A firm’s environment represents all internal or external forces, factors, or conditions that exert some degree of impact on the strategies, decisions and actions taken by the firm. There are two types of environment:
Internal environment – pertaining to the forces within the organization (Ex: Functional areas of management) and
External environment – pertaining to the external forces namely macro environment or general environment and micro environment or competitive environment (Ex: Macro environment – Political environment and Micro environment – Customers).

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