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Homework answers / question archive / External Environment Analysis – 75 Total Points Assignment Overview: Please provide a 2-5 page written report (without Tables or Graphs) for the external environmental analysis
External Environment Analysis – 75 Total Points Assignment Overview: Please provide a 2-5 page written report (without Tables or Graphs) for the external environmental analysis. As explained in Chapter 2 in the text, the external analysis identifies the environmental forces outside the firm that are most likely to influence the firm's actions and future performance. Below, you will find description of the structure of the report and a template to help guide you through this portion of the group project. It is broken down into paragraphs and identifies the external analyses that need to be completed for a full report of the external environment. Other Information: This is a team assignment. Feel free to divide the work between team members as you see fit, but a designated person or a small group should be responsible for a final read through that checks for consistency and grammar. Assessment Rubric: The grades will be assessed using 4 factors: 1) how well the analyses are conducted, 2) the detail of information, 3) whether or not data is used and cited, and 4) the overall presentation (writing, tables, and graphs). Each is weighted at 25%. Submission: Please list every member in the group the submission. One person in your group should submit your assignment via CANVAS before the due date/time. You must cite sources of information in APA format (include a reference page at the end of your submission). All submissions will be submitted using Turnitin. Plagiarism will result in a 0% on the assignment for all members of the group. Section 2 - General Environment Analysis (3-5 paragraphs) In this section, please conduct a general environment analysis as seen in Chapter 2. The General Environment Analysis is a societal-level analysis that identifies the factors in broader society that influences industries and firms within it. This analysis is constructed of 7 environmental segments: demographic, economic, political/legal, sociocultural, technological, global, and physical. To conduct the analysis, please identify the environmental segments that is most greatly influencing the company (usually between 3-5 segments) that you are analyzing and go into further detail about how these trends in society are affecting the firm. Please refer back to Chapter 2 and lecture for details of this analysis. Please include any graphs and tables that help visually aid present the information. Please write this as concisely as possible while still presenting the information effectively.
Introduction
Business environments have a great impact on business. Also, these environments change frequently and this greatly affects how businesses operate and the viability of doing a certain business in a certain environment. Because of their impact on business, these business environments require a lot of consideration when planning business and conducting different business operations (So & Kim, 2017). Also, owing to this, business managers as well as executives have a responsibility of examining external factors and concerns regarding how they may influence business decisions. Moreover, it is also of great significance to monitor all the external factors that can impact how business functions. This is important since it will help in developing methods that can help in overcoming such challenges (So –& Kim, 2017). This article discuses the external environmental factors that affect business. The factors that are discussed in this paper include demographic, economic, political and legal, sociocultural, technological, global and physical factors.
With the advancement of technology, organizations can greatly benefit from these technological breakthroughs. Failure to exploit those technologies, business will face the challenge of being unable to compete with other firms (Abdullah-Al-Hasan & Har, 2019). Technology is important since it enhances the supply chain of a business by bringing about efficiency in the business. Also, technology can help businesses to collect information from their stakeholders and use the information to make informed decisions that improve the businesses competitiveness in the industry.
Economic Factors
Studies show that the state of the economy plays a significant role in all aspects of people’s daily life, that is, from being wellbeing of the employees to company’s ability to thrive. When the economy is affected negatively and the levels of unemployment rises, companies will have to work an extra hard in order to keep their staff (Oraman et al., 2018). Also, during such times, businesses may be forced to change their processes in order to continue earning revenue. For instance, if the company produces products for retailing, it may have to consider lowering the prices in order to increase sales and raise its revenue.
As various political officers leave office and are replaced by new ones, the policies they implement great affect businesses. Owing to the inconsistent politics’ nature, businesses monitor legislative laws closely in order to prepare for potential changes. Some of the policies that have a long impact on business include tariffs, employment law, taxation, competition legislations and intellectual property laws (Oraman et al., 2018). Firms that are affected by different political decisions must modify their processes for purposes of complying with new regulations and legislations; Doing so is likely to keep the companies in business.
It is necessary to note that firms with successful products and services normally evaluate the demographics of their targeted market. This is meant to ensure they meet the needs of the target market. In addition, the businesses perform tests aimed at measuring how well they serve their clients; this is of great importance since it helps the companies in understanding if their targeted market has changed (Oraman et al., 2018). Also, it helps them in determining if they can develop better ways of serving their loyal clients and earning new ones. Some of the demographics that affect business include age, gender, race, beliefs education level, income level, nationality and occupation. A company may decide to target clients within a certain income level or of a certain gender.
Sociocultural Factors
Where different people live, their socioeconomic status and personal values impact, what, why, and where people make purchases. As a result, businesses consider social factors when developing and marketing their products (Hartanto, Wahyudi & Sugiarto, 2017). Also, many of the businesses use current or prevailing events, social issues as well as movements for purposes of appealing their clients. For instance, a business that supports women organizations and women rights is likely to earn the trust and loyalty of female clients. According to Arefieva, Miahkykh & Shkoda (2019), catering to the specific preferences as well as expectations of minority groups can contribute to client satisfaction and business growth.
Global Factors
There are various global factors that affect business regardless of their location. One of such factors is pandemic. A pandemic affects the supply chain of a business. As a result, a company may find it challenging to sell its products to clients in other nations (Hartanto, Wahyudi & Sugiarto, 2017). Also, a global pandemic such as covid-19 may lead to massive unemployment and reduction of the disposable income of targeted clients. As a result, the clients may not be able to do purchases like in the past and this will affect the company’s income level or revenue.
Physical Factors
There are several physical factors that affect business. The main physical factor that affects business is the business location. Where the business is located can determine its success or failure. If the business is located in an area that is characterized by high insecurity levels, then it is likely to be closed early. Therefore, it will have to forgo some income. Also, if the business is located in an area where the income level of the dwellers is low, its revenue may be low compared to a business that is located in an area with affluent clients.
Conclusion
Environment plays a great role in determining the success or failure of a business. The external environment determines most of the factors that will affect the business, such as policies, taxes, tariffs among others. For this reason, management should do extensive environmental analysis in order to determine whether the environment will affect the business either positively or negatively.
