Questions and Answers
What does the business environment encompass?
Which of the following is NOT a component of the PEST analysis?
How can environmental forces influence a business?
What type of analysis is used to identify Strengths, Weaknesses, Opportunities, and Threats?
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Which of the following best defines environmental scanning?
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Which macroenvironmental factor relates to population demographics?
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What aspect would not be included in the microenvironment of a business?
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Which of the following is an example of a political factor in PEST analysis?
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Which of the following best describes 'Strengths' in a SWOT analysis?
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What factors are included in the micro-environment of marketing?
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Which of the following options is NOT considered an economic factor affecting consumer purchasing patterns?
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What is discretionary income?
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Which of the following correctly defines inflation?
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What is the long-term benefit of new technology in terms of products?
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Natural forces in marketing environment are best associated with which of the following?
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Which of the following is not a reason for enacting legislation affecting business?
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What does demarketing aim to achieve?
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Which factor is most influenced by political forces?
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Which of the following is identified as a macro-environmental force?
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What term describes reducing consumer demand to match the supply level?
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What type of forces includes aspects like natural habitats and energy-efficient products?
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What booking engine has made interactions with intermediaries more complex?
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Which of the following is a core belief transmitted across generations?
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What aspect of culture refers to the societal attitude toward art and beauty?
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Study Notes
Business Environment
- Combination of internal and external factors influencing a company's operations.
- Factors can directly or indirectly impact success or failure.
Types of Business Environment
- Macroenvironment: Larger societal forces affecting the entire microenvironment, including demographic, economic, technological, political, and cultural forces.
- Microenvironment: Factors close to the company, such as internal capabilities and relationships with customers and suppliers.
Environmental Scanning
- Process of gathering, analyzing, and distributing information for strategic planning.
- Identifies how external conditions influence organizations and ecosystems.
PEST Analysis
- Evaluates Political, Economic, Social, and Technological factors affecting business:
- Political Factors: Government policies, trade restrictions, taxation.
- Economic Factors: Economic growth rates, inflation, interest rates impacting consumer power.
- Social Factors: Cultural trends, demographics, health consciousness affecting consumer behavior.
- Technological Factors: Advancements in technology, research and development, automation.
SWOT Analysis
- Framework for analyzing organizational performance:
- Strengths: Internal attributes that contribute to success.
- Weaknesses: Internal limitations affecting performance.
- Opportunities: External chances for growth and improvement.
- Threats: External challenges that could hinder progress.
Demographic Factors
- Study of human populations based on size, location, age, gender, race, and occupation.
Economic Factors
- Influence consumer buying power and overall market strategies:
- Inflation: Rise in prices decreasing purchasing power.
- Deflation: Decrease in prices.
- Unemployment: Percentage of actively seeking jobless individuals.
- Discretionary Income: Money available for non-essential spending after necessities.
Natural Forces
- Encompasses environmental factors that attract tourism and focus on sustainability, including conservation and clean energy.
Technological Forces
- Application of innovations leading to competitive advantages:
- Facilitates global communication and efficiency in distribution.
- Obsolescence risk for existing products due to rapid tech advancements.
Political Forces
- Marketing strategies affected by political influences, including legislation aimed at protecting competition, customer rights, and the public interest.
Cultural Forces
- Core beliefs and values shaped by society that influence consumer behavior, including:
- Language: Communication and expression within culture.
- Manners and Customs: Social etiquette and cultural practices.
- Education: Transmission of values and skills.
- Religion: Belief systems shaping behaviors and preferences.
Key Terms
- Demarketing: Strategies to reduce consumer demand to a manageable level.
- Green Movement: Advocates for marketing practices that emphasize environmental sustainability.
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Description
Explore the essential components of the business environment, including macro and micro factors that influence a company's operations. Learn about environmental scanning and PEST analysis to understand how external conditions can impact business success.
