APPLIED

ECONOMICS
Let’s have a recap
What are the contemporary
issues affecting the Filipino
entrepreneurs today? Cite one
then explain
 ACTIVITY TIME
• Read and Reflect
Juan is planning to put up a business in their village
since he saved up few of his salary over the years of
working which yielded more than he expected. Since
he already has acquired the discipline to manage his
finances, he wanted to open up a business and make
sure that this savings would be put to good use and
ensure that his money will grow. He had a hard time
thinking which business idea suit him and is feasible in
his area. He did not know where to start and he was
tired of thinking of what is the best idea for business.
Follow-up question

1. What do you think is the

best way should Juan do in
this situation?
 INTRODUCTION
• For us to help Juan in this situation we need to
identify clearly how can Juan will be able to know
which business idea will be best to use. In putting up a
business, it is essential that a comprehensive analysis
must first be made. According to Richard Lannon
(2016), “there are many tools and techniques that can
be applied to a strategic analysis. The challenge is
selecting the best approach, tools, and techniques to
use given the business problem or opportunity.”
 Common
Analysis Tools
and Techniques
 WHAT IS ANALYSIS
•Analysis is the process of breaking a
complex topic or substance into smaller
parts in order to gain a better understanding
of it.
•It is a detailed examination of the elements
or structure of something.
VMOST Analysis
• VMOST stands for Vision, Mission,
Objectives, Strategy, and Tactical.
• VMOST is a tool that can help you determine
whether your business activities are in line
with your plan and strategies. Because
alignment is crucial to the success of a strategy,
so this can be a useful process to go through.
• VMOST analysis consists and uses FOUR
steps. In each of these Steps, it proposes to
define certain Factors related to the Company.
 VMOST Analysis
•1. Vision & Mission:
• Vision: How you see the Market, and its Future.
• Mission: Mission is a general statement of how
you will achieve your vision.
•2. Objectives:
• The specific goals to be Achieved (and When).
• They should be Defined and Measurable.
 VMOST Analysis
•3. Strategy:
• What methodology will be used to achieve
those Goals.
• It will vary depending on the project.
•4. Tactics:
• What Actions will be used to comply with that
Strategy.
VMOST Analysis
that is inexpensive
VMOST Analysis
 SWOT Analysis
•SWOT, which stands for Strengths,
Weaknesses, Opportunities, and Threats.
•This framework can help identify the
business’s risks and rewards.
•It is also a means of identifying the internal
and external forces that may affect the
business.
 SWOT Analysis
•INTERNAL FACTORS:
• these are the resources and experiences readily
available to the business proponent INSIDE OF IT.
•EXTERNAL FACTORS:
• these are those that affect a company, an
organization, an individual, and those OUTSIDE
THEIR CONTROL.
 SWOT Analysis
INTERNAL
FORCES
STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS
EXTERNAL
FORCES
 SWOT Analysis
STRENGTHS WEAKNESSES
-What or where are you or your -What challenges do you or
INTERNAL
FORCES
business good at? your business face that hinders
-What are you doing well? its success?
-Is there something that needs
to be improved?

OPPORTUNITIES THREATS
EXTERNAL

-What outside possibilities are -What are the risks, changes or

FORCES

there that can positively affect even challenges that can

your business? negatively affect your
business?
SWOT Analysis
 END OF
DISCUSSION
 APPLIED
ECONOMICS
Let’s have a recap
What are the 2 business
analysis tools we discussed
yesterday?
 Porter’s Five Forces
•Porter’sFive Forces is a framework to
analyze the potential profitability of a
marketplace.
•It was invented by Michael Porter in 1979.
•Five Forces looks at five key areas in a
market that impact your price and
profitability
 Porter’s Five Forces
•Five key areas in a market that impact your
price and profitability:
• Threat of New Entrants
• Threat of Substitutes
• Bargaining power of Buyers
• Bargaining power of Suppliers
• Competitive Rivalry
 Porter’s Five Forces
•Threat of New Entrants:
• How easy is it for others to enter your
competitive space?
•Threat of Substitute product:
•Is your product or services easy to substitute?
 Porter’s Five Forces
•Bargaining Power of the Buyers:
• Do they have high/low income to afford your
product or services?
• What is the capability of them to actually buy
from you?
 Porter’s Five Forces
•Bargaining Power of the Suppliers:
•How much power does your supplier has?
•Can they easily raise their price or not?
•Competitive Rivalry:
• Are your competitors competitive?
• Do they have a fierce competitive mindset?
 PESTLE Analysis
•The word ‘PESTLE’ stands for the six factors
•Political, Economic, Social, Technological,
Legal, and Environmental.
•PESTLE analysis is a strategic management
tool that businesses use to identify macro-
economic factors that needs to be
considered.
 PESTLE Analysis
•POLITICAL FACTORS:
• It is about how and to what degree a
government intervenes in the economy
or a certain industry.
• What government policies or political groups
could be beneficial or detrimental to your
business success?
 PESTLE Analysis
•ECONOMIC FACTORS:
• These are determinants of a certain economy’s
performance such as economic growth, exchange
rates, inflation rates, interest rates, etc.
• Does the current economic status affects your
business?
• How does each economic factor impact your
pricing, revenues, and costs?
 PESTLE Analysis
•Social Factors:
•These are the demographic characteristics
such as cultural trends and the
population within which the business
operates.
•How do your customers’ values and beliefs
impact on their buying habits?
 PESTLE Analysis
•Technological Factors:
•These factors pertain to innovations in
technology that may affect the
operations of the industry and the market
favorably or unfavorably.
•How may the advance technology affects
your business operations?
 PESTLE Analysis
•Legal Factors:
• There are certain laws that affect the
business environment in a certain
country while there are certain policies
that companies maintain for themselves
• What regulations and laws apply to our business?
• Do they help or hinder our business?
 PESTLE Analysis
•Environmental Factors:
• These factors include ecological and
environmental aspects such as weather,
climate, environmental offsets and climate
change which may especially affect different
industries.
• What are the effects of climate, weather or
geographical location? How does it affect us?
GROUP PERFORMANCE TASK
• Students will be groups into 5.
• They will choose a certain business here in
Macabebe and conduct a business analysis using
the SWOT ANALYSIS. (3 of each)
• You may use a digital or traditional visual aids.
• You may use the original template or be creative.
• Rubrics will be explained.
 RUBRICS
10 8 6 4
All group members All group members Some group members Only 1 or 2 group
participate equally participate participate members participate

Information is Information is Information may be It lacks in information

presented in detailed presented in an only partially
and an organized way organized way organized and semi
detailed.

Presentation is visually Presentation is Presentation is Presentation is

organized, appealing organized and somewhat organized incomplete and
and complete complete disorganized way