Contents

• External environment audit
• About the organization – Mcdonalds
• External environment analysis of Mcdonalds
• Political factors
• Economic factors
• Conclusion
• List of references

Description

Given the fierce competition in the market, all firms try to outdo one another through various means. In such a scenario, the external environment has become very important. Companies are very much concerned about the factors outside their organisation that affect their functioning in the market. Any company existing in the market cannot afford to remain in isolation and is therefore, inevitably thoughtful about its external environment and forces. Hence, external environment analysis has become quite popular. This analysis assists an organisation in determining the factors that may affect an organisation and the manner or nature of that effect. It helps through various ways and is recommended to be undertaken regularly for maintaining competitiveness.
External environment analysis is also known as the Opportunities and Threats analysis. However, there are many variations in the nature of this analysis. Smith (2004) says that the external environment analysis in particular looks at supporters, competitors, opponents and other external impediments. He includes social, political and economic factors in other external impediments as they are likely to affect the organization from the outside. This analysis is also known as external environment audit. SWOT and PEST/ PESTEL analysis are also considered to be means to the external environment analysis of a company.