External Environment Analysis

The External Environment Analysis is a framework for identifying and examining the key
factors, opportunities, and threats in the external business environment most likely to impact your
organization’s ability to achieve desired results.

It can help you:

•• Identify how key external forces may influence your strategic business decisions.

•• Identify potential opportunities for the future.

•• Expose potential threats to achieving strategic goals.

•• Validate strategic choices.

Directions
•• Use the descriptions of each force to identify key factors that are relevant to your industry
and business.

•• Examine the key factors for new or enhanced business opportunities they may offer.

•• Note threats these factors may present to achieving your goals.

•• Use your analysis to either validate or make changes in your strategic choices.

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 Worksheet for External Environment Analysis

Societal:Changes in demographics (age, education, mobility, race, religion, gender, etc.), lifestyles,
contemporary culture, consumer tastes, employee expectations, social movements, etc.
Key Factors:

Opportunities:

Threats:

Technological:Impact of new technologies on how our business is done, on customers, on suppliers/vendors;

impact of information system technology, etc.
Key Factors:

Opportunities:

Threats:

Economic:Changes in economy (local and national, expansion or recession, etc.), tax structure, money supply,
employment, inflation, interest rates, monetary and fiscal policies, etc.
Key Factors:

Opportunities:

Threats:

Environmental:Changes in concern for the earth/environment, environmental regulation, air quality, hazardous
waste, etc.
Key Factors:

Opportunities:

Threats:

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 Political:Changes in regulation, domestic and foreign policy, political trends, state and local laws, court
decisions, organization’s level of political power, etc.
Key Factors:

Opportunities:

Threats:

Other Relevant Forces:Define for your industry.

Key Factors:

Opportunities:

Threats:

Summary
Most significant opportunities to seize:

Most significant threats to achievement of our goals:

Aspects of my current strategy that need to be reinforced to allow my organization to seize

opportunities and mitigate threats:

Aspects of my current strategy that need to change to allow my organization to seize opportunities
and mitigate threats:

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