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In this context we are looking at ‘the market’ which is ‘external’ to an organisation. When we consider external factors we look at what is not in the organisations control. It is controlled externally and this poses some significant threats AND potential opportunities.

You may want to think that a business or organsation shapes its own goals and is in control of this. Well, control can only be ‘internal’. We cant control what happens outside the business, things that occur and that could impact on business. So ok in some ways the business says, this is what we are aiming for and what we want to do but there has to be an external need or want first or else whats the point?! It also has to be ‘doable’.

A popular acronym and technique used to assist organisations in identifying external factors is known as a PESTLE and I have a couple of posts on this so please read these here first so you have an understanding of them. Acronyms are designed to prompt you with headers that you need to think about so you can scan the environment and horizon across the board. This doesn’t mean they are the be all and end all of course as the PESTLE doesn’t actually head up the market in terms of trends and patterns, demands and competition so its only really a starting point and you would need to consider these within the PESTLE headings. Eg

How does the economy impact trends such as luxury goods and how can changes in legislation effect business in terms of tax, pensions, environmental pressures.

Theres a lot to consider and far too many scenarios for different industries to go into here.

My method, when tutoring Level 7 students to start their business plan journey is to start with a SWOT, follow on with a PESTLE and then move onto scenario planning. This then sifts out the insignificant and leaves the important factors free for deep analysis. Scenario planning can then effectively shape the organisations goals. Ie, what should it aim for and how is it going to get there successfully.

Lets have a look at a couple of examples we might find in a PESTLE.


Society is an easy one as this most certainly guides the market. It is the sociocultural nature of humans that decides what it is we want and therefore what the market needs to provide. This in turn influences what business put forward to offer us and their strategic goals will be shaped by the changing needs and desires of the end consumer.


In many ways businesses are held by technology. This market is crucial in pushing forward trends in the market. Its true that many organisations reliant on technology are held in a state of waiting for the next technological breakthrough so they can grab a hold of this fast moving train and make the most out of the opportunities out there.


We will look at this as it is often not paid the attention it deserves. Legal matters do and of course should be an important part of our business Market. My next post looks at legal obligations so here I will keep it brief but consider how the Law sets standards in such as the manufacture of certain products. This must then impact on how an organisation shapes it goals in terms of quality and sustainability. An organisation operating illegally wont last long in our competitive market.

For learners undertaking the Level 3 Diploma in Management, this post assists with:

Unit 304 BA59 Explain how an organisation’s goals may be shaped by the market in which it operates