Possible responses to external influences

An external influence is a change outside a business's control, such as new technology, a new law or a shift in the economy. A business cannot stop the change, but it can respond by adjusting how it operates.

Adapting the marketing mix

A business may change its product or service to meet new customer needs, and change prices to protect demand or cover higher costs. It can change promotion to stress value, give customers information or target a different group. It can also change how products are sold or distributed so they reach customers more easily. For example, a small bike shop facing more online competition might add a repair service, promote it to local commuters and sell accessories through its website.

Changing operations, people and money

To improve efficiency, a business can change production methods, equipment or systems. It may train existing staff or recruit people with the skills the change requires. It can change suppliers, materials or components to control costs or meet new standards. It may also change staffing levels or working practices to cut costs or access needed skills.

Financial plans may change too: a business might delay investment, borrow money or manage cash flow more carefully. It can adjust stock levels or product ranges to match expected demand.

Planning the response

When a change is complex or outside the business's expertise, it may seek specialist advice from an accountant, solicitor or IT consultant. This costs money but can prevent expensive errors. A response may be short-term, such as a temporary discount, or long-term, such as buying new machinery. One response can affect more than one part of the business, so choices are linked rather than separate.