ENVIRONMENTAL

ANALYSIS
ENVIRONMENTAL ANALYSIS
• It is a strategic tool that helps determine the
external and internal factors affecting the
performance of the business.
• These factors may be political, economic, social
or technological in nature.
• It may consist of at least 20 pages including the
graphical representations, tables and
computations.
 • This part may begin with the description
of global business and some situations.
• A mistake in this section is describing the
business entity that operates in the
GLOBAL
global environment.
ANALYSIS • Remember that the business trend is not
the most important bearing but rather
the opportunities or ideas that it offers.
 • Is the result of what happened in the
past that will lead to ideas expected in
the future.
• It acts as the indicator for any favorable
GLOBAL
sign for a business
TRENDS • In the end the reader must be convinced
that it is worth to exploit the business
idea.
SOCIETAL ANALYSIS
1. Political forces
2. Economic forces
3. Socioeconomic forces
4. Technological forces
5. Ecological forces
6. Legal forces
SOCIETAL ANALYSIS
• It must tell how the environmental forces
effect the proposed business and how
great their effects are.
• Assuming that you consider the interest
rate and disposable income as economic
variables. The analysis may appear as:
ECONOMIC ENVIRONMENT
The prevailing interest rate given by
most commercial and industrial banks
ranges between 10 % and 12% and is
expected to increase to 15 % within a
two-year period because of the policy of
Banko Sentral ng Pilipinas.
ECONOMIC ENVIRONMENT
The prevailing interest rate given by
most commercial and industrial banks
ranges between 10 % and 12% and is
expected to increase to 15 % within a
two-year period because of the policy of
Banko Sentral ng Pilipinas.
INDUSTRY ANALYSIS 3. Determining the most
appropriate strategy that may
1. Conducting a critical
be adopted by the proposed
evaluation of the forces in
business.
the industry that affect the
proposed business.
2. Evaulating the probable
position of the business in
the industry.
 • Is the most difficult part of the industry
analysis.
• Only those forces that are deemed to
CONDUCTING have substantial effects to the proposed
A CRITICAL business must be critically analyzed and
EVALUATION properly described.
• It must not fail to evaluate the target
consumers and competitors.
 • Research work on the target consumers
applies the concept of market
segmentation, market targeting and
CONDUCTING market positioning.
A CRITICAL • Research work on the competitors
EVALUATION identifies the total expected supply.
• The gap between the consumer demand
and the competitor supply represents
the unsatisfied demand.
 1. The proposed business has the
capability to produce the
product.
UNSATIFIED 2. There are no expected new
DEMAND
entrants to the industry other
than the proposed business.
 • Foundation of all other
analyses where there are no
DEMAND AND consumers or buyers of the
SUPPLY product, the business will never
ANALYSIS be created.
EVALUATING THE BUSINESS POSITION
• This deals with market share and
growth
• Entrepreneurship may use
perceptional map, also called
positioning map, to help them
understand their position against their
competitors in the market
 Sample
Perceptual
Map
(Segmentation
Pepsi
Max
Coke
Zero
My Chart Title
High in Caffeine Pepsi
Study Guide)
Diet
Coke Coke
Female, 15- Male, 15-
Pepsi 30 years 30 years
Light

Low in High in
Sugar Sugar
30-50-
years
5- 15-years
50+ Fanta
7 Up
years

Low in Caffeine
DETERMING THE MOST APPROPRIATE BUSINESS STRATEGY

• The strategy is highly

influenced by the analysis of
the business strengths,
weaknesses, opportunities and
threats