Purpose: To discuss the external environment of the firm, PESTEL analysis, and the Porter Five Forces Model.

Assignment: Write a two paragraph (or more) analysis of the following question – Why is it so important that a company understand and remain highly responsive to the external environment? Can you discuss the external environment within the context of your company’s particular industry and macroeconomic environment? Use one facet of PESTEL analysis or one of the Porter Five Forces to describe a characteristic of your company’s external environment. It is important that you describe a real, specific example. You can use your company’s situation for this analysis. If you are not currently employed, you may describe a former employer or company. If security concerns preclude discussion of your current or former company, an example from the business press is acceptable.

Required materials to include on your discussion board post includes Chapter Three from the textbook and one of the Harvard Business Review articles assigned in Unit Two.

Textbook Citation: Gamble, et. al. (2021). Essentials of Strategic Management, Chapter 3;

Answer preview

           The external market in the business world is very volatile, and any small change can cause a ripple effect, the likes of which could be catastrophic to a company (Gamble et al., 2021). During the Covid crisis, companies had to adapt to new and strange business models to keep afloat (Carlsson-Szlezak, Reeves, & Swartz, 2021). A company such as Amazon took the new external environment instigated by Covid as a stepping stone to strengthen their business. The company used the Porter Five Forces to take advantage of the new external environment in its business model. According to the Five Forces, competitive rivalry is determined by the new entrants into the market, substitute present, buyer power, and supplier power (Gamble et al., 2021). In light of this, the company ensured that they were the dominant element in the market, thus eliminating any new rivals that may have been penetrating the market and consequently ensuring that they have no competition from substitute companies. 

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