BUSINESS & ITS

ENVIRONMENT
BY:
VERNIE L. LACORTE, LPT
JESSA MAE T. AGUILAR, LPT
ADELIA SERING, RVM
LAYERS OF BUSINESS ENVIRONMENT

Macro
Environment

Industry

Competitors-
Markets

The
Organization
WHAT IS THE SCOPE OF BUSINESS ENVIRONMENT?
PESTEL ANALYSIS
BY: JESSA MAE T. AGUILAR, LPT
 PESTEL ANALYSIS
POLITICAL
ECONOMIC
SOCIAL
TECHNOLOGICAL
ENVIRONMENTAL
LEGAL
 PESTEL
ANALYSIS POLITICAL

•Wage Order Increases

•Government policies
•Shareholder/stakeholder needs and demands
•Lobbying/pressure group (Union-related groups)
 PESTEL
ANALYSIS ECONOMIC

•Domestic economy
•Global economy
•Taxation issues
•Exchange rate
•Inflation
 PESTEL
ANALYSIS SOCIAL
•Media views
•Company/technology image
•Education/university offerings
•Generation of learners
•War for talent
 PESTEL
ANALYSIS TECHNOLOGICAL

•Technology development
•Competing technology development
•Maturity of technology
•Waste removal/recycling
 PESTEL
ANALYSIS
ENVIRONMENTAL

•Environmental issues
•Environmental regulations
•Ecological
 PESTEL
ANALYSIS
LEGAL

•Current and future legislation

• Regulatory body and processes
•Employment law
•Labor cases filed
 ON LOCAL BUSINESS
Local business is driven by specific local conditions
and market characteristics. It also operates in a larger
economic context.
At the local level, the business must compete for
employees, resources from suppliers at a competitive price,
local advertising and marketing channels.
A local business operates in a larger economic
context.
ON INTERNATIONAL BUSINESS

International Business Environment is the

environment outside the Philippines and in
different sovereign countries, with factors that
are distinct to the home environment of the
organization and the foreign country where the
organization operates.
SWOT ANALYSIS
BY: ADELIA SERING, RVM
refer to the internal factors, and these are the resources and
experiences readily available to the business proponent. Usually
included as internal factors are:
- Financial resources
- Physical resources
- Human resources
- Access to natural resources, trademarks, patents, and copyrights; and
- Current processes, such as employee programs, department hierarchies
and software system, sales and distribution capabilities, marketing
programs, etc.
refer to the external factors, these are those that affect a company, an
organization, an individual, and those outside their control. These
may include:
- Economic trends
- Market trends
- National and local laws and statutes as well as political, environmental,
and economic regulations;
- Demographic characteristics of the target market such as the age, the
gender, the culture of the customers;
- Relationship with suppliers and co-owners; and Competitive threats.
SWOT ANALYSIS
PORTER’S FIVE
FORCES ANALYSIS
BY: VERNIE L. LACORTE, LPT
It is a framework or a guide for
assessing and evaluating the
competitive strength and
position of a business
organization. It was developed
in 1979 by Michael E. Porter of
Harvard Business School.
an assessment of how easy it is for suppliers to
drive up prices. This is driven by the:
-number of suppliers of each essential input;
-uniqueness of their product or service;
-relative size and strength of the supplier; and
-cost of switching from one supplier to another.
an assessment of how easy it is for buyers to
drive prices down. This driven b the:
-number of buyers in the market;
-importance of each individual buyer to the
organization; and
-cost of switching from one supplier to
another.
When it is easy to substitute products in the
market, it increases the likelihood of
customers switching to alternatives in
response to price increases. This reduces
both the power of suppliers and the
attractiveness of the market.
Profitable market attract new entrants, which
erodes profitability. Unless incumbents have
strong and durable barriers to entry, for
example, patents, capital requirements or
government policies, then profits will be
maintained among the existing participants.
The main driver is the number and capability
of competitors in the market. Many
competitors, offering undifferentiated
products and services, will reduce market
attractiveness.
 APPLE INC.
PORTER’S FIVE FORCES
ANALYSIS
 Competitive Bargaining Power
Rivalry or of Apple’s
Competition with Customers/Buyers
Apple
• High aggressiveness • Low switching cost
of firms • Small size of
• Low switching cost individual buyers

STRONG STRONG
 Bargaining Power Threat of
of Apple’s Substitutes
suppliers

• High number of • High availability of

suppliers • Low performance of
• High overall supply substitutes

WEAK WEAK
 Threat of New
Entrants
• High capital
requirements
• High cost of brand
development
• Capacity of potential
new entrants

MODERATE
 OVERVIEW: APPLE INC.
FIVE FORCES ANALYSIS

1. Competitive rivalry or competition (strong force)

2. Bargaining power of buyers or customers (strong force)
3. Bargaining power of suppliers (weak force)
4. Threat of substitutes or substitution (weak force)
5. Threat of new entrants or new entry (moderate force)
APPLE INC. FIVE FORCES
ANALYSIS
MacBook Pro, iPad and
iPhone from Apple. Apple’s
Five Forces analysis (Porter’s
Model) on external factors in
the industry environment
shows that the company must
prioritize competition and
the bargaining power of
buyers.
THANK YOU