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CS Professional · Strategic Management and Corporate Finance · Analyzing the External and Internal Environment

A packaged-foods company in Pune wants to study how changes in interest rates, demographic trends, environmental regulations and new technologies could affect its business. Which framework is designed to scan this broad set of macro-environmental factors?

PESTEL analysis is the right framework. It scans political, economic, social, technological, environmental and legal factors in the macro-environment. The other tools examine internal activities, portfolio position or growth options, not the broad external forces such as interest rates, demographics and regulation.

  1. APESTEL analysisCorrect
  2. BValue chain analysis
  3. CBCG growth-share matrix
  4. DAnsoff product-market grid

Explanation

PESTEL groups macro-environment forces into political, economic, social, technological, environmental and legal factors. The value chain looks at internal activities, the BCG matrix classifies business units by growth and share, and the Ansoff grid maps growth options. None of these scan the external macro factors.

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