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External Environment Analysis - PESTEL

External Environment Analysis - PESTEL

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Running head: EXTERNAL ENVIRONMENT ANALYSIS 1

External Environment Analysis

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EXTERNAL ENVIRONMENT ANALYSIS 2

The External Environment

Any business is largely influenced by the environment it operates in i.e. internal or

external environments. While businesses have complete control over its internal environment

(skills and competencies), it has no direct influence over its external environment. The external

environment can be divided into the Broad and Task environments. Despite a company’s

inability to fully control both external environments, it has the ability to protect itself against

threats and take advantage of any opportunity that presents itself. Aldai Inc. is therefore placed in

a prime position to analyze its environment and come up with a strategic plan that maximizes its

unique skills and competencies thus taking advantage of opportunities and limiting threats.

The analysis of the external environment is essential as it not only helps with improving

the business strategy but it also helps fight competition. This analysis helps an organization

identify how to gain competitive advantage over its competition.

A. The Broad Environment

The broad environment is a part of the external environment that Aldali Inc. has no

influence over despite its significant influence on the company. The Broad environment can be

summarized by the PESTEL analogy i.e. Political, Economic, Social, Technological,

Environmental, and Legal factors. As a herbal cosmetics producer, Aldali Inc. has a chance to

analyze how each of these factors influence its production, service, distribution, marketing and

pricing. The PESTEL analysis should only focus on the areas that are within the sphere of

interest of Aldali Inc. for instance, the company is currently operating in the US thus its legal

parameters are only controlled by regulators such as the US FDA. It has no operations within the

financial markets thus making this economic factor irrelevant to its strategy.

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External Environment Analysis Name: Institution: The External Environment Any business is largely influenced by the environment it operates in i.e. internal or external environments. While businesses have complete control over its internal environment (skills and competencies), it has no direct influence over its external environment. The external environment can be divided into the Broad and Task environments. Despite a company's inability to fully control both external environments, it has the ability to protect itself against threats and take advantage of any opportunity that presents itself. Aldai Inc. is therefore placed in a prime position to analyze its environment and come up with a strategic plan that maximizes its unique skills and competencies thus taking advantage of opportunities and limiting threats. The analysis of the external environment is essential as it not only helps with improving the business strategy but it also helps fight competition. This analysis helps an organization identify how to gain competitive advantage over its competition. A. The Broad Environment The broad environment is a part of the external environment that Aldali Inc. has no influence over despite its significant influence on the company. The Broad environment can be summarized by the PESTEL analogy i.e. Political, Economic, Social, Technological, Environmental, and Legal factors. As a herbal cosmetics producer, Aldali Inc. has a chance to analyze how each of ...
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