Lesson 3.

Patrilyn Catacutan
Jonard Ebesa
Environmental 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 external forces and conditions on
the survival and growth of the business
 Economic forces

 This involves a look at economic factors such as
income of the people, specifically the target market,
economic conditions such as inflation, recession,
prosperity, demand, and supply in the market.
 Physical environment

 This includes a look at the population size, the
geography of the place where business will be
located, land distribution, climate, and in today’s
global warming situation , whether or not the area is
prone to flood or earthquake
 Political factors

 This type of government, the stability and strength
of the government, and good leadership are factors
that can be and advantage to a business.
 Cultures and lifestyle

 It is important to study cultural practices such as
fiestas, celebration of the Christmas season, trends in
consumption patterns , as a means to identify the
goods and services that will fit into these
celebrations and spending behavior.
 Competition

 This is something that needs to be studied. As
already mentioned above, the degree of competition
in the market and the extent and strength of
competition are all very vital in determining the
success or failure of the business.