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Environmental Analysis Of The Macro Environment

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Introduction

Environmental analysis refers to the use of strategic tools to identify internal and external elements that present opportunities and threats that can affect an organisations performance. Four environments/levels that can be evaluated when performing an environmental analysis include:

Evaluating the Macro environment (using PESTEL Analysis) Evaluating the Industry Environment (using Porter Five Forces) Evaluating Strategic Group Evaluating the organisations resources and capabilities (an internal analysis using the VRINE model) The external environment consists of the first two environments mentioned above (The Macro environment and the Industry environment). The external environment provides …show more content…

Gain a better understanding of opportunities and threats in order to gain a better vision of how the organisation will compete profitably.
2. Understand market growth and market decline
3. Understand the future impact of the macro environmental forces it faces
4. Understand the macro environment and therefore align its strategy the the changes occurring within the business landscape
5. Avoid strategies that are doomed to fail in the future due to reasons beyond the organisations immediate control
6. Understand that PESTEL is a useful starting point that should be used when entering a new country, place or market.

Political

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