Question

What is the objective of external analysis? How would you distinguish between an effective and an ineffective external analysis? What would you say would be the most useful way to conduct an external analysis? Why? (Strategic Marketing)

Answer 1

Answer-- Objective of external analysis are- The main objective of external analysis is to find out the external factors which can influence the business activities of the organisation.The impact of external factors can be reduced by taking an advance analysis of external analysis.External factors shows the position of the business that in which sector business is strong and in which sector business is lacking so by the proper external analysis we can resolve and balance this situation.External analysis shows the weakness of the company which means according to the current external competitions where company is week against its competitors in this we can work on it by input of external analysis,external analysis also shows the opportunity which company can grab and earns profit and it also shows the threats which is alarming situation for the company where the company can recovered early with the future threats.

For effective external analysis company should involve their management team like members from sales,marketing ,purchase ,research and development ,production.They can effectively and efficiently handle the situation of market and can correct it if company is lacking in some points,effective analysis involves complete study or analysis of external factors like customer choices,technological changes ,political changes etc.Whereas in case of ineffective external analysis company and company members takes it as for granted analysis ,sometimes only top level management of company takes all decisions without involving any middle level management members ,they also don't care the changes in the external factors this is the completely ineffective and failure external analysis.

The most useful way to conduct an external analysis are--

External analysis can take place by both online and offline modes.In online mode we can find out the changes in the taste and preferences of the consumers by the conducting some online surveys ,we should also be in touch with the government policies which can impact the business activities .In offline modes ,we can work on ground level with the involvement of management team to collect information about the competitors or how can we reduce the production cost due to technological upgradation.