External and Internal Environmental Analysis

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External and Internal Environment Analysis STR/581 March 2, 2015 Edgar Coronel External and Internal Environment Analysis Guzman Realty is a new real estate company that was launched in the market a few years ago. The main purpose of Guzman Realty is selling homes for the diverse local community in the Phoenix area. Changes in the external and internal environment of the real estate company will determine the decisions management takes. With this purpose in mind, this paper will provide a complete environmental scan for the proposed real estate company. Identify and analyze the Most Important External Environmental Factors The external environment is defined, according Pearce & Robinson (2013), “as factors beyond the control of the firm that influence its choice of direction and action, organizational structure, and internal processes”(Pag. 87). The external factors that affect the operations of Guzman Real Estate Company include the remote, industry, and external operating environments. These factors together influence the basis for opportunities and threats that firm encounters in its competitive environment. The Remote Environment The remote environment is comprised of factors that affect the real estate operating situation, and some of those factors include economic, social, and political factors. For instance, the economy is a key external factor that can influence the success of the real estate company. Economic factors The economy is typically measured, according to Nguyen (2015), “by economic indicators such as the gross domestic product, employment rates, manufacturing activities, the price of goods, etc.” (Pag. 1). Consequently, the economy cycle can have varying effects on real estate industry. For instance, when the economy slows down, and construction starts to decline, Guzman Realty can begin to experience decreases in home sales.

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