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Level 4 Diploma in Business Management

The external environment of a business and why it matters

BM402 · Business Operations — Week 11 of 16

CourseBM402
Week11 of 16
SemesterI
TutorOnline in the course chat

This week’s topics

The external environment of a business and why it matters

  1. External factors, drivers and stakeholders
  2. Local, national and international cultures
  3. Establishing market position
  4. Recognising opportunities
  5. Preparing for change

What you will be able to do

  • 4.1 Explain what is meant by the term ‘external environment of a business.’
  • 4.2 Explain why it is important to measure a business’s external environment.

Activity

Start with this week’s 3 videos, then discuss how they apply to this week’s topic and note one example from a real business.

Study materials

Videos

  • How does the local economy affect our lives? · Oak National Academy, Key Stage 4 (GCSE level) · for registered students
  • How have shopping habits transformed over time? · Oak National Academy, Key Stage 4 (GCSE level) · for registered students
  • Causes of economic change · Oak National Academy, Key Stage 4 (GCSE level) · plays on Oak’s website · for registered students

Further resources

  • Introduction to Business 2e, ch. 1.2: Understanding the business environment · PDF · OpenStax (2026); pp. 16–19 · for registered students
  • Principles of Marketing, ch. 18.4: Recent trends in retailing · PDF · OpenStax (2023), how shopping habits changed; pp. 626–628 · for registered students
  • Principles of Management, ch. 10.2–10.3: Organisational change and managing change · PDF · OpenStax (2019), responding to change with the workforce; pp. 278–298 · for registered students
  • The Ongoing Evolution of US Retail: A Format Tug-of-War · Open-access article · Hortaçsu & Syverson (2015), Journal of Economic Perspectives. How shopping moved from small shops to big-box stores and online, and how retailers responded. · for registered students
  • Fluctuations in Uncertainty · Open-access article · Bloom (2014), Journal of Economic Perspectives. Shows how shocks and uncertainty make firms delay hiring and investment. · for registered students
Materials marked “for registered students” open in the student portal, which is set up as soon as you receive final acceptance.
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Course plan
  • Week 1: Business sectors: primary, secondary, tertiary and quaterna…
  • Week 2: Types of business: profit, not for profit, NGOs, micro, SME…
  • Week 3: Legal structures: sole trader, partnership, limited company…
  • Week 4: Business functions and how they work together
  • Week 5: Organisational structures: hierarchic, bureaucratic, matrix…
  • Week 6: How functional relationships shape structure: charts, autho…
  • Week 7: The internal environment of a business and why it is import…
  • Week 8: Midterm evaluation
  • Week 9: Quantifying the internal environment with SWOT/TOWS
  • Week 10: Assessing the internal environment: capacity assessment gri…
  • Week 11: The external environment of a business and why it matters
  • Week 12: Measuring the external environment with PESTLE
  • Week 13: Competition: Porter's Five Forces and the Ansoff matrix
  • Week 14: Assessing a business’s external environment alongside its i…
  • Week 15: Review and coursework completion
  • Week 16: Final evaluation and project assessment
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