Name: _____________________________________ Grade & Section: _______________ Score: ____________

School: Poblacion Polomolok NHS Teacher: Josephine C. Sale Subject: ENTREPRENEURSHIP

LAS Writer: Josephine C. Sale Quarter 1 Week 4.1
Lesson Topic: ENVIRONMENTAL ANALYSIS
Learning Targets: 1. Describe the environmental analysis;
2. State the important areas to be included in the environmental analysis.
Reference(s): ENTREPRENEURSHIP-Grade 11 Module 2 EXECUTIVE SUMMARY,
ENVIRONMENT ANALYSIS, AND BUSINESS DESCRIPTION

ENVIRONMENTAL ANALYSIS
The next major part or section of the business plan is the 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. The environmental analysis may consist of the
graphical representations, tables, and computations. The environmental analysis section is considered the heart
of the business plan.
Since the business that you intend to open in this entrepreneurial course is considered small in terms of
capitalization, the industry analysis will focus mainly on the consumers and competitors. The presence of the
consumers, after all, is the ultimate reason for the existence of any business endeavor.
In today’s competitiveness business environment, an environmental analysis is already a necessity. It is
perceived as the basic element for business survival. It may consist of global analysis, societal analysis, and
industry analysis.

GLOBAL ANALYSIS
The environmental analysis section may begin with a description of the global business situation to
provide enough knowledge about the global perspective or horizon of the business. A common mistake in tis
section is describing a business entity that operates in the global environment because a global analysis
evaluates the business trend in the worldwide market. As a future entrepreneur, you should not devote the whole
section of the global analysis by simply describing the business trends, for example, in the whole Asian region,
in European communities, or even in Mainland USA. Remember that it is not the business trend that has the
most significant bearing on the global analysis but rather the possible business opportunities or ideas that the
global business trend offers.
The trend in the global market is the result of what happened in the past, while a possible business idea
is the expected event that may happen in the future. Investors are more interested in what will happen in the
future. The global trend simply acts as an indicator of any favorable sign for a business idea. However, there is
a direct relationship between these two concepts. Once the world market is properly described, the business
opportunities that the global trend provides must also be described. The reader, therefore, must be convinced
that is its worth to exploit the business idea or opportunity based on the global business trend.

SOCIETAL ANALYSIS
After describing and possibly convincing the reader of the bright business prospect in the world market,
the next step is to present the societal analysis and determine the different variables affecting the societal
environment. These are forces of political, economic, socioeconomic, technological, ecological and legal forces.
Most business plans fall to mention the probable levels of effects of the various forces to the proposed
business, and the frequency of occurrence of the environmental factors. They simply describe the different
variables or forces. A mere description of the various environmental factors does not provide any brilliant idea
to the reader. The societal analysis must tell how the environmental forces affect the proposed business and how
great their effects are.

INDUSTRY ANALYSIS
The third level of environmental analysis is the industry analysis. The industry analysis basically
involved 3 important related tasks as follows:
1. Conducting a critical evaluation of the forces in the industry that affect the proposed business.
2. Evaluating the probable position of the business in the industry.
3. Determining the most appropriate strategy that may be adopted by the proposed business.

Practice Personal Hygiene protocols at all times.

Conducting a Critical Evaluation
Conducting a critical evaluation is the most delicate, tedious, and difficult task in industry analysis.
There are some business plans that do not even show any indications that a critical analysis has been conducted,
but rather, the evaluation appears to be a mere play of words. Nevertheless, not all forces in the industry, even
in the societal analysis, must be analyzed and described. Only those forces that are deemed to have substantial
effects, either positive or negative, to the proposed business must be critically analyzed and properly described.
The industry analysis in all instances must not fail to evaluate and describe the target consumers and the
competitors. Data and information on these important forces in the industry are usually the results of research
work. Research work on the target consumers applies the concepts of market segmentation, market targeting,
and market positioning to determine the total demand of the industry. Research work on the competitors
identifies the total expected supply. The gap between the consumer demand and the competitor supply
represents the unsatisfied demand.
The unsatisfied demand may be considered the market share of the proposed business under the
following conditions:
1. The proposed business has the capability to produce the product.
2. There are no expected new entrants to the industry other than the proposed business.
The industry analysis needs substantial work in the process of establishing the projected demand and
supply.
The demand and supply analysis, also called the consumer and competitor analysis, is the backbone or
the foundation of all other analyses. Where there are no consumers or buyers of the product, the business will
never e created. The presence of the consumers is the ultimate reason for the existence of any business
endeavor.
The entrepreneur must choose the scanning tools that best suit his/her business venture.

Evaluating the Business Position

After conducting a critical analysis of the factors in the industry environment that primarily affect the
proposed business, the next step is to evaluate the possible business position in the industry. This deals with
market share and growth. Entrepreneurs may use a perceptual map, also called positioning map, to help them
understand their position against their competitors in the market. It shows how the consumers respond to their
products and services.
The sample perceptual map shows a comparison among competing products in the market, their
attributes, and the age and gender of their target consumers.

Determining the Most Appropriate Business Strategy

The last important task in the industry analysis is to describe the most appropriate strategy that may be
adopted by the business. The strategy is highly influenced by the analysis of the business strengths, weaknesses,
opportunities, and threats. The reason for the selection of the strategy must likewise be clearly indicated.

Activity:
Find your group which consist of five (5) members. Do the Environmental Analysis Section in Business
Plan and connect it to your activity in LAS Q1 M3.1.
Practice Personal Hygiene protocols at all times.
Practice Personal Hygiene protocols at all times.