ENVIRONMENTAL

FORCES THAT AFFECT

LOCAL AND
INTERNATIONAL
BUSINESS
MODULE 3

MYRTLE JOY P. DE RAMOS

LESSON OBJECTIVE:

1. Differentiate internal and external

environment
2. Perform and appreciate the importance of
SWOT in business success
3. Identify the different factors that may harm or
help a business.
ACTIVITY 1:
Directions: Group the following words below accordingly whether it belongs to internal factors or external factors.

• Missions & Objectives

• Social Factors
• Political Factors
• Demographic Factors
• Policies & Procedures
• Technological Factors
• Staff/ Employees
• Internal Relationship
• Value System
• Competitors
• Marketing Intermediaries
• Financial factors
• Economic Factors
• Suppliers
• Products & Services
ACTIVITY 1:
INTERNAL FACTORS EXTERNAL FACTORS
ANSWER:
INTERNAL FACTORS EXTERNAL FACTORS

Mission and Objectives Suppliers

staff/ Employee Competitors
Financial Factors Marketing Intermediaries
Internal Relationship Economic Factors
Value System Social Factors
Policies & Procedures Political Factors
Products & Services Demographic Factors
Technological factors
ENVIRONMENTAL FACTORS
INTERNAL FACTORS:
➢VALUE SYSTEM. It denotes the culture and norms of the
business. This is the regulatory framework of a business
which every employee must abide and act within the
context.
➢MISSIONS AND OBJECTIVES. Different priorities, policies,
and philosophies of a business are guided by the mission
and vision of a business.
➢FINANCIAL FACTORS. These are the factors like financial
policies, financial position and capital structure which also
affect a business performance and its strategies.
➢INTERNAL RELATIONSHIP. Factors like the amount of
support the top management enjoys from its stakeholders,
employees and the board of directors also affects the
smooth functioning of a business.
EXTERNAL FACTORS:
MICRO ENVIRONMENT
➢SUPPLIERS are those people who are responsible for
supplying necessary inputs to the organization and ensure
the smooth flow of production.
➢COMPETITORS are the close challenges of the business. It
also refers to the numbers of similar competitive product,
brand, size, and market capitalizations. And in order to
survive the competition, one has to keep a close look in the
market and formulate policies and strategies to produce
innovative output.
➢MARKETING INTERMEDIARIES aid the company in
promoting, selling and distributing goods and services to
its consumers. Therefore, marketing intermediaries are
vital link between business and the consumers.
EXTERNAL FACTORS:
MACRO ENVIRONMENT
➢ECONOMIC FACTORS include economic conditions such as
growth rate, inflation, restricted trade practices and others
which have considerable impact on the business.
➢SOCIAL FACTORS include the society together with its
preferences, priorities, pattern of beliefs, purchasing
power, educational background and other.
➢DEMOGRAPHIC FACTORS refer to the study of people, such
as their age, sex, marital status, occupation, family size,
etc.
➢POLITICAL FACTORS include government policies, laws,
and legalities.
➢TECHNOLOGICAL FACTORS. Technology sets challenges to
dealer. It affects the kind of product that a dealer is
offering.
ORGANIZATIONAL
ENVIRONMENTAL SCANNING
Environmental scanning helps
organizations to gain knowledge of
possible influences from outside
environments and how it can
strategically affect the business.
ORGANIZATIONAL
ENVIRONMENTAL SCANNING

ENVIRONMENTAL
SCAN

INTERNAL EXTERNAL
ANALYSIS ANALYSIS

Strength Weaknesses Opportunity Threats

SWOT MATRIX
 ACTIVITY 2:

BUSINESS NAME
STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS
 SWOT ANALYSIS
STRENGTHS WEAKNESSES
These are the These are chances
advantages of your for development
company over the advances or
other. expansions.
External Factors

Internal Factors
OPPORTUNITIES THREATS
These are the These are
limited resources circumstances or
available in your situation which
company. you cannot control.
ACTIVITY 3:
Think of a simple business you would like to venture and
have the following:
✓Name of your business
✓Location of the business
✓Make a simple SWOT Analysis