ExpertExternal Influences – Social and Demographic Factors
Learning outcomes
- Analyse how demographic shifts impact business strategy.
- Understand the effect of changing social trends on product demand and workforce availability.
Social and Demographic Trends
Businesses must adapt to the people they serve and employ.
- Demographics: Statistical data relating to the population (e.g., aging populations, birth rates, migration).
- Social Trends: Changes in attitudes, values, and lifestyles (e.g., increased focus on health, remote working preferences).
Which of the following is an example of a demographic factor?
Demographics impact both Demand and Supply
Students often only think about how an aging population changes customer demand (e.g., more healthcare). Don't forget it also impacts the supply of labor (a shrinking workforce as people retire).
Impact on Business Strategy
If household configurations change (e.g., more single-person households), a food manufacturer might pivot to selling smaller, single-portion meals. If society becomes more health-conscious, a fast-food chain must introduce salads.
A supermarket notices a trend of customers buying more ethically sourced, fair-trade products. This is a response to a change in:
Exam Focus
Look out for scenarios describing a 'brain drain' (skilled workers emigrating). This is a demographic factor that directly impacts a firm's HR recruitment strategy.
How might a declining birth rate impact a manufacturer of baby products over the long term?
An increase in dual-income families (where both parents work) is most likely to increase demand for which of the following?
Which of the following best describes 'social mobility'?
Ready to put this into practice?
Ready to test yourself?
ACCA BT — Business & Technology Practice Exam 1
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