3.1.3 External Environment

    Cards (11)

    • What is the external environment in business?

      The external environment refers to the factors outside a business that can affect its operations and decision-making.
    • Why must businesses consider the external environment?
      Businesses must consider the external environment to make effective decisions.
    • What is the level of control businesses have over the external environment?
      Most businesses are unlikely to have much control over the external environment.
    • How should businesses react to changes in the external environment?
      Businesses need to monitor their environment constantly to react to any changes that occur.
    • What is the advantage of anticipating change in the external environment?
      The most competitive businesses will anticipate change rather than react to it.
    • What does PESTLE stand for in PESTLE Analysis?
      • Political
      • Economic
      • Social
      • Technological
      • Legal
      • Ethical / Environmental
    • How does PESTLE Analysis help businesses?
      PESTLE Analysis provides a useful way to analyze the external environment.
    • What are two key indicators of market conditions?
      Economic Growth (GDP) and Market Demand.
    • What does Economic Growth (GDP) measure?
      Economic Growth (GDP) measures the value of output (activity) in the economy.
    • How does market demand relate to a business?
      Market demand indicates how much of a good or service a consumer wants and is able to pay for.
    • What influences the level of demand in most markets?
      The level of demand is influenced by the rate of economic growth.
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