Environmental Analysis – Global Business Environment

Conduct an environmental analysis to look at and comment on the world in which you will be operating. Unemployment rates for the past 2 to 5 years and the impact it has had on sales and the overall customer base is an effective way of demonstrating the effect of “external” pressures onto your business. Threats due to environmental conditions (like unemployment, layoffs, recession, high interest rates) reduce consumer activity, and should be explored in your marketing plan.


Political and Legal

  • Identify the regulations, permits, insurance, liability, municipal zoning and taxation requirements that you must follow in order to operate your business.
  • The business climate of your town, village and surrounding area is an important influence on your day-to-day operations. Reflect on topics such as taxation, zoning and other factors.



  • Describe the population base that exists to support your product. Identify the market size for your product, and the people that make up your product/service’s consumer group. Provide information about:
  • Where they live, What products do they buy, How much they spend on similar products each year,
  • Where they shop for these products, etc. Indicate whether or not your product is geared towards a specific age group, with spending patterns and consumer demands. Indicate whether this group is shrinking, expanding or yet to be tapped into.



Environmental Analysis – Local Business Environment
Conduct an environmental analysis that looks at and comments on your local area and your network of business contacts, competitors and customers.



  • Identify your sources for direct purchasing by describing their locations, the frequency of your orders and the type and amount of supplies you will be ordering.



  • Explain any particular client support or other specialized consumer groups that can be identified apart from the general public. Describe the spending and product requirements of these groups and the characteristics of your company that support the product and services they are demanding. Indicate whether your product is part of the day to day activities of a specific group or the general public. Identify the influence this will have on your projected sales. Identify your networking contacts in the community, and the overall atmosphere surrounding your business. Identify the influence this will have on your projected sales. Predict the receptiveness of your product concepts, and how the community perceives your business.
  • Describe the expected response to your advertising, and how this will boost sales. Indicate what overall market trends you will be following in order to stay current and “in touch” with the public. What special techniques will you be employing in order to match consumer demands.



  • Identify your direct competition by naming their business, describing their facilities and operations, identifying their share of the consumer market, realizing support for their product and by reviewing the weaknesses of their approach.



Consumer Analysis

  • Identify your target market, describing how your company will meet the needs of the consumer better than the competition does. List the expectations consumers have for your type of product. Since demands may be different, products and services will vary between competitors. Quality, price and after sales service are just some of the areas where this difference occurs.
  • Identify the segment of the market that will benefit from your product and area of expertise as well as your approach to selling your product or service.
  • Predict the sales potential that may be realized by tapping into and holding onto your target market, and attracting others through different strategies and approaches. These different approaches can be all done at the same time or be more incremental – obtaining a core audience for your product or service first, then expanding into the rest of the market. Identify the sales potential for each of these target groups.



Strengths, Weaknesses, Opportunities and Threats Analysis



  • List the strengths of your business approach such as cost effectiveness, service quality and customer loyalty.
  • List other assets of your operations such as flexibility, innovativeness, response to external pressures, creativity and company stability.
  • Relate your experience (professionalism, duration and diversity) and the contacts you have made in all areas of your businesses operations – from suppliers to clients, government officials to business professionals.



  • Describe the areas of weakness in your company’s operations, such as government policies and procedures, and management inexperience.
  • Capital financing, credit, loans and other financial debts should be identified, with strategies to control their effect on your business.
  • Recognize the limited impact of a new product on the market – its lack of recognition may be attributed to the companies inexperience in promoting.
  • Recognize that poor performance will mean lower than expected profits – which will result in a lot of the money going to reduce debts rather than improving business facilities, operations and expanding markets.



  • Examine how proper timing, as well as other factors such as your company’s innovativeness, may improve your business’s chances of success.
  • Use tools such as customer surveys to emphasize the need for product quality and after sales service.
  • Relate your company’s focus to a segment of the present market that is being overlooked.



  • List the external threats to your business’ success, such a existing and newly emerging competitors, performance of the overall economy, and your dependency on other businesses such as suppliers, retailers and distributors for market access and support.


Author: arunadevi

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