How to Analyze a Business Environment

A business environment analysis involves collecting and then interrogating data so that you can produce a report that identifies potential threats from external factors and other aspects that could impair the success of your business.

SWOT analysis

This type of report is also regularly referred to as a marketing environment analysis. It is considered something that is integral to future success as it maps out the conditions required for growth. You can use this tool to analyze business environment elements, allowing you to see the framework required to complete a successful analysis.

Meanwhile, here are some pointers on how to analyze a business environment.

Conduct a PESTLE Analysis

There are several proven methods that provide you with the analytical prompts required to conduct a meaningful investigation of your processes and identify strengths and weaknesses within the business.

A PESTLE analysis covers the following areas of risks and macro-environments that could be influential to the success of your business. This analysis is broken down into the following sub-groups.

P – This is where you take a look at the political landscape to identify factors that could have an impact on your business.

E – Carry out an assessment of how economic conditions and the general trading environment will present potential challenges or create opportunities for your business.

S – This sub-group focuses on social factors and influences that could be relevant to how your business performs. It is also designed to help you identify how to align your business accordingly.

T – This aspect of the analysis is all about focusing on technological developments and reviewing your capabilities in this sphere.

L – Your business needs to be aware of legal implications and challenges that it may need to face or adjust to in order to achieve compliance. It is where you need to be looking at what legal changes could impact how you operate, now and in the future.

E – Environmental factors can now be considered as elements of your trading ethos that need to change or adapt in some way to meet these seemingly ever-increasing environmental headwinds that can steer a business off-course.

Carrying out a PESTLE analysis provides you with the framework to ask all of the right questions and analyze factors that could have a potential impact on your business. The answers to these questions should enable you to develop strategies to overcome the issues identified.

SWOT is Another Popular Method

You may already be familiar with a SWOT analysis. It is a technique that you can use successfully to identify four key things about your business.





Each of these headings is self-explanatory. When you carry out a thorough analysis of your current business environment by looking at what sort of strengths and weaknesses you have it prompts you to develop a strategy to address any issues and decide how you can play to your strengths.

The same applies to identifying opportunities and threats that have the capacity to improve your business and deal with threats that you see as a result of your analysis.

You can use a tried and tested framework for analyzing a business environment, or you can find another way to identify all of these key factors that could prove to be so influential.

Either way, your business should be in better shape to deal with any challenges and take advantage of any opportunities once you have carried out an analysis.

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