Discuss the importance of monitoring the external business environment.


Discuss the importance of monitoring the external business environment.

The External Business Environment:

These are the factors outside the organization that influences its operations and overall performance. The external environment may be composed of the demographic, political, economic, social, legal, international, and other factors that affect the business outside its structure. Technological advancements and competition can immensely impact the business because these are the significant drivers of business performance in the current market. An excellent example of the external business environment is government regulations such as taxes that might raise the cost of production, resulting in higher product or service prices.

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Due to the business's crucial role in its external environment, it is essential to monitor such factors. Monitoring the external environment can be...

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What is an External Environment in Business? - Definition, Types & Factors


Chapter 5 / Lesson 14

Learn about the external environment in business. Read a definition of the external environment, learn the external factors that affect business, and see examples.

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