Categories: Strategy

External Opportunities and Threats

Expansion in domestic and internal market.

Offer new products and services in the market.

Diversification

External Threats

These are the external factors which may harm the company in long run. However, the impact of threats can be minimized to some extent by using the company internal strengths and capitalizing on the opportunities.

What are the examples of External Threats?

Following are the example of threats but not limited to:

Intense competition

Low industry growth

Many new entrants in the market

High taxes and interest rates

Government regulation

Security conditions

Weak economy due to high inflation

Rapid change in technology.

Opportunities and Threats are Uncontrollable

Opportunities and threats are the external factors which are dynamic and uncertain, therefore a company will has limited control over it. It is important to understand that there would be some factors present in the external enviroment but unidentified during the strategy formulation phase.

Tools or methods to identify Opportunities and Threats

EFF (External factor evaluation) matrix SWOT and TWOS analysis are commonly used tools or methods for the external enviroment analysis. However, the accuracy of these tools or methods is still a big question mark.

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