Business Environment Video(study rocket) Review

What is the external environment of a business?

• The elements that impact on the business which are outside its direct control

• The elements that impact on the business which are within its direct control

• The elements that impact on the business which are both within and outside its direct control

• The elements that have no impact on the business

What are the two main factors that impact a business in a competitive market?

• Quality and marketing of their product

• Size and number of firms in the market

• Demand for their product and their costs

• Disposable incomes and interest rates

In a highly competitive market, what strategies can businesses use to stay competitive?

• Lower quality, increase advertising, and reduce workforce

• Increase prices, focus on marketing, and expand their product range

• Reduce costs, develop their brand, and identify unique selling points

• Increase costs, decrease advertising, and rely on customer loyalty

How does an increase in disposable incomes affect demand for a product?

• It leads to a decrease in demand

• It depends on the type of product

• It has no effect on demand

• It leads to an increase in demand

What is the impact of an increase in interest rates on spending power?

• It has no effect on spending power

• It increases spending power

• It reduces spending power

• It depends on the type of product

What are the three principal demographic factors that can affect demand for products or services?

• Employment level, economic activity, and tax cuts

• Location, income, and education level of population

• Age, gender, and race of population

• Size, makeup, and distribution of population

How can changes in the nature of target markets impact labor costs?

• Changes in specific skills may require businesses to change their purchasing and operating policies

• Changes in target markets have no impact on labor costs

• Changes in target markets may lead to a decrease in labor costs

• Changes in target markets may lead to an increase in labor costs

Why might businesses choose to be environmentally friendly?

• To be socially responsible and reduce their impact on the environment

• To increase costs and attract more customers

• To increase their market power and force down selling prices

• To import goods at a lower price

What factors should be considered to judge the impact of the external environment on a business?

• Cost of borrowing, return on saving, and interest rates

• Nature of the product, customer type, location, and potential changes

• Size of the business, competition level, and marketing strategies

• Distribution of population, changes in target markets, and labor costs

How does a change in consumer preferences affect the demand for a product?

• It has no effect on demand

• It leads to an increase in demand

• It leads to a decrease in demand

• It depends on the type of product