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Posted: May 15th, 2023
An external analysis of a company is another indicator
Instructions
An external analysis of a company is another indicator for making strategic decisions. External factors are the general environment of an industry that strategic leaders most likely will not be able to influence. There are six external factors for a PESTEL analysis that influence all firms in a given industry. The PESTEL model groups these segments as: political, economic, sociocultural, technological, ecological and legal.
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Scanning the Environment: PESTEL Analysis
Explore the six PESTEL external factors: political, economic, sociocultural, technological, ecological, and legal.
Choose one industry (automotive, hospitality, manufacturing, high tech, etc.) and discuss the following with your peers:
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Examine one of the six PESTEL factors in relation to your chosen industry. In your opinion, why do you believe this PESTEL factor is the most important to your chosen industry?
Describe one advantage and disadvantage of the PESTEL analysis for strategic planning.
If you were a manager in a global organization, how would you use the technological factor of innovation to gain a competitive advantage?
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Which PESTEL factor is the most important to the automotive industry?
I believe that the most important PESTEL factor to the automotive industry is technological innovation. The automotive industry is constantly evolving, and new technologies are emerging all the time. Companies that are able to successfully adopt new technologies will be able to gain a competitive advantage. For example, Tesla has been able to gain a significant market share by pioneering the use of electric vehicles.
What is one advantage and disadvantage of the PESTEL analysis for strategic planning?
One advantage of the PESTEL analysis is that it provides a comprehensive overview of the external environment. This can help businesses to identify opportunities and threats, and to develop strategies that are aligned with the external environment.
One disadvantage of the PESTEL analysis is that it can be time-consuming and complex. It can also be difficult to accurately assess the impact of each factor on the business.
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How would you use the technological factor of innovation to gain a competitive advantage as a manager in a global organization?
As a manager in a global organization, I would use the technological factor of innovation to gain a competitive advantage in the following ways:
I would invest in research and development to develop new products and services that are ahead of the competition.
I would partner with technology companies to access their expertise and resources.
I would create a culture of innovation within my organization, encouraging employees to come up with new ideas and solutions.
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