Chapter 3 Flashcards
Refers to an evaluation of the possible or probable effects
of external factors and conditions on the survival and
growth of the business.
environmental analysis
is a strategic tool. It is a process to identify all the external
and internal elements, which can affect the organization’s
performance.
environmental analysis
ENVIRONMENTAL
ANALYSIS
It includes a thorough study of: (5)
- Economic Forces
- Physical environment
- Political factors
- Culture and lifestyles
- Competition
This involves a look at economic
factors such as income of the people,
specifically the target market,
economic conditions such as inflation,
recession, prosperity, demanxd, and supply in the market.
economic forces
This includes a look at the population size, the
geography of the place where business will be
located, land distribution, climate, and in today’s
global warmingsituation, whether or not the area
isprone tofloodor earthquake.
physical forces
The type of government, the
stability and strength of the
government, and good
leadership are factors that canbe an advantage to a business.
political factors
It is important to study cultural practices
such as fiestas, celebrationof the Christmas season,trends in consumption
paterns, as a means to identify thegoods
and services that will fit in to these celebrations and spending behavior.
cultures and lifestyle
This is something that needs tobe studied. As
already mentioned above, the degree of
competition in the market and the extent and
strengthof competitionare al very vital in
determining the success or failure of a
business
competition
which is defined as the flow of activities of
households and firms
in a circular direction
the circular flow of economic activity
two other relevant units in the flow
government and foreign countries
An economy
buys goods from other countries; these are called
imports
An economy sells goods to other
countries; these are called
exports
three main producing sectors
-agriculture, fishery, and forestry
-industrial sector
-service sector
Reaps the fruits of natural resources like the soil, water, and forests
argiculture, fishery, and forestry
industry (4) sub categories
-manufacturing
-construction
-electricty, gas, and water
-mining and quarrying
processes raw materials from agriculture,fishery and forestry in to intermediate products that are
further processed into final products.
industrial sectors
service sector (5) sub category
-trade
-transportation, communication, storage banking and finance
-public service (government)
-real estate
-private services
produces the intangibles supporting and
complementing production in the other sectors as we;l as among its own Industries.
service sectors
