ENVIRONMENT AND MARKET || TECHNOLOGY AND LIVELIHOOD EDUCATION
Summary
TLDRThis 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
- π The business environment and market significantly influence the viability of small and micro enterprises, shaping business ideas and opportunities within a specific location.
- π’ 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.
- ποΈ 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.
- π₯ 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.
- π 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.
- ποΈ Government regulations, such as tax policies, economic zones, and infrastructure improvements, directly impact business operations and the ease of doing business.
- πΉ 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.
- π€ 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.
- π‘ Technological changes, such as mobile tools and social networks, can increase efficiency and productivity, offering entrepreneurs cost-effective ways to communicate and operate.
- π 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
π 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.
π 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.
π 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.
Mindmap
Keywords
π‘Business Environment
π‘Tangible Factors
π‘Intangible Factors
π‘Demography
π‘Clustering
π‘SWOT Analysis
π‘Government Regulation
π‘Economic Indicators
π‘Technology
π‘Opportunity Identification
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
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