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External Analysis: Assessing the Environment for Strategic Planning
Understanding External Environment Analysis
External analysis involves examining a company's industry environment, considering factors such as competitive structure and position.
Importance of External Analysis
External analysis helps businesses identify opportunities and threats in their external environment, providing valuable insights for strategic planning.
External Analysis Frameworks
One commonly used framework for external analysis is PESTEL, which analyzes factors in the political, economic, social, technological, environmental, and legal domains.
Internal and External Strategic Analysis
Combining internal and external analysis provides a comprehensive assessment of an organization's current state and identifies areas for improvement.
Key Takeaways
External analysis allows businesses to:
- Identify industry trends and threats
- Understand the competitive landscape
- Make informed decisions about future strategies
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