FPII: Unit 4

Which is an example of an external factor that might affect the business environment?

• Staff members are reassigned duties.

• The business develops a new product

• The government implements new regulations.

• The business improves its information systems.

Businesses are affected by social factors in the external environment because:

• customer needs are also affected by these factors.

• a business must use social networking to survive.

• every business creates consumer products.

• customers no longer value quality.

Jonathan has some extra money to spend this month, so he purchases an iPad. He wants it only to play games on, making it a:

• consumer staple.

• discretionary item.

• poor buying decision.

• technological product.

When an economy is struggling, consumers are less likely to make discretionary purchases. Which is an example of a discretionary item?

• food

• clothing

• vacation

• medical care

How does technology affect a business's customers?

• It makes them spend more money.

• It influences what they want and need.

• It emphasizes certain cultural differences.

• It distracts them from making informed buying decisions.

Industry associations differ from regulatory agencies in that they:

• exist to make a profit

• lack government authority

• are formed only for social purposes.

• have been created to protect consumers.

Every new business owner must pay attention to forces operating outside the company that affect its chances for success. These forces are referred to as:

• the external environment.

• cultural intelligence.

• demographics.

• competition.

Which business environment provides the most options for consumers?

• monopoly

• common economy

• global competition

• international sanctions

Laura is part of a group that is traveling to the state capitol to convince legislators to pass laws that are favorable for small businesses. This is a practice known as:

• environmental scanning.

• globalization

• outsourcing

• lobbying

Amie deals with people from many different countries, so she studies their customs and traditions to become sensitive to these differences. Amie is developing:

• social responsibility.

• cultural intelligence.

• demographics

• globalization