Technological environment

This is a rapidly changing area and organisations should be very careful with it. It can influence the following:-

•    Changes in production techniques e.g. the use of robots, Computer Aided Manufacture
•    Products that are made or sold e.g. software
•    How services are provided. ATMS for banks
•    How to identify markets creation of customer databases.

Much has been made of the application of new technologies to communications and business especially the Internet.The impact of information as the raw material in a knowledge-based economy is huge. Within an industry failure to exploit information and new production technology can lea to an organisation failing behind its rivals and losing its competitive edge.

The distribution of services has change and there has been removal of entry barriers in certain industries such as banking and insurance. Much lower start up costs has created threats to the established players, which if they do not respond to, could lead to decline.

New technology leads to innovation of substitutes for example in the pharmaceutical industry, biotechnology and data storage devices.
Examples of changes in production processes includes use of robotics and computers. This has led to lower cost of production, better quality goods or both.