1. External environmental analysis of business
In-written By- Presented By-
Anurag Gour Anushree Korde
Twinkle Soni Ashish Singh

2. Definition
Environmental analysis is the study of the
organizational environment to pinpoint
environmental factors that can significantly influence
organizational operations.

3. Strategically Important Components
 Customers
 Economy
 Competition
 Public opinion

4. Environmental scanning
 Environmental scanning is a process of gathering,
analyzing, and dispensing information for tactical or
strategic purposes.

5. Approaches to Environmental Scanning
Systematic Approach
Ad hoc Approach
Processed-form Approach

6. Environmental scanning includes macro
environment
 The major external and uncontrollable
factors that influence an organization's decision
making, and affect its performance and strategies.

7. Factors of the external macro environment
 Political
 Economic
 Social
 Technological

8. Factors of the external- macro
environment

9. Political factors
 The political environment of the country influences
the business or organization to a great extent. Some
examples:-
 Tax policy
 Employment laws
 Political stability
 Trade restrictions and tariffs

10. Economic factors
 Economic factors affect the purchasing power of potential
customers and the firm's cost of capital. The following are
examples:
 Economic growth
 Interest rates
 Exchange rates
 Inflation rate

11. Social factors
 Social factors include the demographic and cultural
aspects of the macro environment. These factors affect
customer needs and the size of potential markets.
Some social factors include:
 health consciousness
 population growth rate
 age distribution
 emphasis on safety

12. Technological Factors
 The technology adopted by the industries determines
the type and quality of goods and services to be
produced.
 Technological environment influences the business in
terms of investment in technology. Some
technological factors includes:
 R&D activity
 Rate of technological change
 Costs involved