The External Environmental Factors are those factors that are external to an organization. These factors are beyond the control of an organizations management. An organization has to see these forces as a challenge.
The five External Environmental forces are given below:
- Political/Legal Factors: These factors are the factors that relate to the government and the political situation of a country. The government defines the laws and regulations so businesses are affected deeply by this factor.
- Economic Factor: The stage of business cycle that is attributed with the country, the interest rates and the monetary and fiscal policies all come under this factor. Furthermore, the economic conditions also define the buying power of the consumers.
- Socio/Cultural Factors: A company can only sell and produce what is acceptable to the society and the culture of a certain area. Alcoholic drinks can not be produced, sold or marketed in Muslim countries,
- Competition: You as a company need to know what your competitor is up to. This will let you remain ahead of your competitor at all times.