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Module 3-External Business Environment
BSED English (BLAW 2019, English 3)
Cebu Roosevelt Memorial College
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Module Strategic Business (External Business Environment) By: Patima L. Lagnason
I. Cite the relevant natural environment of a certain business.
Internal and external factors influence the function of a business and comprise its environment. Examples of internal factors include the company’s products, employees and marketing. External factors include competitors, customers and economic conditions. Internal factors that affect a business environment include anything present within the business itself. For example, the direction of the organization has a big effect on the business environment. Leadership within the company affects the organizational direction. Likewise, factors such as friendliness, communication style and level of positivity affect the organizational direction.
The strength of employees is another internal factor that affects the business environment. Hard-working, motivated, talented employees are more likely to provide good results. Additionally, employees should work well together. Strategic risks, innovation and financial concerns are other examples of internal factors for the business environment.
With external factors, the economy is a big influence on the business environment. The global economy as represented by market fluctuations is likely to affect any business. Politics relating to wars, terrorism and currency devaluation have a big impact on the economic factor.
Infrastructure is another example of an external factor. This includes items such as zoning laws, housing developments and highway construction. Changes in the infrastructure can
have a big influence on the business environment. Other external factors include laws, finance and the weather.
II. Explain PEST Analysis and demonstrate the interplay of each major environmental dimension.
PEST Stands for-Political, Economic, Socio-Cultural, and Technological
A PEST analysis is a strategic business tool used by organizations to discover, evaluate, organize, and track macro-economic factors which can impact on their business now and in the future.
The framework examines opportunities and threats due to Political, Economic, Social, and Technological forces. Outputs from the analysis inform strategic planning processes and contribute to market research.
Political-Political or Politically motivated factors that could impact the organization. Examples: New government policies, political stability/instability, bureaucracy, corruption, competition regulation, foreign trade policy, tax policy, trade restrictions and etc.
Economic-Overall economic forces that could impact on your success. Examples: Economic trends, growth rates, industry growth, seasonal factors, international exchange rates, International trade, labor costs, consumer disposable income, unemployment rates, taxation, inflation, interest rates, availability of credit, monetary policies, raw material costs, etc.
Social-Social attitudes, behaviors, and trends that impact on your organization and target market. Examples: Attitudes and shared beliefs about a range of factors including money, customer service, imports, religion, cultural taboos, health, work, leisure, the environment; population growth and demographics, immigration/emigration, family size/structure, lifestyle trends, etc.
Technological-How technology can either positively or negatively impact the introduction of a product or service into a marketplace is assessed here. These factors include technological advancements, lifecycle of technologies, the role of the Internet, and the spending on technology research by the government. Examples:
Module 3-External Business Environment
Course: BSED English (BLAW 2019, English 3)
University: Cebu Roosevelt Memorial College
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