UNIT 2 – BUSINESS OPPORTUNITIES & CHALLENGES

APPLIED
ECONOMICS
MODULE 7: Industry Analysis and
Competition
Sectors of the
Economy and
Related
Industries
 Agriculture and
Fishing
The primary sector in the
Philippines includes two
main industries: (1)
agriculture, hunting, and
forestry; and (2) fishing.
 Industry Sectors
The secondary sector, which is
characterized by the transformation of
raw materials into other goods, is also
referred to as the industry sector.
 Manufacturing by the
Industry and Industry
Group
1. Food manufactures
2. Beverage industries
3. Tobacco manufactures
4. Textile manufacture
5. Wearing apparel
6. Footwear and leather and leather
products
7. Wood, bamboo, cane and rattan
articles
 Manufacturing by the
Industry and Industry
Group
8. Paper and paper products
9. Publishing and printing
10. Petroleum and other fuel products
11. Chemical and chemical products
12. Rubber and plastics products
13. Nonmetallic mineral products
14. Basic metal industries
15. Fabricated metal products
 Manufacturing by the
Industry and Industry
Group
16. Machinery and equipment, except
electrical
17. Office, accounting, and computing
machinery
18. Electrical machinery and apparatus
19. Radio, television and communication
equipment and apparatus
20. Transport equipment
21. Furniture and fixtures
22. Miscellaneous manufactures
 Service Sector
It is characterized by the
marketing and selling of
products from the primary
and secondary sectors.
 Other Services
Industries
1. Education
2. Health and Social Work
3. Hotels and Restaurant
4. Sewage and Refuse
Disposal, Sanitation, and
Similar Activities
5. Other Service Activities
Employment Structure of
the Economy
It requires a comparison of the
number of workers employed in
the primary, secondary, and
tertiary sectors.
Public Sector versus
Private Sectors
Private sector is composed of
institutions that are privately
owned, whiled the Public sector
is composed of government-
owned enterprises.
 The Free Rider Problem
The availability of public goods
to everyone leads to a market
failure called the free rider
problem.
 Externalities
Positive externalities lead to
benefits to third parties,
while negative externalities
lead to harmful effects.
 Demerit goods
On the other hand, have
negative externalities and
consumption of which causes
harm to society.
 Industry Classification

Sectors and industry

classifications may vary across
countries.
 Industry Principles,
Tools, and
Techniques in
Identifying Business
Opportunities
Porter’s Five Model
Threat of New Entrants
This factors evaluates how easy
it is for firms to enter this
industry.
Economy of Scale
Means high volume of
production to achieve a certain
level of revenue.
 Bargaining Power of
Suppliers
Analyzing the structure of the
industry requires an analysis of the
suppliers and how powerful they
are in terms of influencing input
and product prices.
 Supplier
Concentration
Refers to the number of
suppliers in the industry.
Bargaining Power of
Buyers
Similar to supplier power,
the bargaining power of
buyers or consumers
impacts industry structure.
 SWOT Matrix
SWOT stands for
strengths, weaknesses,
opportunities, and
threats.
 Strengths
Strengths vary across firms and
across industries, but identifying
the strengths of a firm largely
requires analyzing the internal
processes and core
competencies of the firm.
 Weaknesses
Another internal element is
weaknesses. In contrast to
strengths, these are the factors
that are causing negative impacts
on a company’s performance.
 Opportunities
Are positive external forces that
impact the firm’s industry or
several industries.
 Threats
Finally, forces that are
somehow harmful to a
business and outside its
control are considered
threats.