Definition: elements outside the business that the business has very little control over.
· 10 factors
· Porter’s 5 Model
1. Suppliers- selling the product or delivering a service to the business
2. Consumer- potential buyers of the product
3. Competitors- business that sells the same or similar product
4. Strategic alliance- the merging of two businesses so that they may expand the target market
5. Intermediaries-bridge between the business and the consumer
6. Non-Government Organizations (NGOs)/Non-profit Organizations- organizations that help with environmental, social and educational issues.
7. Industry regulators: controls actions of the business so that the consumers aren’t exploited.
8. Community Based Organizations (CBOs)- providing local services for the community.
9. Trade Unions and Employer Organizations- protects the interest of the employees
10. Other Organizations- organizations that have unique and different roles to fill up the market environment.
Porter’s 5 Models:
1. The level of rivalry in the market- aim is to gain an advantage over competitors.
2. The availability of substitute products- to see what’s better or different between similar products.
3. The treat of new entrants to the market- threat of future competitors.
4. The power of supplier- Finding dominance between business and supplier.
5. The power of the buyer- finding how much control the buyer has.