Why is it important for any organization $($firms$,$ nonprofits, etc.$)$ to study and understand its external environment? In today's ever$-$changing business landscape, it is more important than ever for businesses to understand the external environment in which they operate.

By understanding the Political, Economic, Social, Technological, Environmental, and Legal $($PESTEL$)$ factors that can impact their business, organizations can develop strategies that are better suited to succeed in their particular context. By understanding the external environment, businesses can develop strategies that are better suited to succeed in the long term. Whether you are a business owner, an executive, or a student, understanding the external environment can provide valuable insights into the current and future landscape in which your company operates.

For example, a business that is considering expanding into a new market should conduct a PESTEL analysis to assess the political, economic, social, technological, environmental, and legal factors that could impact its operations in that market. This information can be used to develop strategies that mitigate risks, such as the risk of political instability or economic recession, and capitalize on opportunities, such as the growing demand for its products or services in that market.