Which of the following statements is true of external analysis?
A)It is capable of analyzing only the threats that a company might come across.
B)It studies the factors that influence an organization's appeal and environment.
C)It focuses on the factors that influence employees of an organization to leave.
D)It analyzes a firm's resources and capabilities to assess how effectively it is able to deliver unique value.

Question

Quizplus · Accepted Answer

External analysis focuses on studying the factors outside of the organization that can influence its performance, such as the industry, market, competition, legal and regulatory environment, economic conditions, and technological developments. It helps the organization understand the opportunities and threats in its external environment and devise strategies to respond to them. It does not primarily focus on employee turnover or assessing the firm's resources and capabilities.

Which of the Following Statements Is True of External Analysis