Business Studies – External Influence - Technological Chang

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  • Created on: 25-03-08 16:29
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Business Notes Emma Rudd BMA
External Influences
Technological Change
Modern Advances
The recent technological changes have had major implications for businesses. Some
of these developments include:
Personal computers
CD's and mini disks
The internet, intranets and extranets
Mobile phones
Technological advances have created new markets for new products. But
technological change can also be threatening for businesses for example the
electronic mail, whilst offering opportunities for companies providing internet
services, can pose a threat to more established businesses such as the Post Office.
Technological advances can also affect the way businesses operate. Communications
within businesses have been transformed by technology. Businesses can
communicate simply, cheaply and quickly across the globe. Developments such as
faxes have allowed detailed documents to be sent immediately to anywhere in the
world. Similarly email allows employees and organisations to communicate
immediately and messages can be sent to many recipients at the same time.
The development of extranets has created close links between businesses, helping
to improve efficiency. Companies can now share data with suppliers through
extranets, to enable production and deliveries to match demand in the stores, this
could enormously improve stock control.
The technical revolution has extended beyond communications. The process of
manufacturing has been transformed by automation whereby machines replace
people. The most dramatic aspect of this has been the use of computercontrolled
technology on the production line. This had assisted in improving productivity levels
helping to reduce costs and to enhance productivity.
The Benefits of Technological Change
The major advantage of technology to businesses is to allow the development of
new methods of production resulting in lower costs and higher profits on each sale.
However in a increasingly competitive global market firms seek to improve their
market position by offering high quality and sophisticated products at low prices.
Using ever more sophisticated technology in planning and producing products is one
way of achieving lower costs.
Using technology in the products as well as the production process also offers a
great advantage to businesses. Firms possessing technological leads over rival
producers are frequently able to charge a higher price for their products. Possessing
a technical edge may also attract new customers to a business. Many stores now
offer customers the opportunity to purchase goods from stores over the Internet,
which has proved to be attractive for consumers leading busy lives.

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Business Notes Emma Rudd BMA
New markets have also been created due to technological advances for example
markets for personal stereos and mobile phones. These are now mass markets.
Technological advances have also ensured that smaller niche markets have
The Disadvantage of Technological Change
Firms in high technology markets face demands to research new products and to
implement more efficient methods of production. Thus commercial pressures may
exist to improve technology used in products and processes.…read more


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