External environment are factors that have indirect influence on the business. The business cannot control these factors as they are more powerful therefore they need to be aware and deal with them. Any business should create strategies that deal with these forces so that it identifies the threats that they can bring to the business.
The organization then needs to navigate its strategies in a way that it becomes successful by matching the internal strengths to external opportunities that prevails.
The main factors that affect external environment are classified into micro environment and macro environment. Micro environment are forces that have a direct bearing on how the firm operates. The forces are more linked to the firm. However, they do not affect the firms in the industry in the same way. Some of the micro environmental forces include; customers, suppliers, intermediaries, competitors and the public. A business exists because of the presence of customers therefore the major task is to look for a way of getting and sustaining them. Competition always exists within firms because more customers go for particular type of products in a particular firm making it more popular. This makes customers important as they enable the firms to operate.