What is environmental analysis? Why should a company use it and what does it accomplish?

Question

Quizplus · Accepted Answer

The Answer is Environmental analysis is the process of evaluating the external factors that can impact a company's operations, such as economic, social, political, and technological factors. It involves assessing the opportunities and threats that exist in the company's external environment.

A company should use environmental analysis because it helps them to understand the current and potential future conditions in the market. By identifying and understanding these external factors, a company can make more informed decisions and develop strategies that are better aligned with the external environment. This can help the company to anticipate changes, identify potential risks, and take advantage of opportunities.

Environmental analysis accomplishes several things for a company. Firstly, it helps the company to stay competitive by understanding the market and industry trends. It also helps the company to identify potential risks and challenges, allowing them to develop contingency plans and mitigate potential negative impacts. Additionally, environmental analysis can help a company to identify new opportunities for growth and expansion, as well as potential threats to their current business model. Overall, environmental analysis is a valuable tool for companies to stay informed and make strategic decisions that are better aligned with the external environment.

What Is Environmental Analysis? Why Should a Company Use It