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External Environmental Analysis is the systematic process of examining and evaluating factors outside an organisation that may influence its performance, strategies, competitiveness, and long-term survival. These external factors are generally beyond the direct control of the organisation, but they can create opportunities as well as threats. In Strategic Management, external environmental analysis helps managers understand the conditions in which the organisation operates and formulate strategies that are appropriate to changing market conditions. It enables an organisation to anticipate changes, reduce risks, identify new opportunities, respond to threats, and gain competitive advantage. The external environment can be broadly studied at two levels: the macro-environment and the micro-environment. The macro-environment consists of broad forces that affect industries and organisations across a country or economy. One of the most widely used frameworks for analysing the macro-environment is PESTLE analysis. PESTLE stands for Political, Economic, Social, Technological, Legal, and Environmental factors. These factors influence business decisions, industry attractiveness, consumer behaviour, investment decisions, and strategic planning. Political factors refer to the influence of government policies, political stability, taxation policies, trade policies, government regulations, public expenditure, and political institutions on business activities. Governments determine the overall framework within which organisations operate. A stable political environment generally encourages investment and business expansion, whereas political instability can increase uncertainty and business risk. Government policies relating to foreign direct investment, import and ___ _____ __________ _____ __________ ____ _______ ________ _____ ____ _______ ____.
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