BICOL COLLEGE INC.

Senior High School Department

Daraga, Albay

SELF LEARNING MODULE

IN
ENTREPRENEURSHIP

Module 2:
 EXECUTIVE SUMMARY, ENVIRONMENT
ANALYSIS, AND BUSINESS DESCRIPTION
I. Title of Material/Introduction

EXECUTIVE SUMMARY, ENVIRONMENT ANALYSIS, AND

BUSINESS DESCRIPTION PREPARATION

This module discusses three other major parts of the business plan namely the executive
summary, environmental analysis, and business description.

II. Objectives

At the end of this lesson, the learner should be able to implement the business plan.
Specifically, the learner must be able to:

1. Describe the executive summary,

2. Identify the major areas of an executive summary included in the
environmental analysis, and
3. State the important areas to be included in the business description

Executive - relating to or having the power to put plans or actions into effect.
Summary
- a brief statement or account of the main points of something.

Environment - the circumstances, objects, or conditions by which one is surrounded

Analysis - detailed examination of the elements or structure of something.

Model - a description or analogy used to help visualize something that cannot be

directly observed.

Business Model – defines the perspective of the business in terms of its structure,
production, operation, and financial activities that will lead to the achievement of
the Vision, Mission, Goals, and Objectives.
 Environmental Analysis - is a strategic tool that helps determine the external and
internal factors affecting the performance of the business.

IV. Pre-Test

Multiple Choice. Write the letter of your answer.

1. is commonly the last section to be written after all

other major parts have been completed.
a. Introduction c. Executive Summary
b. Environment Analysis d. Business Description

2. What is the most important part of your business plan?

a. Executive Summary c. Background
b. Table of Contents d. Financial Plan

3. True or False: If your executive summary is more than three pages it will
most likely not be read.
a. True: too much is not needed when writing an executive
summary, the readers will be bored
b. False: More is always needed when writing an executive
summary
c. Both of the above
d. none of the above

4. Entrepreneurs may use a _ to help them

understand their position against their competitors in the
market.
a. Business model c. Business Strategy
b. Positioning map d. Business Description

5. According to this analysis where there are no consumers or buyers of the

product, the business will never be created. What analysis is this?
a. Global Analysis c. Consumer and
competitor analysis
b. Societal Analysis d. Industry analysis
V. Learning Activities:

1. Read about all the things related to Executive Summary.

2. Be familiar about the content/parts of Executive Summary and study the
sample business model.
3. Identify the Basic Elements of Environmental Analysis.
4. Study how to make a critical evaluation and evaluate a business position.
5. Read about how to determine the Most Appropriate Business Strategy.
6. Read about Business Description.
7. Take time to Read Young Entrepreneur !

Take time to Read Young Entrepreneur!

EXECUTIVE SUMMARY

Although the executive summary is commonly the last section to be written after
all other major parts have been completed, it is the next major part of the business plan after
the introduction. It points out the overall highlights of the business plan as well as bird’s eye
view of its sections. However, the executive summary must not, in any manner, provide a
summary of the different major sections of the business plan. It must be written in a simple
language that can be easily understood and at the same time attract the attention and influence
the decision of the reader.

Investors, creditors, and other significant parties usually proceed to the details usually
proceed to the details of the business plan once they find the executive summary interesting,
convincing, and worthy of further reading. Although there is no standard format as to its
sections and contents, the executive summary must include the following sections:

1. Vision, mission, goals, and objectives of the business

2. Business model
3. Business and product position
4. Wealth improvement approaches
5. Parties supporting the business

VISION, MISSION, GOALS, AND OBJECTIVES

 At the very outset, the business plan must depict the fundamental characteristics,
nature, philosophical values, identity, and image of the business. These important concerns
are embodied in the vision, mission, goals, and objectives (VMGO) of the business. The
VMGO must be clearly stated and easily understood. They must be reviewed and revisited at
least every three years to determine whether they are still reasonable and achievable in view
of the rapid changes in the business community.

BUSINESS MODEL

Business Model Template

BUSINESS MODEL

Partner Key Offer Customer Customer

network Activities Relationship Segments

Key Distribution
Resources Channels

Cost structure Revenue statements

Figure 6.2.1. Sample Business Model

The business model defines the perspective of the business in terms of its
structure, production, operation, and financial activities that will lead to the achievement of
the VGMO. There is no standard model that will exactly fit all types of business because
they have different strengths and weaknesses, infrastructures, networks, and value
propositions. The business model must basically reflect certain innovations that will indicate
the competitiveness of the business in the industry. It must define how the business gives
importance to its relations with customers, creditors, supplies, and internal human resources.
BUSINESS AND PRODUCT POSITION

The business and product position will help determine how the business defines its
course and the process of accumulating wealth. It tells the size of the market and the target
market share of the business and product. The business and product position must be able to
convince the readers that the proposed business has a competitive advantage in the market.
 WEALTH IMPROVEMENT APPROACHES

This section of the executive summary describes the methodologies or approaches

that will be taken by the business in order to

1. Maintain a competitive advantage,

2. Position the business in the market,
3. Improve the market share, and
4. Maximize the utilization of resources.

This section also includes a brief discussion of the marketing policies and financial
operations of the business, and the profitability level of the industry and of the business.
Standard benchmarks are good indicators in assessing the economic performance of the
business.

PARTIES SUPPORTING THE BUSINESS

The last section of the executive summary is a description of the parties that strongly
support the business. The parties that have a direct relationship with the business are as
follows:

1. Consumers
2. Creditors
3. Suppliers
4. Employees and staff

Relevant information about individuals and parties that support the business is
important since the proposed business may conduct transactions with them later.
The executive summary must cover at least three pages but must not go beyond five pages. An
executive summary that is either too short or too long may discourage the reader to continue
reading.

ENVIRONMENTAL ANALYSIS

The next major part or section of the business plan after the executive summary is the
environmental analysis. It is a strategic tool that helps determine the external and internal
factors affecting the performance of the business. These factors may be political,
economic, social, or technological in nature. The
environmental analysis may consist of at least 20 pages including the graphical
representations, tables, and computations. The environmental analysis section is considered
the heart of the business plan.

Since the business that you intend to open in this entrepreneurial course is considered
small in terms of capitalization, the industry analysis will focus mainly on the consumers and
competitors. The presence of the consumers, after all, is the ultimate reason for the existence
of any business endeavor.

In today’s competitive business environment, an environmental analysis is already a

necessity. It is perceived as the basic element for business survival. It may consist of global
analysis, societal analysis, and industry analysis.

GLOBAL ANALYSIS

The environmental analysis section may begin with a description of the global
business situation to provide enough knowledge about the global perspective or horizon if the
business. A common mistake in this section is describing a business entity that operates in the
global environment because a global analysis evaluates the business trend in the worldwide
market. As a future entrepreneur, you should not devote the whole section of the global
analysis by simply describing the business trends, for example, in the whole Asian region, in
European communities, or even in mainland USA. Remember that it is not the business trend
that has the most significant bearing on the global analysis but rather the possible business
opportunities or ideas that the global business trend offers.

The trend in the global market is the result of what happened in the past, while a
possible business idea is the expected event that may happen in the future. Investors are more
interested in what will happen in the future. The global trend simply acts as an indicator of
any favorable sign for a business idea. However, there is a direct
relationship between these two concepts. Once the world market is properly described, the
business opportunities that the global trend provides must also be described. The reader,
therefore, must be convinced that is its worth to exploit the business idea or opportunity
based on the global business trend.

SOCIETAL ANALYSIS

After describing and possibly convincing the reader of the bright business prospect in
the world market, the next step is to present the societal analysis and determine the different
variables affecting the societal environment. These variables include

1. Political forces,
2. Economic forces,
3. Socioeconomic forces,
4. Technological forces,
5. Ecological forces, and
6. Legal forces.

Most business plans fall to mention the probable levels of effects of the various forces
to the proposed business, and the frequency of occurrence of the environmental factors. They
simply describe the different variables or forces. A mere description of the various
environmental factors does not provide any brilliant idea to the reader. The societal analysis
must tell how the environmental forces affect the proposed business and how great their
effects are.

Assuming that you consider the interest rate and disposable income as economic
variables that may effect on the proposed new business, the description of the analysis may
appear as follows:

Economic environment. The prevailing interest rate given by most commercial

and industrial banks ranges between 10 and 12 percent and is expected to increase to 15
percent within a two-year period because of the new monetary policy of the Bangko Sentral
ng Pilipinas (BSP). The move of the BSP has a substantial or very high effect on the financial
operation of businesses that have high financial leverage. However, since the start-up capital
requirements of the new business will be funded solely by the owners, the interest rate may
appear to have a low effect on the proposed business.
 The disposable income of Filipino consumers, according to the latest data released by
the National Economic Development Authority and the National Statistics Office, has
substantially increased which has been attributed mainly to the new salary rates of all
employees, both public and private, coupled with the high remittances of overseas contract
workers. It is expected that the remittances will continue to increase at the rate of 10 percent
for the next 6 to 8 years. This present trend on the disposable income may appear to have a
very high favorable effect on the operations of new businesses.

INDUSTRY ANALYSIS

The third level of environmental analysis is the industry analysis. The industry
analysis basically involved three important related tasks as follows:

1. Conducting a critical evaluation of the forces in the industry that affect the
proposed business

2. Evaluating the probable position of the business in the industry

3. Determining the most appropriate strategy that may be adopted by the

proposed business

Conducting a Critical Evaluation

Conducting a critical evaluation is the most delicate, tedious, and difficult task in
industry analysis. There are some business plans that do not even show any indications that a
critical analysis has been conducted, but rather, the evaluation appears to be a mere play of
words. Nevertheless, not all forces in the industry, even in the societal analysis, must be
analyzed and described. Only those forces that are deemed to have substantial effects, either
positive or negative, to the proposed business must be critically analyzed and properly
described.

The industry analysis in all instances must not fail to evaluate and describe the target
consumers and the competitors. Data and information on these important forces in the
industry are usually the results of research work. Research work on the target consumers
applies the concepts of market segmentation, market targeting, and market positioning to
determine the total demand of the industry. Research work on the competitors identifies the
total expected supply. The gap between the consumer demand and the competitor supply
represents the unsatisfied demand.
 The unsatisfied demand may be considered the market share of the proposed business
under the following conditions:

1. The proposed business has the capability to produce the product.

2. There are no expected new entrants to the industry other than the
proposed business.

The industry analysis needs substantial work in the process of establishing the
projected demand and supply.

The demand and supply analysis, also called the consumer and competitor
analysis, is the backbone or the foundation of all other analyses. Where there are no
consumers or buyers of the product, the business will never be created. The presence of the
consumers is the ultimate reason for the existence of any business endeavor.

The entrepreneur must choose the scanning tools that best suit his/her business
venture.

Evaluating the Business Position

After conducting a critical analysis of the factors in the industry environment that
primarily affect the proposed business, the next step is to evaluate the possible business
position in the industry. This deals with market share and growth. Entrepreneurs may use a
perceptual map, also called positioning map, to help them understand their position
against their competitors in the market. It shows how the consumers respond to their products
and services.

The sample perceptual map shows a comparison among competing products in the
market, their attributes, and the age and gender of their target consumers.
 Low in caffeine
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Coke Zero Coke
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Diet Coke Male, 15-30 years

Female, 30-
50 years
Pepsi Light

Low in sugar High in sugar

30-50 years

5-15 years Fanta

30-50 years
7 up

Low in
caffein

Determining the Most Appropriate Business Strategy

The last important task in the industry analysis is to describe the most appropriate
strategy that may be adopted by the business. The strategy is highly influenced by the
analysis of the business strengths, weaknesses, opportunities, and threats. The reason for the
selection of the strategy must likewise be clearly indicated.

BUSINESS DESCRIPTION

The business description section presents the nature and form of the business to be
undertaken, and may cover two to three pages. As to nature, the business may be a
merchandising, service, manufacturing, or a hybrid. The description must include the
innovative features of the business. As to form, it may either be a sole proprietorship, a
partnership, or corporation. The reason/s for the selection of the form must also be indicated.
 In case the study is about an already existing business, the present status of the
business must be provided, including the intended innovation.

In addition, the business description also includes the following:

1. Product or service that it plans to produce or serve

2. Various plant and office equipment

3. Future parties with whom contracts may be necessary
4. Personal requirement
5. Administrative operation
VI. Practice Tasks

Practice Task 1
Research about the following questions:

 What do you think is the purpose of writing an

executive summary in a business plan?
 What is the use of environment analysis?
 How about business description?

Practice Task 2 - JUSTIFY ME.

Write True if the statement is correct. Otherwise write False and state your
reason briefly.

1. The executive summary is the first major section that is

prepared in writing the business plan.

2. The executive summary is the summary of the different

sections in the business plan.

3. The executive summary appears at the end of the business plan and
summarizes the details of the plan.
 4. The business model defines the perspective of the business in terms
of its structure, production, operation, and financial activities that
will lead to the achievement of the VGMO.

5. It is necessary that the executive summary presents the business

and product position to the reader.

6. In conducting the global analysis, the primary consideration is the

trend in the world scenario followed by the business idea or
opportunity that the trend may present.

7. All forces in the societal environment must be critically evaluated.

8. The foundation of the industry analysis is the evaluation or study

conducted on the customers and competitors.

9. The primary objective in conducting the consumer analysis is to

determine whether there is a demand for the product.

10. It is enough to describe the proposed business as a sole

proprietorship in the business description section.

Practice Task 3 – LOOK FOR SAMPLES!

Look for samples of Executive Summary, Environment Analysis, and

Business Description in the web and study it. Take notes about some
observations that you can get from those samples and share it in the class.

Here are some suggested links:

 h

 ttps://www.uvm.edu/vtvegandberry/Pubs/SampleFoodBusiness
PlanOklahomaState.pdf
 http://www.spmvv.ac.in/ecell/docs/business-models/3.pdf

 https://www.hbs.edu/newventurecompetition/Documents/SE-
TrackAppSuccess_BusPlan.pdf
 Enumerate the following:

1-5 Important areas to be included in the executive summary of the

business plan.

6-8 Three major sections of the environmental

analysis. 9-14 Different variables in the societal

analysis.

15-17 Three related tasks in the industry analysis.

18-20 At least three (3) Content of Business Description

VIII. Assignments
EXECUTE ME!

With your the same group in the previous lesson, do the following:

1. Prepare the executive summary of your proposed business

plan. Use the example on the next page as a guide.

Scoring rubrics for each activity will be used.

EXECUTIVE SUMMARY

nts the VGMO, the business model, the business and production positions, wealth improvement approaches, and the parti

Vision, Mission, Goals, and Objectives

 Business Model

Business and Product Position

ENVIRONMENTAL ANALYSIS
Wealth Improvement Approaches
This section presents the industry analysis covering the following forces
directly affecting the proposed business:
Parties the trend
Supporting in Business
the the industry, the consumers, the
competitors, market forecast, market share, market position, and marketing strategy.

Trend in the industry

Consumer Analysis
 Markey segmentation and targeting
 Demand analysis

Competitor Analysis
 Supply analysis

Market Forecast
 Demand and supply forecast

Market Share

Market Position

Marketing Strategy
 BUSINESS DESCRIPTION

This section shall describe the product to produce, the equipment needed in the small
business, the size of the business in terms of capitalizations and scope, and the personnel
required to handle the operation.

Product Description

Equipment/Materials Needed

Size of the Business

Personnel Requirement
 Category Beginning Developing Proficient Highly Excellent
Proficient
2 4 6 8 10

Completeness The work is Many questions Two or One All

very are more question is questions
incomplete. missing/partially questions partially are
complete. are missing answered answered
or or completely.
partially completely
complete. missing.
Correctness The work Some There are There is 1 There are
is full of questions/tasks 2 or 3 error in the 0 errors in
errors. were not errors in output. the output.
answered the
correctly. output.
Collaboration We did the Only some of We We worked Everyone
work by the group worked together so worked
ourselves. members are together that together
We talked a cooperative. most of everyone using
little among the time. contributed his/her
group Sharing to the final knowledge
members ideas output. and
regularly. abilities to
make the
output
come
together.
Cleanliness Our final There are some Our work Our final There are
output is erasures. is clean. output is no
full of very clean erasures.
erasures.
References:

Aduana, Nick L (2017).Entrepreneurship in Philippine Setting for Senior High School,

Quezon City, Philippines : C & E Publishing Inc. pp. pp.221-232.

https://www.merriam-webster.com

https://www.lexico.com/definition

https://www.uvm.edu/vtvegandberry/Pubs/SampleFoodBusinessPlanOklahom
aState.pdf

http://www.spmvv.ac.in/ecell/docs/business-models/3.pdf

https://www.hbs.edu/newventurecompetition/Documents/SE-
TrackAppSuccess_BusPlan.pd