CAPSTONE FINAL EXAM QUESTIONS
AND ANSWERS GRADED A+ 2025/2026
External Environment - ANS All factors outside the firm that influence performance and
cannot be controlled but can be analyzed for opportunities and threats.
Political / Legal Environment - ANS Laws, regulations, trade policies, tax policies, labor laws,
and government stability that affect firm behavior.
Economic Environment - ANS Macroeconomic conditions such as inflation, interest rates,
unemployment, GDP growth, and exchange rates.
Demographic Environment - ANS Characteristics of a population including age, gender,
income, education, ethnicity, and population growth.
Sociocultural Environment - ANS Social values, beliefs, attitudes, lifestyles, and cultural norms
that influence consumer behavior.
Technological Environment - ANS Rate of technological change, innovation, automation, R&D,
and new product/process development.
Physical (Natural) Environment - ANS Natural resources, climate change, environmental
sustainability, and ecological regulations.
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Global Environment - ANS International markets, foreign competitors, trade agreements,
currency exchange rates, and geopolitical conditions.
Porter's Five Forces Model - ANS A framework used to analyze industry structure and
profitability.
Threat of New Entrants - ANS The likelihood that new firms can enter an industry and
compete.
Barriers to Entry - ANS Economies of scale, capital requirements, brand loyalty, switching
costs, access to distribution, government regulation.
Threat of Rivalry - ANS The intensity of competition among existing firms.
Threat of Substitutes - ANS The availability of alternative products that satisfy the same
customer need in a different way.
Threat of Suppliers - ANS The ability of suppliers to raise prices or reduce quality.
Threat of Buyers - ANS The ability of customers to force prices down or demand higher
quality.
Rivals - ANS Firms competing in the same industry with similar products.
Complements - ANS Products or services that increase the value of another product when
used together.
Resources - ANS Assets, capabilities, processes, knowledge, and relationships controlled by
the firm.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
AND ANSWERS GRADED A+ 2025/2026
External Environment - ANS All factors outside the firm that influence performance and
cannot be controlled but can be analyzed for opportunities and threats.
Political / Legal Environment - ANS Laws, regulations, trade policies, tax policies, labor laws,
and government stability that affect firm behavior.
Economic Environment - ANS Macroeconomic conditions such as inflation, interest rates,
unemployment, GDP growth, and exchange rates.
Demographic Environment - ANS Characteristics of a population including age, gender,
income, education, ethnicity, and population growth.
Sociocultural Environment - ANS Social values, beliefs, attitudes, lifestyles, and cultural norms
that influence consumer behavior.
Technological Environment - ANS Rate of technological change, innovation, automation, R&D,
and new product/process development.
Physical (Natural) Environment - ANS Natural resources, climate change, environmental
sustainability, and ecological regulations.
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Global Environment - ANS International markets, foreign competitors, trade agreements,
currency exchange rates, and geopolitical conditions.
Porter's Five Forces Model - ANS A framework used to analyze industry structure and
profitability.
Threat of New Entrants - ANS The likelihood that new firms can enter an industry and
compete.
Barriers to Entry - ANS Economies of scale, capital requirements, brand loyalty, switching
costs, access to distribution, government regulation.
Threat of Rivalry - ANS The intensity of competition among existing firms.
Threat of Substitutes - ANS The availability of alternative products that satisfy the same
customer need in a different way.
Threat of Suppliers - ANS The ability of suppliers to raise prices or reduce quality.
Threat of Buyers - ANS The ability of customers to force prices down or demand higher
quality.
Rivals - ANS Firms competing in the same industry with similar products.
Complements - ANS Products or services that increase the value of another product when
used together.
Resources - ANS Assets, capabilities, processes, knowledge, and relationships controlled by
the firm.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
