External Opportunities and Threats Assignment Help

The External Opportunities and Threats of a Company

An organization normally operates in two types of an environment- one is the external environment, and the other is the internal environment. External environment consists of both threats as well as opportunities, and both these factors are beyond control.

What is an external opportunity?

Factors that are favorable for the existence of a company are referred to as external opportunity. It is always good to monitor external environment of a company because an organization can do well only by utilizing opportunities that are already there.However, if your organization is unable to capitalize on the opportunity and competitors capitalize on it, then this opportunity itself might turn into a threat. Time is a very important factor, and it is essential that an organization uses it properly in order to formulate and execute its strategies.

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Examples of external opportunities

  • Diversification,
  • Expansion in the internal as well as domestic market,
  • Try offering certain new products as well as services in the market,
  • Acquisition of the direct competitors,

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What is an external threat?

These are those external factors that might have a harmful effect on your organization in the long run. But you can definitely minimize their effect of this threat by using the strengths of a company and by capitalizing on opportunities for the company.

Examples of threats

  • Low growth rate of the industry.
  • Interest rates and high taxes.
  • Rules set up by the government.
  • Technological changes.
  • Existing security conditions.
  • Suffering from economy due to very high inflation rates.
  • Intense competition in the market and entry of new companies into the market.

Opportunities, as well as threats, are the external factors which are beyond the control of an organization. They are uncertain as well as dynamic. It is very important for you to understand that there would be certain factors which would remain completely unidentified during the phase of the strategic formulation.

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