ABSTRACT
This chapter focuses on the analysis of the business concern in terms of the examination and assessment of the external and internal environment. The basic premise is that an organisation's business and financial performance are influenced by their internal and external environment. The external environment of an entity reflects those factors that are outside the entity but have an impact on the entity's ability to operate. The external environment consists of competitors; the socio-economic system; and the political and legal systems. According to Mind Tools, the political, economic, social and technological analysis enables management to understand the 'big picture' of the environment in which an organisation operates, and forces them to think about the opportunities and threats that lie within it. According to Johannas von Franz and NikolausSchall, practitioner’s guild: strengths, weaknesses, opportunities, threats is used to identify and analyse an entity's strengths and weaknesses, as well as the opportunities and threats that reflect its external environment.
