Environmental factors
Environmental factors cover two main aspects:
The physical conditions that a business has to deal with, such as:
- climate change
- weather
The green credentials of global business, including:
- recycling
- pollution
Physical conditions
The weather can have a major impact on a firm鈥檚 sales:
- many products and services are seasonal
- good summers mean the increase in sales of fizzy drinks and sun tan lotion
- bad weather can cause disruption to deliveries which could lead to a business being unable to fulfil customer orders
Major natural disasters can have devastating impact on companies. The car firm Toyota was badly affected by the tsunami that struck Japan in March 2011. This, along with the nuclear crisis at Fukushima, caused massive disruption to supplies and production. Toyota and many other leading Japanese firms will be dealing with the effects for many years to come.
Green credentials
Being a 鈥榞reen鈥 firm is also important.
- firms that recycle goods will attract customers who want to buy from companies that are environmentally friendly
- firms that work to minimize their carbon footprint or to cut down on pollution to rivers and the environment may also be more attractive to customers who are interested in the environment
Causing environmental damage may have a negative impact on a business. In 2010, an explosion on a drilling rig operated by the gas and petroleum company BP resulted in 210 million gallons of oil being spilled into the Gulf of Mexico. This caused extensive damage to the Gulf鈥檚 wildlife and marine life and was disastrous for BP鈥檚 public image.