So its customers would not be lured by its competitors, wendy's decided to offer a 99-cent value menu to compete with the value menus offered at burger king and mcdonald's. this is an example of which element of the immediate environment?

This is an example of COMPETITION element of the immediate environment. 
In marketing, there are three elements of  consumers' immediate environment, these are: company, competition and corporate partners. These three elements works together and directly determine the performance of a company in a particular place. In the scenario given in the question, Wendy decided to offer the 99 cent value menu purposely to attract more consumers than its competitors.

Yes it is why ..