Describe the relationship of the External factors to building the Competitive

Advantage of an organization
In an organization, having a competitive advantage against their competitors is like being ahead
of their game in the industry. Competitive advantage will help them have more customers and be
the chosen one in their line of business. To be able to gain a competitive advantage, one must
know how to deal with the different external factors to have mastery of what to improve, why its
should be done, how to execute, and if it is worth the risk.

Economic forces is one of the external factors that will help you gain an advantage that will be
helpful to the organization. Knowing and monitoring the status of the economy will help you
come up a better way to decide on how your organization shall perform in the industry.
Economics is very broad, you have to consider not just the inflation rate that will surely affect
the liquidity and operation of your business, this also one of the crucial part of forces that an
organization must look for if they want to have a competitive advantage despite of all the
changes in the economy.

Social, Cultural, Demographic, and Environmental natural forces is another factor to consider if
you want to come up a competitive advantage. Here lies all the information you need to be able
to know how to perform according to your target customers needs and meet their satisfaction.
Your organization needs be aware of the different kinds of information in relation to their target
customers and their target community to understand each and every differences of their
customers. For example knowing that your target customers are women, you also have to
consider if your target are of all ages, or only the teens or the elderly. Aside from that, knowing
about the environmental state of your target is also important because for example you wanted to
build a Barbecue stand in a community where people aren’t allowed to eat meat or most of the
people belonged in that certain community is elderly which are not allowed to eat those kind of
food because it might affect their health.

Political, Legal, and Governmental forces, I think this one is important as the rules an
organization have for their employees and etc. Legality is simply needed because without legal
consent to operate, your business might operate but for only a short period of time and you’ll
need to pay a fine which will only complicate your situation instead of having a competitive
advantage. I am not sure on the part of political but I guess this will somehow affect an
organization, their stand on political issues must be neutral because in my own opinion they shall
never have a biased behavior if they want to continue to operate and have customers because
their priority must be their customers. Governmental forces will follow after following all the
legal procedures to operate your business because after all, there are governmental rules that
entrepreneurs need to follow to be able to operate legally.

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Technological forces, now in this modern technology era, most organizations must be updated in
the technological advances as well. This will give them the benefit of easier and efficient work
within their organization. For example, your organizations products are related to manufacturing
a furniture, to be able to have more materials and outputs to be done you surely will need to have
a technology that will help your employees to work fast like have a machine that cuts and
finishes the materials needed to make a table. Its like you have the man power and technological
power to fasten the process of achieving the desired output. In terms of administrational work, a
systematic way of recording and monitoring the performance of an organization will help make
efficient work, accuracy and transparency which will help you operate accordingly and this will
happen with the help of technology as well, by putting a specific system to achieve this work.

Competitive forces, the last force you shall consider to have a competitive advantage against
other organization is to have something unique and I think you will be able to have this if you
look for the previous external forces and identify each and every thing you need to consider and
putting them up together, you will have an advantage that will make your organization unique
and has the best products or service to offer. An advantage which is either a procedure or an
actual product or services.

The organization will have the opportunity to lessen the threat because they already identified
them through the help of the external forces which will result into a new opportunity for the
organization which also might be the biggest break for them to have a competitive advantage.

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