External environments are a set of forces and conditions outside of a given business or organization that can influence the overall performance of the business or organization. There are two different environmental categories under external environment, with those bring: general environment and competitive environment.
A general environment consists of the forces that effect the competitive environment of a business or organization. There are five different forces that effect the general environment. The first of those forces being globalization. This can be any from trade agreements to demographics and outsourcing services to imports and exports. The second force within a general environment is technology. These are the various advanced that have a direct effect on the goods and services that companies will produce, the raw materials that they will purchase, and the technologies that are used for the ordering and shipments of the goods that companies manufacture. The third force is sociocultural. This is changes in a number of different demographic factors, such as: age, gender, educational level, race, and a number of those factors. Companies need to identify the difference in wants and needs based on their sociocultural factors. The fourth factor is the economy. This includes various factors, such as: unemployment rates, gas prices, housing market, and interest rates. All of these factors have a direct impact on the economy and need to be closely analyzed by businesses