Given the importance of understanding the external environment, why do some firm
ID: 458385 • Letter: G
Question
Given the importance of understanding the external environment, why do some firms fail to do so? Give an example of a firm that did not understand its external environment. What were the implications of the firm’s failure to understand that environment? Given the importance of understanding the external environment, why do some firms fail to do so? Give an example of a firm that did not understand its external environment. What were the implications of the firm’s failure to understand that environment?Explanation / Answer
The external environment involves very complex analysis and the same is very dynamic and unpredictable which depends on multiple factors and it is out of control of the organisation.
It needs the experts analysis and it is very costly to get their consultancy.
The best example for an organisation which fail to understand thexternal environment is m/s Nokia INC.
It results in huge losses like loosing customer base, employee turnover, reduced market share, decline in financial position and reputation, may result in winding up etc.,