Technological Forces

Almost daily, businesses are driven to rethink the business technology they use to reach customers, produce their products, and provide their services. When we refer to business technology, we mean digital tools such as computers, telecommunications, and the internet. The expansion of internet access to virtually every corner of the world has forced many traditional brick-and-mortar businesses into online sales. Consumers can conveniently shop at any time of the day for products and services without leaving their homes, their desks, or their phones. The disadvantage to businesses is that consumers are also able to compare competitors’ prices, benefits, features, and services. Ride-sharing businesses such as Uber and Lyft became successful in a technological environment where the use of smartphones is widespread.^[1] Today’s businesses have to be vigilant about spotting emerging trends, not only in technology but in the way consumers use that technology.

Businesses also have to consider how they will invest in developing new technologies to remain competitive. New developments in automation and artificial intelligence affect a business’ operations and what they produce. At the same time, businesses have to continuously assess their technology infrastructure and protect themselves by investing in cybersecurity.

Environmental Forces

Physical changes in the environment all over the world can have a significant effect on businesses. As the effects of climate change become more apparent, businesses have to contend with extreme weather and natural disasters. They also have to be aware in how they use limited natural resources such as fresh water. Some of these forces may present opportunities for businesses to create products and services that complement environmental forces. For example, rising temperatures caused by climate change present an opportunity if businesses can develop new cooling systems that reduce harmful emissions.^[2] At the same time, environmental forces may influence business strategy such as deciding where to locate new facilities.

Legal Forces

There is a minefield of laws and regulations that companies must deal with in order to stay in business. Legal developments in our culture at large, such as the legalization of marijuana or the strengthening of privacy laws, can and do have an enormous impact on the way companies do business, on everything from what companies sell to how their products are manufactured, labeled, and marketed. Volkswagen paid huge fines, because it falsified data about its cars’ emissions. Tide aired commercials not to promote the marvels of its laundry detergent, but to warn parents to keep the Tide pods away from children, who may be tempted to eat them. E-cigarette manufacturer Juul fought efforts to ban the sale of their products due to health concerns.^[3] To obtain an advantage, businesses can send representatives known as lobbyists to ask legislators to pass laws that are favorable to them.

---