Why can competition be considered part of a firm's business environment?
Correct answer: A. Competitors influence the firm's choices without being controlled by it
- A. Competitors influence the firm's choices without being controlled by it
- B. Competitors are always owned by the same shareholders
- C. Competitors determine the firm's internal accounting rules
- D. Competitors remove the need for market research
Explanation
Rival firms can affect prices, product quality, promotion and market share, so they influence business decisions while remaining outside the firm's direct control. Competition therefore belongs to the external micro-environment.
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About The Business Environment
Business environment includes the internal factors and external forces that affect business decisions, performance and survival. It covers customers, competitors, suppliers, government, technology, economic conditions, society, law and ecology, including the distinction between the microenvironment and the wider PESTLE environment.
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