External Analysis of the Portable Saw Mill Industry Explain three benefits of conducting an external analysis.

For Edward Perry, Timber King's new CEO, external analysis is one of the most strategic activities he can engage in and have his company continually pursue. Of the many benefits associated with external analysis, the top three are staying on top of customer trends and their continual evolution, being able to anticipate and act on opportunities, and getting advance warning of any significant threats (Banham, 2010). These three areas of customer-centered analysis, scanning the external environment for opportunities while looking to mitigate threats must eventually be integrated to the internal systems and processes of Timber King in order for the company to be successful (Feldmann, Olhager, 2008). The company must become highly agile and market-driven for the portable saw mill business to succeed.

Educate Mr. Perry on some of the challenges of conducting an external analysis.

There are many inherent challenges in completing an external analysis of your company. First, the methodology or approach to researching the external factors needs to be considered. This is a very critical decision because it will dictate in large part how valuable the data you collect is (Banham, 2010). Inherent in the methodology must be the overarching goals of the external analysis to begin with. If the goal is to expand the overall market for portable saw mills, the methodology and respondents included...

These are all aspects of the methodology that need to be defined before the actual external monitoring takes place.
Second, many of Timber King's competitors will be relying on secondary market research that has already been published on the portable saw mill industry. While these secondary research studies are useful, they fail to actually capture the rapidly changing nature of the marketplace. In addition to using these secondary sources of information, Timber King needs to be boil and embark on primary research to better understand their target markets as well. This will include looking at creating new approaches to capturing environmental information. One approach that many companies rely on is working with their suppliers, distributors, dealers and others external to the company to better understand how the value chain fo the industry is changing (Feldmann, Olhager, 2008).

The best external analysis programs capture both primary research-based results through interviews and very clear methodologies tied back to corporate objectives, in addition to intensive use of secondary data. That's why it is so critical to create a framework for managing external analysis that captures the best of both broad areas of research methodology (primary vs. secondary research)(Banham, 2010). What will be critical for Timber King is to understand how each source of information has a drastically different…