The external environment of a business refers to all the outside factors or influences that impact the operation of the business. It includes all factors outside the reach of the business that can impact its operations, also known as the macro environment. The external environment can affect competitiveness, budgeting, decision making, and the marketing mix. Here are some key points about the external environment:

• The external environment includes political, economic, social, technological, legal, environmental, and ethical factors.
• Companies must adapt, exploit, and fit with the forces in their external environments to succeed and thrive.
• The external environment can be analyzed using a PESTLE analysis, which takes a look at six different external factors that could influence the organization.
• The common external environment factors that businesses should consider are political, economic, social and cultural, legal, technological, and environmental.
• External environmental uncertainty makes it harder to predict what the business needs to do to respond to the changes in its environment, and also means the business needs to be able to adapt quickly to changes.
• Complexity in the external environment makes it harder for a business to understand the factors affecting it, and often requires specialized knowledge in multiple areas to understand it.

In summary, the external environment of a business includes a group of factors that are outside the direct control of the business but can still have a large impact on the business.