To determine: Why it is important for any organization to study its external environment.
Introduction:
Strategic management refers to formulating and implementing the way to achieve the goals by considering available resource and the internal and external environment. It will be framed by the top management on behalf of an organization.
Explanation of Solution
Determine why it is important for any organization to study its external environment:
As the external environment affects the performance of the firm and the industry, understanding the external environment is important for any organization. It helps the company to mitigate the threats and control the opportunities accordingly. Five forces model helps to determine the reason for the profitability of the industry and it helps to create and implement the strategies to improve the profits of the firm.
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