Task environment C. Operating environment D. Internal environment Geographic segmentation is when a business divides its market on the basis of geography. There are several ways that a market can be geographically segmented. Economic Factors Affecting Business Environment Demand and Supply. In terms of the geographic and environmental competitive landscape, Israel has an ideal environment to foster technological advancement. Direct competitors are those that sell very similar goods and services. Additionally, start-ups currently in Tel-Aviv have been successful in selling to U.S. markets. Current undergraduate students. 4. New Zealand is an island country located 1,000 miles (1,600 km) southeast of Australia in Oceania.It consists of several islands, the largest of which are the North, the South, Stewart, and Chatham Islands. Businesses also consider geographic and climactic factors. For example, in 2016, California citizens voted for a law to ban the use of single-use plastic bags, affecting the majority of retailers in that state. Indirect competitors are those that sell unrelated goods and services, but to similar target markets. Indirect environmental factors can affect any business by creating changes in societal expectations and government laws and regulations in efforts to protect the environment. Department of Geography and Environment, St Clement's, London School of Economics and Political Science, Houghton Street, London, WC2A 2AE Follow us LinkedIn FaceBook Twiiter Instagram YouTube. A. Useful links. With technology creating a knowledge base accessible to anyone in the world, programmers have started to multiply in Tel Aviv. Economic and geographic environmental factors impact businesses that are beginning, expanding or currently competing. Geographic literacy will also be necessary for reasons of enhancing economic competitiveness, preserving quality of life, sustaining the environment, and ensuring national security. Read National Geographic's latest stories about the environment. Find out more. Demand is how willing and able a consumer is to purchasing what a business offers and supply is how able the business is to make available what the consumer needs. LSE Careers. Businesses often take into consideration the overall economic conditions in a country, such as whether a recession or boom is underway. The term "competitive environment" refers to the number and types of companies against which a given business competes in its industry. There are two great economic factors affecting business models work – demand and supply. The industry environment directly influences a firm and its competitive actions and responses. 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