Chap 2

Question 1

The external and internal factors that affect a company’s success, like competitors, economy, and technology

Answer 1

Business environment

Question 2

Three important factors affecting the business environment:

Answer 2

1. General Environment: Includes demographic, economic, and technological factors.
2. Industry Environment: Involves competitive forces and market conditions.
3. Competitor Analysis: Understanding rivals’ strategies and market actions.

Question 3

External environment factors that affect business:

Answer 3

1. Demographic Segment (population size, age structure)
2. Economic Segment (country’s economic condition)
3. Political and Legal Segment (laws and trade policies)
4. Social and Cultural Segment (workforce diversity, gender roles)
5. Advancement in Technology Segment (innovation and digital transformation)
6. The world of business Segment (international trade and globalization trends)

Question 4

Importance of Market Segmentation:

Answer 4

Helps businesses target the right customers.
Improves marketing effectiveness.
Increases profitability by catering to specific needs.

Question 5

Five forces affecting competitiveness

Answer 5

1. Threat of new entrants
2. Power of suppliers
3. The buyer’s bargaining power
4. Threat of substitute products
5. The power of competition

Question 6

Threats from new and substitute products:

Answer 6

New entrants bring competition and force innovation.
Substitute products can reduce market share and profitability.