Question

List and discuss the 10 external areas that give rise to opportunities and threats?

Answer 1

The 10 External areas that give rise to opportunities and threats are as follows:

1. ECONOMIC CHANGES - During inflation and delflation a firm could creat opportunities by reducing the price of the product. This could be a threat if the customer ignores the product due to its high cost.

2. SOCIAL CHANGES - This creates a new demand and could even create new opportunities. This could also be a threat if people in the society will completely ignore using the product.

3. DEMOGRAPHIC CHANGES - This helps the firm get opportuinities to acquire the new market place. There wold we more competitive penetration between each firm and try to gain competitive advantage.

4. CULTURAL CHANGES - This could be considered as a threat as this could influence the people to buy new trendy product which leadto decline of the excisting products.

5. NATURAL ENVIRONMENTAL CHANGES - These changes are bought by an individual or natural ecological process.

6. TECHNOLOGICAL CHANGES - A firm without advanced technology in it will suffer to survive in the competitive market. If it doesn't update their products, customers might reject it.

7. GOVERNMENT INTERVENTIONS - New rules and regulations might give an opportunities to purchase the resources at the lower cost. It may even constrain the ability to expand.

8. POLITICAL FORCE - This political interventions may create opportunities or threats. Their self introducing laws might effect the firm adversely.

9. INTERNATIONAL EXCHANGE RATE - This create a competitive atmosphere based on the market demand which is a gain to the firm, at the same time this could be a threat as it's difficuit to survive in the changing market conditions.

10. NEED OF THE CUSTOMER - This need to be keenly observed as their should be an identification of need of the customer and the wants and supply should be produced accordingly.