How to Prepare Marketing Environment Analysis

Market environment analysis is an analysis tool used to identify the factors that affect the organisation in both internal and external ways. Environment analysis is implemented by the organisation to determine the factors that affect the organisation directly.

An entrepreneur establishes a structure to maintain the employee standards through stereotypical culture and standard policies. Environment analysis is concerned with the external environment that is used to identify issues and opportunities. Based on the external situation, strategies are developed that relate with the market.

Business market is always non-consistent and improvising strategies are not suggested for marketers. Pestle analysis tool is a renowned tool used to analyse the external environment. These steps will identify the external environment for any organisation.

Identify the PEST Factors: Examine the environment and identify the vital factors and necessities that affect the organisation position in the market.

Find Opportunities: Identify the opportunities present in the external environment and analyse the opportunities that can improve the business environment.

Identify Threads: Find the problems that affect the business in the market environment and identify the scope of the problem, which will showcase the intensity of the problem.

Take Action: Make use of identified opportunities and implement accordingly in the market to reduce the issues and improve the business in the market.

Marketing Environment Analysis

The comprehensive identification of strengths and weaknesses of an organisation that reflect on the business. It is the ultimate objective of the performing environment analysis. Identification of opportunities and threads will help the organisation to grow and improve the standards in the market.

Pestle analysis is used widely to analyse the external environment. Each letter in the word “PESTLE” are different factors that relate with the opportunities and threads. Political, economic, social, technological and legal are the different elements that describe the factors to showcase the external environment. 

Political Factors 

Political factors are described as the guidelines provided by the government. A manager should be considered both national and international elements and analyse the beneficial and problematic situations for the organisation could affect in future.

  • Stability of the government
  • Foreign policies with export partners
  • Tax Laws
  • Freedom of press
  • Involvement of government in trade unions and agreements  

Economic Factors 

Economic factors are focused on the market and economy. Manager needs to consider the negative and positive factors that will affect the organisation. Based on the negative and positive impact on the business, financial strategies are drawn by the managers, keeping time and resources as the primary elements.

  • Interest Rate
  • Stock market trends
  • Inflation rate
  • Exchange rate
  • Fiscal and monetary policy   

 Social Factors 

Evolving society is the major aspect to focus National and international perceptions of communities. Social factors deal with all the customer insights to take the company into society for better communication using company products and services.

  • Family size
  • Income level
  • Buying behaviour
  • Concern towards savings and investment
  • Brand and price conscious

Technology Factors

Adaptable and innovative technologies lead the business with a competitive speed. Regular external environment analysis will provide the updated insights to the company about the technology, to adopt and utilise in the way that reflects positively on the business.

  • Automation process
  • Budget assigned to research and development
  • Incentives
  • Communication and basic infrastructure

Legal Factors

Appropriate follow-up of regulations will drive the organisation in a positive direction. Companies must deal with regulations, which are specified to the country. Managing bodies in the organisation must look after these legal factors for a positive way.

  • Consumer protection laws
  • Employee protection laws
  • Product regulation 
  • Patent infringement  


Market environment analysis is a significant aspect that should be focused by every company in the market. Factors that have been described are the essential elements, which will help an organisation to identify opportunities and threats.

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