The external environment concerns everything that has an impact on the business, by analysing the external environment the business can view its own position.
General external forces that influences business are:
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ECONOMIC STATUS - The country is it in a boom, recovery, recession or depression state?
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SOCIO-CULTURAL - How society consume products or services, do they prefer a certain type o product based upon its price?, environmental benefits? or just plain branding?
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DEMOGRAPHIC - What is the make up of the population, which areas are growing? and which areas are not?
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POLITICAL - The legal framework within which the business operates. This will include the working conditions, business procedures, environmental issues, etc.
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NEW ENTRANTS - Does the market look lucrative for new entrants?, Does the market have any barriers to entry?
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BARGAINING POWER - Is your environment one where the power is with buyers or suppliers?, Make sure your business gives as much emphasis to improving supplier relationships to gain competitive advantages.
We shall now explain how we will guide you through developing a Marketing strategy:
