In order to meet objectives in a situation of violetand rapid changes in the socio-economic-politicalenvironment, an organisation needs to build upstrengths and capability to convert threats intoopportunities. It needs to be vigilant, analytical inapproach, and initiative- taking to meet challenges posed by dynamic environment. An analysis of externalenvironment would throw light on:
The strategies and plans of growth of competitors.
Existing government policy.
The scope for growth and an improvement in themarket position.An indepth analysis would show the financial,technological, marketing and managerial strengths of the company, and this would help in formulation of suitable investment strategy to meet objectives of theorganisation. The impact of government plans and policies on the environment should be ascertained, andthe inter-linkage between government plans and business plans of the company should be established.This is shown in he Figure I below: