3.1.3 Understanding that businesses operate within an external environment

• Match the external environment factor with its description:

  Social ↔️ Cultural norms and lifestyles

  Technological ↔️ Automation and research

  Environmental ↔️ Climate change and regulations
• What framework is commonly used to analyze the macro environment?

  PESTLE
• Which technological factor is part of the PESTLE framework?

  Automation
• The external environment includes social factors such as cultural norms and demographics


  True
• PESTLE is used to analyze the macro environment and its impact on businesses

  True
• Analyzing the macro environment helps businesses identify potential opportunities and threats
• The macro environment includes factors such as political, economic, social, technological, legal, and environmental
• Macro environment factors are largely within the business's control

  False
• What is the external environment of a business defined as?

  Factors outside the business
• What economic factors are included in the external environment?

  Inflation, growth, interest rates
• Technological factors in the external environment include technological advancements, automation, and research and development
• The external environment of a business consists of factors outside the business that are typically uncontrollable
• Technological factors include automation and research & development
• The PESTLE framework examines political, economic, social, technological, legal, and environmental
• Political factors in the macro environment include government policies and regulations
• Order the steps a business should take to adapt to changes in the external environment:

  1️⃣ Identify the change

  2️⃣ Analyze the impact

  3️⃣ Develop a strategy

  4️⃣ Implement the strategy

  5️⃣ Monitor and adjust
• Match the external environment factor with its description:

  Legal ↔️ Consumer protection laws

  Environmental ↔️ Resource availability

  Technological ↔️ Research and development
• Understanding the macro environment is crucial for businesses to develop effective strategies
• The micro environment is external to the business and cannot be influenced by it

  False
• Understanding the micro environment is more important than the macro environment for strategic decision-making

  False
• Match the macro environment factor with its example:

  Political ↔️ New government regulations

  Economic ↔️ Rising inflation rates

  Social ↔️ Changing consumer lifestyles

  Technological ↔️ Automation of production
• Micro environment factors such as customers, suppliers, and competitors can be directly influenced by the business
• The external environment factors are typically uncontrollable
• Environmental factors in the external environment include climate change, resource availability, and environmental regulations.


  True
• Understanding the external environment helps businesses develop effective strategies
• The PESTLE framework is used to analyze macro environmental factors that are controllable by the business.

  False
• Match the micro and macro environmental factors with their descriptions:

  Macro environment ↔️ Broader external forces

  Micro environment ↔️ Immediate operating factors
• Strategic alliances are formed to share resources and expertise with other organizations.


  True
• What legal factors are considered in the external environment?

  Consumer protection laws
• How could a new tax law impact a business's profitability?

  Increase tax burden
• What micro environmental factor focuses on customer needs and preferences?

  Customers
• Micro environmental factors include political, economic, social, technological, legal, and environmental forces.

  False
• What strategy involves expanding into new markets or products to reduce reliance on specific sectors?

  Diversification
• Order the steps for adapting to external environment changes:

  1️⃣ Market Research

  2️⃣ Customer-Centric Approach

  3️⃣ Strategic Alliances

  4️⃣ Diversification
• Political factors in the external environment include laws and government policies


  True
• Legal factors in the external environment relate to health and safety regulations


  True
• Economic factors in the macro environment include inflation and interest rates

  True
• Understanding the macro environment helps businesses identify opportunities and threats


  True
• What type of factors in the external environment are typically uncontrollable by a business?

  Uncontrollable
• Environmental regulations are a key component of the environmental