What I Know

1. Which statement is not true about environmental analysis?

A. It is a process by which organization monitor their relevant environment.
B. It helps identifies opportunities, plan and does not take action.
C. It identifies strengths and weaknesses of the business.
D. It is a careful study of various factors influencing the business.
2. This objective of environmental analysis puts importance that one must be aware
of existing environment and changes in various factors of environment like
changes in economic, technological political and so forth.
A. To provide input for decision-making.
B. To ensure optimum utilization of resources
C. To identify the threats and opportunities of environment.
D. To understand current and probable change in environment.
3. This objective of environmental analysis means to select an alternate among the
various available alternates so that the best alternate is selected and decided.
A. To provide input for decision-making.
B. To ensure optimum utilization of resources
C. To identify the threats and opportunities of environment.
D. To understand current and probable change in environment.
4. This objective of environmental analysis identifies opportunities and risks in the
environment.
A. To provide input for decision-making.
B. To ensure optimum utilization of resources
C. To identify the threats and opportunities of environment.
D. To understand current and probable change in environment.
5. This objective of environmental analysis put relevance in the maximum utilization
of the company’s resources to make the business successful.
A. To provide input for decision-making.
B. To ensure optimum utilization of resources
C. To identify the threats and opportunities of environment.
D. To understand current and probable change in environment.
6. According to ___________________, “Environmental analysis surveys the
business landscapes to determine how external variables will affect its decision
making.”
A. Adam Smith C. John Maynard Keynes
B. Alfred Marshall D. Robert Grant
7. Some authors credit SWOT to _____________, who led a convention at the
Stanford Research Institute (now SRI International) in the 1960s and 1970s
using data from Fortune 500 companies.
A. Adam Smith C. John Maynard Keynes
B. Albert Humphrey D. Robert Grant
8. The acronym for SWOT is _______________.
A. Suppliers, Workers, Overtime, Tool
B. Staff, Workers, Operation, Time
C. Strengths, Weaknesses, Opportunity, Threats
D. Supreme, Weaknesses, Opportunity, Threats
9. Mang Ando business is lechon manok in their community. Aside from Mang
Ando there are other establishments that sell grilled chicken like Chicken Inasal,
Pampanga Lechon, Boy’s Manok Inihaw. Then Mang Ando’s business has
_______________ in the business.
A. Opportunity C. Weakness
B. Strength D. Threat
10. When you encounter a high turnover of employers in your business, then your
business has _______.
A. Opportunity C. Weakness
B. Strength D. Threat
11. In a bookstore business, which of the following can be classified as an
opportunity?
A. Got the idea of using Price Bundling to increase sales.
B. E-books eliminates need for physical books
C. Customer are supportive
D. Difficulty in hiring due to low salary
12. In a bookstore business, which of the following can be classified as strength?
A. Invite authors for book signing event
B. E-books eliminates need for physical books
C. Customer are supportive
D. Difficulty in hiring due to low salary
13. In a bookstore business, which of the following can be classified as threats?
A. Got the idea of using Price Bundling to increase sales.
B. E-books eliminates need for physical books
C. Customer are supportive
D. Difficulty in hiring due to low salary
14. This pertains to the characteristics of the business or project that gives
advantage over others.
A. Opportunity C. Weakness
B. Strength D. Threat
15. This pertains to the elements in the environment that could cause trouble for the
business or project.
A. Opportunity C. Weakness
B. Strength D. Threat

Assessment
1. This economist states that environmental analysis surveys the business
landscapes to determine how external variables will affect its decision
making.
A. Adam Smith C. John Maynard Keynes
B. Alfred Marshall D. Robert Grant
2. Which statement is not true about environmental analysis?
A. It is a process by which organization monitor their relevant environment.
B. It helps identifies opportunities, plan and does take action.
C. It identifies strengths and weaknesses of the business.
D. It does not study various factors affecting the business.
3. This objective of environmental analysis puts relevance that one must be
aware of existing environment specifically factors such as changes in
economic, technological political and so forth.
A. To provide input for decision-making.
B. To ensure optimum utilization of resources
C. To identify the threats and opportunities of environment.
 D. To understand current and probable change in environment.
4. This objective of environmental analysis means to choose an alternate among
the alternatives so that the best alternates is selected and decided.
A. To provide input for decision-making.
B. To ensure optimum utilization of resources
C. To identify the threats and opportunities of environment.
D. To understand current and probable change in environment.
5. This objective of environmental analysis examines opportunities and threats
in the environment.
A. To provide input for decision-making.
B. To ensure optimum utilization of resources
C. To identify the threats and opportunities of environment.
D. To understand current and probable change in environment.
6. This objective of environmental analysis puts outmost importance in the
proper use of the company’s resources to make the business successful.
A. To provide input for decision-making.
B. To ensure optimum utilization of resources
C. To identify the threats and opportunities of environment.
D. To understand current and probable change in environment.
7. Proponent of SWOT Analysis since he led a convention at the Stanford
Research Institute (now SRI International) in the 1960s and 1970s using data
from Fortune 500 companies.
A. Adam Smith C. John Maynard Keynes
B. Albert Humphrey D. Robert Grant
8. SWOT analysis is a technique use to evaluate business or project. The
acronym for SWOT is _____________________________________.
A. Suppliers, Workers, Overtime, Tool
B. Staff, Workers, Operation, Time
C. Strengths, Weaknesses, Opportunity, Threats
D. Supreme, Weaknesses, Opportunity, Threats
9. If a business has a strong support in the market, then your business has
___________.
A. Opportunity C. Weakness
B. Strength D. Threat
10. When you receive a proposal for new investor, then your business has
_______.
A. Opportunity C. Weakness
B. Strengths D. Threat
11. In an online business, which of the following can be classified as an
opportunity?
A. Well known blogger patronize your products.
B. Discover a new level of marketing that ca increase your sales
C. Customer are supportive
D. Difficulty in distributing products to rural areas
12. Proponent of Forces Competitive Model
A. Adam Smith C. John Maynard Keynes
B. Albert Humphrey D. Michael Porter
13. In an online business, which of the following can be classified as threats in
the business?
A. Competitors have well known bloggers that patronize products
B. Free shipping fee to your valued clients
C. Customers have freebies
D. Financial difficulties
 14. This pertains to the characteristics of the business or project that could
endanger the profitability of the business.
A. Opportunity C. Weakness
B. Strength D. Threat
15. In an online business, when your online site has thousand followers then your
business has _________.
A. Opportunity C. Weakness
B. Strength D. Threat

What I Have Learned

Directions: Unscramble the letter to come up with the correct word. Use the
meaning in the clue. Write your answer on the line.
SWOT ANALYSIS1. TSOW AANSISLY - A technique used to
understand the strengths, weaknesses, opportunities, and threats involved in
a business or project.
MICHAEL PORTER2. ERTORP HAELCIM - He introduced Competitive Forces
Model.
STRENGTH 3. NGTHREST - An internal factor of SWOT Analysis.
THREATS4. SREATTH - An obstacles face by the business.
OPPORTUNITIES 5. OTROPPUNIESTI - An external factor of SWOT Analysis
that can increase profitability.

Industry and Environmental Analysis

In a book published by the Development Academy of the Philippines, how to prepare
project feasibility studies, it includes an industry analysis of the following important
factors:
 Competition-Who are your competitors in the industry? What is the market
share of these businesses? It is very important that you know your
competitors and be ready for them.
 Customers-Who will you sell your product to? The target market must be
identified. Who exactly will buy your products?
 Suppliers- Who are your suppliers, from whom one can source raw
materials, intermediate products, or even finished goods one intends to resell.
A business may need one or more suppliers. It is important to develop
suppliers who are reliable in terms of quality of what they supply and their
dependability in coming up with your orde.
In short, Industry Analysis is a tool that facilitates a company's understanding of its
position relative to other companies that produce similar products or services.
Understanding the forces at work in the overall industry is an important component of
effective strategic planning. Industry analysis enables small business owners to
identify the threats and opportunities facing their businesses, and to focus their
resources on developing unique capabilities that could lead to a competitive
advantage.
Environmental Analysis
 According to Robert Grant, author of “Contemporary Strategy Analysis” an
environmental analysis surveys the business landscapes to determine how
external variables will affect its decision making.
 It is the careful study of various factors influencing the business. It is the
process by which organization monitor their relevant environment to identify
opportunities and threats affecting their business.
 It helps to identify opportunities, to plan and to take appropriate actions.
 It is the study of technological factor, political factors, global factor and so on.
By carefully analyzing the environment, the businessmen come to know the
opportunities provided and threat posed by environment. Keeping in view, its
strengths and weakness, it can avail benefits of available opportunities and
face threats.

Objectives of Environmental Analysis

1. To understand current and probable change in environment. It is
importance that one must be aware of existing environment and changes
in various factors of environment like changes in economic, technological,
political, global environment, and so forth.
2. To provide input for decision – making. Decision – making means to
select an alternate among the various available alternates. In this
process, we need information for analyzing various alternates, so that the
best alternate is selected. Environmental analysis provides such
information to decision maker.
3. To ensure optimum utilization of resources. The key of business success
lies in the most effective utilization of the company’s resources.

Other objectives:

1. To identify the threats and opportunities of environment.

2. To identify the strengths and weakness of the business.
3. To diversify the business in new areas and to keep the business dynamic.
4. To foresee the impact of various helps the organization of business
environment.

Process of Environment Analysis

1. Monitoring- means to understand the various environment factors which
affect the business and to identify published or unpublished sources of
information which affect business. Eg. newspapers, magazines and journals
2. Searching and Scanning- needed to manage the timely availability of
required information by scanning and searching. Many organizations have
management information system for systematic gathering, processing, storing
and providing information.
3. Forecasting- an essential element in environment analysis. Forecasting is
concerned with estimation of direction and intensity of changes in
environment factors. Forecasts of important components of business
environment help in formulating plans and strategies.
 4. Evaluation and Assessment- identify and evaluate as to how these
environmental changes will affect our business so that appropriate counter
strategies can be made well in time. Assessment provides us answer to the
key issues presented by the environment and their impact on business

One of the most widely known industry analysis is Porter’s 5 Forces or

Competitive Forces Model, was introduced by Michael Porter in his 1980 book
“Competitive Strategy: Techniques for Analyzing Industries and Competitors.”
According to Porter, analysis of the five forces gives an accurate impression of the
industry and makes analysis easier. The five forces are the following:
1. Intensity of industry rivalry
2. Threat of potential entrants
3. Bargaining power of suppliers
4. Bargaining power of buyers
5. Threat of substitute goods/services

The SWOT Analysis

SWOT is an acronym for strengths, weaknesses, opportunities, and threats. In short,
SWOT Analysis is a planning tool used to understand the strengths, weaknesses,
opportunities, and threats involved in a business or project.
A SWOT analysis can be carried out for a product, place, industry, or person. It
involves specifying the objective of the business venture or project and identifying
internal and external factors that are favorable and unfavorable to achieve that
objective. Some authors credit SWOT to Albert Humphrey (2005), who led a
convention at the Stanford research institute (now SRI International) in the 1960s and
1970s using data from Fortune 500 companies. However Humphrey himself does not
claim the creation of SWOT, and the origins remain obscure.
1. Strengths – This pertains to the characteristics of the business or project that
gives advantage over others. The primary technique for identifying your
business strengths involves evaluating which operations actually make
money.
2. Weaknesses – A characteristic that place the business or project at a
disadvantage relative to others. Identify weaknesses by finding parts of your
operation that cost you money.
3. Opportunities – These are the elements that the business or project could
exploit to its advantage. The technique for identifying opportunities
encompasses finding markets, partnerships, products or services that you
actually can pursue.
4. Threats – These are the elements in the environment that could cause
trouble for the business or project. Owning a business means facing risk. Use
the technique of including only threats that have direct impact currently on
your business or that seem as if they will impact you and your business in the
next five years.

Internal and External Factors of SWOT

The internal factors are the strengths or as weaknesses depending upon their effect
on the organization’s objectives. What may represent strengths with their respect to
one objective may be weaknesses (distractions, competition) for another objective.
The factors may include all of the 4Ps – price, product, promotion and place; as well
as personnel, finance, manufacturing capabilities and so on.
The external factors may include macroeconomic matters, technological change,
legislation, and socio-cultural changes, as well as changes in the market – place or in
competitive position. The results are often presented in the form of a matrix.
SWOT analysis may also be used in pre – crisis planning and preventive crisis
management. SWOT analysis may also be used in creating recommendations during
a viability study/survey.