Strategic Management Essay
The study of the external environment is a crucial step in the mapping of business strategy for an organization.
Discuss how the assessment of external forces can be performed with business examples to support your analysis.
1. Question Paper 2
2. Introduction 3
3. PEST Analysis 4
(3.1) Political Legal Environment 4 (3.2) Economic Environment 4
(3.3) Social Environment 5 (3.4) Technological Environment 5
4. …show more content…
There are many ways and techniques that a firm can adopt to assess the external environmental forces. The most common and popular techniques are the PEST analysis and Industry Analysis
It is useful to consider as a starting point, what environmental influences have been particularly important in the past, and the extent to which there are changes occurring, which may make any of these more or less significant in the future, for the organization and its competitors.
PEST analysis (a mnemonic for Political, Economic, Social and Technological factors) is the most frequently used tool to consider the impact of the general environment. It provides a broad framework for considering a wide range of potential factors in order to summarise the most important influences of the general environment. Beside, it can evaluate the potential impact of these influences, while the opportunities and threats to be faced. Is positive or negative.
Each of the four headings can be broken down further to suggest more detailed consideration of particular factors and changes that might influence the organisation both currently and in the future. Whilst varying dependent upon