BUSI 4940 Exam 1 Review Questions
and All Correct Answers.
General Environment - Answer Factors in the external environment that can affect the
company, but the company cannot directly affect back.
Or, dimensions in the broader society that influence an industry and the companies within it. In
general, firms cannot directly control or significantly impact the segments of this environment.
For example, the U.S. economy is so big that one company can't do much to impact it. However,
the U.S. economy can impact any given company within it.
Industry Environment - Answer Factors that directly affect the company's competitive
actions and responses. But the company CAN have a significant effect back on them as well.
Think the threat of new entrants, the power of suppliers and buyers, the threat of substitutes,
and rivalry among competing firms.
There are some actions suppliers can take that will affect your company, but there are also
actions you can take to affect your suppliers. Furthermore, customers can also affect you, but
you can also affect your customers.
Competitor Analysis - Answer How companies gather and interpret information about their
competitors is called ______________________.
General Environment - Answer The following are external factors that are Segments and
Elements of the _______________.
1. Political/Legal
2. Economic
3. Sociocultural
4. Technological
5. Demographic
6. Environmental
7. Global
We want to know if these will change and how they will affect our firm in the next 5 years.
,Opportunity - Answer A condition in the general environment that, if exploited effectively,
helps a company reach strategic competitiveness.
Threat - Answer A condition in the general environment that may hinder a company's efforts
to achieve strategic competitiveness.
External Environment Analysis - Answer This process is _____________________,
1. Scanning: Identifying early signals of environmental changes and trends
2. Monitoring: Detecting meaning through ongoing observations of environmental changes and
trends.
3. Forecasting: Developing projections of anticipated outcomes based on monitored changes
and trends.
4. Assessing: Determining the timing and importance of environmental changes and trends for
firms' strategies and their management.
Demographic - Answer Segment of General Environment concerned with statistics regarding:
1) Population Size;
2) Age Structure;
3) Geographic Distribution;
4) Ethnic Mix;
5) Income Distribution
*Remember P. E. S. T. /D. E. G.
Economic - Answer Segment of General Environment that refers to the nature and direction
of the economy in which a firm competes or may compete; Interest rates, inflation rates, GDP,
Budget deficits/surpluses, personal savings rates, unemployment.
*Remember P. E. S. T. /D. E. G.
, Political/Legal - Answer Segment of General Environment that refers to tax policies, trade
restrictions, tariffs, subsidies, stability of the government, antitrust, health & safety,
discrimination, child labor.
Likely the most impactful potential issues a firm may face come from this segment.
*Remember P. E. S. T. /D. E. G.
Sociocultural - Answer Segment of General Environment concerned with a society's attitudes
and cultural values; Women in the workforce, diversity, shifts in preferences regarding
product/service, work-life balance attitudes.
*Remember P. E. S. T. /D. E. G.
Technological - Answer Segment of General Environment that includes the institutions and
activities involved in creating new knowledge and translating that knowledge into new outputs,
products, processes, and materials; Technological innovations, Industry 4.0 (smart factories),
Industry 5.0 (robotics), service delivery, new medicines.
*Remember P. E. S. T. /D. E. G.
Global - Answer Segment of General Environment that focuses on the extent to which PEST-
DEG type factors in other countries affect America or the locations where your firm operates.
*Remember P. E. S. T. /D. E. G.
Environment - Answer Segment of General Environment that refers to potential and actual
changes in the physical environment (Natural disasters, weather) and business practices that are
intended to positively respond to those changes in order to create a sustainable environment.
(pollution, energy consumption)
*Remember P. E. S. T. /D. E. G.
Industry - Answer A group of firms producing products that are close substitutes or are
related based on their primary business activities.
Basically, a group of companies that compete by providing similar goods, services, or both.
and All Correct Answers.
General Environment - Answer Factors in the external environment that can affect the
company, but the company cannot directly affect back.
Or, dimensions in the broader society that influence an industry and the companies within it. In
general, firms cannot directly control or significantly impact the segments of this environment.
For example, the U.S. economy is so big that one company can't do much to impact it. However,
the U.S. economy can impact any given company within it.
Industry Environment - Answer Factors that directly affect the company's competitive
actions and responses. But the company CAN have a significant effect back on them as well.
Think the threat of new entrants, the power of suppliers and buyers, the threat of substitutes,
and rivalry among competing firms.
There are some actions suppliers can take that will affect your company, but there are also
actions you can take to affect your suppliers. Furthermore, customers can also affect you, but
you can also affect your customers.
Competitor Analysis - Answer How companies gather and interpret information about their
competitors is called ______________________.
General Environment - Answer The following are external factors that are Segments and
Elements of the _______________.
1. Political/Legal
2. Economic
3. Sociocultural
4. Technological
5. Demographic
6. Environmental
7. Global
We want to know if these will change and how they will affect our firm in the next 5 years.
,Opportunity - Answer A condition in the general environment that, if exploited effectively,
helps a company reach strategic competitiveness.
Threat - Answer A condition in the general environment that may hinder a company's efforts
to achieve strategic competitiveness.
External Environment Analysis - Answer This process is _____________________,
1. Scanning: Identifying early signals of environmental changes and trends
2. Monitoring: Detecting meaning through ongoing observations of environmental changes and
trends.
3. Forecasting: Developing projections of anticipated outcomes based on monitored changes
and trends.
4. Assessing: Determining the timing and importance of environmental changes and trends for
firms' strategies and their management.
Demographic - Answer Segment of General Environment concerned with statistics regarding:
1) Population Size;
2) Age Structure;
3) Geographic Distribution;
4) Ethnic Mix;
5) Income Distribution
*Remember P. E. S. T. /D. E. G.
Economic - Answer Segment of General Environment that refers to the nature and direction
of the economy in which a firm competes or may compete; Interest rates, inflation rates, GDP,
Budget deficits/surpluses, personal savings rates, unemployment.
*Remember P. E. S. T. /D. E. G.
, Political/Legal - Answer Segment of General Environment that refers to tax policies, trade
restrictions, tariffs, subsidies, stability of the government, antitrust, health & safety,
discrimination, child labor.
Likely the most impactful potential issues a firm may face come from this segment.
*Remember P. E. S. T. /D. E. G.
Sociocultural - Answer Segment of General Environment concerned with a society's attitudes
and cultural values; Women in the workforce, diversity, shifts in preferences regarding
product/service, work-life balance attitudes.
*Remember P. E. S. T. /D. E. G.
Technological - Answer Segment of General Environment that includes the institutions and
activities involved in creating new knowledge and translating that knowledge into new outputs,
products, processes, and materials; Technological innovations, Industry 4.0 (smart factories),
Industry 5.0 (robotics), service delivery, new medicines.
*Remember P. E. S. T. /D. E. G.
Global - Answer Segment of General Environment that focuses on the extent to which PEST-
DEG type factors in other countries affect America or the locations where your firm operates.
*Remember P. E. S. T. /D. E. G.
Environment - Answer Segment of General Environment that refers to potential and actual
changes in the physical environment (Natural disasters, weather) and business practices that are
intended to positively respond to those changes in order to create a sustainable environment.
(pollution, energy consumption)
*Remember P. E. S. T. /D. E. G.
Industry - Answer A group of firms producing products that are close substitutes or are
related based on their primary business activities.
Basically, a group of companies that compete by providing similar goods, services, or both.
