ENVIRONMENTAL

ANALYSIS
BUSINESS PLAN: PART III
ENVIRONMENTAL ANALYSIS

The next major part or section of the business plan after the executive summary 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 at least 20 pages including 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 competitive business environment, an environmental analysis is already a
necessity.
ENVIRONMENTAL ANALYSIS: PARTS
It is perceived as the basic element for business
survival. It may consist of the following:
1. SWOT Analysis
2. PEST Analysis
3. Market Forecast
4. Market Share
5. Market Position
6. Market Strategy
SWOT ANALYSIS
SWOT (strengths, weaknesses, opportunities, and threats) analysis is a
framework used to evaluate a company's competitive position and to develop
strategic planning. SWOT analysis assesses internal and external factors, as
well as current and future potential.
 
A SWOT analysis is designed to facilitate a realistic, fact-based, data-driven
look at the strengths and weaknesses of an organization, initiatives, or within
its industry. The organization needs to keep the analysis accurate by avoiding
pre-conceived beliefs or gray areas and instead focusing on real-life contexts.
Companies should use it as a guide and not necessarily as a prescription.
 
In identifying your strengths and opportunities, entrepreneurs should use this
as a competitive advantage over its competitors. In identifying the
weaknesses and threats of the business, the entrepreneur should make a
solution how they will address these problems.
SWOT Analysis Pros and Cons
POSITIVE NEGATIVE
High-level assessments Needs to have a clear unit of
analysis
First point for brainstorming Strategic analysis doesn’t come
Awareness of internal-external from the SWOT
situation
Ideal for small and large
businesses
Start open discussion with
stakeholders
PEST ANALYSIS
PEST ANALYSIS
 political, economic, social and technological is a
management method whereby an organization can assess
major external factors that influence its operation in order to
become more competitive in the market. As described by
the acronym, those four areas are central to this model.
 PEST Analysis can assist an organization in recognizing
and thereby capitalizing on opportunities offered by existing
conditions in the business environment. It can also be used
for identifying current or possible future challenges, allowing
for effective planning of how to best manage these
challenges.
MARKET FORECAST
•is a core component of a market
analysis. It projects the future numbers,
characteristics, and trends in your target
market. A standard analysis shows the
projected number of potential customers
divided into segments.
MARKET SHARE
•is the percentage of an industry's sales that
a particular company owns. Essentially, it is
the share of your business's total industry
revenue from selling your products and
services. Businesses with larger market
shares are industry leaders and
competition for smaller companies.
HOW TO COMPUTE MARKET SHARE:
Market share is calculated by taking the company's sales over
the period and dividing it by the total sales of the industry over
the same period.

X 100
 EXAMPLE:
Your company sells notebooks and planners and
your total revenue for a fiscal quarter is
P200,000. During that same fiscal period, total
industry sales were P2,000,000. 

Market share = (P200,000 / P2,000,000) x 100 = 10%

MARKET POSITION
- Market Positioning refers to the ability to
influence consumer perception regarding a
brand or product relative to competitors. The
objective of market positioning is to establish
the image or identity of a brand or product so
that consumers perceive it in a certain way.
MARKET STRATEGY
- is a business's overall plan for reaching
prospective customers. Usually, a
marketing strategy describes a value
proposition and key messages, and it has
information about who the target market
is - where they shop and what drives
them to make a purchase.
Marketing Strategy Examples:
1. Business to business (B2B)
- Business-to-business (B2B) marketing targets businesses that sell
to other businesses. 
Example: To help reach more customers, a small business sells its
socks to a department store.
2. Call to action (CTA)
- Call-to-action marketing motivates customers to purchase, join or
perform some other action right away. This involves signing up for
a service or completing a purchase after viewing an advertisement.
Example: An apartment complex sends a promotional email that says
"Register today!" to encourage consumers to lease that day.
Marketing Strategy Examples:
3. Direct
- Direct marketing is performed by communicating with customers
through mail, flyers, emails and other promotional materials without
the use of a third party. Companies focus on having a call to action
and personalizing messages for consumers.
Example: To promote their spring special for cutting lawns, a
landscaping company leaves flyers on the doors of homes nearby.
4.  Diversity
• Diversity marketing acknowledges differences in cultures and
subgroups, such as age or gender. It motivates companies to create
an inclusive story that features the experiences of minority groups
and attracts them to their product.
• Example: To honor the LGBTQ+ population, a clothing company creates
a limited-edition rainbow t-shirt for Pride Month.
Marketing Strategy Examples:
5. Email
- Email marketing sends a commercial message to a large
group through email. Using an email list of targeted
customers, companies distribute advertisements and
company updates. Email lists grow by enticing consumers to
sign up in exchange for rewards such as an e-book or free
trial.
Example: A newspaper group sends a mass email to past
subscribers advertising a deal to save P20 if they resubscribe
now. The bottom of the email features a big button flashing
"Subscribe now."