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

1. Why is it important for a firm to study and understand the external

environment?

Organizations must understand how the external environment influences their

competitive actions and responses in order to compete successfully and earn above-

average returns. This is significant because it will assist the organization in identifying

potential risks and opportunities, which is essential for building a growth strategy and

meeting its objectives.

2. What are the differences between the general environment and the industry

environment? Why are these differences important?

The sociocultural elements that affect an industry and its firms make up the

general environment. The seven environmental factions that these dimensions are

categorized into are demographic, economic, political/legal, sociocultural, technological,

global, and physical sustainability. The industrial environment, on the other hand,

pertains to all of the circumstances that have an effect on companies within the bounds

of the financial sector.

A detailed investigation of the firm's competitors adds to the knowledge gathered

from examining the general and industry surroundings. If the company knows the

variations, it will be able to create and execute a more effective strategy. These

contrasts are crucial to comprehend because they act as a resource of threats and

challenges for the organization, influencing corporate leaders' strategic decisions in

directing their businesses toward their goals.

3. What is the external environmental analysis process (four parts)? What does

the firm want to learn when using this process?

Companies conduct an external environmental analysis to cope with often conflicting

and inadequate data sources and to better understand of the environment as a whole.

The four parts of this study are scanning, monitoring, forecasting, and evaluating.

Scanning: Scanning is the initial step in the process, and it involves looking for

any early indications that indicate the presence of new trends or changes in the

environment.

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What is the external environment analysis process four parts )?

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

What are the 4 external environmental variables?

What are the parts of external analysis?