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Unlock This CourseTechnology is everywhere in our daily lives, from smartphones to online shopping. For businesses, technology isn't just about having the latest gadgets - it's about survival and growth. Technological factors are external influences that businesses must consider when making important decisions about their future.
Think about how Netflix killed off video rental shops, or how Uber changed the taxi industry. These are perfect examples of how technology can completely transform entire industries, creating winners and losers along the way.
Key Definitions:
Technology doesn't just improve existing processes - it can completely revolutionise entire industries. Businesses that embrace technological change often thrive, whilst those that resist it may struggle to survive in the modern marketplace.
Technological factors come in many forms, each presenting different opportunities and challenges for businesses. Understanding these different types helps business leaders make informed decisions about which technologies to adopt and when.
Modern communication technology has transformed how businesses interact with customers, suppliers and employees. From email and video conferencing to social media and instant messaging, these tools have made business communication faster, cheaper and more efficient than ever before.
Smartphones and tablets allow employees to work from anywhere, customers to shop on-the-go and businesses to reach people instantly through apps and notifications.
Cloud computing lets businesses store data online, access software remotely and scale their operations without massive upfront costs for hardware.
Platforms like Facebook, Instagram and TikTok provide new ways to market products, engage with customers and build brand awareness at relatively low costs.
When COVID-19 forced everyone to work from home, Zoom's video conferencing technology became essential. The company's daily users jumped from 10 million in December 2019 to over 300 million by April 2020. This shows how external events can suddenly make certain technologies crucial for business survival.
Automation and AI are perhaps the most talked-about technological factors affecting modern businesses. These technologies can perform tasks faster, more accurately and often more cheaply than humans, but they also raise important questions about employment and the future of work.
Factories now use robots to assemble cars, pack products and perform quality checks. This automation increases production speed and reduces errors, but it also means fewer jobs for factory workers. Businesses must weigh the cost savings against the social impact and potential customer backlash.
The rise of online shopping has fundamentally changed retail business models. Companies that once relied solely on physical shops now need strong online presence to compete effectively.
Online shopping isn't just convenient for customers - it opens up global markets for businesses. A small UK company can now sell products to customers in Australia, America, or anywhere with internet access. However, this also means facing competition from businesses worldwide.
Platforms like Amazon and eBay allow small businesses to reach millions of customers without building their own websites, though they take a commission on sales.
PayPal, Apple Pay and contactless cards make online transactions quick and secure, reducing barriers to online purchasing.
Google Ads, Facebook advertising and influencer marketing allow precise targeting of potential customers based on their interests and behaviour.
ASOS started as a website selling clothes "As Seen On Screen" in celebrity magazines. By embracing e-commerce early and focusing on young, tech-savvy customers, ASOS grew into a global fashion retailer worth billions. Their success shows how businesses can use technology to create entirely new business models.
Modern businesses collect enormous amounts of data about their customers, sales and operations. Technology now allows them to analyse this data to make better decisions, predict trends and personalise customer experiences.
Every time you shop online, use a loyalty card, or interact with a business on social media, you create data. Businesses use this information to understand customer behaviour, optimise their operations and develop new products that people actually want.
Businesses track what customers buy, when they buy it and how they found the product. This helps them stock the right items, set competitive prices and target marketing more effectively.
By analysing past patterns, businesses can predict future trends. Retailers might stock up on umbrellas before a rainy season, or manufacturers might adjust production based on predicted demand.
As businesses become more digital, they also become more vulnerable to cyber attacks. Protecting customer data and business systems is now a critical concern that affects everything from insurance costs to customer trust.
Hackers target businesses to steal customer data, demand ransom payments, or disrupt operations. A single security breach can cost millions in fines, lost sales and damaged reputation. This means businesses must invest heavily in cybersecurity measures.
Laws like GDPR require businesses to protect customer data and can impose huge fines for breaches. This affects how businesses collect, store and use customer information.
Businesses must spend money on firewalls, encryption, security software and staff training to protect against cyber threats.
Cyber attacks can shut down operations completely. Businesses need backup systems and recovery plans to minimise disruption.
In 2018, British Airways suffered a cyber attack that compromised 500,000 customers' personal and financial data. The company was fined £20 million by the Information Commissioner's Office and faced numerous lawsuits. This case shows how cybersecurity failures can have massive financial and reputational consequences.
Growing environmental concerns are driving demand for green technology. Businesses are adopting renewable energy, electric vehicles and sustainable production methods both to reduce costs and meet customer expectations.
Environmental technology isn't just about being eco-friendly - it often makes good business sense too. Solar panels reduce electricity bills, electric delivery vans cut fuel costs and energy-efficient equipment lowers operating expenses.
Many businesses are installing solar panels or buying renewable electricity to reduce energy costs and appeal to environmentally conscious customers.
Delivery companies are switching to electric vans to reduce fuel costs and meet emission regulations in city centres.
With so many technological options available, businesses must carefully evaluate which technologies to adopt. The wrong choice can waste money and put the business at a competitive disadvantage.
Smart businesses don't just adopt technology because it's new or trendy. They consider factors like cost, implementation time, staff training needs and potential return on investment before making decisions.
Consider both upfront costs and ongoing expenses like maintenance, training and upgrades when evaluating new technology.
Will employees need extensive training? Might some jobs become redundant? How will staff react to the changes?
Will this technology help the business serve customers better, reduce costs, or gain an edge over competitors?
Kodak actually invented digital photography in 1975 but chose not to pursue it because they feared it would hurt their profitable film business. By the time they realised their mistake, competitors had taken over the digital market. Kodak filed for bankruptcy in 2012, showing how failing to adapt to technological change can destroy even the biggest companies.