Compared with the industry environment, the general environment has a more direct effect on the firm's strategic competitiveness and above-average returns.

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The industry environment has a more direct effect on a firm's strategic competitiveness and above-average returns because it includes factors such as competitors, suppliers, and customers that directly influence a firm's operational effectiveness and strategic decisions. The general environment, while important, affects firms more indirectly through broader economic, technological, sociocultural, demographic, political/legal, and global trends.

Compared with the Industry Environment, the General Environment Has a More