By Todd Ballowe Published on 03-05-08
External Analysis

Definition: The External Analysis examines opportunities and threats that exist in the environment. Both opportunities and threats exist independently of the firm. The way to differentiate between a strength or weakness from an opportunity or threat is to ask: Would this issue exist if the company did not exist? If the answer is yes, it should be considered external to the firm.

Opportunities are situations that exist but must be acted on if the business is to benefit from them.

Threats refer to external conditions or barriers that may prevent the firms from reaching its objectives.

Check out our SWOT definition and video and our article on Internal & External Analysis.