External environmental factors are the factors outside the organization that influence the business.

1. External Environment

2. Types of Environment ?

3. Types of Environment ?
• Internal Environment
• External Environment

4. External Enviornment
• Factors outside-the organisation which provide opportunities or pose
threats to the organisation.
• Factors that can impact the ability of a business or investment to
achieve its strategic goals and objectives.
• Uncontrollable Factors

5. Macro Enviornment (PESTLE)
• Refers to the external factors which affects company and its business
and there is no control of compnay on these factors.
• Types of Factors
⚬ Economic
⚬ Non Economic
￭ Political
￭ Demographic
￭ Socio Cultural
￭ Technological
￭ Natural

6. Macro Environment
• Economic -
• The Economic Environment constitutes of economic conditions,
economic policies and the economic system that is important to
external factors of business
• Economic environment refers to the nature and direction of the
economy within which business organisation are to operate.

7. Macro Environment
• Non Economic
• Political and Legal Forces
• Refers to the Political government and legal environment. It has
close relationship with the system and economic policy.
• This refers to set of laws, regulations, which influence the businness
organisations and thier operations.

8. Macro Environment
• Non Economic
• Demographics Forces
• Demography Refers to study of the population. Demographic factors
are as below.
⚬ Size of Population
⚬ Growth Rate
⚬ Family Size
⚬ Educational Level
⚬ Age Composition
⚬ Gender Composition

9. Macro Environment
• Non Economic
• Social Cultural Forces
• Socio Cultural Environment is an important factor that should be
analysed while formulating compnay business strategies.
• These includes peoples attitude to work and wealth, ethical issues,
role of family, marriage, religion and education and the social
responsibilities of business.

10. Macro Environment
• Non Economic
• Technological Forces
• Technological Forces or factors could be said to be the most
pervasive in the environment. Technology refers to the application of
knowledge base which science provides. It is a well established fact
that information and communication technology has revolutionized
business operations

11. Macro Environment
• Non Economic
• Natural Forces
• The natural environment includes geographical and ecological factors
that influence the business operations. These factors include the
availability of natural resources, weather and climatic condition,
location aspect etc.

12. Pestele Analysis
• This is framework used to analyse the external environment analysis.
the process entails learning about various external factors which
affect the organisation.
⚬ Political
⚬ Economic
⚬ Social
⚬ Technological
⚬ Legal
⚬ Enviornmental