ANALYZING FIRM’S ENVIRONMENTDefinition of terms:FIRM- is a business organization,

such as a corporation, limited liability company or partnership, which sells goods orservices to
make a profit.ENVIRONMENT- is everything that is around us and constantly interact with it and
adapt the conditions in their environment.Analysis is the critical starting point of strategic
thinking” (Kenichi Ohmae)Environmental analysis is a strategic tool. It is a process to identify all
the external and internal elements, which can affect the organization’s performance. The analysis
entails assessing the level of threat or opportunity the factors might present. These evaluations are
later translated into the decision-making process. The analysis helps align strategies with the firm's
environment.Business environmentIs a collection of all individuals, entities and other factors,
which may or may not be under the control of the organisation, but can affect its performance,
profitability, growth and even survival.Businesses must constantly analyze the trade environment
and the market.The Business Environment is broadly classified, into two categories:INTERNAL
ENVIRONMENTEXTERNAL ENVIRONMENTInternal environmentThe factors which exist
within the organization, imparting strength or causing weakness to the organisation, comes under
internal environment.External environmentThe factors and elements outside the organization
which may affect its performance, either positively or negatively.Those factors which are beyond
the control of business enterprise are included in external environment.