What technique is used to analyse the External Business Environment?

What technique is used to analyse the External Business Environment?
A . Porter’s Five Forces Analysis
B . Resource Audit
C . Value Chain and Value Stream
D . Lean Thinking

View Answer

Answer: A

Explanation:

Porter’s Five Forces Analysis is a technique used to analyze the industry or business domain within which an organization operates. It helps to identify the competitive forces that influence the profitability and attractiveness of a market. These forces include the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitute products or services, and the intensity of competitive rivalry. This analysis is essential for understanding the external business environment and for strategic planning.

Reference: Business Analysis.pdf, Chapter 3, Strategy Analysis