1. Why do we need to analyze the external environment?

 External factors in an external environment are those circumstances or situations that a business cannot
control that affect the business decisions that owners and stakeholders make. The external factors will
include economic, sociocultural, political/legal, technical, and environmental considerations. The primary
purpose of external analysis is to know and understand the opportunities and threats in an industry or any
segment that will drive profitability, growth, and volatility. It is important to keep the business ahead of
the competition. To be able to do that the organization must continually adjust their strategies to reflect
the environment in which their businesses operate. Information gathering from external environment is
very important to create competitive advantage for every business. Being competitive means
demonstrating the viability of your business. Business strategy should demonstrate your competitive
advantage over your rivals. It needs to identify how you will capture your target market, how will the
marketing strategies and tactics created will generate customers and sales. Even the manpower needed,
the functions needed for operation are important in formulating your strategy while considering factors
from external environment.

2. Which among the external factors most likely affects the hospitality and/or tourism industry?
 In an organization, some things are under control, such as who to hire and what products or service to
offer in the market. External factors are the things outside your control, such as the economy, your
competition, your customers, and other elements in your external environment. Failure to understand
how external factors can affect your company can lead to bad business. An organization's stability and
profitability are interdependent on its ability to quickly recognize and respond to changes in the external
environment. Change is unavoidable and having the flexibility in dealing with these kinds of unexpected
market conditions can mean the difference between survival and failure of an organization. A scenario
where a shift in government policy, for example, could have a significant effect on a business. Proposed
legislation at the federal and state level might legally require a company to make changes to its
operations. That is why understanding the external environment and ability to predict or adapt to changes
is the key to a successful business launches and ventures.

To sum up everything, setting up a business takes a lot of effort of planning, perseverance, and motivation to make
it possible. Having a clear picture of success means being ready to stand up for competition. Better understanding
of the external factors that could affect your business will be beneficial to the company. To compete is being aware
of risks of losing the business. But with complete understanding to the market, both the customers and
competitors, it will help in building a successful business. Finding out what the customers really want will help you
improve products and services offered to meet their needs. And by discovering how rivals work and what they are
offering, it can help the business in making the products, services and marketing stand out. Using this knowledge
to create strategies will be an advantage against the competitors' weaknesses and will improve own business
performance.