Learn how to do External Analysis of a company (with examples)

In this lesson, we will do a political analysis of a country.

Let us take the example Robert’s smartphone business, about which we have talked in the previous lessons. He is operating in United States of America. In order to successfully operate in the country, he has to know the current political scenario of the country. He also has to know what may come in the future.

The year is 2019 and Donald Trump is the president of the United States of America.

Read this piece from Financial Times to have an idea on what is meant by political analysis:

https://www.ft.com/content/3e3d9776-7ac3-11e6-ae24-f193b105145e

Below is an excerpt from this article:

The survey showed that a large majority of the business school’s alumni believe the political system is obstructing growth. Some 56 per cent of Democrats held that view, 82 per cent of Republicans and 74 per cent of independents, it said.

Mr Rivkin added: “The American political system is now threatening the American economy, and vice versa. We need a sober look at the strengths and weaknesses of the US economy, so that leaders in government, business and other parts of society can work together on a national economic strategy for shared prosperity.”

This article is a perfect example of political analysis. It analyses the political situation and derives possible impacts that will be faced by the US economy in the future. You will find some opinion from experts.

Now, in order to analyze the political scenario of the country, the first thing that has to be done is to understand the goal of the organization. After that, you can list out few of the questions that relate to the political scenario and are important for the survival for the business.

One of the goals that we came up with for Robert’s company was:

Sell x number of smartphones (priced at $y) to the customers who have disposable income of more than $y and likes Robert’s smartphone technology and features.

Now to achieve this goal, what political hurdles Robert can face? There can be many or zero hurdles depending on the current political scenario.

Below is the list of few questions for which we will find answers to understand the scenario:

• Is government making any decision for smartphone businesses? If yes, is it favorable?
• Will government make any decision for smartphone businesses? If yes, will it be favorable?
• Will government make any economic policy changes? How it will affect consumer purchase power?
• Is government stable? Is there any political issue going up? Will it affect smartphone sale?

Right now, the answer to the first three questions is “NO”. And the answer to the fourth question is, “Yes. Government is stable and no current political issue will affect smartphone business.”

You see here? Answer can be as simple as one liner or you can get into score of information collection to fill a desk just to answer one question from the above four.