Mastering External Business Analysis for Strategic Growth

Analyzing External Factors Influencing Your Business

To effectively plan and develop your business, it's crucial to identify and assess the external variables that may influence its activity. This involves seeking information that can be helpful to your project, considering not only laws, rules, regulations, and measures, but also the broader political and economic situation, population trends, culture, and advancements in science and technology.

Key External Factors to Analyze (PESTEL Framework)

The primary types of external factors to analyze include:

• Political Factors

  Investigate government policy decisions that could significantly impact the business world and your future enterprise. This includes understanding political stability, trade policies, fiscal policies, and government initiatives.

• Economic Factors

  Analyze the current economic status and projections relevant to your company's creation and, more importantly, the immediate area of influence where your markets will operate. Consider factors like inflation rates, interest rates, economic growth, and consumer spending power.

• Sociocultural Factors

  Businesses are profoundly affected by societal changes. Research prevailing lifestyles, cultural norms, and demographic trends at the time of establishing your company, as well as future shifts. This includes population growth, age distribution, health consciousness, and cultural attitudes.

• Environmental Factors

  Growing social concern about the environment necessitates finding new, sustainable production methods, non-polluting energy sources, and adhering to laws that control environmental deterioration. Consider climate change, resource scarcity, and environmental regulations.

• Technological Factors

  Research, Development, and Innovation (R&D&I) are of high strategic importance in business. Explore the types of technology, organizational forms, and new materials being used in production or services that could impact your business plan. This includes automation, artificial intelligence, and new communication technologies.

• Legal Factors

  Investigate the laws that affect the creation and development of your business. There are general laws that apply to all businesses, and other specific standards that will affect different areas of influence, such as legal norms from the European Union, national laws, regional (Autonomous Communities) regulations, and local ordinances.

Preliminary Diagnosis of Future Activity

Once the external information is gathered, you must analyze and assess its potential influence on the activity you plan to develop. After this thorough analysis, you will be able to identify three basic aspects crucial for evaluating the impact of external factors on your project:

• Opportunities: Positive influences that can be leveraged for growth and advantage.
• Threats: Unfavorable influences that must be anticipated and mitigated.
• Strategic Responses: Ways of acting or adapting to capitalize on opportunities and counter threats.

Finally, you should summarize the threats and opportunities identified for your project. With this comprehensive understanding, you can formulate a preliminary diagnosis based on the external analysis performed. After evaluating these factors, you can then determine appropriate competitive strategies for your business.