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CA Intermediate · Financial Management and Strategic Management · Strategic Analysis: External Environment

A Kolkata-based firm studies how its competitors, customers, suppliers and distributors behave, rather than broad national conditions such as inflation or demographics. In strategic management terms, this is a scan of which environment?

This is a scan of the operating or micro environment. It covers the immediate players such as competitors, customers, suppliers and distributors that directly influence the firm. Broad factors like inflation and demographics belong to the macro (remote) environment instead.

  1. AInternal environment
  2. BMacro environment
  3. COperating (micro) environmentCorrect
  4. DRemote environment

Explanation

The operating or micro environment comprises competitors, customers, suppliers and distributors that directly affect the firm. Inflation and demographics belong to the macro or remote environment. Internal environment covers the firm's own resources and capabilities.

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