External business environment: 

Environment of the business refers to the visible and invisible natural and artificial surroundings of the business that directly and indirectly affect its business.External environment includes all those factors which affect the business and exist outside of the business and it has no control over these factors which are Economic, political, social,technological,natural.

Economic environment includes: customers, inflation,interest rate,competitors.
Customers: Customers are the core part of every business success, they are of an individual unit,they can be of different types.They include household,government,industry,commercial enterprises,etc. The number of different types of customers highly influences the business.
1. You must know your customers what they like and try to befriend with them, the great thing about having customers that are also friends is that they will provide you with the feedback and give you ideas as well as reviews. This isn’t just a clever way to market your business , it’s also a great way to learn in fact it’s a necessity, by knowing well your customers it will help you run your business well and in case things are not going well the best people to turn to are your customers.after all who better to tell you what to serve their needs and get hold of them.

For example, suppose a firm supplies goods only to the government.It means the firm has only one customer.If because of some reason their relations get bad,the supply of goods will stop and in that case the closure of that firm is certain.This clearly indicates that the customers do influence business. Therefore, a firm should make efforts to have different kinds of customers,

Competitors: Without competition people will not work hard because you will be saying that everything is perfect but that’s wrong,no one need to stay on the ground,we all need to go high so without competitors you will not see that there is something missing, you will compare yourself with others and this is what will help you to see that you need to compete with the people around, in order to be at the top. The competing firms can influence business in a number of ways.You never be alone in the market you are operate in, there will always be one or more companies providing the similar product meeting similar demands as yours, You should know this about your competitor:

1. How many are they?? How many competitors are there in the same site, know how many they are and how you are going to compete with them and deal with them so that you can stay ahead of competition and that their presence will not affect your business and your performance.

2. How is their quality?? You may have bad quality or good one but not better as your competitor’s product so you need to know their quality that brings them more customers and try to make some changes on your product ,make some creation and bring some innovation on your product that will make it unique and attractive than that of your competitors in order to bring more customers and stay ahead of competition.

3. What are their weakness if there is any, know your competitors weakness so that you will put effort where they are weak and try every possible alternative you could not to be weak.your competitor may have weakness in giving customer good care if that’s the problem they have,you should work well in order that you will not fall in the same cage as them,you must avoid anything that could lead you to be weak as your competitor because that could affect your business badly.

4. What services do they offer, what type of service your competitor offer to the customers, is it the same as what you offer to your customer, how do they deliver product to their customer, how do they package product/services for their customer,how do they care their customer, what language do they use and then imitate them and try some new thing to attract more customers.

5. What is their price level? How do they sell their product/services do they sell on low price is that why they have more customer find out and try to lower your price too, if your competitor have same good product/services as yours and they sell their services on lower price than yours of course they will grab all the customers, what you will need to do is to try to lower the price in the way that will not affect your business and this will help you to hold your customers.

6. What is their image among their customers? Your competitor may have an image(bad or nice) in front of their customer because of many reasons, find out what makes your competitor look good to their customer then try that too, know what makes them look bad to their customers and avoid that.if you analyse all this it will help you to compete in the market and stay ahead of competition.
Without the competitors there would be no need for progress, and most businesses would just get lazy. So while healthy competition is good for clients, it gives countless sleepless nights to the management.