase. A recent study by the stateofworkingamercia.org, states that roughly twenty-seven million workers, one out of every six American workers, are either unemployed or underemployed. Since the recovery process has begun many Americans accrued large amounts of debt needing to be repaid, forcing them to look for the quickest and easiest way to save a dollar. A reduced amount of consumers willing to purchase a business’s products, numerous businesses have seen revenue decline drastically. As the business continues to lose income, it begins to lose the money to pay supplier contracts. This causes businesses, like Barnes & Noble, to cut back on ordering supplies, triggering fewer amount of books to be stocked in the stores, eventually leading to consumer dissatisfaction. Websites like, Amazon.com, which purchase products, such as books, singularly from the manufacture as ordered by the consumers are able to cut out the need for hiring suppliers. With this process added the business is able to spend less money ordering the products, allowing them to spend more money in areas such as advertisement.

Technology, the singular most prevalent interactive environmental force influencing Barnes & Noble’s business triumph, is growing monthly with the numerous new innovations. The influx of internet shopping has negatively affected the physical bookstores. According to PewResearch’s Mobile Technology Fact Sheet, fifty-eight percent of American adults own a smartphone, thirty-two percent own an e-reader, and forty-two percent own a tablet computer. As previously mentioned, economic changes influence where and how a consumer spends, but technology changes how a person lives and functions on a daily basis. One prime example of a new innovation that has impacted the way many Americans live daily is the creation of GPS devices. These devices can inform the person using it where the closest store is, how traffic is flowing, pre-cautionary warnings, and even where most people or “checking –in”. In the same study by PewResearch forty-seven percent of Americans with an average household income of less than or equal to $30,000 a year own a smartphone. Americans want, need, and thrive off of technology. These trends have influenced consumers to adapt to the ease of technology and purchase products like eBooks and audiobooks rather than the hardcopy books offered at stores like Barnes & Noble. Consumers live busy lives and shopping simply just takes too much time from their day, enticing the consumers to browse the internet and make online purchases. Social media is another aspect of technologic innovations that allows a business to be broadcasting to millions with a simple click of the finger. Consumers are able to voice their opinions publically to their friends, check-in, upload videos or pictures, or quickly compare multiple business products without traveling twice the distance between the two locations. Technology can either give the business the opportunity to be successful or to bring the business down.