EXTERNAL ENVIRONMENT

1. POLITICAL ENVIRONMENT

Political environment is refers to the laws, rules and regulations that influence or restrict the business company and individuals when they want to develop their products to the market. There have few types of examples in political factors which are taxation, pricing regulations, trade regulations and tariffs.

Malaysia is a country of combination of 3 main races which are Malay, Chinese and India. As we all know that food is taken by Malay must be halal. Halal means the ingredients that are used do not contain any substances that counted as impure in Islamic law. For example is pork. Muslims cannot eat pork because it is consider as impure in Islamic law. According to Food Regulations 1985 in labelling, the industries must follow the rules and label correctly the ingredients on the packaging. For instance, the food that is target to sell to Muslims, the industries must label halal logo on packaging as a notification for them to know that this food is safety to eat. Even though the food is not bought by Muslims, the industries also need to label. This is because it is one of the rules contains in the Food Regulations 1985.

Therefore, it will be better for the industries to produce or manufacture the products that can be taken by Muslims. This is because will bring much more profits to the industries. Malay is the biggest race among all the races in our country. So if the companies only focus on the Chinese and India, it will bring lesser revenues when compare focus on the three main races. Besides, the industries also need to label correctly on the packaging. If they do not follow it, the industries will consider as violate the laws. Hence, the political environment will influence the industries.

2. ECONOMICAL ENVIRONMENT

Economical environment is the factors that can affect the consumer spending power and spending patterns during business cycle stage no matter is in the domestic or global economy. The factors may include economic growth rate, unemployment rate, exchange rate and so on.

According to the statistics in Malaysia, the Gross Domestic Products (GDP) growth rate in 2011 is from 1.80 per cent increased to 3.32 per cent in 2012. The increase in GDP growth rate is 1.52 per cent. The unemployment rate in January 2012 is from 3.10 per cent increased to 3.30 per cent in January 2013. The rise in unemployment rate is 0.20 per cent. The employed persons of 2011 are from 11776.8 thousand persons increased to 12123 thousand persons in 2012. The increase in employed persons is 346.2 thousand persons. The unemployed persons of 2011 are from 395.8 thousand persons decreased to 382.9 thousand persons in 2012. The decrease of unemployed persons is 12.9 thousand persons. The consumer spending in first quarter of 2012 is RM 90533 million increased to RM 99812 million in third quarter of 2012. The increase of consumer spending is RM 9279 million. So, we can conclude that the economic in Malaysia is recover based on the statistics above.

We can assume that the consumer spending increases is because of the recovering of economic in Malaysia. When the economic is in the recover state, the purchasing power of consumer will be rises. Consumers will spend more when their purchasing power increases so it will affect the profits of industries. The profits of industries increase will bring along the GDP growth rate to rise. Besides, industries will hire more workers to increases productivity for satisfy the demand of consumers. Thus, this is why it will decrease the unemployment rate and make the economic in Malaysia is in the recover state.

3. SOCIO-CULTURAL ENVIRONMENT

Socio-cultural environment is refers to social forces that affect society's basic value, opinions, interests and attitudes in many aspects such as demographics, age distribution, education level, distribution of wealth and social classes, living conditions and lifestyle.

Based on the obesity statistics in Malaysia, 43% of Malaysian adults were overweight in 2006 and 38% of overweight children in the child population of Malaysia. The recent World Health Organizations (WHO) results of 2010 showed that 60% of Malaysians aged 18 and above had a BMI over 25 which mean that they are all in the overweight state. Besides, Malaysia is ranked as sixth in Asia with the highest adult obesity rate in the WHO survey of 2010.

Consumers have changed their attitudes towards the lifestyle because of the increases of obesity rate in Malaysia. They will start to prefer the food that is low fat, less sweet, less salty, more fibre and so on. This is to help them to practise a healthy lifestyle. Therefore, the industries will make sure their products is can be ingratiated with consumer's favour or demand. Then, this will aid to stimulate the market to produce more healthy products for the consumers and decrease the obesity among Malaysians. Furthermore, it can help to raise the revenues of industries.

4. TECHNOLOGICAL ENVIRONMENT

Technological environment is means that the speed of new creation and development of different technology that changes rapidly in the global market which can be bring many opportunities or profits to the whole industries.

Recently, technology has improved a lot when compare to before especially the internet service. The appearance of internet has brought many benefits to us. For example, when students are doing assignments, they need to find a lot of necessary information to finish it so that they can easily find and get any related information from internet. This is because we can access to more information in internet no matter the sources are origin from the online library, newspapers or articles. Besides, we also can obtain the information from global through internet. If not because of internet, we will face many problems when search for the needed information.

The improvement of technology is really brings many advantages to our life. It is not only benefit us and also benefit to the industries. The internet service has allows the companies to promote and sell their products through online. The online service has brings many opportunities to the companies. This is because consumers can easily get to know about the price of products, types of products, location of shops and any promotions organised by the company through the homepage of company. Besides, consumers also can order and buy their products through online because the company may be is located far away from their house or consumers are lazy to go out buy. Hence, the new technology will assist and affect the profits of industries become higher.