UNIT 3: THE FIRM AND ITS ENVIRONMENT (LESSON 1)

Question 1

MAJOR PROBLEMS FACED BY BUSINESS

Answer 1

1. UNCERTAINTY
2. GLOBALIZATION
3. INNOVATION
4. GOVERNMENT POLICY
5. TECHNOLOGY
6. DIVERSITY
7. COMPLEXITY
8. INFORMATION OVERLOAD

Question 2

Consists of elements that have a direct impact on the business operations.

Answer 2

INTERNAL ENVIRONMENT

Question 3

Also known as the “OPERATING ENVIRONMENT”

Answer 3

MICROENVIRONMENT

Question 4

-General environment of the firm

Answer 4

MACROENVIRONMENT

Question 5

INTERNAL ENVIRONMENT CONSISTS OF?

Answer 5

-Employees
-Board of directors
-Managers

Question 6

Consists of factors that have indirect but significant influence on the operations of the business

Answer 6

EXTERNAL ENVIRONMENT

Question 7

Two Types of External Environment

Answer 7

Microenvironment
Macroenvironment

Question 8

MICROENVIRONMENT CONSISTS OF?

Answer 8

Customers
Suppliers
Regulatory agencies
Competitors

Question 9

MACROENVIRONMENT CONSISTS OF?

Answer 9

Economic
Political
Social
Legal
Technical

Question 10

Is the actual monitoring and evaluation of information from the external and internal environment of a business organization

Answer 10

ENVIRONMENTAL SCANNING

Question 11

Three Modes of Environmental Scanning

Answer 11

1. Ad hoc environmental scanning
2. Regular scanning
3. Continuous scanning

Question 12

is not often done and is usually applicable only during a crisis situation

Answer 12

Ad hoc environmental scanning

Question 13

is usually done at least once a year or at regular intervals

Answer 13

Regular scanning

Question 14

refers to the continuous collection of data on a board range of environmental factors

Answer 14

Continuous scanning

Question 15

Is a technique that identifies the STRENGTHS and WEAKNESS of a company, as well as OPPRTUNITIES and THREATS if faces.

Answer 15

swot analysis

Question 16

– what does your company do better than others?

Answer 16

STRENGTHS

Question 17

– what aspects of your company need to be improved?

Answer 17

WEAKNESSES

Question 18

– what trends/conditions can positively impact your company?

Answer 18

OPPORTUNITIES

Question 19

– what trends/conditions can negatively impact your company?

Answer 19

THREATS

Question 20

Things your company does well

Qualities that separate you from your competitors

Internal resources such as skilled, knowledgeable staff

Tangible assets such as intellectual property, capital, proprietary technologies etc.

Answer 20

strengths

Question 21

Things your company lacks

Things your competitors do better than you

Resource limitations

Unclear unique selling proposition

Answer 21

weaknesses

Question 22

Underserved markets for specific products

Few competitors in your area

Emerging need for your products or services

Press/media coverage of your company

Answer 22

opportunities

Question 23

Emerging competitors

Changing regulatory environment

Negative press/media coverage

Changing customer attitudes toward your company

Answer 23

threats

Question 24

Link between SWOT and PEST

Answer 24

OPPORTUNITIES AND THREATS ARE

POLITICAL
ECONOMICAL
SOCIOLOGICAL
TECHNOLOGICAL
LEGAL
ENVIRONMENTAL

Question 25

Is a method used in analyzing the POLITICAL, ECONOMIC, SOCIAL, and TECHNOLOGICAL forces affecting the company.

Answer 25

PEST ANALYSIS

Question 26

PEST?

Answer 26

POLITICAL, ECONOMIC, SOCIAL, and TECHNOLOGICAL

Question 27

- war - dictatorship - facilities for starting a business - waste reduction policy - high taxes

Answer 27

political

Question 28

- high gdp - price inflation - saturated markets - high loan rates for companies

Answer 28

economic

Question 29

- purchasing habits - budget for households - trends and cultural influence in the country

Answer 29

social

Question 30

- the country's technical and logistical resources - the level of expertise - the latest development

Answer 30

technological

Question 31

- law to preserve animal and plant life - suitable environment to launch the activity

Answer 31

environmental

Question 32

- Target middle and high income populations with better purchasing power. - Target developing countries with higher par capital

Answer 32

economic factor

Question 32

- employment laws of the country - laws related to the activity - permits, authorization and other requirements

Answer 32

legal

Question 33

- Target health conscious population. - Develop Social Campaigns to attract younger generation.

Answer 33

social factor

Question 34

- Installation of modern technologies to improve efficient manufacturing. - Modern technologies improve research and development.

Answer 34

Technological Factor

Question 35

- Strict Adherence to safety rules and Regulations * Strict guidelines on enforcing copyright regulations on imitation companies

Answer 35

legal factor

Question 36

- Research and use of sustainable raw materials. - Planning and conducting environment awareness campaigns.

Answer 36

environmental factor