Topic

Exploring the External Environment

Instructions

What is the external environmental analysis process? What does the firm want to learn when using this process?

Answer preview

An external environmental analysis normally investigates information regarding a business’s industry, competition as well as social and political environments. It is clear that these factors impact business organizations but they are out of its control. The environmental analysis is considered to be a strategic tool that has the ability of identifying all the internal and external elements that can greatly impact an organization’s performance. The analysis encompasses evaluating the degree of opportunity or threat factors which may be present. The external environment influences the business organization’s strategic alternatives and the decisions made in light of them.

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