The External Environment
         Chapter 4
    McGraw-Hill/Irwin                           Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
  Learning Objectives
        1.  Three tiers of environmental factors that 
            affect firm performance
        2.  Five factors in the remote environment
        3.  Examples of the economic, social, political, 
            technological, and ecological influences on a 
            business
        4.  The five forces model of industry analysis 
            and give examples
        5.  The influences of entry barriers, supplier 
            power, buyer power, substitute availability, 
            and competitive rivalry on a business 
        6.  The five factors in the operating environment
        7.  The influences of competitors, creditors, 
            customers, labor, and direct suppliers on a 
            business
                                                           4-3
   The Firm’s External Environment
    Comprised of following 
        Components:
    Remote environment
    Industry environment
    Operating environment
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  Ex. 4.1 The Firm’s External Environment
                                                         4-5
  Remote Environment
     Economic Factors
     Social Factors
     Political Factors
     Technological Factors
     Ecological Factors
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