The external environment factor

And we know that organization is a social entity that has a hierarchical structure where all necessary items are put together and they act within it to reach the collective goal. Organization or more specific business organization and it activates are always being affected by the environment. In an organization, every action of the management body is influenced by the environment.

The external environment factor

The external environment factor

Materials Markets The internal environment is under the control of the marketer and can be changed with the changing external environment. Nevertheless, the internal marketing environment is as important for the business as the external marketing environment.

This environment includes the sales department, marketing department, the manufacturing unit, the human resource department, etc.

External Environment The external environment constitutes factors and forces which are external to the business and on which the marketer has little or no control.

The external environment is of two types: Micro Environment The micro component of the external environment is also known as the task environment.

It comprises of external forces and factors that are directly related to the business. Market intermediaries include parties involved in distributing the product or service of the organisation. Macro Environment The macro component of the marketing environment is also known as the broad environment.

The macro environment can be divided into 6 parts. Demographic Environment The demographic environment is made up of the people who constitute the market.

These factors include the GDP, GNP, interest rates, inflation, income distribution, government funding and subsidies, and other major economic variables.

Physical Environment The physical environment includes the natural environment in which the business operates. This includes the climatic conditions, environmental change, accessibility to water and raw materials, natural disasters, pollution etc.

Technological Environment The technological environment constitutes innovation, research and development in technology, technological alternatives, innovation inducements also technological barriers to smooth operation. Technology is one of the biggest sources of threats and opportunities for the organisation and it is very dynamic.

Social-Cultural Environment The social-cultural aspect of the macro environment is made up of the lifestyle, values, culture, prejudice and beliefs of the people. This differs in different regions. Importance of Marketing Environment Every business, no matter how big or small, operates within the marketing environment.

The business environment is one of the most dynamic aspects of the business. In order to operate and stay in the market for long, one has to understand and analyze the marketing environment and its components properly.

Essential for planning An understanding of the external and internal environment is essential for planning for the future.

A marketer needs to be fully aware of the current scenario, dynamism, and future predictions of the marketing environment if he wants his plans to succeed.

Internal and External Environment Factors that Influences Organizational Decision Making

Understanding Customers A thorough knowledge of the marketing environment helps marketers acknowledge and predict what the customer actually wants. In-depth analysis of the marketing environment reduces and even removes the noise between the marketer and customers and helps the marketer to understand the consumer behaviour better.

Tapping Trends Breaking into new markets and capitalizing on new trends requires a lot of insight about the marketing environment. The marketer needs to research about every aspect of the environment to create a foolproof plan.

Threats and Opportunities A sound knowledge of the market environment often gives a first mover advantage to the marketer as he makes sure that his business is safe from the future threats and taps the future opportunities.

Understanding the Competitors Every niche has different players fighting for the same spot. A better understanding of the marketing environment allows the marketer to understand more about the competitions and about what advantages do the competitors have over his business and vice versa.

Did we miss something?These factors that happen outside the business are known as external factors or influences. These will affect the main internal functions of the business and possibly the .

On the contrary to internal factors, external elements are affecting factors outside and under no control of the company. Considering the outside environment allows businessmen to take suitable adjustments to their marketing plan to make it more adaptable to the external environment.

Organization’s External Environment. The external environment of an organization comprises of all the entities that exist outside its boundary, but have significant influence on its growth and survival. An external environment is composed of all the outside factors or influences that impact the operation of business.

The business must act or react to keep up its flow of operations.

The External Environment

Internal and External Driving Force or environment (I just prefer the term driving forces) Thee are two types of driving forces (factors) that affect the way an organization operates in either a. SWOT analysis looks at the Strengths, Weaknesses, Opportunities, and Threats of (or facing) a given company, so in fact, it looks at two internal factors and two external factors.

Strengths and Weaknesses are the two internal variables.

Examples of internal and external environment