CHAPTER 8: INDUSTRY TRENDS; An
Increased Delivery Options
analysis of trends in Retail and
Restaurant Industry
Topics within the discussion:
➢ Define industry trends
➢ Discuss how to spot and measure
Industry trends
➢ Discuss and understand what are
industry trends in Restaurant and
Retail Industry
➢ Enumerate and discuss the different
strategies of Jollibee Corporation
and SM Retail Parking
➢ Identify factors affecting Restaurant
and Retail Industry
INDUSTRY TRENDS
- are patterns or trends that occur within a
specific industry. a specific industry.
How to Spot and Measure Industry
Trends
● Bargaining power of buyers
● Bargaining power of sellers
● Threat of substitutes
● Threat of new entrants
● Rivalry among competitors
RESTAURANT AND RETAIL INDUSTRY
TRENDS
1. Green Kitchens Focusing
Environmental Concerns
The most recent issue that has led to
consumer changes in the food and the
beverage industry is the environment. This
includes plastic waste and pollution.
2.
Delivery is one of the fastest-growing
restaurant industry trends in the last two
years.
3. Ghost Kitchens
A standard ghost kitchen operates out of a
kitchen and doesn't have a dining space for
consumers to eat at.
4. Self-Serve Options and
Automation
Some restaurants are introducing pre-made
menu items that can be purchased through
vending machines or self-serve bars.
5. Simplified Menus
In every dining experience, menu variety is
something that plays a crucial role.
Why is it important to keep up with food
trends?
RETAIL INDUSTRY TRENDS
1. Elevate Your In-Store Shopping
Experience
Online shopping is the trend nowadays, but
that doesn’t mean you should completely
ignore your physical store. You want to
on focus on making your store safer to shop. It
means having a better product warranty and
return policy in place and using technology
to provide check-out-free and touch-free
shopping.
 2. Restructure Your Store Portfolio
Given the rising cost of goods, restricted
income, intense online competition, and
other factors, it’s tempting to focus on trying
to “save” 2022. However, if you want your
business to thrive, you need to make 2023 a
growth year, not a year to “make up” for
what was lost.
3. Adopt New Channels
• More sales will be made via mobile
• People want to be able to buy what they
want whenever they want, and smartphones
play a crucial part in this.
4. Implement Same-Day Delivery
• People want to get hold of the items they
shopped online as quickly as possible.
5. Explore Social Commerce
• Social commerce is helping a lot of
physical retail stores thrive and stay
competitive.
6. Create Interactive Retail Experiences
with Augmented Reality and Virtual
Reality
• Instead of just using static images and
videos to help consumers make informed
decisions, consider using VR and AR to
provide a richer and more delightful virtual
shopping experience.
JOLLIBEE
Jollibee Foods Corp. engages in the
development, operation, and franchising
fast food stores under the trade name
Jollibee. The Food Service segment
operates quick service restaurants and the
manufacture of food products to be sold to
Jollibee Group -owned and franchised QSR
outlets.
SM RETAIL
SM Retail, Inc . is the country’s leading
retailer with a nationwide portfolio of
department stores, supermarkets and
specialty stores.
Mr. Henry Sy, Sr. established the first
Shoemart Store in 1958, offering a selection
of shoes from both domestic and foreign
manufacturer
SM RETAIL’S INDUSTRY STRATEGIES
● Product
● Price
● Place
● Parking
● Promotion
Retail strategy is any method that helps
spread awareness and increase sales and
profitability for your products or company.
Here are the 4Ps Strategy of SM Retail
1. Product - The product is any item or
service that your customers need or
desire.
2. Price - Price is what you sell your
product for. It’s based on your cost
of goods sold, promotional plans,
and product lifestyle. Your pricing
strategy must work for your target
market and competition.
3. Place - Place is where customers
can buy your products. In terms of
 retail, this could mean a stand-alone
store downtown, a shopping center,
or a mall. Place considerations
include:
∙ Parking
∙ Public transportation options
∙ Signage
∙ Competitor locations
∙ Visual merchandising
4. Promotion - Promotion refers to
how you reach customers. Every
retailer needs a promotional plan to
build awareness, increase foot
traffic, and improve conversion
rates.
JOLLIBEE FOOD CORPORATION’S
INDUSTRY STRATEGIES
A customer only cares about one thing:
what product or service can do for them.
Because of this, prioritize making your
product the best it can be and optimize your
product lines accordingly. It Included:
∙ Design
∙ Quality
∙ Features Options
∙ Packaging
∙ Market positioning
Restaurant Strategies are vital to the
success in the food industry because they
allow them to promote their brand more
efficiently and effectively.
Here are the 4Ps Strategy of Jollibee
Food Corporation
1. Price - Consider what will trying to
achieve with the pricing strategy and
how price will work with the rest of
strategy.
2. Packaging - A company's
packaging catches the attention of
new buyers in a crowded
marketplace and reinforces value to
returning customers.
3. Promotion - Promotion is the part of
the marketing mix that the public
notices most. It includes television
and print advertising, content
marketing, coupons or scheduled
discounts, social media strategies,
email marketing, display ads, digital
strategies, marketing
communication, search engine
marketing, public relations and
more.
4. Process – Prioritize processes that
overlap with the customer
experience. The more specific and
seamless of processes are, the
more smoothly the staff can carry
them out. If the staff isn't focused on
navigating procedures, they have
more attention available for
customers—translating directly to
personal and exceptional customer
experiences.
The restaurant industry and retail industry
are two vastly different business sectors.
From labor differences to contrasts in
profitability, the two types of industries each
come with a distinct series of risks and
rewards. Neither industry is better than the
other; determining which industry to pursue
is largely a matter of tastes
IDENTIFYING FACTORS AFFECTING help a restaurant build a loyal
RESTAURANT INDUSTRY customer base.

7 FACTORS AFFECTING RESTAURANT 6. Capacity and Diner turnover - The

SALES
1. Seasonality - Restaurant sales tend
to fluctuate with seasons. Customer
traffic can remain steady, skyrocket
considerably, or drop dramatically
depending on the season and
region.
floorplan of fine-dining and
quick-service restaurants can also
influence sales.
∙
“The way you architecturally layout a
restaurant really can affect the customer
experience,” explained Luke Ostrom, a
partner at Rye Street Tavern in Baltimore.

2. Quality of Service - Whether your 7. The Economy - The status of the

business is fast-casual dining, a economy certainly influences
fast-food restaurant, or fine dining, restaurant sales. As one example,
your service quality should be the the pandemic changed restaurants,
best it can be to improve customer perhaps permanently.
satisfaction. Restaurants must
continually improve their service With stay-home orders and a
quality in order to keep customers spreading virus, restaurants had to
pouring in. rethink their expenses to
compensate for the financial stress
3. Menu and Pricing - Your menu and COVID brought. This reduced sales
pricing are the heart of your in nearly every industry, including
restaurant. It’s an essential part of the restaurant industry.
remaining competitive in the
restaurant industry and attracting Boost sales with a tried, tested, and true
customers to your business. forecasting solution - The factors we’ve
covered above directly affect restaurant
4. Location - Location is just as crucial sales. Restaurant owners should deeply
to a restaurant’s success as the analyze each aspect, leverage
menu. It plays a role in the dining sales-boosting opportunities and plan
experience and affects accessibility proactively for future uncertainties.
and convenience.
IDENTIFYING FACTORS AFFECTING
5. Restaurant Experience and RETAIL INDUSTRY
Branding - Your restaurant’s
atmosphere determines the Factors that affect the RETAIL INDUSTRY
customer experience. In addition to nowadays
quality food, proper lighting,
comfortable seats, soothing music, a ● Success in the retail business isn’t
clean environment, and fresh air can as simple as providing consumers
with the opportunity to buy your
 products. Your customers
themselves define your enterprise,
nearly as much as your product line
itself defines your entire enterprise.
1. Technological Factors - We have
to admit that the advancement and
development of technology have
opened a lot of doors for everyone.
This includes entrepreneurs,
businessmen, and companies.
When it comes to offline advertising,
retail company owners still turn to us
for quality store signage, say B2B
signage experts at Front Signs, US
sign making company. These
methods of advertising have
ultimately helped many companies
to grow. With the rise of
e-commerce, retail companies are
able to step-up their game.
recycled materials is increasing in
number. They have also been
changing the way in packaging their
products, opting for a more
environmentally friendly type of
packaging.
These three are just some of the factors that
highly affect the current retail industry.
However, through time, these factors would
eventually either increase, decrease, or
change, depending on the state of the near
future and what kinds of developments in
technology and other aspects would arise.
Part of being an entrepreneur and having
your own business is taking smart and
logical risks. Taking in these factors will help
business owners and companies make the
best decision out of the current and
incoming situations they may find
themselves in.

2. Social Factors - Social factors also

influence the retail industry. These
affect as well as define the lifestyle,
and essential elements such as
family, community, socio-economic
status, and religion. For a retail
business, it’s a kind of perspective
that goes beyond demographics. It
helps in identifying the people who
comprise your consumer base as
well as how they live, and how these
factors may affect your relationship
with them.

3. Environmental Factors - The

continuous rise in environmental
awareness has caused some
retailers to respond in different ways
that would make consumers feel
better about their purchases.
Because of this, the number of
retailers offering products made with
Chapter 1: Basic Concepts in Business
Policy
Topics within the discussion:
➢ Differentiate the difference between
business policy and strategy.
➢ Discuss the strategic planning
phases.
➢ Define Globalization.
➢ Discuss and understand the period
of electronic age.
➢ Enumerate and discuss the different
theories in organizational adaptation
Business Policy - are the guidelines
developed by an organization to govern its
actions.
Business Strategy - refers to the unified,
structured, and integrated plans that are
designed to achieve specific objectives of
an organization.
Features of Business Policy
● SPECIFIC
● CLEAR
● RELIABLE
● APPROPRIATE
● SIMPLE
● COMPREHENSIVE
● FLEXIBLE
● STABLE
Key Components of a Business Strategy
● MISSION, VISION & BUSINESS
OBJECTIVES
● CORE VALUES
● SWOT ANALYSIS
● OPERATIONAL TACTICS
● RESOURCE PROCUREMENT &
ALLOCATION PLAN
● MEASUREMENT
Business Strategy vs. Business Policy
Policies are guidelines or paths of action to
reach the goals, while strategies are major
courses of action or patterns of successful
action to achieve the objectives. They are
intended to meet and fight against a certain
competition, much larger and apparently
more powerful than the enterprise itself by
using its resources in the best possible
manner.
STRATEGIC PLANNING STAGES
● Environmental Scanning
● Strategy Formulation
● Strategy Implementation
● Strategy Evaluation
● Strategic Planning Stages
Environmental Scanning - The process of
gathering, organizing and analyzing
information. In addition, it’s a process that
surveys and analyzes relevant data to
identify opportunities and threats. The goal
of this strategic planning process step is to
gain a clear understanding of your industry’s
current landscape in order to better inform
future decisions and achieve your long-term
vision.
Strategy Formulation
● Have a clear picture of what needs
to be addressed in order to
accomplish your business goals.
● Build on things you found are
working well to date.
● Prioritizing your objectives and
formulate individual strategies to
address each one.
 ● Identify what internal resources
and/or funding you may have at your
disposal, as well as what resources
you may need to budget and plan
for.
Strategy Implementation
● Clear communication
● The entire company should be
engaged and made aware of the
company’s long-term vision.
● Each individual should understand
how their role contributes to the
bigger picture. “A little less
conversation, a little more action.”
Strategy Evaluation - Every organization
should strive for continuous improvement,
and so part of the strategic planning
process is taking a moment to monitor and
adjust as needed. By implementing
checkpoints into your overall plan, business
leaders can identify what’s working and
what’s not, and pivot accordingly.
Strategy evaluation involves setting and
adjusting benchmarks as needed, gathering
feedback and measuring performance. The
results of strategy evaluation can help
establish best practices and inform future
strategies.
GLOBALIZATION
What is Globalization?
"Globalization” is the process by which
businesses or other organizations develop
international influence or start operating on
an international scale.
More simply, globalization refers to an open
flow of information, technology, and goods
among countries and consumers. This
openness occurs through various
relationships, from business, geopolitics,
and technology to travel, culture, and
media.
Globalization - the speedup of movements
and exchanges (of human beings, goods,
and services, capital, technologies or
cultural practices) all over the planet. it is a
popular way of maximizing the success of a
company.
ELECTRONIC AGE
Electronic age also known as digital age,
computer age, or new media age is a period
in human history characterized by the shift
from traditional industry that the industrial
revolution brought through industrialization
to an economy based on information
computerization.
More About the Electronic Age
● The Internet has become a force for
companies to improve and enhance
the way they transact business. It is
now a common knowledge that
customers, suppliers, and partners
can transact, communicate, and do
business through the Internet.
● Distribution channels have changed
drastically through the years.
Companies can now go to
customers directly even without the
distributors or intermediaries. The
repercussions of these changes
include the reduction of costs,
improved customer service, and
better relationships with customers.
 ● Customers have more power than
ever because they now have
unlimited access to information
through the Internet.
● Firms are now exploring endless
possibilities to innovate using
theInternet.
● Business pacing is increasing. This
reality paves the way for the urgency
of using the internet to get
information on customer needs and
expectations, innovations, among
others. The environment becomes
increasingly turbulent.
● The Internet is putting corporations
out of their traditional boundaries.
Customers, suppliers, and
manufacturers are becoming more
adjacent to each other that there are
no more separations that traditional
setup has in terms of internal
operating plans and processes.
There is now more transparency in
doing business.
● Knowledge is a very important asset.
Companies have a competitive
advantage if they are well-informed.
● Institutional Theory
● Strategic Choice Perspective
● Organizational Learning Theory
Population Ecology vs. Institutional
Theory
Population Ecology - once an organization
is successfully established in a particular
environmental niche, it is unable to adapt
to changing conditions
Institution theory - organizations can and
do adapt to changing conditions by imitating
other successful organizations.
Strategic Choice Perspective &
Organizational Learning Theory
Strategic Choice Perspective - focuses
on decisions to be made in a particular
planning situation, whatever their timescale
and whatever their substance.
Organizational Learning Theory -
focuses on the creation of knowledge and
the use of that knowledge within an
organization. The knowledge created is then
transferred within the organization.

Theories of Organizational Adaptation

What is Organizational Adaptation?

A concept in organization theory and

strategic management that is used to
describe the relationship between an
organization and its environment.

Theories of Organizational Adaptation:

● Population Ecology
CHAPTER 2: Corporate Governance and 1. Resolves Conflict;
Social Responsibility 2. Provides Integrity;
3. Compliance;
The Role of Corporate Governance 4. Visibility of Error.
Great plans evolve businesses.
GOLDEN RULE:
Corporate Governance - A set of ethical Corporate Governance is committed to
processes for overseeing how decisions are following best business practices.
settled, executed, and communicated
between key shareholders, including ● Transparency
investors, management, and sometimes ● Disclosure
also staff, and clients. ● Fairness

Corporate Governance is deemed to be The modern and complex business world,

essential for: demands high quality, ethics and excellence
to be properly imbibed into the organization
● Effective governance and at the level of a person, process, and
accountability product. To cope with this change, core
● Compulsory disclosure competency is needed to be identified
● Sustainable business model and leveraged for success, and all this
can be made possible through corporate
AN EFFECTIVE GOVERNANCE USUALLY governance.
LEADS TO :
The Role and Responsibilities of the
● Increase economic growth; Board of Directors
● The attraction of more investors;
● The minimization of wastage and "All the world’s a stage, and the men and
risk in resources. women merely players.” -William
Shakespeare
Why is corporate governance important?
Board of Directors - governing panel of
THE ROLE OF CORPORATE elected shareholders of a company
GOVERNANCE IN BUSINESS responsible for setting the strategy and
overseeing management.
1. A framework for business *Commonly referred to as the board
decision-making;
2. A platform for a globally secure Shareholders - are people who own the
investment environment; shares of the company stock.
3. A system for achieving long-term
strategic goals

ETHICAL ROLE OF CORPORATE

GOVERNANCE IN BUSINESS
Importance of Board of Directors 2. RESPONDING TO AND
MANAGING ANY CRISES THAT
No modern corporation can function ARISE WITHIN THE COMPANY.
effectively without a board of directors. 3. DETERMINING, MONITORING,
Directors are important because they AND STRENGTHENING THE
represent the company’s shareholders ORGANISATION’S PRODUCTS,
and protect their interests and assets. SERVICES, AND PROGRAMS.
4. BEING ACCOUNTABLE FOR THE
Is the board of directors more powerful ORGANISATION’S
than the CEO? PERFORMANCE AND ACTIONS
AND ENHANCING ITS PUBLIC
What is a Board of Directors' role? IMAGE.
5. ENSURING LEGAL COMPLIANCE
A company's board of directors: AND ETHICAL INTEGRITY OF THE
● sets policies. COMPANY.
● advises the executive team on
strategy, Responsibilities Of the Board of
● sets executive compensation, Directors
dividends,
● resource management, social Responsible for the company’s operations
responsibility, and other matters. to not only shareholders but also to the
employees, customers, suppliers, creditors,
government, and other stakeholders.

General Responsibilities of the Board

of Directors

1. Establishing the mission, vision, and

objectives of the company.
2. Deciding the organizational structure
of the company.
CORE FUNCTION OF THE BOARD OF 3. Selecting the top-level executives
DIRECTORS and managers.
4. Formulating and implementing
1.oversee the company’s management policies and strategies to ensure
2. protect shareholders’ interests efficient management and the
smooth functioning of the
These core functions are subdivided into organization.
several specific functions like ; 5. Managing and allocating the
finances and resources of the
1. LEADING ACQUISITIONS AND corporation for growth and profits.
MERGERS WITH OTHER
COMPANIES AND
ORGANIZATIONS.
TYPES OF BOARD OF DIRECTORS
1. Outside/External directors - these
directors are independent members
(not the organisation’s employees)
who are not involved in the
corporation’s day-to-day operations
but are reimbursed for their services.
They are often experts in business
or corporate fields who provide their
views and experience for decision
and policy making.
2. Inside/Internal directors - These
members are the organization’s
employees who have extensive
experience and knowledge about the
functioning of the company.
They are not compensated or
reimbursed as they are already
C-level officers, major shareholders,
or a representative of the
organization.
An effective board has several members to
represent the shareholders and carry out
the necessary tasks of management of the
organisation.
The Role of the Board of Directors in
Strategic Management
The strategic plan should align with the
company’s vision.
boards or managers: who actually set the
strategy?
Take note!
The fact is, this process actually varies
substantially from one company to another.
However, the most important thing is for
everyone to agree on the process and
ensure that it gets executed well.
CLARIFYING THE BOARD'S ROLE IN
STRATEGIC MANAGEMENT
When it comes to running an organization,
it’s no secret that teams need a strategic
plan.
BUT WHAT EXACTLY IS THE ROLE OF
THE BOARD AND MANAGEMENT WHEN
IT COMES TO DEVELOPING AND
IMPLEMENTING THESE STRATEGIC
PLANS?
HOW DO THE ROLE OF THE BOARD
AND THE MANAGEMENT DIFFER?
Boards and Managers
Board directors and managers are equally
concerned about where each of them draws
the line between managing strategy and
managing the company.
In recent years, boards have been under
intense pressure to have clear answers
prepared regarding strategy for
shareholders, regulators and others when
corporate performance is lacking. This is
because, ultimately, the board is
responsible for strategic planning.
In preparation to have a board discussion
about strategy, board directors should
collect and analyze data related to the
industry:
● environment,
● nature of the competition,
● the business models
The strategic plan should align with the
company’s vision.
The preparation, collection, and analysis
of data should help them- develop a
platform for strategic decision-making
that defines the fundamentals of the
business portfolio and the dominant
business model that will help determine
the future allocation of resources and
capabilities.
THE BOARD'S ROLE IN STRATEGIC
PLANNING ENTAILS;
I - identifying priorities
E - establishing goal and objectives
F - finding resources
A - allocating funds to support the
decision that need to be mare
around strategic planning
The board is also responsible for
monitoring the execution of the strategic
plan.
As the plan progresses, boards may need to
revisit the allocation of funds, as well as
consider the impact of acquisitions and
divestitures.
The Social Responsibilities of Decision
Makers
There's a lot more at stake than just the
survival of a business. Whole communities
are wondering how they can recover post-
pandemic.
Take note!
Corporate governance is not the only
mechanism required in times of need and
this is why large enterprises will also have a
corporate social responsibility mandate.
Concept of Corporate Social
Responsibility
● proposes that a private corporation
has responsibilities to society that
extend beyond making a profit.
● ties businesses to communities and
helps them stay relevant to thei
customers and society.
● This applies both economically and
socially.
● Depending on the industry, CSR can
take many forms. CSR can be acts
of philanthropy,
environment-saving, and
volunteer programs.
Morale-boosting programs for
employees and stakeholders also
fall under CSR.
HOW IMPORTANT IS THE DECISION -
MAKER IN AN ORGANIZATION ?
The decision-making role is the heart of the
executive activities of the management. The
quality of the decisions and the way these
are being made is highly dependent on
organizational management.
WHAT ARE CORPORATE DECISION -
MAKERS GOALS ?
Corporate decision-makers are the
professionals who make choices among
multiple alternatives to achieve the
organization's goal and solve issues. They
gather information, evaluate evidence, and
take action after identifying the best option
for their situation.
WHAT ARE THE RESPONSIBILITIES OF
A BUSINESS FIRM AND HOW MANY
THEM MUST BE FULFILLED?
Milton Friedman and Archie Carroll offer
two contrasting views of the responsibilities
of business firms to society.
Carroll - "Maximizing profits is like
maximizing food." Just as a person needs
food to survive and grow, so does a
business corporation need profits to survive
and grow.
Friedman - “There is one and only one
social responsibility of business-to use its
resources and engage in activities designed
to increase its profits so long as it stays
within the rules of the game, which is to say,
engages in. Open and free competition
without deception or fraud.
Carroll's Four Responsibilities of
Business
● Economic - a business
organization's management is to
produce goods and services of value
to society so that the firm may repay
its creditors and shareholders.
● Legal - defined by governments in
laws that management is expected
to obey. For example, U.S. business
firms are required to hire and
promote people based on their
credentials rather than to
discriminate against non-job-related
characteristics such as race, gender,
or religion.
● Ethical - organization's management
is to follow the generally held beliefs
about behavior in a society. For
example, society generally expects
firms to work with the employees
and the community in planning for
layoffs, even though no law may
require this.
● Discretionary - are the purely
voluntary obligations a corporation
assumes. Examples are
philanthropic contributions, training
the hard-core unemployed, and
providing day-care centers.
Carroll lists these four responsibilities in
order of priority. A business firm must first
make a profit to satisfy its economic
responsibilities. To continue in existence,
the firm must follow the laws, thus fulfilling
its legal responsibilities.
Corporate Social Responsibilities of
Decision Makers
The benefits of this are manifold: the
collective impact of corporates and
individuals that work toward preserving
energy and resources benefits the public. It
positively impacts businesses that
contribute materially to conservation efforts.
Ethical Decision- Making
Even the most rational approach to ethics is
defenseless if there isn't the will to do what
is right.
Decision-making appears to be an important
element in business. Every corporate
decision made does not only affect the
stakeholders but also both the community
and environment.
To take ethical decisions at a personal level
or in the capacity of a Corporate
Governance and Social Responsibility one
needs a good understanding of the
subject and courage.
AND MANY BUSINESSES ARE AWARE Corporate Governance and Social
OF THE BENEFITS OF ETHICS IN Responsibility
CORPORATE GOVERNANCE AND
SOCIAL RESPONSIBILITY AND DESIRE POSITIVE
TO OPERATE “THE RIGHT WAY” BY
FOLLOWING RULES THAT LEAD TO : 1. Businesses run online.- “malls inside
the computer”
● Accountability 2. Fast communication in business
● Transparency 3. More exposure to the target market -
● Fairness free advertisement
● Responsibility 4. Affiliate Marketing
5. Job opportunities - work from home
Ethical decision-making requires:
DOWNSIDE
● a review of different options,
● eliminating those with an unethical 1. CYBER CRIME
standpoint, 2. FRAUD
● choosing the best ethical 3. POSERS
alternative. 4. HACKING
5. PLAGIARISM
In any given situations in business the
general question one has to ask are:

I. Is it right?
II. Is it fair?
III. Who gets benefits and who gets hurt
and who is untouched and why?
IV. How will the public view your
decision?
V. How your decision will be
questioned, or will it come on the
front page of the newspaper?

Steps in Ethical Decision Making:

(I) Integrity and accountability

(II) Business Ethics in practice

Ethical decisions affect and influence every

aspect of a company’s daily operations and
management.

The Impact of the Internet on

CHAPTER 3: ENVIRONMENTAL
SCANNING AND INDUSTRY ANALYSIS
LEARNING OUTCOMES
➢ DEFINE THE ENVIRONMENTAL
SCANNING
➢ KNOW HOW TO ANALYZE THE
INDUSTRY
➢ ENUMERATE AND DISCUSS THE
MARKET STRUCTURE
➢ DISCUSS THE 5 FORCES MODEL
OF MICHAEL PORTER
➢ EXPLAIN THE 5 MAIN P the strategies to fit in the changing demands
STRATEGIES
➢ DISCUSS COMPETITIVE
INTELLIGENCE
➢ DEFINE SWOT ANALYSIS
ENVIRONMENTAL SCANNING
➢ is the continuous observation of trends
and events in the internal and external
environments of an organization that have
an impact on its success now and in the
future. The findings are very helpful in
defining goals and strategies.
COMPONENTS OF ENVIRONMENTAL
SCANNING
• internal environmental components -
the components that lie within the
organization are internal components and
changes in these affect the general
performance of the organization. Human
resources, capital resources, and
technological resources are some of the
internal environmental components.
• external environmental components -
the components that fall outside the
business organization are called external
environmental components. Although the
components lie outside the organization,
they still affect the organizational activities.
the external components can be divided into
microenvironmental components, and
macro environmental components.
IMPORTANCE OF ENVIRONMENTAL
SCANNING
• GOAL ACCOMPLISHMENT: the
objectives of an organization cannot be
fulfilled unless it adapts itself to
environmental changes. one has to adjust
of the environment.
• THREATS AND WEAKNESS
IDENTIFICATION: for an organization to
grow, it must minimize its threats and
identify its weaknesses. this is made
possible with the help of environmental
scanning with which better strategies can be
developed.
• FUTURE FORECAST: environmental
changes are often unpredictable. An
organization cannot anticipate all the future
events but based on the analysis, it can
make better strategic decisions in the future.
Hence, environmental analysis helps to
forecast the prospects of the business.
• MARKET KNOWLEDGE: every
organization must be aware of the ongoing
changes in the market. if it fails to
incorporate strategic changes due to
changing demands, it will not be able to
achieve its objectives.
• FOCUS ON THE CUSTOMER:
environmental scanning and analysis make
an organization sensitive to the changing
needs and expectations of the customer.
• OPPORTUNITIES IDENTIFICATION: with
the analysis of the current environment, an
organization will be able to identify the
possible opportunities and take necessary
steps.
Know How to Analyze the Industry
STEP BY STEP CHECKLIST
1. Identify your industry and provide a
brief overview
2. Summarize the nature of the
industry
3. Provide a forecast for your industry
4. Identify government regulation that
affect the industry
5. Explain your unique position within
the industry
6. List potential limitation and risks
7. Talk to people
MARKET STRUCTURE
Types of Market Structure
● perfect competition
● monopolistic competition
● oligopoly
● monopoly
CHARACTERISTICS OF MARKET
STRUCTURE
● number of sellers
● product differentiation
● barriers to entry/exit
● nature of competition
● pricing power
PERFECT COMPETITION - occurs when
there is a large number of small companies
competing against each other. they sell
similar products (homogeneous), lack price
influence over the commodities, and are
free to enter or exit the market.
Number of sellers - Many firms
Product differentiation - Identical Products
Barriers to entry/exit - Very low
Nature of competition - Compete on price
only
Pricing power - None
MONOPOLY - a single company represents
the whole industry. it has no competitor, and
it is the sole seller of products in the entire
market.
Number of sellers - Single seller
Product differentiation - No close
substitute
Barriers to entry/exit - Very high
Nature of competition - Little competition
Pricing power - Significant
OLIGOPOLY - consists of a small number
of large companies that sell differentiated or
identical products.
Number of sellers - Few firms
Product differentiation - Very good
substitutes or differentiated
Barriers to entry/exit - High
Nature of competition - Price, product
differentiation
Pricing power - Limited to significant
MONOPOLISTIC COMPETITION - is a type
of imperfect competition such that there are
many producers competing against each
other, but selling products that are
differentiated from one another and hence
are not perfect substitutes.
Number of sellers - Many firms
Product differentiation - Differentiated in
quality, features, and marketing
Barriers to entry/exit - Very low
Nature of competition - Price, product
differentiation
Pricing power - Limited
THE 5 FORCES MODEL OF MICHAEL
PORTER
PORTER’S FIVE FORCES
1. COMPETITIVE RIVALRY
The first of Porter's five forces looks at the
number and strength of your competitors.
consider how many rivals you have, who
they are, and how the quality of their
product compares with yours.
2. SUPPLIER POWER
suppliers gain power if they can increase
their prices easily, or reduce the quality of
their products. if your suppliers are the only
ones who can supply a particular service,
then they have considerable supplier power.
Even if you can switch suppliers, you need
to consider how expensive it would be to do
so.
3. BUYER POWER
if the number of buyers is low compared to
the number of suppliers in an industry, then
they have what's known as "buyer power."
This means they may find it easy to switch
to new, cheaper competitors, which can
ultimately drive down prices.
4. Threat of Substitution
this refers to the likelihood of your
customers finding a
different way of doing what you do.
5. THREAT OF NEW ENTRY
your position can be affected by potential
rivals' ability to enter your market. if it takes
little money and effort to enter your market
and compete effectively, then rivals can
quickly enter your market and weaken your
position.
MINTZBERG 5PS STRATEGY
WHAT'S YOUR APPROACH TO
DEVELOPING STRATEGY?
• Many of us brainstorm opportunities, and
then plan how we'll take advantage of them.
• Management expert Henry Mintzberg,
argued that it can be difficult to get strategy
right. to help us think about it in more depth,
he developed his 5 ps of strategy – five
different definitions of (or approaches to)
developing strategy.
ABOUT 5PS
1. STRATEGY AS PLAN
➢ planning comes naturally to many
managers and as such, has become
the default first step.
2. STRATEGY AS PLOY
➢ Mintzberg says that getting the better of
competitors, by plotting to disrupt, dissuade,
discourage, or otherwise influence them,
can be part of a strategy. This is where
strategy can be a ploy, as well as a plan.
3. STRATEGY AS PATTERN
➢ Strategic plans and ploys are both
deliberate exercises. Sometimes,
however, strategy emerges from
past organizational behavior. Rather
than being an intentional choice, a
consistent and successful way of
doing business can develop into a
strategy.
4. STRATEGY AS POSITION
➢ "position" is another way to define
strategy – that is, how you decide to
position yourself in the marketplace.
in this way, the strategy helps you
explore the fit between your
organization and your environment,
and it helps you develop a
sustainable competitive advantage.
5. STRATEGY AS PERSPECTIVE
➢ the choices an organization makes about
its strategy rely heavily on its culture – just
as patterns of behavior can emerge as
strategy, patterns of thinking will shape an
organization's perspective, and the things
that it is able to do well.
WHAT IS COMPETITIVE INTELLIGENCE?
• business information to manage and
reduce the risk presented by internal and
external forces.
• the bridge between information and action
WIDE IMPLICATIONS
● improve your organization’s
knowledge of its respective markets
of emerging technologies and or
trends
● improve the quality of your products
relative to the competition success
criteria
● develop a system for continuous
monitoring
● measure success on an ongoing
basis
SWOT ANALYSIS
• acronym & technique that used to
determine and define the strengths,
weaknesses opportunities and threats.
• planning tool used to understand
strengths, weaknesses, opportunities and
threats involved in and project business.
• Swot analysis can be applied to an entire
company organization, or individual projects
within a single department.
SWOT ANALYSIS
• it aims to identify the key internal and
external factors or elements.
• These factors are considered to be
important for achieving an objective.
Internal factors include: THREATS

• strengths and weaknesses internal to a • entry of foreign competitors, introduction of

business. new substitute products, changing
• these are the elements that you can have customers tastes, increased government
some control over and can change. regulation, climate disasters.

external factors includes:

• opportunities and threats are going on

outside your company.
• one can benefit from opportunities and
save from a threats but can't change them.
• swot analysis is a fruitful strategic planning
technique it effectively provides you with
killer assessment tools, you just have to
identify the strength, weaknesses,
opportunities, and threats.

STRENGTH

• abundant financial resources, well-known

brand name, economies of scale, lower
costs, superior management talent, better
marketing skills, good distribution skills, and
committed employees.

WEAKNESSES

• limited financial resources, very narrow

product line, limited distribution, higher
costs, out of date products, weak market
image, poor marketing skills.

OPPORTUNITIES

• rapid market growth, rival firms are

complacent, new uses for product
discovered, economic boom, government
regulation, sales decline for substitute
product.