Which management approach begins with analyzing the external environment?

The correct choice is rooted in the concept of "outside-in planning," which focuses on evaluating and understanding external factors before making strategic decisions. This approach emphasizes the importance of analyzing the market, industry trends, customer needs, and competitor actions. By starting with external analysis, organizations can align their strategies with the realities of the environment in which they operate, ensuring that their plans are relevant and responsive to market conditions.

In contrast, other approaches, such as bottom-up and top-down planning, prioritize internal perspectives, either gathering insights from lower levels of the organization (bottom-up) or directing strategies based on higher management's vision (top-down), without necessarily starting with an external analysis. Inside-out planning similarly focuses on leveraging internal resources and capabilities before considering the external market dynamics. Therefore, "outside-in planning" is unique in its proactive approach to understanding external influences that shape strategic planning.