The External Environment (15) Flashcards
The external environment is the…
landscape and context in which business occurs. I
What are the three characteristics of the external environment?
It is dynamic, ever-changing, and substantially affects how business is carried out.
It is dynamic, ever-changing, and substantially ______ how business is carried out.
affects
The external environment is grouped by the following forces… (PESTLE)
Political
Economic
Social
Technological
Legal
Environmental
Political forces cover the…
stability and general state of politics in the region.
Political forces cover the ______ and general ______ of politics in the region.
stability, state
When are political forces important to note?
the political environment is especially important to note when both marketing internationally and when gauging the changes in the domestic environment as the political stability of a country can affect the risk level of doing business there
The political ______ of a country can affect the risk level of doing business there
stability
The currency risk and potential profits of doing business internationally and importing goods is affected by what three forces in the political environment?
Monetary, trade, and tariff policies affect…
What are some examples of political forces?
Political stability in general
Trade agreements
Tariff policy
Tensions between domestic political groups
The economic forces in the external environment include…
all factors that influence the wealth or buying power of consumers, including inflation, income, employment, interest rates, and productivity.
All factors that influence the wealth or buying power of consumers fall under which type of external environmnental force?
economic
The economic forces in the external environment include all factors that influence the ______ or ______ power of consumers
wealth, buying
The economic forces in the external environment include..
inflation, income, employment, interest rates, and productivity.
What are some examples of economic forces/traits/trends that influence the wealth or buying power of consumers?
inflation, income, employment, interest rates, and productivity.
Per capita Gross Domestic Product (GDP) in a country
Disposable income per capita
The prime interest rate
The employment rate
Exchange rates
The social forces in the external environment include…
demographic characteristics and the culture of the population, including cultural values and personal values.
The social forces in the external environment include… demographic characteristics and the culture of the population, including cultural values and personal values fall under which type of force in the external environment?
social forces
What do the social forces in the environment represent?
the very market and target market itself
The social force is the…
customer base
this changes the very makeup and viability of the market segments
If the demographics of the market as a whole change, then this changes the very makeup and ______ of the market ________.
viability, segments
For instance, if one is marketing to young married couples and fewer couples decide to get married, then the marketer’s target market group decreases in size. If the values of the population change, then that could affect customer preferences toward goods or purchasing behavior.
the customer basae is a ______ force.
social
Different generations also have different ______ and consumption ______.
values, behavior
What are some examples of forces/trends/factors of the social environment?
Demographic) age distribution of the population, population growth
(Demographic) marital status and average age of first marriage
Generational differences in consumption
Religion and faith
(Cultural and personal values) work ethic, environmental sustainability
Job mobility preference (tendency to stay at one job or change jobs often)
Cultural values such independence / individualism versus a team orientation; a tendency toward indulgence or restraint (Note that a framework called Hofstede’s cultural dimensions is a great resource for in-depth research on how cultural values affect members of a country.)
The technological forces include anything that affects…
innovation, including technological advances, hardware and software capabilities, and the state of learning in general.
What are aome overarching themes and trends that mark the technological landscape?
Computer processing speed
Wireless capabilities
Automation capabilities
Size of processor chips
Cell phone functionality
What do legal forces include?
the regulatory systems that affect business at the local, regional, national, and international levels.
Legal forces include the ________ ______ that affect business at the local, regional, national, and international levels.
regulatory systems
A government’s _______ decisions can have a widespread impact on the region’s policies.
legal
Some examples of legal forces are..
Health and safety laws
Regulations for business formation
Employment laws
Antitrust laws against monopolies
Intellectual property, trademark, copyright law
The environmental force of the environment includes elements of the…
climate, weather, or natural resources that affect production, purchasing, or other economic activity.
The ______ environment can affect the supply of raw materials to the manufacturer, which eventually affects the product cost of goods sold.
natural
The natural environment can affect the supply of raw materials to the manufacturer, which eventually affects…
the product cost of goods sold.
Climate change alters natural
_______ and the ________ and raw materials that come from those habitats.
habitats, resources
For instance, unexpected weather patterns can affect tourism sales and attendance at sporting events, festivals, and even outdoor shopping areas. As an example, if it doesn’t snow, then ski resorts won’t have revenue from skiers.
What are some examples of environmental forces?
Raw materials available
Weather patterns
Terrain of area
Natural disasters such as fires, hurricanes, floods, or tornadoes
Climate and / or climate change
