ABM Applied Economics Q2 Module8.2 Apply SWOT Analysis As A Tool in Evaluating A Business Opportuni

SENIOR HIGH SCHOOL
Applied Economics
Quarter 2 – Module 8.2:
Business Principles, Tools, and
Techniques in Participating in Various
Types of Industries in the Locality
Writer:
CINDY M. RONQUILLO
T-III, SHS IN APALIT(STAND ALONE 1), Cluster VI
Editors:
JANE P. VALENCIA, EdD – Math/ABM Supervisor
CHAIRMAN
KARINA B. HERNANDEZ – Teacher III
2
What I Need to Know

This module was designed and written with you in mind. It is here to help you
apply business principles, tools and techniques in participating in various types of
industries in the locality. The scope of this module permits it to be used in many
different learning situations. The language used recognizes the diverse vocabulary
level of students. The lessons are arranged to follow the standard sequence of the
course. But the order in which you read them can be changed to correspond with
the textbook you are now using.
The module is divided into two lessons, namely:
Lesson 1: Types of Industries
Lesson 2: Apply SWOT Analysis as a Tool in Evaluating a Business Opportunity
After going through this module, you are expected to:
identify the different types of industries; and

distinguish the different products and services of the business industries.
discuss industry and environmental analysis as a tool in evaluating business
opportunities;
apply SWOT analysis as a tool in evaluating a business
opportunity. select business opportunities appropriate in your
locality.
What I Know
Choose the letter of the best answer. Write your answer on a separate sheet of
paper.
1. Which statement is not true about environmental analysis?
A. It is a process by which organization monitor their relevant environment.
B. It helps identifies opportunities, plan and does not take action. C. It
identifies strengths and weaknesses of the business.
D. It is a careful study of various factors influencing the business. 2. This
objective of environmental analysis puts importance that one must be aware of
existing environment and changes in various factors of environment like
changes in economic, technological political and so forth.
A. To provide input for decision-making.
3
B. To ensure optimum utilization of resources
C. To identify the threats and opportunities of environment.
D. To understand current and probable change in environment. 3. This objective
of environmental analysis means to select an alternate among the various available
alternates so that the best alternate is selected and decided. A. To provide input for
decision-making.
D. To understand current and probable change in environment. 4. This
objective of environmental analysis identifies opportunities and risks in the
environment.
D. To understand current and probable change in environment. 5. This
objective of environmental analysis put relevance in the maximum
utilization of the company’s resources to make the business successful. A.
To provide input for decision-making.
D. To understand current and probable change in environment. 6. According to
___________________, “Environmental analysis surveys the business landscapes to
determine how external variables will affect its decision making.” A. Adam Smith C.
John Maynard Keynes B. Alfred Marshall D. Robert Grant
7. Some authors credit SWOT to _____________, who led a convention at the
Stanford Research Institute (now SRI International) in the 1960s and 1970s
using data from Fortune 500 companies.
A. Adam Smith C. John Maynard Keynes B. Albert Humphrey D.
Robert Grant
C.
8. The acronym for SWOT is _______________.
A. Suppliers, Workers, Overtime, Tool
B. Staff, Workers, Operation, Time
C. Strengths, Weaknesses, Opportunity, Threats
D. Supreme, Weaknesses, Opportunity, Threats
9. Mang Ando business is lechon manok in their community. Aside from Mang
Ando there are other establishments that sell grilled chicken like Chicken
Inasal, Pampanga Lechon, Boy’s Manok Inihaw. Then Mang Ando’s business
has _______________ in the business.
A. Opportunity C. Weakness
B. Strength D. Threat
10. When you encounter a high turnover of employers in your business, then your
business has _______.
11. In a bookstore business, which of the following can be classified as an
opportunity?
A. Got the idea of using Price Bundling to increase sales.
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B. E-books eliminates need for physical books
C. Customer are supportive
D. Difficulty in hiring due to low salary
12. In a bookstore business, which of the following can be classified as strength?
A. Invite authors for book signing event
13. In a bookstore business, which of the following can be classified as threats?
A. Got the idea of using Price Bundling to increase sales.
14. This pertains to the characteristics of the business or project that gives
advantage over others.
15. This pertains to the elements in the environment that could cause trouble for
the business or project.
Lesson Apply SWOT Analysis as
2 a Tool in Evaluating a
Business Opportunity
Businesses need to study various factors influencing the business. Internal and
external factors are needed to be considered to identify business opportunities and
threats affecting the business. As you go through lesson, you will learn about
industry and environmental analysis and apply one of the most widely used
industry analysis- the SWOT Analysis as a tool in evaluating a business
opportunity.
What’s In
In the previous lesson, you have learned about different business industries that
you see in your community and write type of products and services they produced.
Now, read and answer the activity.
Activity: Pick three (3) businesses in your community and interview the business
owners about their business including the opportunity and challenges they
5
encounter in starting up their business. Use the format below.
Name of Products/ Opportunity that Challenges
Business Services influenced in encountered
Offered starting the
business
1.
2.
3.
Notes to the Teacher

The teacher should encourage the learners to read books in
Economics. This will help them to easily understand the lesson.
What’s New
Every student knows National Bookstore especially booklovers. But do you know
the owner of National Bookstore? She is Socorro Ramos, the woman behind
National Bookstore. Now, I want you to read her story and answer the questions
below.
Socorro Ramos or Nanay Coring as they simply called her as a young girl helped
her grandmother sell fruits at the local market in their home province. Life was
hard and her mother decided to move to Manila to find better opportunities. She
attended a public school and took on many jobs during summer vacation – from
wrapping bubble gum to sewing buttons on shirts. After finishing high school, her
family did not have enough money to send her to college. She then worked as a
salesgirl at a bookstore. It was there where she met her would be husband, Jose.
They opened a stall shop in Escolta. They named it National Bookstore, after their
cash register. But things did not go uphill from there. In the 1940s, a strict
censorship on books was implemented. Nanay Coring had to put the books away
and resort to selling soap, candies, and slippers. After the war, the whole of Escolta
was burned down. This did not dampen Nanay Coring and Jose’s souls. They
opened another small store. This time, they sold the books they had previously put
away and whisky.
6
Gathering their earnings, the couple bought more school supplies and books. They
slowly rebuilt National Bookstore. They ventured into postcards and greeting cards.
They also partnered with international publishing houses and reprinted books at
lower prices. Aside from selling products of well-known brands, National Bookstore
also now manufactures its own school supplies – Best Buy. Keeping up with the
times, they have teamed up with Kobo, a Canadian based e-book seller. National
Bookstore is also visible on social media and customers can even shop online via
their website. Students, office workers, and everyone else will find what they are
looking for at National Bookstore. (Article by M. Tuvida)
Activity.
1.What are the problems/challenges encountered by Nanay Coring in her
business?
2. What alternatives did Nanay Coring take when the business encountered
problem?
3. What were the business opportunities she selected?
What is It
Industry and Environmental Analysis
In a book published by the Development Academy of the Philippines, how to
prepare project feasibility studies, it includes an industry analysis of the following
important factors:
➢ Competition-Who are your competitors in the industry? What is the market
share of these businesses? It is very important that you know your
competitors and be ready for them.
➢ Customers-Who will you sell your product to? The target market must be
identified. Who exactly will buy your products?
➢ Suppliers- Who are your suppliers, from whom one can source raw materials,
intermediate products, or even finished goods one intends to resell. A
business may need one or more suppliers. It is important to develop
suppliers who are reliable in terms of quality of what they supply and their
dependability in coming up with your orde.
In short, Industry Analysis is a tool that facilitates a company's understanding of
its position relative to other companies that produce similar products or services.
Understanding the forces at work in the overall industry is an important
component of effective strategic planning. Industry analysis enables small business
owners to identify the threats and opportunities facing their businesses, and to
focus their resources on developing unique capabilities that could lead to a
competitive advantage.
7
Environmental Analysis
➢ According to Robert Grant, author of “Contemporary Strategy Analysis” an
environmental analysis surveys the business landscapes to determine how
external variables will affect its decision making.
➢ It is the careful study of various factors influencing the business. It is the
process by which organization monitor their relevant environment to identify
opportunities and threats affecting their business.
➢ It helps to identify opportunities, to plan and to take appropriate actions. ➢ It
is the study of technological factor, political factors, global factor and so on. By
carefully analyzing the environment, the businessmen come to know the
opportunities provided and threat posed by environment. Keeping in view, its
strengths and weakness, it can avail benefits of available opportunities and face
threats.
Objectives of Environmental Analysis
1. To understand current and probable change in environment. It is
importance that one must be aware of existing environment and changes in
various factors of environment like changes in economic, technological,
political, global environment, and so forth.
2. To provide input for decision – making. Decision – making means to select
an alternate among the various available alternates. In this process, we
need information for analyzing various alternates, so that the best alternate
is selected. Environmental analysis provides such information to decision
maker.
3. To ensure optimum utilization of resources. The key of business success
lies in the most effective utilization of the company’s resources.
Other objectives:
1. To identify the threats and opportunities of environment.
2. To identify the strengths and weakness of the business.
3. To diversify the business in new areas and to keep the business dynamic. 4.
To foresee the impact of various helps the organization of business
environment.
Process of Environment Analysis

1. Monitoring- means to understand the various environment factors which affect
the business and to identify published or unpublished sources of information
which affect business. Eg. newspapers, magazines and journals
2. Searching and Scanning- needed to manage the timely availability of required
information by scanning and searching. Many organizations have management
information system for systematic gathering, processing, storing and providing
information.
3. Forecasting- an essential element in environment analysis. Forecasting is
concerned with estimation of direction and intensity of changes in
environment factors. Forecasts of important components of business
environment help in formulating plans and strategies.
4. Evaluation and Assessment- identify and evaluate as to how these
environmental changes will affect our business so that appropriate counter
strategies can be made well in time. Assessment provides us answer to the key
8
issues presented by the environment and their impact on business
One of the most widely known industry analysis is Porter’s 5 Forces or
Competitive Forces Model, was introduced by Michael Porter in his 1980 book
“Competitive Strategy: Techniques for Analyzing Industries and Competitors.”
According to Porter, analysis of the five forces gives an accurate impression of the
industry and makes analysis easier. The five forces are the following: 1. Intensity
of industry rivalry
2. Threat of potential entrants
3. Bargaining power of suppliers
4. Bargaining power of buyers
5. Threat of substitute goods/services
The SWOT Analysis

SWOT is an acronym for strengths, weaknesses, opportunities, and threats. In
short, SWOT Analysis is a planning tool used to understand the strengths,
weaknesses, opportunities, and threats involved in a business or project.
A SWOT analysis can be carried out for a product, place, industry, or person. It
involves specifying the objective of the business venture or project and identifying
internal and external factors that are favorable and unfavorable to achieve that
objective. Some authors credit SWOT to Albert Humphrey (2005), who led a
convention at the Stanford research institute (now SRI International) in the 1960s
and 1970s using data from Fortune 500 companies. However Humphrey himself
does not claim the creation of SWOT, and the origins remain obscure.
1. Strengths – This pertains to the characteristics of the business or project
that gives advantage over others. The primary technique for identifying your
business strengths involves evaluating which operations actually make
money.
2. Weaknesses – A characteristic that place the business or project at a
disadvantage relative to others. Identify weaknesses by finding parts of your
operation that cost you money.
3. Opportunities – These are the elements that the business or project could
exploit to its advantage. The technique for identifying opportunities
encompasses finding markets, partnerships, products or services that you
actually can pursue.
4. Threats – These are the elements in the environment that could cause
trouble for the business or project. Owning a business means facing risk.
Use the technique of including only threats that have direct impact currently
on your business or that seem as if they will impact you and your business
in the next five years.
Internal and External Factors of SWOT
The internal factors are the strengths or as weaknesses depending upon their effect
on the organization’s objectives. What may represent strengths with their respect to
one objective may be weaknesses (distractions, competition) for another objective.
9
The factors may include all of the 4Ps – price, product, promotion and place; as well
as personnel, finance, manufacturing capabilities and so on.
The external factors may include macroeconomic matters, technological change,
legislation, and socio-cultural changes, as well as changes in the market – place or
in competitive position. The results are often presented in the form of a matrix.
SWOT analysis may also be used in pre – crisis planning and preventive crisis
management. SWOT analysis may also be used in creating recommendations
during a viability study/survey.
How to Use SWOT Analysis as a Tool in Evaluating Business Opportunity

Learned it easy, use the SWOT Template.
HERE are TIPS that will help you in using the SWOT Template
STRENGTHS WEAKNESSES
Is the business in demand in your community? What could you improve? Is the product new in your
community? What should you avoid? Is it accessible to all? What factors would cause the loss Will your
community patronize it? of your sales?
OPPORTUNITIES THREATS Where are the good opportunities facing you? What obstacles do you face? What
are the interesting trends you are aware of? What is your competitor doing that you What are the external
factors that can increase should be worried about? profits? Could any of your weaknesses threaten your
business?
What’s More
Activity: Identify the STRENGTH, WEAKNESSES, OPPORTUNITY and THREATS.
Apply SWOT Analysis by using the SWOT Template. Use the following listed words
in the box.
a. Workers are well mannered, educated about books
b. Irrelevant location
c. E-books and e-readers eliminates needs for physical books
d. Manager has poor leadership skills
e. Visible on social media and customers can even shop
online via their website.
f. One stop shop for office and school supplies
10
g. Pandayan and Orchids Bookstore are their competitors
h. Competitors offer rewards points and discounts for
students and teachers
i. Partnership with international publishing house
j. Patronize by the booklovers and students
What I Have Learned

Directions: Unscramble the letter to come up with the correct word. Use
the meaning in the clue. Write your answer on the line.
__________________1. TSOW AANSISLY - A technique used to understand the
strengths, weaknesses, opportunities, and threats involved in a business or
project.
__________________2. ERTORP HAELCIM - He introduced Competitive Forces
Model.
__________________3. NGTHREST - An internal factor of SWOT Analysis.
__________________4. SREATTH - An obstacles face by the business.
_________________ 5. OTROPPUNIESTI - An external factor of SWOT Analysis
that can increase profitability.
What I Can Do
Performance Task. Choose a e-business or online business that you might like to
do in the future and make a SWOT Analysis to help you decide if your business is
feasible. Make a Powerpoint Presentation.
RUBRICS (50 pts.)
Excellent Good Fair Poor Very Poor
Introduction/purpose/compa
ny background (20 pts.)
SWOT Analysis (20 pts.)
Presentation (10 pts.)
11
Brief Introduction of the Business:
Brief introduction of the business and company’s background. State the purpose of
the business
Strengths:
1. What does your business do well?
2. Is your business strong in its market? (do research and support with evidence)
3. Does your business have a strong sense of purpose and the culture to support
that purpose?
Weaknesses:
1. What does your business do poorly?
2. What problems could be avoided?
3. Are there any potential financial difficulties?
Opportunities:
1. Are industry trends moving upward? (support with evidence, provide sources)
2. Do new markets exist for your products or services? (do research, support with
evidence, provide sources)
3. Are there any new technologies you can exploit?
Threats:
1. Who are your competitors?
2. What are competitors doing well?
3. What obstacles do you face?
4. Are there troubling changes in your business environment such as technologies,
laws, and regulations? (do research, support with evidence, provide sources)
Assessment
Choose the letter of the best answer. Write the chosen letter on a separate
sheet of paper.
1. This economist states that environmental analysis surveys the business
landscapes to determine how external variables will affect its decision
making.
A. Adam Smith C. John Maynard Keynes
B. Alfred Marshall D. Robert Grant
2. Which statement is not true about environmental analysis?
A. It is a process by which organization monitor their relevant environment.
B. It helps identifies opportunities, plan and does take action.
C. It identifies strengths and weaknesses of the business.
D. It does not study various factors affecting the business.
3. This objective of environmental analysis puts relevance that one must be
aware of existing environment specifically factors such as changes in
economic, technological political and so forth.
12
C. To identify the threats and opportunities of environment. D. To
understand current and probable change in environment. 4. This objective of
environmental analysis means to choose an alternate among the
alternatives so that the best alternates is selected and decided. A. To provide
input for decision-making.
understand current and probable change in environment. 5. This objective of
environmental analysis examines opportunities and threats in the
environment.
understand current and probable change in environment. 6. This objective
of environmental analysis puts outmost importance in the proper use of
the company’s resources to make the business successful. A. To provide
input for decision-making.
understand current and probable change in environment. 7. Proponent of
SWOT Analysis since he led a convention at the Stanford Research Institute
(now SRI International) in the 1960s and 1970s using data from Fortune
500 companies.
B. Albert Humphrey D. Robert Grant
8. SWOT analysis is a technique use to evaluate business or project. The
acronym for SWOT is _____________________________________. A.
Suppliers, Workers, Overtime, Tool
B. Staff, Workers, Operation, Time
C. Strengths, Weaknesses, Opportunity, Threats
D. Supreme, Weaknesses, Opportunity, Threats
9. If a business has a strong support in the market, then your business has
___________.
10.When you receive a proposal for new investor, then your business has
_______.
B. Strengths D. Threat
11.In an online business, which of the following can be classified as an
opportunity?
A. Well known blogger patronize your products.
B. Discover a new level of marketing that ca increase your sales
D. Difficulty in distributing products to rural areas
12.Proponent of Forces Competitive Model
B. Albert Humphrey D. Michael Porter
13.In an online business, which of the following can be classified as threats in
the business?
13
A. Competitors have well known bloggers that patronize products
B. Free shipping fee to your valued clients
C. Customers have freebies
D. Financial difficulties
14.This pertains to the characteristics of the business or project that could
endanger the profitability of the business.
15.In an online business, when your online site has thousand followers then
your business has _________.
Additional Activities
Entrance and Exit Slip. Fill in the table below.
ENTRANCE SLIP EXIT SLIP
What I know about SWOT What I learned about SWOT
Analysis Analysis
_______________________________ _____________________________
__ _____________________________
_______________________________ _____________________________
__ _____________________________
_______________________________
__
What I think about SWOT
Analysis
________________________________
________________________________
Answer Key
14
Assessment: 2. D
1. B 3. D
2. D 4. A
3. A
4. C References 5. C
6. B
5. B What's More
7. B
6. D A. Strength
7. B B. Weakness 8. C
C. Threat 9. B
8. C D. Weakness
9. D E. Strength 10. A
F. Strength
10.C G. Threat 11. B
11. A H. Threat 12. D
12. C
I. Opportunity
J. Strength 13. A
13. B What I Know 14. D
14. A
1. D 15. B
15. D
Dinio and Villasis 2017: Applied Economics. Rex Bookstore, First Edition.
Leano, Roman D. 2016: Applied Economics for Senior High School.
Mindshapers Co., Inc.
Competency Based Curriculum and CBLM 2019.Entrepreneurship
https://corporatefinanceinstitute.com/resources/knowledge/strategy/indus
t ry-analysis-methods retrieval date June 10, 2020
15
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SENIOR HIGH SCHOOL

What I Need to Know

After going through this module, you are expected to:

identify the different types of industries; and

Notes to the Teacher

Process of Environment Analysis

The SWOT Analysis

How to Use SWOT Analysis as a Tool in Evaluating Business Opportunity

What I Have Learned

SWOT Analysis (20 pts.)

Presentation (10 pts.)

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