A thorough analysis of the environmental factors shall enable the analyst to recognize the inherent risk involved and also enable him to take advantage of the opportunities. While some factors, on the other hand, present greater opportunities for a great accomplishment of the objectives. Some factors of the environment present threats to the company’s present strategy and the accomplishment of the objectives. Hence business environment analysis helps to forecast the future prospects of the business concern. If the anticipations and expectations are precise and accurate, the decisions are likely to be better. Again the entrepreneur can anticipate only a few of such changes and not all. Moreover, such changes cannot be predicted precisely well in advance. He can identify the opportunities and avenues in which the businessman can operate successfully and achieve the object.Ĭhanges in the environment are often frequent and all of a sudden. This will enable him to take proper preventive measures. He can ascertain the possible threats to the business. Threats Inherent in any Opportunityīusiness Environmental diagnosis helps the businessmen in two ways. If the company fails to adjust or react to the demands of the environment, by changing their strategies, it can’t achieve corporate objectives. Happenings in the Market PlaceĮvery firm should be in constant touch with the market place and should be aware of what is happening in the marketplace. It also helps strategies to develop an early warning system to prevent threats or to develop strategies, which can turn a threat to the firm’s advantage. Identification of Threatsīusiness Environment analysis and diagnosis give businessmen time to anticipate opportunities and to plan to take optional response to these opportunities. However, environmental analysis enables the business enterprises to study the environment and formulate the strategies accordingly, which will result in successful attainment of objectives. When a company neglects to adjust its strategy to the business environment, or does not react to the demands of the environment by changing its strategy, the company cannot achieve success in attaining its objectives.
0 Comments
Leave a Reply. |