1.5 External environment - notes
So far we have examined the nature of business activity, types of organisations and objectives and investigated the nature of stakeholders. Businesses have a range of aims and objectives, but they do not operate in a vacuum, but with a dynamic external environment which impacts on their decision making and operations. In this section we will look at the nature and scope of this external environment and how it provides opportunities and threats to the firm.
By the end of this section you should be able to:
- Prepare a PEST analysis for an organisation and use it to analyse the impact of the external environment on a firm
- Evaluate the impact of a change in any of the PESYT factors on a firm's objectives and strategy
- Analyse the impact that external opportunities and threats may have on business objectives and strategy
- Explain how external opportunities and threats can impact on decision making and SWOT analysis