Now that you are a qualified and certified analyst of the external environment, please share your ideas of why you think thorough evaluation of the external environment is important.
It might be useful to look at Mr. Porter and his analysis when comining to your conclusion.
Support your analysis with concepts and theories we are studying - you may use your text or any outside source.
External environmental evaluations are important for a company to consider because investing in business is risky with knowledge and without is just inviting losses. Environments such as political, economic, and are often seen as important, but Porter has given us five that are close to the company and should be considered in all businesses on a regular basis.
The most commonly overlooked or least considered in my experience is threat of substitutes. If one owns a catering business, other caterers are not the only threat, so are party supply shops, retailers and chains such as K Mart and Target, clowns, restaurants, and parks. So looking to see what substitutes for ...
Using the Porter system for scanning the external environment for all the possible problems. Includes how to understand and review the threats and information available for making risk assessments before investing.