Internal Influences - Products

The output (Product) that a business chooses to produce (good) / deliver (service) has a direct impact on the structures / systems / processes / layout / job design / technologies required within a firm. 

The industry sector (primary, secondary, tertiary) that a business operates within will play a large role in determining the internal characteristics of the firm.  A retail business (Woolworths) is very different to a manufacturer (Toyota) is very different to a mining firm (BHP).

What a firm does should be determined by customer preferences and the success or failure of business output. The output of the firm (good / service) should be desired by customers, whose preferences have been researched through marketing. If products / services are unsuccessful (low sales, losses), they should be deleted from a firm’s offering.

If a business decides to add a new product line to its offering, the internal processes will need to be changed (suppliers, technology, new staff) to enable this output to be produced. Eg: Cafe decides to offer wood-fired pizza. This decision will impact internal processes in many ways. This change will also need to be financed through debt or equity. Staffing may also require changes: recruit new workers, training for existing staff, or make some staff redundant.