APPLIED ECONOMICS

Name of Learner Grade Level:

Section: Date:

LEARNING ACTIVITY SHEET

Industry and Environmental Analysis: Business Opportunities

Identification

Background Information for Learners

Industry Analysis
Industry analysis is a market assessment tool used by businesses and analysts to
understand the competitive dynamics of an industry. It helps them get a sense of what is
happening in an industry.
Industry analysis, for an entrepreneur or a company, is a method that helps to understand
a company’s position relative to other participants in the industry. It helps them to identify
both the opportunities and threats coming their way and gives them a strong idea of the
present and future scenario of the industry. The key to surviving in this ever-changing
business environment is to understand the differences between yourself and your competitors
in the industry and use it to your full advantage.

A. The SWOT Analysis

SWOT Analysis simply means Strength, Weaknesses, Opportunities and Threats. It is a
business framework that helps to assess a wide variety of factors that may have a profound
impact on a business’s performance. These factors may either be internal to a company or
external. Furthermore, these factors may either be favourable/helpful or
unfavourable/harmful to a company.
A SWOT analysis template that can be used as a guide to identify the strengths,
weaknesses, opportunities, and threats.
SWOT Analysis Template
Strengths Weaknesses
 Government incentives  Difficulty of organization
 Low capital requirements  Costly set-up
 Market acceptance  Possible pollution problems
 Experience leaders  Lack of training of workers
Opportunities Threats
  Project may replace imported good  Entry of competitors
available in the market
 Time consuming production process
 Will improve employee welfare
 Opportunity from residents in the
 Improved company reputation community

B. Porter’s Five Forces of Competitive Position Analysis

Under the Porter’s theory, he identifies five forces that determine the competitiveness and
attractiveness of a market and which seek to locate the power in a business situation, its
current competitive position, and strength of a position that an organization may enter into.
This five help in identifying if new products or services are potentially profitable. Once the
area where power lies is identified, then areas of strength can be pinpointed and exploited,
solutions to weaknesses may be proposed, and possible mistakes avoided.

Source: https://www.business-to-you.com/porters-five-forces/

Environment Analysis
The other analysis that has to be done is an analysis of the environment in which the
business will operate. This means an evaluation of the possible or probable effects of the
external forces and conditions on the survival and growth of the business.

A. PESTEL Analysis

A PESTEL analysis or PESTLE analysis (formerly known as PEST analysis) is a

framework or tool used to analyze and monitor the macro-environmental factors that may
have a profound impact on an organization’s performance. This tool is especially useful when
starting a new business or entering a foreign market. It is often used in collaboration with other
analytical business tools such as the SWOT analysis and Porter’s Five Forces to give a clear
understanding of a situation and related internal and external factors. PESTEL is an acronym that
stands for Political, Economic, Social, Technological, Environmental and Legal factors.

Source: https://www.business-to-you.com/scanning-the-environment-pestel-analysis/

Tools in Evaluating a Business

According to a guide developed by North Carolina’s Small Business and Technology
Development Center, the key factors that must be considered in analysing the industry are the
following:
1. The geographic area which your business will cater to.
2. The size and outlook of the industry.
3. Description of the output.
4. The buyers have to be identified.
5. The regulatory environment.
6. The need to identity the leading business in the industry, and to provide
company information on the most successful businesses that you will be up
against.
7. Factors that will affect the growth of the business.

Learning Competency with Code

Apply business principles, tools, and techniques in participating in various types of industries
in the locality. ABM_AE12-IIa-d-10
Activity: Industry and Environmental Analysis
Directions: Choose one existing business within your municipality and using the templates
below; perform a SWOT Analysis, PESTLE Analysis and Porter’s Five Forces of
Competitive Position Analysis to determine the factors that will affect the growth of the
business.

Name of the Business:

Output No. 1: SWOT Analysis

Strengths Weaknesses

Opportunities Threats
Output No. 2: PESTLE Analysis

P E S T L E
Political Economic Social Technological Legal Environmental

Factors Factors Factors Factors Factors Factors

Output No. 3: Porter’s Five Forces

Rubric

Analysis is Analysis Analysis lacks

Analysis is detail and
Analysis is mostly shows
somewhat
Activities detailed and detailed and limited detail provides little
detailed. (if any)
Differentiated differentiated and
(10-13 differentiation
(17-20 points) (14-16 differentiation
points)
points) (5-9 points) (0-4 points)
Output No.1

Output No.2

Output No.3

Total Points:

Reflections

1. How do you find the activities?

2. Using the acronym PESTLE and SWOT, write what you have learned from this activity.
P-
E-
S-
T-
L-
E-

S-
W-
O-
T-

3. What have you learned from the said activity and how can you apply it in your day to day
basis?