The external business environment

Question 1

name the 4 external forces that can influence a businesses activities

Answer 1

• market conditions and competitors
• environmental and social factors
• demographic factors
• economic factors

Question 2

what should external factors not be looked at in? why?

Answer 2

shouldn’t be looked at in isolation as is often a relationship between them

Question 3

name some examples of positive changes in the external environment

Answer 3

• a fashionable product
• closure of a major competitor
• increase in the number of consumers
• falling interest rates
• raising consumer incomes

Question 4

name some examples of negative changes in the external environment

Answer 4

• increase in consumer demand for environmentally friendly products
• a new business enters the market
• over supply of products in the market
• high unemployment levels