Definition : An analysis and
evaluation process that
businesses use to understand
their current environment
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The global environment refers to the
macro-level which comprises industries,
markets, companies, clients and
competitors in general.
On the micro-level are other factors such
as suppliers, vendors and local
customers and competitors are analyzed
within the industry analysis.
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What is the current external environment
(data and situations) of a business?
 What
are the implications of these issues for
business?
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What key forces in the business’s
environment need to be addressed
 and
which ones are less important?

What trends and issues are affecting
business?
 What
is the impact of the trends on
business?

How might the environment change
in the future?
 How
will businesses’ decisions and
actions influence this environment?

How do customers, interest groups,
community organizations, agencies
or governments impact the
environment?
 Are
there any events on the horizon to
be dealt with?

What factors are within a business’s
control and which are beyond its
influence?
 What
could a business do to affect the
impact of these factors?

Political factors
Taxation Policy
• Trade regulations
• Governmental stability
• Unemployment Policy etc.
•
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Economical factors
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Inflation rate
Growth in spending power
Rate of people in a pensionable age
Recession or Boom
Customer liquidations
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Socio-cultural
age distribution.
• education levels.
• income level.
• consumerism.
• diet & nutrition.
• population growth
• life expectancies
• Religion
•
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Technological factors
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Internet
E-commerce
Social Media
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Environmental factors
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Laws on
Waste disposal
Energy consumption
Pollution monitoring etc.
Legal factors
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Unemployment law
Health and safety
Product safety
Advertising regulations
Product labeling
labor laws etc.
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Ecology
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affects customer's buying habits.
affect the firm production process.
Potential supplies

labor supply
 quantity of labor available.
 quality of labor available.

material suppliers.
 delivery delay.
 level of competition to suppliers,

service provider.
 special requirement.
Examples:
 Interviews with business officers, owners, managers
 Comments made by business officers, owners, managers
 National and local newspapers
 Trade publications
 Business magazines
 Websites: Hoover’s, Morningstar, brokerage firms,
credible financial sites
 Personal Observations
 Research findings (county demographic & census
information and state records.)
 Input from professional organizations
Aids in anticipating changes
 Answers the question, “Where are we
now?”
 Provides a starting point for businesses’
planning of goals, objectives, and actions
that answer the question, “Where do we
want to be?”
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Search for local demographic and census
information to find out the general age,
income, educational and employment factors
for the area.
Check out various resources for any new
building or economics changes coming. This
can be personal interviews or news searches.
Have there been any new votes or laws passed
that will change business in the area?
Look for trends in population such as aging or
new growing families for the area
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Create a list of potential / available
customer groups. (both major and
minor.)
Create a list of direct competitors (both
major and minor.)
Next create a list of businesses
competing for the same customer
dollars but not necessarily the same
business.