Technological factors are variables that are being used for evaluating available alternatives with respect to technological capabilities. Organizations consider it an important tool for improving operations and functions. Technological factors are one of various external environment factors that affect businesses greatly and are also an integral component of the PESTLE analysis. In the present scenario, utmost dependence on equipment, technological factors can have more effect on business operation and success globally than ever before.
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How Technological Factors Affect Business Environment
Technology trends affect businesses on many levels. When an employee is efficient, he turns out to be productive. Additionally, when a business is more in touch with its present and potential customers, the more chance it has to build a strong customer loyalty base. Advancement of technology can make this possible. Strategic leaders are constantly looking for development and updates within the technological environment. In this way, they not only improve their operations but, they will also be well aware of business transformational phase. They will derive groundbreaking strategies to grow exponentially.
Technology Transforms Operations
The technological environment of business has changed the way in which businesses function. Advancements in information technology have almost taken over every department of the organization. Now, information is stored in data servers and cloud technology as against the old way of storing data in registers and files.
Furthermore, development of technology has also introduced digital marketing strategies through which companies are able to sell their products and services. Even the research and development R&D divisions in companies have changed its way of functioning and more advanced techniques in the development of products and services have been introduced only through technological advancements.
For example, Siemens and Boeing are hugely investing in the adaption of 3D printing technique for product designing. They believe that this will accelerate the designing process, reduces production cost as well as improves the effectiveness of designing.
Technology helps in Developing Marketing Strategies
Technology has brought in a transformation through which companies collect, record, retrieve and utilize data and which also helps them in coming up with groundbreaking business strategies. Through available data, companies are able to monitor and evaluate customer trends and their demands for a particular product. Thanks to the development of information technology, businesses can understand consumer behavior and conduct a macro environment analysis and develop marketing strategies accordingly.
Technology is not only useful for collecting and using data but, it is also being used by organizations to analyze data and make meaningful conclusions as well as informed decisions. Having more focus on the customers, business strategies will certainly prove out to be effective for the success of an organization.
Negative Impact of Technology on Business
Technological environment imposes positive effects on a business. Internet makes the communication process smoother and easier. Despite all the pros, technology has on the business environment, it also imposes some negative impacts as well.
Business Relationships. Internet technology like Skype and other chat rooms have made it possible for businesses hold meetings without having all the parties be physically present at the same place. This type of meeting is less personal as compared to a face-to-face meeting. In this way, the personal aspect of business relationships tends to reduce. Lack of physical proximity has reduced brainstorming and another form of communication which involves personal touch.
Brick and Mortar. Advancement in e-commerce technology holds a negative impact on brick-and-mortar stores. Small-scale businesses are finding it very difficult to compete with both online and larger businesses in the industry that are operating both in person and on the internet. This advancement in the technological environment of business eventually forces small organizations to go out of operation.
Examples of Technological Factors
Regardless of what your company is selling or offering it will be benefited immensely by using different types of technological factors.
- Internet: almost every business today has a website which helps them in making and maintaining a global presence. Utilizing the social media platform businesses can easily communicate with their targeted audience. In addition to this, through internet technology, you can also easily communicate with your employees, clients and co-workers in other countries.
- Automated Process: Automating various production lines allow companies to replace human unskilled tasks with completely machinery ones. This benefits the company by reducing the cost for manufacturers, suppliers, retail stores as well as other parties involved. This factor, however, imposes a negative impact on the employment level of an economy.
How Technological Factors affecting Tesco
Tesco is a British multifaction and merchandise retail company. Technological advancement brings Tesco new opportunities.
- Firstly, started FRID retail technology and added FRID tags to its product range. RFID technology automated administrative task like stock counting.
- Secondly, customers can pay as they want. Tesco launched PayQwiq a mobile payment platform application in more than 524 stores. Consumers can download the PayQwiq app and linked Clubcard or NFC technology. It allowed customers to pay for their shopping and get loyalty points.
- Thirdly, "scan as you shop" are checkout points that provided convenience for customers and minimized labour cost.