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3.1.3 External Environment
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Kate Madison Roxas
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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.
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Why must businesses consider the external environment?
Businesses must consider the external environment to make effective decisions.
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What is the level of control businesses have over the external environment?
Most businesses are unlikely to have much control over the external environment.
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How should businesses react to changes in the external environment?
Businesses need to
monitor their environment constantly
to
react
to any
changes
that occur.
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What is the advantage of anticipating change in the external environment?
The most competitive businesses will
anticipate change
rather than
react
to it.
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What does PESTLE stand for in PESTLE Analysis?
Political
Economic
Social
Technological
Legal
Ethical / Environmental
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How does PESTLE Analysis help businesses?
PESTLE Analysis provides a useful way to analyze the external environment.
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What are two key indicators of market conditions?
Economic Growth
(
GDP
) and
Market Demand.
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What does Economic Growth (GDP) measure?
Economic Growth (GDP) measures the value of output (activity) in the economy.
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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.
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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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