WORKSHOP TWO- 2.2 EXTERNAL ASSESSMENT A 1
External factorsplay a critical role in business growth and prosperity therefore, itis essential for managers to consider them in strategic management.Change is a conviction so, a process of identifying alteration aswell as adapting new business activities must be put intoconsideration (David & David, 2015). Market competition is oneof the primary external factors it changes advertising strategies,product outline, and costs, thus, if a business is not strong enoughto withhold rivalry, it might end up to collapsing. Notably, it iscrucial to consider consumers before manufacturing products, sincethey are potential determinant of market share. Additionally,technology has changed swiftly in the last decade, thus making it anexternal cause that affects business. If a company does not adapt tothe rapid technological alteration, it risks losing its market share.It influences not only product design but also the delivery services(David & David, 2015).
Even though businesses vary depending on their structure, products,and services, they can fall into bankruptcy due to the significanteffect by high-ranking external factors. For instance, pooradvertising condition in general economy, and the particular marketin which a business maneuvers are common causes of bankruptcy. Theeconomy has a tendency of subsequent booming and bust cycle of rapidgrowth followed by recessions. During this period, consumers’confidence and expenditure are likely to decline, which can result inlow-income. Corporations implicated in a particular niche market canalso be vulnerable to reallocation in customer partiality. Likewise,competition from big business also lessens revenue of small ones,thus leading to insolvency (David & David, 2015). Personnelinvolved in decision making, and planning in a company ought topractice critical thinking in surveying the market and externalfactors.
David, F. R.,& David, F. R. (2015). Strategic Management: A CompetitiveAdvantage Approach, Concepts and Cases(Chapter 3, pp 58-87).Retrieved from:http://amberton.mylifeblue.com/media/Syllabi/Winter%202015/Graduate/MGT6203_E1.pdf