LESSON 3

Question 1

The first layer of the environment is the physical or natural environment.

It is composed of the natural elements that are inherent in the earth. It is divided into climate, physical resources and wildlife.

Answer 1

physical environment

Question 2

The climatic conditions in a particular region in the Philippines where the business will be established must be evaluated.

Answer 2

climate

Question 3

The availability of raw materials is another major factor that can influence the success or failure of the business venture.

Answer 3

Physical Resources

Question 4

The wild plants and animals in the Philippines forests are continually abused.

In view of this, the entrepreneur must ensure that his/her business contributes to the preservation and not the destruction of the ecological system of the local community and our country in general.

Answer 4

wildlife

Question 5

Changes in the physical environment have a direct impact on the societal environment and the effect can be felt later in the industry environment.

Answer 5

THE SOCIETAL ENVIRONMENT

Question 6

is generally composed of social, political, cultural, economic, legal and technological forces

Answer 6

The societal environment

Question 7

The critical evaluation and thorough study of the environment where the business operates is technically called.

Answer 7

environmental scanning

Question 8

There societal environment is composed of different forces, namely:

Answer 8

1. Political
2. Economic
3. Social
4. Technological
5. Legal

Question 9

are elements in society resulting from human interactions that can influence the thoughts, behavior, attitude, actions and even beliefs and customs of the people.

Answer 9

Social Forces

Question 10

are the various elements usually comprising of the political parties, political systems, and other related political groups that substantially influence the political stability of a country.

Answer 10

Political Forces

Question 11

basically refers to the integrated characteristics of a group of people or ethnic group in a particular society.

include the following:
1. Religion
2. Language
3. Beliefs
4. Customs
5. Education

Answer 11

culture

Question 12

are factors which are primarily caused by changes or movements in the Philippine economy that have direct or indirect effects on the entrepreneurial venture.

Answer 12

Economic forces

Question 13

is the amount of interest that the lender (e.g., banks, financial institutions, and financial intermediaries) charges to the borrower for certain amount within a specified period of time.

Answer 13

Interest rate

Question 14

are the elements and bodies that are directly involved in the legislation and interpretation of laws and ordinance directly affecting the business.

Answer 14

Legal forces

Question 15

basically refer to the trends and developments in computer and information technology that have impact in business.

Answer 15

Technological forces

Question 16

refers to the gathering, critical evaluation and utilization of information on events and activities and their relationships with the physical, societal and industry environment.

Answer 16

Environmental scanning

Question 17

is a tabular framework of the trends and developments in the different forces in the external environment.

Answer 17

PESTLE Analysis

Question 18

PESTLE stands for

Answer 18

Political, Economic, Sociocultural, Technological, Legal and Ecological Forces.

Question 19

This is the environment where business conducts its various entrepreneurial activities.

is the internal environment layer where the trends and changes are easily and immediately felt by the business.

Answer 19

industry environment

Question 20

refers to the system or institution that handles the affairs of a particular country.

Answer 20

Government

Question 21

refer to individual person or companies that provide required materials, parts, or services to the business.

Answer 21

Suppliers

Question 22

are the buyers of goods or services produced or rendered by the business.

Answer 22

customers

Question 23

are the forces existing in the industry environment that produce, sell, or render products or services which are similar to those of business.

Answer 23

competitors

Question 24

produce and sell similar products or services

Answer 24

Direct competitors

Question 25

produce and sell substitute products.

Answer 25

indirect competitors

Question 26

are the workers of the business who are highly responsible for the production of goods or delivery of services to the consumers.

Answer 26

employees

Question 27

refer to banks, financial institutions and financial intermediaries engaged in the lending of money to the borrower usually for a fee or charge in the form of interest.

Answer 27

creditors

Question 28

s is used to identify a business’, strengths, weaknesses, opportunities, and threats.

Answer 28

SWOT analysis

Question 29

include internal capabilities, resources, and all positive situational factors that may help the company serve its customers and achieve its objectives.

Answer 29

Strengths

Question 30

include internal limitations and negative situational factors that may interfere with the company’s performance.

Answer 30

Weaknesses

Question 31

are favorable factors or trends in the external environment that the company may be able to exploit to its advantage,

Answer 31

Opportunities

Question 32

are unfavorable external factors or trends that may present challenges to performance.

Answer 32

threats

Question 33

The first of the five forces refers to the number of competitors and their ability to undercut a company.

Answer 33

Competition in the Industry

Question 34

A company’s power is also affected by the force of new entrants into its market.

Answer 34

Potential of New Entrants into an Industry

Question 35

The next factor in the five forces model addresses how easily suppliers can drive up the cost of inputs.

Answer 35

Power of Suppliers

Question 36

The ability that customers have to drive prices lower or their level of power is one of the five forces.

Answer 36

Power of Customers

Question 37

The last of the five forces focuses on substitutes. Substitute goods or services that can be used in place of a company’s products or services pose a threat.

Answer 37

Threat of Substitutes

Question 38

physical environment is divided into three elements

Answer 38

climate, physical resources, and wildlife