ENVIRONMENT AND MARKET || TECHNOLOGY AND LIVELIHOOD EDUCATION

Summary

This script delves into the critical impact of the business environment on small enterprises, emphasizing how location influences business ideas and opportunities. It outlines tangible and intangible factors such as physical layout, demography, culture, government regulations, and technology that shape the business landscape. The script also guides entrepreneurs on identifying business opportunities through idea generation, screening, and SWOT analysis, highlighting the importance of understanding both controllable and uncontrollable factors for strategic business planning.

Takeaways

• 🌐 The business environment and market significantly influence the viability of small and micro enterprises, shaping business ideas and opportunities within a specific location.
• 🏢 Business environments consist of tangible factors like land, economic zones, and transportation networks, as well as intangible factors such as demographics, industry trends, and government policies.
• 🏞️ The natural and physical environment, including the location's aesthetics and barriers, plays a role in the business's success and the ambience it creates for customers.
• 👥 Demography provides crucial insights into the target market, including age, gender, socioeconomic status, and growth trends, which are vital for product matching and marketing strategies.
• 🌐 Culture and subculture affect the types of products that are acceptable in a locality, influencing both the emotional environment and the safety perceptions of potential customers.
• 🏛️ Government regulations, such as tax policies, economic zones, and infrastructure improvements, directly impact business operations and the ease of doing business.
• 💹 The economy, including resource management and economic indicators like GDP, unemployment rates, and inflation, influences both entrepreneurs and consumers, affecting business decisions and consumer spending.
• 🤝 Competitors are part of the business environment, and it's essential for entrepreneurs to differentiate their products or services to acquire a reasonable market share.
• 💡 Technological changes, such as mobile tools and social networks, can increase efficiency and productivity, offering entrepreneurs cost-effective ways to communicate and operate.
• 🔍 Spotting and identifying business opportunities involves idea generation, screening based on personal preferences and business characteristics, and conducting a SWOT analysis to assess strengths, weaknesses, opportunities, and threats.

Q & A

What is the significance of understanding the business environment for small or micro enterprises?

Understanding the business environment is crucial as it has far-reaching and long-term effects on the viability of small or micro enterprises. It shapes business ideas and opportunities, which are often delimited to the surrounding areas unless the business can migrate to a more favorable location.

What are the tangible factors included in the business environment?

Tangible factors in the business environment include the land area available for economic zones, the physical layout, barriers such as rivers, parks, or lakes, building obstructions, and the transportation network.

How do intangible factors like demography and technology affect a business?

Intangible factors such as demography, which includes the characteristics of clients and suppliers, and technology, which refers to the available technology for production, influence the external and internal operations of a business.

What is meant by the term 'clustering' in the context of the business environment?

Clustering refers to the phenomenon where a particular type of product or service is concentrated within the same area, such as literary shops being clustered along specific intersections in Metro Manila.

Why is the visibility of a store important in the physical environment?

The visibility of a store in the physical environment is important because it can significantly impact the potential client's awareness and accessibility to the business.

How does demography help entrepreneurs in decision-making?

Demography provides invaluable information about the population's age, gender, socioeconomic status, family size, religion, and growth trends, which helps entrepreneurs match their products to the target market and decide on marketing strategies, pricing, and product packaging.

What role does culture play in shaping the business environment?

Culture, or subculture, influences the types of products that are acceptable to a particular locality and can shape the emotional environment of an area, affecting business decisions and consumer behavior.

How do government regulations impact business operations?

Government regulations, such as tax policies, establishment of economic zones, and assistance in product labeling and packaging, directly affect entrepreneurs by influencing the financial matters of business and the quality of life, which in turn affects consumer behavior.

Why is it important for entrepreneurs to study economic indicators?

Entrepreneurs must study economic indicators like GDP, unemployment rate, and inflation rates to improve business forecasts, such as when to buy materials, open a store, introduce new products, or hire employees, based on consumer spending patterns.

How does technology influence the business environment and what are some examples of technological changes?

Technological changes, based on the application of science, create new products or process improvements, enhancing efficiency and productivity at a lesser cost. Examples include mobile tools for online connection, new business tools for analysis and database management, social networks, and modern digital equipment.

What is the first step in identifying a good business opportunity according to the script?

The first step in identifying a good business opportunity is idea generation, which involves looking for many opportunities from various sources such as personal hobbies, everyday experiences, suggestions from family and friends, problems needing solutions, and existing product issues.

How can entrepreneurs screen business ideas effectively?

Entrepreneurs can screen business ideas based on their personality and personal preferences, as well as the characteristics of a good business, such as demand for the product, availability of raw materials, technology, and capital, and the potential profitability.

What is SWOT analysis and how does it help in evaluating a business idea?

SWOT analysis is a strategic planning method used to identify the Strengths, Weaknesses, Opportunities, and Threats related to a business. It helps in improving the business plan and preparing for potential challenges by understanding controllable factors like internal resources and capabilities, and uncontrollable factors like market conditions and external pressures.

Outlines

00:00

🌐 Understanding the Business Environment

This paragraph emphasizes the significance of the business environment in shaping business ideas and opportunities for small and micro-enterprises. It highlights how the location of a business can limit or expand its potential, with factors such as the physical layout, transportation, demography, culture, and government regulations playing crucial roles. The concept of clustering, where similar businesses congregate in specific areas, is introduced as a strategy for visibility and market presence. The paragraph also discusses the importance of considering the natural and physical environment, including the impact of local conditions and structures on business ambiance.

05:01

📈 Economic Factors and Technology in Business

The second paragraph delves into the economic factors that influence business operations, such as resource management, production, distribution, and consumption. It underscores the importance of understanding economic indicators like GDP, unemployment rates, and price indexes for business forecasting and decision-making. The paragraph also addresses the role of technology in driving business efficiency and productivity, with examples like mobile tools, business analysis software, and social networks. It encourages entrepreneurs to leverage technological advancements to improve their operations and to differentiate their products in a competitive market.

10:05

🔍 Identifying and Evaluating Business Opportunities

The final paragraph focuses on the process of spotting and identifying business opportunities, which is central to entrepreneurship. It outlines the idea generation phase, suggesting various sources for business ideas, such as personal interests, everyday experiences, and problems that need solutions. The paragraph then discusses the screening of business ideas based on personal preferences and the characteristics of a good business, such as market demand and profitability. It introduces the SWOT analysis as a tool for evaluating the strengths, weaknesses, opportunities, and threats of a potential business venture, helping entrepreneurs to refine their business plans and prepare for challenges.

Keywords

💡Business Environment

The business environment refers to the external and internal factors that affect a business's operations. These factors can be tangible, like transportation networks or land, or intangible, like cultural trends or government policies. In the video, the business environment is described as crucial for shaping business ideas and opportunities based on the location and available resources.

💡Tangible Factors

Tangible factors are physical elements that impact a business, such as the availability of land, transportation infrastructure, and the presence of natural or man-made barriers. In the context of the video, tangible factors like physical layout and transportation networks are key considerations when evaluating the viability of a business location.

💡Intangible Factors

Intangible factors refer to non-physical elements that influence business operations, such as cultural trends, economic conditions, and government regulations. These factors are significant in understanding the broader environment in which a business operates, as highlighted in the video when discussing industry trends and local subcultures.

💡Demography

Demography refers to the statistical study of populations, including factors like age, gender, and socioeconomic status. In the video, it is emphasized that understanding the demographic profile of an area is crucial for businesses in determining their target market, product offerings, and marketing strategies.

💡Clustering

Clustering describes the phenomenon where businesses offering similar products or services are located in close proximity to each other. The video mentions examples such as craft stores or car accessory shops being grouped in specific areas, which can influence a business's visibility and competitiveness.

💡SWOT Analysis

A SWOT analysis is a strategic tool used to identify the Strengths, Weaknesses, Opportunities, and Threats related to a business. The video suggests that conducting a SWOT analysis is essential for improving a business idea and preparing for potential challenges by understanding both controllable and uncontrollable factors.

💡Government Regulation

Government regulation refers to the laws and policies enacted by local and national governments that impact business operations. In the video, regulations such as tax policies, economic zone creation, and product labeling laws are highlighted as critical factors that influence the success or failure of business ventures.

💡Economic Indicators

Economic indicators are statistical metrics used to gauge the overall economic health of a country, such as GDP, unemployment rates, and inflation. The video explains how understanding these indicators helps entrepreneurs make informed decisions about pricing, product launches, and hiring based on consumer spending and economic trends.

💡Technology

Technology in a business context refers to the tools and innovations that improve processes, increase efficiency, and reduce costs. The video discusses technological changes like mobile tools, social networks, and digital equipment, which enable businesses to stay competitive and improve productivity at a lower cost.

💡Opportunity Identification

Opportunity identification is the process of recognizing potential business ideas that can lead to successful ventures. The video emphasizes that entrepreneurs must have a keen eye for spotting opportunities, using personal experiences, market needs, or problems with existing products as sources for business ideas.

Highlights

Business environment and market have a significant impact on the viability of small or micro enterprises.

Business ideas and opportunities are often shaped by the business location.

The business environment encompasses both tangible and intangible factors affecting business operations.

Tangible factors include land, economic zones, physical layout, and transportation network.

Intangible factors consist of demography, local competitors, available technology, and political situation.

Natural and physical environment, including location and man-made structures, affect business ambiance.

Clustering phenomenon where similar products are offered within the same area can influence business location decisions.

Demography provides invaluable information for matching products to the target market and deciding on marketing strategies.

Culture and subculture influence the type of products acceptable to a particular locality.

Government regulations, such as tax policies and economic zones, directly affect business operations.

Economy influences financial matters of business and the quality of life, affecting consumer buying power.

Existing enterprises, including competitors, are part of the business environment that entrepreneurs must consider.

Technological changes, such as mobile tools and social networks, can improve business efficiency and productivity.

Entrepreneurs should conduct an environment scan to understand the factors affecting their business.

Spotting and identifying business opportunities is essential for entrepreneurship.

Idea generation involves looking for opportunities that can turn into a good product or business venture.

Screening business ideas involves considering personal preferences and the characteristics of a good business.

SWOT analysis helps determine the strengths, weaknesses, opportunities, and threats of a potential business.

Transcripts

business environment and market

learning outcome 2 understanding

business environment and business ideas

the study of the business environment in

a particular location

has far-reaching and long-term effects

on a small or micro

enterprises viability in fact

business ideas and opportunities are

partly shaped or that are mean by the

business location

unless it is possible to migrate to more

favorable location

the ideas and opportunities for business

will often times

be delimited to the surrounding areas

the business environment consists of

both the tangible and

intangible factors that affects either

the external or internal business

operations they may include the land

area available for economic zones

the physical layout and barriers such as

rivers parks or lakes and building

obstruction as well as the

transportation network

all of which are considered tangible

factors

they also include the demography of

clients and suppliers

the competitors in the local area and

the available

technology for production the intangible

factors on the other hand

include the subculture industry trends

economic and government activity for the

political situation in the area

business environment and market

natural and physical environment this

concerns the physical location of a

business tour

the natural environment also pertains to

the natural

and man-made structures that may enhance

the beauty of the location

such as park or ac front view or serve

as

barrier to the locations such as dump

site or high rise

structures that obstruct a view the

living condition in an

area also serve as standard for the

ambience you want to create for your

store

there is also a phenomenon referred to

as clustering

where a particular type of product is

offered within the same area

for instance most literary shops are

clustered along the intersection of b

mappa and aurora avenue in metro manila

philippine crafts store crowd the area

under the capri bridge or a car

accessories are found in banavi area

the key word to have in mind when

scanning the physical environment

is the visibility of your intended store

to the potential client

demography this pertains the number of

people

living in the area their age gender

socioeconomic status family size

religion and even growth trends these

are

invaluable information that can help

entrepreneurs in matching their product

to the target market in deciding for the

marketing strategy

pricing and product packaging among

others

culture culture or subculture

being the totality of the way of life

ideas and customs of a set of people

or society primarily influence the type

of product that are acceptable to a

particular locality

for example the influence of the

japanese culture gave rise to minimalist

designs

a subculture also shape the emotional

environment of an

area for instance the feeling of fear

for a specific location

may serve as a barrier for a business

a place where one does not feel safe

because of the prevalence of crime

will discourage entrepreneurs

changes in the lifestyle which is

brought about by

changes in the population demography and

the economy

also affect a business these lifestyle

changes may be the increase of women's

participation

in the world of work change in buying

pattern and shift in taste

government regulation the loss and

fallacy

policies of the national and local

government unit

also influence the business operations

some example of policies that

directly affect entrepreneurs are the

imposition

or removal of taxes for products the

establishment of economic zones

and assistance in product labeling and

packaging of product

in addition improvement of facilities

and roads

the transportation network that

facilitates

transfer of products from one area to

another

or promotes accessibility for consumers

economy this pertains to the management

of resources

and study of the system of production

distribution

and consumption of goods and services a

country's economy

influences both the entrepreneurs and

consumers

as it relates to the financial matters

of business like

taxes and interest rate into the quality

of life cost of utilities and services

among others even small scale

entrepreneurs must learn to study

economic indicators to improve business

forecasts

such as when to buy certain materials

and supplies

when to open a store or introduce new

products based on consumer spending

or when to hire employees

some example of economic indicator

includes

the gross domestic product or the gdp

which increases when a country's economy

is doing good

the second one is unemployment rate

which indicates that more unemployed

people usually signal an economy getting

worse

and the last one is price indexes and

inflation rates which determine the

buying power of consumers

the existing enterprises who are either

direct

or indirect competitors are also part of

the business environment

it is important to scout for product or

services that answer a similar need to

what you intend to provide

think of how you can create a niche that

will differentiate your product

from other businesses either in

specifying a target market

or in differentiating your product

quality or price

the key concept to think about is

acquiring a reasonable market share

despite of the competition

technology technological changes are

inventions

based on the application of science that

create new product or process

improvements some example of

technological changes

are mobile tools that enable online

connection

new businesses tools for analysis and

database

social networks and modern digital

equipment

technological changes are inventions

based on the application of signs

that create new product or process

improvements

some example of technological changes

are mobile tools

that enable online connection new

business tools

for analysis and database social

networks

and modern digital equipment this

advanced in technology resolve to

efficiency

and productivity at a lesser cost it can

be observed that spending message

through email provides a cheaper and

faster means compared to the hand

delivered mails

mail meals an entrepreneur can be

benefit from technological changes

by identifying the appropriate

technological solution available in the

area

or local

at this point it must be quite clear why

an

environment scanning of an area

considered as

business side is helpful for the

entrepreneur

in fact the impact of the factors in the

business environment does not only

include the business operations

but is relevant at the start of the

venture

during the business idea generation and

opportunity identification stage

a concise guide on how to spot and

identify business opportunities

are provided in the following section

spotting and identifying business

opportunity

spotting business opportunities is one

of the most essential aspects of

entrepreneurship an

entrepreneur must have a keen eye for

identifying opportunities

that can potentially turn into a good

product

or business venture at the same time an

entrepreneur should also know

which opportunity to drop and which ones

to develop

idea generation the first step in

identifying a good business opportunity

is to look for many opportunities

this is called the idea generation phase

the file domain are the good source of

business ideas

number one personal hobbies and

interests

two everyday experiences travel

and adventures three suggestions from

the family members and friends

four problems that need solutions

five problems with existing products

six books magazines news

7 observing listening around you

screening business ideas once you have

generated several business opportunities

and ideas

the next step is to select and screen

this

though there can be many ways to do this

a good way to proceed is to screen your

ideas based on

one your personality and personal

preferences

and number two the characteristic

of a good business consider the

following criteria

number one personality personality and

personal preferences

a personal preferences b education

skills and experiences c

work experience b support from family

and friends

number two characteristic of

a good business a demand for product

b availability of raw materials

technology and capital

c perfect profitability

the swot analysis

once you have chosen your business idea

the next step is to consider a swot

analysis

in order to determine the strength

weaknesses

opportunities and threats of your

potential business

this step will help you improve your

business of choice and prepare for

challenges the table below will help you

differentiate

among these four features

the controllable factors is strength and

weaknesses

strength positive factors that

contribute to

favorability of a business opportunity

example

cheap raw materials skilled employees

is of management small capital outlay

weaknesses set of problems with

difficulties

or shortcomings encountered by the

business examples

inexperienced owner lack of working

capital in full location

the uncontrollable factors are

opportunities and threats

opportunities positive factors that are

not within the control of the business

examples

absence of similar product in the market

new markets being developed growing

demand for similar products

and favorable government policy threats

negative factors that are beyond the

control of the business example

rising cost raw material shortage too

many competitors