WHAT I KNOW?
1. This refers to seeking for and sorting through data about the environment.
a. Interest
c. Environmental Scanning
b. Rates
d. Habit
2. Refers to the factors/elements outside the organization.
a. Environment
c. Internal Environment
b. External Environment
d. Situation
3. Factors/elements within the organization which may effect, either positively or
negatively, the performance of the organization.
a. Internal Environment
c. Economic Situation
b. Economics
d. Inflation
THE BUSINESS ENVIRONMENT
-Is defined as the total surroundings, which have a direct or
indirect bearing on the functioning of business.
The Environmental Forces:
1.Sociocultural Environment-refers to the structure and
dynamics of individuals and groups and their behaviors,
beliefs, lifestyles, interpersonal relationship, poverty, life
expectancy rate and literacy.
2.Political Environment-this includes the political form,
government policies, and attitude towards the business
community.
THE ENVIRONMENTAL FORCES
3.Technological Environment-includes the methods,
techniques and approaches adopted for product goods and
services and its distribution.
4.Legal Environment-refers to the set of laws, regulations, and
legalities that affect the business operations.
5.Competition- “Know thy competitors” is the rule of the
thumb in the industry.
6.Economic Environment-refers to economic growth,interest
rates, foreign exchange rates, unemployment rates and
globalization of the economy.
PHASES OF BUSINESS DEVELOPMENT
Phase One: Launch
Each company begins its operations as a business and usually by
launching new products or services. During this phase, sales are low,
but slowly(and hopefully steadily) increasing.
Phase Two: Growth
During this phase, companies experience rapid sales growth.
Phase Three: Shake-out
During this phase, sales continue to increase, but at a slower rate,
usually due to either approaching market saturation or the entry of
new competitors in the market.
Phase Four: Maturity
When the business matures, sales begin to slowly decrease. Profit
margins get thinner, while cash flow stays relative stagnant. However,
it’s important to note that many businesses extend their business life
cycle by reinventing themselves and investing in new technologies
and emerging markets.
Phase Five: Decline
During this phase, sales profit and cash flow all decline. Companies
accept their failure to extend their business life cycle. Firms lose their
competitive advantage and finally exit the market.
TWO TYPES OF BUSINESS FRAMEWORK
PEST ANALYSIS FRAMEWORK:
·Political-is how the government intervenes in the economy.
·Economic-taxes, interest rates, inflation, the stock markets
and consumer confidence have to be taken into account.
·Social-changes in lifestyle and buying trends, media, major
events, ethics, advertising and publicity factors.
·Technological-innovations, access to technology, licensing,
manufacturing, research funding and global communications.
SWOT ANALYSIS FRAMEWORK
· Strengths-the edge that you have over the competitors
·Weakness-the disadvantages or internal characteristics that
work against a successful outcome compared to the
competitors.
·Opportunities-current external factors or trends that can be
used to be taken advantage.
·Threats-current external factors which may cause a problem
to cause a negative impact and can jeopardize the business.
PERFORMANCE TASK NO. 4
Interview one of your relatives or friends who is working at a
market place, post offices, hardwares, department stores and
banks places in your locality. Take note of the changes that
have taken place due to environmental forces that you have
learned.