Ateneo de Manila University

John Gokongwei School of Management

Project Information Cataloging System (PICS)

Class Project Information and Cover Sheet

Name of Student/s: (Surname, First School Year: Sem:

name, MI) Subject Code:
Course Name:

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(Information below this line and in this column

for use by Faculty &/or PICS staff only.)
Grade: Call Number:
Project Title: Functional Area:

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Abstract (150 words or less)

Author(s)’ Recommended Key Words

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BUSINESS ENVIRONMENT

- defined as everything which surrounds the business organization

- impacts or affects a business’ ability to operate effectively in developing and
maintaining successful relationships with its target customers
- companies must be aware of the changing environment in order to take
advantage of opportunities and minimize the effect of its threats

Two (2) Types of Environment

a. External environment – comprises all forces and events “outside” the

organization that have an “effect” on its business activities
b. Internal environment – factors and functions “inside” or within the organization
that have an “effect” on its business activities

I. EXTERNAL ENVIRONMENT

Two (2) Kinds of Environmental Effect

a. Macroenvironment - all “forces” and events “beyond” the immediate

environment that have “indirect effect” on a firm’s activities
b. Microenvironment – all “forces” and events “within” the immediate environment
that have “direct effect” on a firm’s activities

Four (4) Forces in the Macroenvironment (STEP)

a. Socio-cultural-demographic – attitudes to healthy living, change in

lifestyles, attitude to work and issues, "green" concerns, value systems,
demography / population (changes in size & age structure), education and
health, household composition

b. Technological-information – investment policies of various governments,

new research initiatives, new patents and products, speed of change, R&D
level of expenditures. Internet, mobile phones, facilities, ATM machines

c. Economic – consumer expenditures, disposable income, spending patterns,

exchange rates, investments, inflation, interest, business/economic cycle,
unemployment, cost of energy, transport, communications, raw materials

d. Political-legal – politics (global, regional, national, local) legislation (laws,

taxes) government policies (ownership, attitude to monopoly & competition)

Example 1: Let’s take a look how the STEP affects the PINEAPPLE INDUSTRY

Major Players Plantation Products Markets

Farms
1. Del Monte Bukidnon, Fresh and canned USA, Europe, Asia
2. Dole Davao, South pineapples, canned
(mainly Japan, Korea,
3. T’ Boli Agri. Cotabato tropical fruit cocktail /

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4. Crown Fruits salad, fruit juice and Singapore).
concentrates, fruit
purees and dried fruits.
Source : MBA report, Ateneo-Rockwell 2002

a. Socio-cultural-demographic

Change in Customer’s Preference – Healthy lifestyles of consumers resulting to

decline in consumption of canned fruits especially by the younger generation.
Pineapples can now be ordered in the form of fresh, processed canned juice with pulp
bits.

b. Technological-information

Ginaca machines - made the mass production of pineapple possible. The machine
quickly removes the crown and outer skin and core of the fruit.

ISO 9000 certification – is a quality standards rating, which is now becoming an

indicator of world-class quality.

c. Economic

Interest Rates and Foreign Currency Adjustments – Fluctuations may have positive
(exports) or negative (dollar loans) effects on the company.

Farm facilities - inadequate farm to market roads, poorly maintained irrigation systems
and lack of post-harvest warehousing, bulk handling and port facilities contribute to the
high costs of producing, transporting and distributing products.

d. Political-legal

Unstable Peace and Order Situation in Mindanao – loss of business confidence in the
island due to political conflict.

World Trade Organization – Philippine membership to WTO paved the way for more
open trade among countries with reduced tariffs barriers.

Five (5) Groups in the Microenvironment

a. Customers
– “ The most important person ever in the company ” and “ The Customer is King “

Five (5) Types of customer markets :

i. Consumer markets – individuals and households that buy

goods and services for personal consumption. Example :
Rudy Ang or Rico Osi
ii. Business markets – buy goods and services for further
processing as added raw material. Example : Globe
Telecoms, San Miguel Corporation

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 iii. Reseller markets – buy goods and services to resell at a
profit. Example : 7-Eleven Convenience store, SM Mega
mall
iv. Government markets – agencies or offices that buy goods
and services to produce public service. Example :
Department of Public Works and Highways
v. International markets – buyers from other countries.
Example : USA, Japan

b. Suppliers – provide the company raw material needed to produce goods and
services

c. Intermediaries – help the company promote, sell and distribute products to the
final buyers. Example : wholesalers, dealers, distributors, retailers, etc.

d. Stakeholders – any interest group the company deals in. Example : general
public, Non Government Organizations, local community, financial institutions,
media, etc.

e. Competitors – direct or indirect competition

II. INTERNAL ENVIRONMENT ( Company / Firm / Organization )

a. Top Management
- set the company’s mission / vision, objectives, strategies and policies

b. Marketing
- prepares and implements the Marketing Plan as approved by management
- 4 Ps of Marketing: Product, Price, Promotions & Place of Distribution

c. Production / Manufacturing
- in charge of producing the physical or tangible output of a product or rendering
the intangible output of a service

d. Purchasing
- ensures the delivery of supplies and raw materials to the factory plant

e. Accounting / Finance
- handles the finances of an organization and provides funds to carry out the
Marketing Plan
- records sales and measures them versus targets

f. Personnel
- tasks with the hiring and firing of the officers and staff of a company
- looks into the staff morale and competencies

g. Research and Development

- determines new trends and technology for application to the production of the
company’s products and services