Handout 5

Question 1

refers to an in-depth examination of key factors that influence the business operations of a firm. It involves carefully studying a firm’s external environment to predict environmental changes and detect changes already underway.

Answer 1

Environmental scanning

Question 2

It includes physical resources, wildlife, and climate that are an inherent part of existence on Earth.

Answer 2

Natural environment.

Question 3

It is mankind’s social system that includes general forces that do not directly affect the short-run activities of the firm but can influence its long-term decisions.

Answer 3

Societal environment.

Question 4

These regulate the exchange of materials, money, energy, and information.

Answer 4

Economic forces.

Question 5

These generate problem-solving inventions.

Answer 5

Technological forces.

Question 6

These allocate power and constrain and protect laws and regulations.

Answer 6

Political-legal forces.

Question 7

These regulate the values, morals, and customs of society.

Answer 7

Sociocultural forces.

Question 8

It includes elements or groups that directly affect a firm and, in turn, are affected by it.

Answer 8

Task environment.

Question 9

They have the power to create or reduce the demand for a product or service.

Answer 9

Customers.

Question 10

They provide a product or service to another business.

Answer 10

Suppliers.

Question 11

They provide a better or similar product to the same target segment.

Answer 11

Competitors.

Question 12

They directly participate in activities that help fulfill the firm’s goals.

Answer 12

Employees.

Question 13

Any change in tax law will impact the business operation.

Answer 13

Government Regulations.

Question 14

They bring attention to the firm and could affect the operation in either a positive or negative way.

Answer 14

Special Interest Groups.

Question 15

It is a framework used to evaluate a firm’s competitive position by listing the conditions inside and surrounding it.

Answer 15

SWOT Matrix.

Question 16

These are the internal areas where an organization excels and factors that separate an organization from its competitors.

Answer 16

Strengths.

Question 17

These are the internal areas that hinder an organization from performing at its optimum level.

Answer 17

Weaknesses.

Question 18

These are favorable external factors that could give an organization a competitive advantage.

Answer 18

Opportunities.

Question 19

These are the factors that may pose potential harm to an organization.

Answer 19

threat

Question 20

It is a tool to identify the external forces that may affect an organization positively and negatively.

Answer 20

PESTEL Analysis.

Question 21

These are factors related to how the government intervenes in the economy.

Answer 21

politics

Question 22

These factors determine the impact of the economy and its performance on an organization and its profitability.

Answer 22

Economical

Question 23

These factors determine the impact of the social environment and emerging trends on the business profitability of an organization.

Answer 23

Social

Question 24

These factors determine the impact of technological innovation and development on a particular market or industry.

Answer 24

Technological

Question 25

These factors determine the influence of the surrounding environment and ecological aspects’ impact on a market or industry.

Answer 25

Environmental

Question 26

It is developed by Michael E. Porter as a framework for assessing and evaluating the competitive strength and position of a business organization.

Answer 26

Porter’s Five (5) Forces.

Question 27

This force analyzes how suppliers can easily influence price increases.

Answer 27

Supplier power.

Question 28

This force analyzes how buyers can easily influence price decreases.

Answer 28

Buyer power.

Question 29

This force examines the intensity of competition in the marketplace. This is driven by the number and capability of competitors in the market.

Answer 29

Competitive rivalry.

Question 30

This force is threatening when buyers can easily find substitute products with attractive prices or better quality and when buyers can switch from one product or service to another with little cost.

Answer 30

Threat of substitution.

Question 31

This force determines how easy or difficult it is to enter a particular industry.

Answer 31

Threat of new entrants.

Question 32

The business ecosystem is demonstrated by a network composing four
(4) types of players in the industry: customers, suppliers, competitors, and complementors.

Answer 32

Ecosystem Assessment Tool.

Question 33

These are the people or parties that buy the products and services of an organization

Answer 33

Customers.

Question 34

These parties provide the resources to produce or sell finished products or services

Answer 34

Supplier

Question 35

These parties fight over an organization’s market share by offering similar products or services and targeting similar customers.

Answer 35

Competitors.

Question 36

These organizations offer complementary or harmonizing products or services that could work well with a company’s products to make the result more attractive to consumers.

Answer 36

Complementors.