SOCIOECONOMIC

FACTORS
AFFECTING
BUSINESS AND
INDUSTRY
 SOCIOECONOMIC FACTORS
AFFECTING BUSINESS AND
INDUSTRY

Socioeconomic factors are characteristics that define the quality of life in

a society. They influence the behaviors, attitudes, trends, tastes and
lifestyles of individuals. In fact, the different class segments of the
society that is, upper class, middle class and lower class are attributable
to the socioeconomic factors. Education, income and occupation are the
main parameters of socioeconomic status, according to the American
Psychological Association.

20XX PRESENTATION TITLE 2

 INCOME

Income is the amount of money individuals earn from their daily economic
activities, be it employment, business or investments. The availability of
disposable income influences spending habits. Your customers are likely to
purchase expensive or luxurious items whenever there is an increase in their
disposable incomes. However, when income is scarce, customers tend to
restrict their spending to essential items. Income fluctuations occur as a result
of changes in the rates of economic growth. When the economy is doing well,
employees earn pay hikes, businesses post record sales, financial markets
thrive and mutual funds grow. The opposite happens during periods of
economic decline.

20XX PRESENTATION TITLE 3

 EDUCATION

Education equips members of the society with the skills and knowledge they
require to be employed in different jobs and professions. The standards of
education in your society depend on the availability and accessibility of
educational amenities. A society that has a well-educated population
flourishes because individuals are employable in well-paying jobs. The
literacy levels in your target markets also influence your scope of
interactions with customers.

20XX PRESENTATION TITLE 4

 BUSINESS VIABILITY AND ITS EFFECT TO
THE COMMUNITY

The goal of community sustainability is to establish local economies that are

economically viable, environmentally sound and socially responsible.
Achieving this goal requires participation from all sectors of the community,
both to determine community needs and to identify and implement innovative
and appropriate solutions. Viability is defined as the ability to survive. In a
business sense, that ability to survive is ultimately linked to financial
performance and position. A business is viable where either: it is returning a
profit that is sufficient to provide a return to the business owner while also
meeting its commitments to business creditors; it has sufficient cash
resources to sustain itself through a period when it is not returning a profit.

20XX PRESENTATION TITLE 5

 OCCUPATION

Occupation refers to the type of jobs people perform by virtue of their

skills, experiences or choices. You may be self-employed or work as an
employee of an individual or organizational entity. The different types of
occupation dictate the income earned by people in the society. High-
salaried individuals are normally associated with skilled occupations.
Self-employed individuals owning successful businesses also generate
huge amounts of income. Unskilled occupations such as menial labor do
not pay much. Therefore, the ability of customers to afford the different
products you offer in your business depends on types of their
occupation.

20XX PRESENTATION TITLE 6

 OTHER FACTORS AFFECTING BUSINESS AND
INDUSTRY

1. Economic Conditions
Before creating business plans or when evaluating existing ones, it is
important to 'scan' the external environment. Is the environment
conducive to business you are going to establish or are there some
problems to be encountered in the future?

20XX PRESENTATION TITLE 7

 2. Social Environment

These forces are continually in a state of change. Social factors relate to

pattern of behavior, tastes, and lifestyles. A major component of this is a
change in consumer behavior resulting from changes in fashions and
styles. The age structure of the population also alters over time
(currently we have an ageing population). An understanding of social
change gives business a better feel for the future market situation.

20XX PRESENTATION TITLE 8

 3. Government

Government is continually updating Laws in a wide range of areas, such

as consumer protection legislation, environmental legislation, health &
safety and employment law, etc. Businesses need to take a pro-active
approach and be ahead of these changes, rather than hurriedly making
alterations to products and processes in a reactive way.

20XX PRESENTATION TITLE 9

 4. Economic Changes

Economic changes are closely related to social ones. The economy goes
through a series of fluctuations associated with general booms and slumps in
economic activity. In a boom nearly all businesses benefit and in a slump
most lose out. Other economic changes that affect business include changes
in the interest rate, wage rates, and the rate of inflation. Businesses will be
more encouraged to expand and take risks when economic conditions are
right, e.g. low interest rates and rising demand.

20XX PRESENTATION TITLE 10

 5. Political Changes

Political changes relate to changes in government influence. In recent

years these changes have been particularly significant because as members
of the European Union we have to adopt directives and regulations created
by the EU which then become part of UK law.
Political changes are closely tied up with legal changes.

20XX PRESENTATION TITLE 11

 6. Changes in Technology

Changes in technology have also become particularly significant in the

post-millennium world. This is particularly true in terms of modern
communication technologies. The creation of databases and electronic
communications have enabled vast quantities of information to be
shared and quickly distributed in a modern company enabling vast cost
reductions, and often improvements in service. Organizations to be
aware of the latest relevant technologies for their business and to surf
the wave of change.

20XX PRESENTATION TITLE 12

 7. Environmental Factors

The location of countries influences on the trades that businesses do.

Adding to that, many climatic changes alter the of industries and the
way consumers react towards a certain offering that is launched in the
market. The environmental factors include geographical location, the
climate, weather and other such factors that are not just limited to
climatic conditions. These in particular affect the agri-businesses,
farming sectors and so on.

20XX PRESENTATION TITLE 13

 A viable business has great effects to the community. Some of this are:

1. It provides a community jobs in the business sector;

2. It produces taxable income for the community from both the business establishment and
the workers,
3. Government continuously makes Improvement in community infrastructures such as:
bridges, roads, sewers, water or electric to entice other business to invest in the community,
4. It contributes more opportunities for the people in terms of services such as improved
health; peace and order; social welfare, and so on.
5. It helps in the establishment of better schools, more businesses and even more jobs for its
citizens; 5. It leads to improved business services to the community;
6. It improves community life.

20XX PRESENTATION TITLE 14

Impact of Entrepreneurs and Community Development

Business entrepreneurs play a critical role in the development of the economy

as this is the key contributor to innovativeness and product improve- ment. It is
one of the important ingredients to the creation of new employments and in the
building of communities in ways of offering them jobs

20XX PRESENTATION TITLE 15

Recommendations in Maximizing Positive Impact to Community Most businesses in the
country have responsibilities to our community. It is their social obligations to help the
community through:

1. Divert a proportion of revenues to good and worthy causes for community development and
outreach programs;
2. Find creative ways to improve the life of the firms' employees and the community;
3. Establishment of linkage between business and community to thresh out some problems
regarding social and environmental issues and consultations;
4. Establishment of scholarship grants to poor but deserving students in the community;
5. Help build customer attraction, satisfaction and loyalty, at a time when customers are
increasingly exercising their right to choose;
6. Reduce risks of negative publicity, boycotts and tarnished public image:
7. Improve product image, brand name and reputation
20XX PRESENTATION TITLE 16
 MINIMIZING THE NEGATIVE IMPACT ON
BUSINESS

First Things First: Get Your Act Together

The first, and most important, step as your business engages in damage control associated with
a negative impact is to identify the problem and correct it at an operational or product
development level. Once the problem has been addressed, the possibility of repeat negative
feedback on the same issue is reduced and most likely eliminated.

Follow Up, Speak Up, Engage

The second step necessary to mitigate the damage caused by a negative online review consists
of engaging the aggrieved customer with a timely, relevant and contextual response that seeks
to provide the individual with both an explanation and a resolution.
20XX PRESENTATION TITLE 17
Let Time Run Its Course

The third step in reducing the negativity effect in your online or live transactions that have
been influenced by consumer feedback is to rely on the rule of recency and encourage new
customers who have experienced outstanding service or received superior products to provide
their feedback.
Responsible leadership requires that you establish risk-management plans so that the most
likely major negative events for your business have the impact of a temporary inconvenience
rather than a permanent shutdown and destroyed lives.

THE BASICS
1. Communication with those most directly impacted.
2. Access to Information
3. Have you provided accurate hazardous material and other safety documents to local
officials?

20XX PRESENTATION TITLE 18

 HOW TO STAY IN BUSINESS

1. Financing and Cash Flow

2. Backup Plans for Meeting Customer Needs

20XX PRESENTATION TITLE 19

 WHAT TO DO IF YOU’RE
IMPACTED BY A DISASTER
THAT HAPPENS TO
SOMEONE ELSE?

1. How can you best support your customer's continuity plans?

2. Do you have the financial strength to forego loss of orders and payments from customers for
months or more?
3. Do you or your suppliers have "alternate source" agreements to ensure that your needs are
met by a qualified source while your supplier recovers?
4. Tooling, well-guarded formulas, raw materials that meet your specs and process capabilities
and capacity are just a few considerations in managing supplier risk "alternate source"
agreements

20XX PRESENTATION TITLE 20