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There are many factors that affect the international trade in the United Kingdom. Huge competition from multinational companies also affects the local companies also affects the local businesses in UK. There are global factors that affect to the business organizations in a direct way as well in indirect way even though global factors are part of External Environment.
United Kingdom’s global factors are as follows.
Social factors: These are the factors that affect the social environment of the UK. The social factors determines habits, behaviour and life style of the people in UK. The spending power of people in that area. The spending power of the people is also considered. The age and gender of the power also affects the buying power of the people. The different cultural believes also affects the business in UK.
Political Factors: These factors deal with the policies of political environment in UK. The business of the company in UK is affected by the rules and regulations that are formed by the government. The companies functioning in the UK market have to follow all the rules of the European Union. The political structure of the country affects the functioning of the company.
Economic Factors: Economic factors are affected by the changes in the international market. When the income of the people increases their living standard increases. With the increase of the living standard the people the spending power of the people increase. This increases the demand of the product in the market and because its production increases. The economic factors that affect the overall business activities are interest rates and inflation.
Technological Factors: These are the factors that affect the innovation and the creativity in the Business Organizations. The advancing technology reduces the labour work and lowers the production cost. The companies which improves their technology stands at a competitive advantage that the others. The major factor affecting the company these days is technology. Whoever doesn’t adopt to the technology will not be able to survive in the market in long term.
E.g.: Codec Camera parts.
Legal Factors: These are the legal factors controlling the country which also bind upon the company. For smooth running of the company it is important that it follows all the rules and regulations of the government. The business organizations should always keep an eye on changing political decision because it can be affected in should term and long term as well
Global factor give the opportunity to make international trade which is boosting UK economy. In present many of the UK organizations are operating in other countries where they get cheap labour and raw material.
And UK has good reputation all over the world for their advancement in technology, this gives an opportunity to expand the business all around the world.