An external environment is composed of all the outside factors or influences that impact the operation of business. These are generally uncontrollable for a business concern.
The external environment can be broken down into two types i.e. (1) the micro environment & (2) the macro environment.
(1) Micro Environment
It consists of the factors that directly impact the operation of a company such as:
• Customers
• Suppliers
• Competitors
• Market Intermediaries
• Public
(2) Macro Environment
It consists of general factors that a business typically has no control over. The success of the company depends on its ability to adapt the such macro factors. These factors are:
• Economic
• Political
• Socio-cultural
• Technological
• Global
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