External factors originate outside the organization but can influence its operations and strategic direction.

Economic Factors

• Economic fluctuations – Diversifying income sources, closely managing costs, building emergency funds, adapting to market
changes, maintaining efficient cash flow, identifying potential opportunities during downturns, and staying informed about economic
trends
• Current exchange rate – Regular monitoring of market fluctuations.
• Raw material cost – Carefully tracking the raw material usage, negotiating with suppliers, diversifying the sourcing options,
optimizing inventory levels, implementing lean manufacturing practices to reduce waste, monitoring price fluctuations, and
considering alternative materials or production processes when possible.
Market trends
• Customer demands – Prioritizing active listening, demonstrating empathy, clearly communicating with customers, managing
expectations, staying calm, and being open to feedback, while also assessing their needs and finding solutions to address their
concerns thoughtfully; essentially, strive to create a customer-centric culture where you prioritize understanding and meeting
customer needs. Emerging technologies – New or recently introduced technologies that have the potential to change society and the
economy
• Emerging technology – actively staying informed about new advancements, assessing their potential impact on your field, evaluating
their feasibility for your business, considering pilot projects to test them, and fostering a culture of continuous learning within your
organization to adapt and potentially leverage new technologies as they arise.
• Competitor activity – Conducting a thorough competitor analysis to understand their strengths and weaknesses, identifying
market gaps, and then leveraging our unique selling proposition (USP) to differentiate our product or service, while actively
monitoring their actions to adapt our strategies accordingly; key steps include identifying y competitors, analyzing their
products and marketing strategies, and developing a strategy to highlight our unique advantages in the market.

Social environmental factors

• Sustainability concerns – conducting a sustainability assessment, reducing waste, switching to renewable energy, optimizing
resource usage, engaging with your supply chain to ensure ethical practices, promoting transparency, setting clear
sustainability goals, and actively monitoring progress while incorporating environmental, social, and economic factors into
decision-making across your operations.
• Public perception – focusing on being transparent and accountable, actively engaging with your audience, listening to
feedback, addressing concerns promptly, communicating clearly and consistently, and taking proactive steps to build a
positive image by aligning your actions with your stated values.

Legal and regulatory changes

• New laws – The businesses will establish a proactive monitoring system to stay informed about upcoming legislation, consult with legal
experts to assess the impact of new laws on their operations, develop implementation plans to adapt to changes, and regularly review
compliance procedures to ensure ongoing adherence; this includes actively engaging with industry associations and government
agencies to gain insights into potential regulatory shifts.
• Compliance requirements – continuously monitor relevant regulations, conduct regular risk assessments, develop clear compliance
policies, provide comprehensive employee training, and implement internal audit processes to identify and address potential
issues; actively communicating updates and changes to staff is also crucial.
• Standards updates – Establishing a dedicated compliance team to actively monitor relevant updates, conducting regular internal
audits to assess compliance gaps, implementing necessary changes to policies and procedures, providing ongoing employee training
on new regulations, and leveraging technology to automate compliance tracking and reporting; this ensures proactive adaptation to
evolving legal landscapes and minimizes potential risks.