Social & Technological Environment
Business: BTEC Level 3 National Extended Diploma, topic 1.3.4
Social and Technological Environment
Changes in society and technology can affect a business’ strategic and functional decision making.
Urbanisation
- Urbanisation describes people moving from rural areas to urban areas.
- People usually move to urban areas because there are more job opportunities there.
Migration
- Migration describes people moving from one country to another, with the intention of residing and accessing employment.
- For example, increasing migration has increased demand for cultural food shops and this can reduce demand for groceries from established retailers.
Consumer lifestyle changes
- Consumer lifestyle changes occur when buying habits or spending patterns change.
- For example, Morrisons has introduced online grocery shopping to respond to changes in consumer expectations.
Social changes
- Social changes can include the growth of e-commerce and the changes in buying habits as people begin to expect the availability of e-commerce platforms to complete online transactions.
Impact of Demographic Changes
Demographic changes, including changes in the population structure, can affect a business in several ways.
Impact of the ageing population
- The UK’s population is ageing, and as healthcare improves and people live longer, demand for products and services can change.
- For example, Saga holidays, which targets over 50s with holiday packages, may need to increase its capacity as demand from over 50s increases for its holiday products.
Rising birth rates
- The UK’s population is expanding as birth rates continue to increase.
- An expanding population will increase demand for products and services and businesses must be able to respond to these increases to maintain market share.
- For example, as the population increases, food producers must be able to increase production to meet demand.
Migration
- Migration, the movement of people between countries, can affect demand for products and services.
Test yourself on Social & Technological Environment
The act of moving from one country to another with the intention of residing and accessing employment.
Which of the following terms does this describe?What has grown in recent years, impacting buying habits?
What is happening to the UK's population?
What is the impact of an expanding population on demand in the economy?