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free smude BBA Semester 1 solved assignments for BBA103 Q1.The External Analysis examines opportunities and threats that exist in the environment. How is it done? What should business managers do to access the business environment?

Answer:  Both opportunities and threats exist independently of the firm. The way to differentiate between a strength or weakness from an opportunity or threat is to ask: Would this issue exist if the company did not exist? If the answer is yes, it should be considered external to the firm. Opportunities refer to favorable conditions in the environment that could produce rewards for the organization if acted upon properly. That is, opportunities are situations that exist but
must be acted on if the firm is to benefit from them. Threats refer to conditions or barriers that may prevent the firms from reaching its objectives.

The following area analyses are used to look at all external factors affecting a company:

  • Customer analysis: Segments, motivations, unmet needs
  • Competitive analysis: Identify completely, put in strategic groups, evaluate performance, image, their objectives, strategies, culture, cost structure, strengths, weakness
  • Market analysis: Overall size, projected growth, profitability, entry barriers, cost structure, distribution system, trends, key success factors
  • Environmental analysis: Technological, governmental, economic, cultural, demographic, scenarios, information-need areas
  • Goal: To identify external opportunities, threats, trends, and strategic uncertainties

The SWOT Matrix helps visualize the analysis. Also, when executing this analysis it is important to understand how these elements work together. When an organization matched internal strengths to external opportunities, it creates core competencies in meeting the needs of its customers. In addition, an organization should act to convert internal weaknesses into strengths and external threats into opportunities.

Steps for business managers

  • Focus on your strengths.
  • Shore up your weaknesses.
  • Capitalize on your opportunities.
  • Recognize your threats.

 Now identify

  • Against whom do we compete?
  • Who are our most/less intense competitors?
  • Makers of substitute products?
  • Can these competitors be grouped into strategic groups on the basis of assets, competencies, or strategies?
  • Who are the potential competitive entrants? What are their barriers to entry?

Next evaluate

  • What are their objectives and strategies?
  • What is their cost structure? Do they have a cost advantage or disadvantage?
  • What is their image and positioning strategy?
  • Who are the most successful/unsuccessful competitors over time? Why?
  • What are the strengths and weaknesses of each competitor?
  • Evaluate competitors with respect to their assets and competencies.
  • Regarding the given points we need to raise the following questions:

Size and growth: What are important and potentially important markets? What are their size and growth characteristics? Which markets are declining? What are the driving forces behind sales trends?


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