Analysis Firms External Environment

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The key elements of external analysis are rivalry, substitute, threats, and opportunity. Rivalry takes into account competition or competitive factors within the market, substitute analyzes other related businesses or products similar to yours, and opportunity seeks ways to make current opportunities greater. External analysis is a key component to a strategic plan because each of these factors affect the businesses ability to plan for the future and build their brand. Any business needs to know who their competition is and how they operate, what products are on the market that are similar to theirs, and seek new opportunities to make their business better.

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