The external audit is a list of external opportunities and threats that could benefit or harm the organization.

 

The external audit is divided in:

• Economic forces.

• Social, cultural, demographic, and environmental forces.

• Political, legal and governmental forces.

• Technological forces.

• Competitive forces.

 

Based on the external audit, the organization can formulate different strategies to take advantage of opportunities and avoid threats.

“The Industrial Organization (I/O) approach to competitive advantage advocates that external (industry) factors are more important than internal factors in a firm for achieving competitive advantage”.