Situations Believe External Environment Firm Important Internal Environment Determinant Fi Q34247085

In what situations do you believe that the external environmentof the firm is more important than the internal environment as adeterminant of the firm’s profitability? Explain

Expert Answer

The external environment of the firm is much more important thanthe internal environment because of the following reasons:

1. Change in taste and preferences is an external customerconcern which impacts the profitability of the company.

2. Change in policies is external to the company which impactsthe profitability at large.

3. Change in the supply or constarints in the supply can impactthe profitability.

4. In increase in the number of rivals or availablity ofsubstitutes impact the profitability of