External Environment Affect On Business Interview Question

You are applying for a position in your chosen career (please decide the type of position based on your career goals). You really want to impress your future boss with your knowledge of business because you realize that demonstrating that understanding will give you an advantage over the other applicants. You have studied the external business environments, the importance of demonstrating the value of the product or service, and the impact of supply and demand. If hired, you understand how each of those concepts will relate to the success of your potential company, and you feel prepared for your interview.

While the interview seems to be moving along at warp speed, you suddenly are asked the following question:
In this type of business, we are impacted by many external environments that can create challenges. Of the six external environments, which two do you see as creating challenges for this company, and how would you deal with those challenges if you were hired for this position?

1 Provide a brief description of this company and reference the type of position for which you are interviewing.
2 Answer the question in a complete sentence, restating the question that you are about to answer. Answer the interviewer's question with detailed information and example(s) to illustrate your total understanding of the environments and their impact on this business where you hope to be employed.

A business can be defined as any entity that supplies products or services to consumers to earn a profit.

This may sound simple enough, but businesses are subject to forces outside of their own internal operations that can create advantages or challenges to the success of the business. Those forces are referred to as External Environments. Six key external environments affect every business to some degree.

ECONOMIC

Economic conditions can create opportunities or threats based on the type of business. If the economy is doing well and people are earning good wages and salaries, then businesses will prosper whether their products satisfy a want or a need.

If economic conditions are struggling, then businesses that supply products that satisfy wants; such as TVs, tech toys, and new furniture; will suffer because people will be more focused on their needs. They will lack the financial ability to spend money on wants. 

Conversely, businesses that supply products that satisfy needs will not be as affected by lower economic conditions because people will still need those products. Items such as medical supplies, fuel, and food staples are examples of needs.

POLITICAL/LEGAL

Political and legal conditions impact businesses by creating regulations and laws that can either benefit or create challenges for businesses.

If a law is passed stating that businesses must install filters to reduce harmful emissions from their factories, this will be costly for businesses, and it will not help to generate more profit. This would create a negative impact for those businesses.

On the other hand, if a law lowering the tax rates for businesses is passed, that would create a positive impact for those businesses affected.

COMPETATIVE