The major external changes that impact an organization include government and legislation change, change in consumer preferences, market conditions, entry of competitors in the market, technological changes and social changes. The competitors pose a great threat to the market capitalization of any company. They are always in a surge of competitive advantage that could differentiate from other players in the market. The access of resources in terms of supply and distribution in which an organization has lesser control can cause delay in production of goods and meeting demands of its stakeholders. The globalization has posed another threat to the organizations because of increase availability of cheap and quality products in the market. Environmental changes, economic expansion/recession, legal and regulatory changes also affect the business processes of a firm. If an economy is in recession, the cost of borrowing for the firm to carry out its day to day activities would be higher which will pose threat to the sustainability of the firm.
