Applied Eco Flashcards
relating to any activity of creating, buying or
selling any kind of commodities or even providing
services to prospect buyers or clients.
Business
the lifeblood of any country’s economy
Business
7 environmental
segments
Economic segments -include inflation rates, interest
rates, trade deficits or surplus, personal savings rate and
gross domestic product.
These segments are all related to determined how the economy performs.
Political/legal segments - covers antitrust laws, taxation
laws, deregulation philosophies, labor training laws, and
educational philosophies and policies.
The segments
relate to the functions of the government in monitoring
the different economic and business related activities.
Sociocultural segments- interests are women in the
workforce, workforce diversity, and attitudes about the
quality of work life.
This segment focuses on the role of
the human resources, its development and the society.
Technological segments- pertains to product innovations,
application of knowledge, focus of private and
government.
This segment supported R&D expenditures.
Global segments -are those related to important political
events, critical global markets, and newly industrialized
countries, different cultural and institutional attributes
the political, cultural, and economy of other countries in
order to compete in the international market
Physical Environmental segments concerns are energy consumption, practices used to develop energy sources,
Demographic segment- are the population size, age
structure, geographic distribution, ethnic mix, and
income distribution
A company’s power is affected by the force of new entrants
into its market. The
The threats of new entrants
EXAMPLE: In the cosmetic industry, Avon and Mary Kay
have been two of the famous make up brands in the country.
But the entry of cosmetics brands that use organic and natural
ingredients has brought noticeable changes in the landscape
of the makeup industry
The threats of new entrants
This specifically deals with the ability of the customers to
drive prices down.
The power of buyers
This force addresses how easily suppliers can drive up the
price of goods and services. It
Power of suppliers
the power to drive competition up they
threatening to increase their products or services’ prices or to
reduce the quality of the goods they pro
Suppliers
powerful when there is no competition with
substitute products and the products make up an important part
of their buyers’ businesses.
Supplier
Competitors substitutions that can be used in place of a products or services pose a threat.
The Threat of Product Substitute
If customers rely on a company to provide a tool
or service that can be substituted with another tool or service or by
performing the task manually, and this substitution is fairly easy
of low cost, a company’s power can be weakened.
The Threat of Product Substitutes
The importance of this force is the number of competitors
and their ability to threaten a company. The larger the number of
competitors, along with the number of equivalent products and
services they offer, dictates the power of a company
The Intensity of Rivalry Among Competitors
Coca-Cola Co. and Pepsi Cola Co. have been
famous rivals in the soft drinks market. In some industries, rivalry
dissipates the firms’ profits because of aggressive competition.
This drives down prices and often leads the rival firms to incur
losses.
The Intensity of Rivalry Among Competitors
involves the interaction of six factors:
concentration, diversity of competitors, product differentiation,
excess capacity, exit barriers, and cost conditions.
Aggressive rivalry
It pertains to the number and size of
distribution of firms.
Concentration
This factor identifies firms’
differences in goals, strategies, objectives, and costs
structures – elements can drive competition
Diversity of competitors
Firms need to make their
products unique so these will stand out in the market.
Product Differentiation
Refers to a firm’s ability to create more
products then what customers demand
Excess capacity
What high exit barriers do is that they
prevent a firm from exiting an industry.
Exit barriers
Excess capacity causes price
competition. When costs are high, e.g., fixed costs relative
to variable costs, companies can adjust their prices if
there are no other hindrances to do so.
Cost condition
PORTER’S FIVE FORCES OF COMPETITIVE POSITION
ANALYSIS.
Concentration
Diversity of Competitors
Product Differentiation
Excess Capacity
Exit Barriers
Cost Conditions
It was developed in 1979 by Michael E. Porter
PORTER’S FIVE FORCES OF COMPETITIVE POSITION
ANALYSIS.
Pestel stands for?
Political (e.g., government policies, stability of government,
taxes)
o Economic (e.g., interest rates, inflation, credit, forex)
o Social (e.g., culture, education, gender, wealth distribution)
o Technological (e.g., new innovations, technological
advancement, rate of technological obsolescence)
o Legal (e.g., product regulation, employment laws, patent,
health and safety regulations); and
o Environmental (e.g., geographical location, weather)
was created in the 1960’s by business
gurus, Edmund P. Learned, Roland Christensen, and Kenneth
Andrews in their book, Business Policy, Text, and Cases.
Swot analysis
an
analytical framework that can help a company meet its challenges
and identify new market
Swot
is a simple but useful framework for analyzing
the organization’s strength and weaknesses, and the opportunities
and threats
Swot analysis
it can re-state its vision and mission and
eventually formulate and develop more effective
strategies
Strength
enable that company to re-channel the use
of its current resources to other productive use, and
minimize the loss.
Weakness
beyond the control of the
managers/owners but a better understanding of both
their internal and external environments, specifically the
competitors, may help planners/managers to design
strategic plans
Threats
Swot stands for
S - provides an area to list everything done right
W- detract from the value you offer
O- your business is likely to prosper
T- beyond your control that could place your strategy
generally the commercial aspect related to
agriculture or agricultural activities and its products.
Agribusiness
It is the business sector encompassing farming and farming related commercial activities.
Agribusiness
engaged in the production and
operations of a farm, the manufacture and distribution of
farm equipment and supplies, and the processing,
storage, and distribution of farm commodities
Agribusiness sector
quite diverse as it encompasses
input production, farm operations and management,
equipment and supplies manufacturing, food/non-food
processing, trading, and retailing
Agribusiness sector
defined as roasted, ground and
molded nibs of fermented pure (100%) cacao beans without
added ingredients and additives
Cacao tablea
have higher employment, income and
output multipliers relative to the agriculture and services sectors.
Manufacturing industries
promotes stronger inter-industry and intersectoral linkages, firm productivity, technological development and
innovation.
Manufacturing
3 Roadmap for Structural Transformation
Short-run (2014-2017) Goals:
• maintain competitiveness of comparative advantage industries
• strengthen emerging industries
• strengthen capacity of existing industries
Medium-run (2018-2021) Goals:
• shift to high value added activities
• investments in upstream or core sectors
• link and integrate manufacturing with agriculture and services
industries
• create a manufacturing innovation ecosystem
Long-run (2022-2025) Goals:
• continue technology upgrading to maintain a globally
competitive and innovative manufacturing industry
aims to make the country
a major hub for manufacturing of original equipment
manufacturing (OEM) parts and allied services, such as
maintenance, repair and overhauling (MRO), for the global
commercial aircraft industry
Philippine aerospace industry
complex with large number of
parts and components (textiles, glass, plastics, electronics,
rubber, steel, and other metals) involving different
production processes
Automotive
can lead to an expansion of many complementary
investments by automotive parts firms, particularly because
the automotive industry is a highly global industry,
technology-driven and competition is intense among its
players.
The promotion of automotive industry
aims to make the
Philippines a competitive manufacturing base of motor vehicles
and parts and components, serving both the domestic and export
markets, and a global hub for automotive-related human resource
development and process outsourcing.
automotive manufacturing industry
the natural alternative to imported
diesel in the Philippines
Biodiesel from the coconut
transesterified into
coco methyl ester (CME) and is referred to as cocobiodiesel
when blended with fossil diesel
Coconut oil
has a unique advantage over other forms of
biodiesel because of its unique chemical properties, thereby
making it more environment-friendly and economical.
It may cost more than fossil diesel and other biodiesels
Coco biodiesel
serves as a high value/ high volume
secondary product of the coconut industry which protects
coco farmers from falling copra prices in the world market.
Coco biodiesel
also
expected to generate higher demand for e-vehicles for
public transportation
Green cities
study of how people
make decisions when they purchase, helping businesses and
marketers capitalize on these behaviors by predicting how and
when a consumer will make a purchase.
Consumer behavior theory
regarded as a relatively
new field of study with no historical body of research of its own.
Consumer behavior
most
probably became an important field of study with the
development of the so-called marketing concept.
Consumer behavior
include a person’s attitude,
perceptions about a situation, their ability to understand
information, what motivates them, their personality and
belief
Psychological factors
For example, a person who is actively reducing their
plastic consumption will buy differently to someone who
doesn’t believe in climate change.
Psychological factors
include age, gender,
financial situation, occupation, background, culture and
location.
Personal characteristics
Ex. An older person will probably shop in a different
way to a younger person, for example with a preference
for bricks-and-mortar stores rather than online shopping
Personal characteristics
can include a person’s friends,
family, community, work or school community, or
groups they associate with such as a local church or
hobby group.
Social influence
Ex. A shopper who is at a school where a certain style of
trainers is in fashion might search out similar shoes to fit
in with their peers.
Social influence
centers its analysis on the
importance of pre-existing attitudes in the decision-making
process.
Theory of Reasoned Action
five-step process that consumers use when
making a purchase.
1.input, is where consumers
absorb most of the marketing materials they see on television,
newspapers or online.
2.Once the consumer collects the data, he or
she moves into information processing.
3. Consumers move to the decision-making stage after a
period of thought.
4.Under the EKB Model, marketers have two periods where
their input is the most valuable.
5. During the initial information
stage, marketers must provide consumers with enough
information about the product
put forward his hierarchy of needs in
1943, sending ripple effects through the entire psychological
community.
Abraham Maslow
believed
heavily in the idea of impulse
behavior.
Hawkin stern
argued that
sudden buying impulses fit
alongside rational purchasing
decisions to paint a complete
picture of the average
consumer.
Stern
are driven largely by external
stimuli and have almost no
relationship to traditional
decision-making.
Impulse purchases
Stern established 4 categories of impulse buying
- Pure impulse purchases, like a candy bar at the checkout
line of a grocery store. - Second, consumers make reminded
impulse buys, like placing a display of hot dog buns next to a
meat cooler. - Third are suggested impulse purchases, such as a
warranty for an electronic device. - Finally, consumers make
planned impulse decisions, where they know they want to buy a
product, but are unsure about the specifics
predict how consumers
make purchasing decisions and show marketers how best to
capitalize on predictable behaviors.
Consumer behavior theories
an
effort to explain the principles by
which a business firm decides
how much of each commodity
that it sells
Theory of production
Firm must purchase or hire
scarce inputs,
Factors of production
are those that do not change as output is
increased or decreased, and typically include premises
Fixed factors
are those that do change with output,
which means more are employed when production
increases, and less when production decreases
Variable factors
when the only
way to increase output is by using up existing stocks of
inputs.
The very short run
when it can increase its
output by using more variable factors, such as by hiring more
workers, but not by increasing its fixed factors
Short run
when it increases its scale of
operations.
Long run
tends to focus only on the short and long
run, and largely ignores the very short and very long run.
Economic analysis
whole market can also be considered in terms of the short
and long run.
Time periods for the Market
when its capacity is fixed.
This usually means that the number of firms in the
industry is fixed, with no new firms entering or leaving the
market
The industry short run
comes into play
whenever a firm tries to increase output by applying
additional variable inputs to a fixed factor.
law of diminishing marginal returns
Diminishing marginal returns forms part of a larger
principle, called the
principle of variable proportions.
major driver of socio-economic impact
Business
is a major predictor of
business success, especially in the long term.
Socioeconomic impact
