THE FIRM AND ITS ENVIRONMENT

Good day! Our report is about the firm and its environment. It is important
for us to be knowledgeable about this topic because it will be essential for
us, future professionals in the corporate field, to assess our firms and the
effects of the different business environment on our business. 
Before we dive into our discussion, we have a video presentation here, for
you to have an overview of what the firm is

Business Environment (DANICA)

(In order to discuss this topic thoroughly, we must first tackle what
business and environment means)
 Business
- refers to any economic activity being carried on by the person or
persons, natural or juridical. (this includes Buying, selling, transporting,
financing or rendering services, in pursuit of profit)
--on the other hand--
 Environment
- (In a business context) refers to the surrounding circumstances in
which the business is operating.

Two Factors
(So the business environment has two factors, namely internal and external
environment)
 Internal Environment - (Internal Environment includes elements
WITHIN the organization’s boundaries such as employees,
management and culture. The internal environment uses the what we
call as 5 M’s to operate the business. These are…) Man, Management,
Machinery, Material and Money.
--on the other hand--
 External Environment - (is an organizational environment that includes
all elements OUTSIDE the boundary of the organization. The external
environment has 5 factors) Political, Economic, Socio-cultural,
Technological, and Legal (which will be further explained by the next
reporter) (moving on, the external environment can be broken down
into 2 types) Micro and Macro environment.
 1. Micro Environment- refers to the environment which is close to
business and affects it’s capacity to work (These includes
suppliers, customers, market intermediaries, competitors, and
the public.)
1.1. Suppliers -  people who supply raw materials and require
components of the company
1.2. Customers - (who are also known as the…)“King of Markets”
(they are called the KINGS OF MARKET because without
customers neither business nor the economy can survive. There
are 5 types of customers namely...) Foreigners, Government and
other Institutions, Industries, Retailers, and Wholesalers
1.3. Market Intermediaries - are the bodies involved in
transacting the product from the producer to ultimate
consumers (in other words they work as a LINK between a
business and final customer. These include...) agents, wholesalers
and retailers; marketing services agencies; physical distribution
companies.
1.4. Competitors - are other businesses who can offer the SAME
or SIMILAR goods and services to your customers (Every moves
of the competitors affects the business)
1.5. Public - ANY group has actual interest in business enterprise
(there is also what we call the general public which are both the
users and nonusers of the product or services the business is
offering.)

2. Macro/general environment -  are the major uncontrollable,

external forces ( such as economic, demographic, technological,
natural, social and cultural, legal and political forces) A macro
environment refers to the set of conditions that exist in the
economy as a whole, which influence a firm's decision making
and have an impact upon its performance. In a larger scale
 (These forces will be later explained by the next reporter. Before moving
on, do you have any questions regarding my topic? None? So now let's give
the stage to miss Paculba for her insights on Environmental forces and
Environmental Scanning)

It affects the decisions, strategies, process and performance of the business. The environment
is consisting of factors which are beyond the control of the business (STEP) social,
technological, economical, legal and political. It provides opportunities or poses threats to the
organization.
Environmental Forces and Environmental Scanning (JHANE CARLA)
(now let’s tackle Environmental Forces and Environmental Scanning. First,
let’s discuss environmental forces. So it was discussed by Miss Amomonpon 
that the macro-environment is a major uncontrollable and external force
that affects not just the organization, but also the suppliers and customers.
It has 5 major forces/factors namely...) 

 Political, Economic, Socio-cultural, Technological, and Legal forces

(which are also known as the PESTL factors/forces)
1.1 Political Factors- (Political forces/factors involves the
cyclical decisions and laws the GOVERNMENT MAKE that
impacts the business and every environment in general) This
includes tax policies, government issued regulations, and
government contracts 
1.2 Economic Factor- (This is one of the hardest to handle and
often most difficult to assess because it...) involves rates like
inflation rate and tax rates, consumer buying habits, Employment
and unemployment, economic growth and etc. which can affect
the market and ECONOMY on a LARGE SCALE.
1.3 Sociocultural Factors- (These are forces within SOCIETIES
and CULTURES that affect the thoughts, feelings and behaviors
of the population) include changes in culture and demographics
such as Population size and rate of growth, Age distribution,
Values and attitudes, and religion.
1.4 Technological Factors - (refers to the factors revolving
around technological changes that can influence HOW an
organization does business) this includes production techniques,
information and communication resources, as well as ecommerce
technologies
 1.5 Legal Factors- These are the things that limit the business
operation. Examples of which are export and import
restrictions,  Legal factors connected to tax and customs
regulations, and laws connected to employee protection 
(The difference between Legal and Political factors is that Legal
factors only cover the laws passed by the government
specifically for business operations, unlike political factors that
have a lot of aspects that deal with the general laws.)

(Moving on, these factors are very relevant to our next topic which is
environmental scanning)

 Environmental Scanning - is the process of gathering, analyzing, and

dispensing information to identify external threats and opportunities
for tactical or strategic purposes. 
(Environmental scanning provides an internal analysis of a firm and
looks into the its external environment to formulate a strategy in
order to gain COMPETITIVE ADVANTAGE)
-Environmental Scanning includes the techniques PESTL Analysis for
the external environment, and SWOT analysis that outlines both
internal and external environment

1. PESTL Analysis- (It was mentioned a while ago that the external
environment is the environment OUTSIDE the boundary of the
organization) (In PESTL Analysis, we analyse the PESTL factors
that we’ve discussed which are the POLITICAL, ECONOMIC,
SOCIO-CULTURAL, TECHNOLOGICAL and LEGAL factors) We
do this in order to monitor the external environment and trends
that could impact the business.
2. SWOT Analysis - SWOT Analysis deals with analyzing and
establishing the Strengths and Weaknesses (Internal),
Opportunities and Threats (external) of the organization. 

(Before moving on to the next reporter, our last topic is about other
environments that affect the business)
  Demographic environment - A study of perspective of population, it’s
sizes, standard of living, growth rate, age-sex composition, family size,
income level, education level and etc
 International environment - It is particularly important for industries,
directly depending on imports and exports
 Natural environment - Every business unit must look for these factors
before choosing the location of the business
(That is all for my report, thank you. Do you have any questions? If none
then let’s proceed to the next reporter)

Domestic and International Environment of the Firm (Ate Kristel)

(Hi guys, I’m Kristel and I am going to tackle the topic Domestic and
International Environment of the Firm. Let’s first discuss what is the
difference between domestic and international environments...)

 Domestic Environment pertains to factors from INSIDE the country’s

geographical boundaries or where the business is operating that may
affect the business, on the other hand, the International Environment
pertains to the factors from OUTSIDE the country where the
business is operating that may affect the business

- Domestic business refers to the business where economic transactions

are conducted within the geographical boundaries of the one country.
International business refers to the business where economic
 transactions are conducted across border with several countries in the
world.

(Let’s proceed to domestic environment in business)

 Domestic Environment in Business - in order to effectively and
efficiently penetrate the market you are targeting, you must first look
into the domestic environment that surrounds your business. This
includes the climate, business policies, political setup, tradition, belief
system and etc. of the country where your business is operating 
1. Factors that Impact the Domestic Environment
1.1 Market Analysis - the understanding of your customers wants
and needs (As the customers are the kings of the market,
knowing their wants and needs will give the business the
opportunity to predict trends within the market) Example is
MCDonalds who research about the preference of the customers
or the market that they want to catch the attention. Market
analysis is one of the reasons their branches are successful.
(market here means the population of customers)
1.2 Cyclical Changes - Refers to the ups and downs of the
economy ex. Ups and down of inflation rate, higher
unemployment rate. (This factor is easier to predict but it has a
strong impact on the business. Example naa kay business na
burger then the prices of the ingredients sa burger kay ni-
increase because of increase in inflation rate or pagtaas ng
presyo ng mga bilihin, chances are you will need to also increase
the price of your burger para naa gihapon kay income and dili ka
alkansi. On the other hand, if ang prices sa ingredients kay
mobalik sa iyang original presyo for example next week or next
month, pwede napud nimo ibalik ang original price sa imong
product)
1.3 Market Size - Refers to the potential number of customers
your business can sell to. Knowledge of the size of your target
market allows you to fully assess opportunities and accurately
plan your approach and your investments – wisely. (Example
ganahan nasad ka magbusiness ug milktea, before ka mag start sa
 business i-determine sa nimo ang market size of milktea sa
phillipines or sa imong barangay, para makadetermine ka kung pila
ang imong potential customers and makaplan ka kung sa imong
himuon na actions.)

1.4 Access to materials and Labor - refers to the availability and

accessibility of raw materials and labor for the business
(Example you want to have a furniture business made out of
narra, before venturing to the business, you need to first make
sure that raw materials are present and if their are skilled
artisans who could make these kinds of furnitures in your area)
1.5 Infrastructure - Infrastructure is the general term for the
basic physical systems of a business, region, or nation (Examples
of infrastructure include transportation systems, communication
networks, sewage, water, and electric systems. You need to
assess this in order to efficiently and effectively operate your
business within the domestic area)

(That concludes my report. Do you have any questions? If none let’s proceed
to miss Delante for her report on phases of economic development)

Phases of Economic Development (Pricess)

Stages of Economic Development

Subsistence Economy- is an economy directed to basic subsistence (livelihood) rather

than to the market.
EXAMPLE:
 artisan fishing, labor-intensive agriculture, grazing livestock
Commercial economy - is driven by a market (protected thoroughly from fraud)  that
consistently produces technology and increases personal wealth. . The refusal of monetary
gain and the need to increase revenue are the main point of contention between commerce
and sharing.
Emerging market - is a market that has some characteristics of a developed market, but
does not fully meet its standards. This includes markets that may become developed
markets in the future or were in the past.
EXAMPLE:
The Philippines is one of the emerging markets and is the sixth richest in Southeast Asia
by GDP per capita. The Philippines is primarily considered a newly industrialized country,
which has an economy transitioning from one based on agriculture to one based more on
services and manufacturing.
Technology-Based Economy - , is the approach used to help create a climate where this
economic base can thrive.
For example, the process like assembly line production or creating medical vaccines are
considered technologies. Even social or political things like language, money, banking, and
democracy are considered technologies. Think of the technologies you would need to
produce a car and sell a car.

Forms of business organization (Lyka Ceniza)

SOLE PROPRIETORSHIP (ADVANTAGES)

 Easy to form -because less ra ang legal papers, 
 Not expensive - lower business fees
 Low government regulations - more liberated 
 More Freedom and flexibility -As a sole proprietor, you aren’t
restricted to complicated and strict regulations

SOLE PROPRIETORSHIP (DISADVANTAGES)

 Unlimited liability - If naay liability ang business and kulang ang
pambayad moexpand ang liability sa business owner’s personal assets
  Lots of works - since their is only one owner, it is expected that
managing and supervising task will be made by the owner himself
 Business dies with owner - if the owner dies, the business will also die
with him/her

PARTNERSHIP (AVANTAGES)
 Easy to form - The partners can agree to create the partnership
verbally or in writing
 Less expensive - less expensive alternative because the burden of
expenses is shared by the partners
 Moderate government regulations
 Sharing of Skills - partners can contribute their skills to the business,
they should complement with each other

PARTNERSHIP (DISADVANTAGES)
 Decision making can be complicated - since their are partners in the
business, these partners may have decisions they don’t agree with
resulting to complications
 Partnership can be unstable
 Shared profit - while a sole trader retains all the profits of their
business, those of a partnership are shared amongst the partners.

CORPORATION (ADVANTAGES)
 Unlimited life - There is no limit to the life of a corporation, since
ownership of it can pass through many generations of investors
 Limited liability - The shareholders of a corporation are only liable up
to the amount of their investments.
 Easy to raise capital - in particular can raise substantial amounts by
selling shares or issuing bonds

CORPORATION (DISADVANTAGES)
 Greater possibilities for management disagreement - 
  Double taxation - it may pay taxes on its income, after which
shareholders pay taxes on any dividends received, so income can be
taxed twice.
 Harder to start - it needs more expenses or investors to start a
corporation

(And that brings us to the end of our presentation. We sincerely appreciate

your attention today guys. Would anyone like to ask any questions?)