Learn in the textbookFrameworks for Analyzing the Business Environment
DefinitionThe external environment (外部環境) covers factors outside the company that it cannot easily change directly, such as the market, competitors, the economy and regulations.
ExplanationThe external environment includes the moves of parties close to the business, such as customers and competitors, and society-wide shifts in population, the economy, law and technology; the latter is called the macro environment (マクロ環境). The company cannot stop outside changes on its own, so what it plans is how to respond to them.
AnalogyIt is like the weather: you cannot change it, but you can choose whether to take an umbrella or move your plans.