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Topic 7 - The External Audit (Part 1) (Key Social, Cultural, Demographic,…
Topic 7 - The External
Audit (Part 1)
Definition
Focus to identify and evaluate trends and events beyond the control of a single
Reveal opportunities and threat confronts an organisations
Offer actionable responses
Key External
Forces
1. Categories
Economic forces
Social, cultural, demographic, natural environmental forces
Political, governmental and legal factors
Technological forces
Competitive forces
2. Process of Performing
an External Audit
Gather competitive intelligence and information about
Economic
Social
Cultural
Demographic
Legal
Technological trends
Political
Governmental
Information should be estimated and evaluate
Should be communicated
3. Economic Forces
Shift to service company
Availability of credit
Level of disposable income
Interest rate
Inflation rate
GDP trend
Consumption pattern
Import / export factors
Consumption pattern
Unemployment trend
Key Social, Cultural, Demographic, and
Natural Environmental Variables
Number of marriages
Number of divorces
Number of births
Number of deaths
Energy conservation
Social programs
Pollution control
Attitude towards foreign people
Social responsible issues
Per capita income
Technological
Forces
The Internet of Things
3D painting
Mobile devices
Biotech
Analytics
Robotics
Artificial Intelligent (AI)
Autotech
Political, Government and
Legal Variables
Environmental regulations
Number of patents
Changes in patent laws
Equal employment laws
Unionisation trends
Entrust legislation
Global price of oil changes
Local, state and federal laws
Local, state and national elections
Import / export regulations
Result of Technological
Advances
Major opportunity and threats must be considered in formulating strategies
Can create new competitive advantages
Can create new markets, result in new and improved products
Can reduce or eliminate cost barriers between businesses
Characteristics of Most
Competitive Companies
Continually to adapt, innovate and adapt
Use vision / mission as a guide for all decision
Hire and retain the best employees and managers
Strive to stay cost - competitive on a global - basis
Competitive
Intelligence
Systematic and ethical way to analyse and gather data about competitors' activities and trends
Purpose to improve the business
Objectives
provide a general understanding of an industry and competitors
Identify areas which competitors' area are vulnerable and to assess the impact
Identify potential move a competitor would make