IDENTIFYING BUSINESS

OPPORTUNITIES
 ENVIRONMENTAL SCANNING

 a process that systematically surveys and interprets

relevant data to identify external opportunities and
threats

 an organization gathers information about the external

world, its competitors and itself
STEPS IN ARRIVING AT BUSINESS
OPPORTUNITY
1.Generating Ideas
2.Screening Process
3.Formulating the concept of the business
 1. GENERATING IDEAS
Source: Environment
Scan & Understand the needs & wants of people
Taking macro-perspective or viewing larger environment where
business will be situated
 Looking at the STEEP factors (Social, Technological, Economic,
Environmental, & Political)

Abraham Maslow - “People generally have different kinds of basic

needs such as food, clothing, shelter, safety , socialization,
recognition for self-esteem and self- fulfillment.”
 WAYS OF SCANNING THE ENVIRONMENT
1. Looking Closely at the market
Demand & Supply Gap Analysis
Import-Export Movement
Product Substitution
Forward-Backward Industry Linkages
2. Looking at People’s skills
 Observe your Community
3. Looking at Available Business Assistance Program
 Visit DTI Office
 Government & Private Institutions
 Non-Government Organizations
 METHODS OF COLLECTING INFORMATION
Ad Hoc Scanning
-short-term, infrequent & initiated by crisis (building networks)
Regular Scanning
-involve studies done on a more or less regular basis
Continuous Scanning
-entails regular collection or processing of data on a wide
range of factors from business environment
 Accessing Networks (connecting to a certain provider)
 Public Meetings, Trade Fairs & Fora
 Focused-Group Discussion (gathering people from similar
backgrounds or experiences to discuss a similar topic)
 Key People Surveys (survey on important persons on a certain activity)
 Publications (books, journals and other reading materials)
 In-Depth Interviews (conducting intensive individual interviews to
explore certain perspectives)
 Usage & Awareness Studies (used to gain understanding about the
appeal of a product/service)
 2. SCREENING PROCESS
A. Personal-Level Screening
Personal Market Preference (committed)
Educational & Training Background
Work experience (degree of expertise & knowledge)
Business Network &Contacts (buyers, suppliers or
creditors)
Family Support
B. Firm-Level Screening
Technology
Availability of Skills
Availability of Raw Materials
Financial/Capital Requirement
Profitability
Government Support
3. FORMULATING THE CONCEPT OF THE BUSINESS
A. RESOURCE ANALYSIS - where strengths and weaknesses are
identified, indicates what the firm is capable of doing at the
start of the business.
1. Resources (THE 7 M’s) Money, Materials, Machines,
Manpower, Management (people), Methods, Moment (time)
2. Strengths (identify the distinctive competencies of the
company which can work to its advantage)
3. Weaknesses (resources that the company lacks or a
restriction in the management’s ability)
B. Environmental Analysis - gives an indication whether the business can
survive or not.
Identifying Opportunities & Threats in the Environment
 Socio-Cultural
 Technological & Technical
 Economic
 Natural
 Political
 Peace & Order
 Population Trends
 Government Program
 Global Environment
Opportunities:
1. People have developed the habit of eating in fast food restaurants. Many of these
establishments serve ham & bacon and other processed meat.
2. A new technology can cure ham in three days.
3. In general, there is peace and order in the place of business.
4. The population is increasing. More people mean more consumers who need food.
5. The government is providing assistance to MSMEs.
6. If there is a shortage of local pork, it is possible to import from other countries.
Threats
1. The purchasing power of population has lowered because of the peso devaluation and
high cost of oil, thus reducing the number of people who buy ham and bacon.
2. Foot and mouth disease can threaten the supply of raw materials.
3. Political instability can affect the economy.
 TOWS ANALYSIS
 A tool which is used to generate, compare and select strategies
 Strictly speaking it is not the same as SWOT analysis, and it is
certainly not a SWOT analysis which focuses on threats and
opportunities. This is a popular misconception.
TOWS may have similar roots. TOWS is a tool for strategy
generation and selection; SWOT analysis is a tool for audit and
analysis.
One would use a SWOT at the beginning of the planning
process, and TOWS later as you decide upon ways forward.
 FOUR TOWS STRATEGIES
1. Strength/opportunity (SO).
Here you would use your strengths to exploit
opportunities.
2. Weakness/opportunity (WO).
Indicates that you would find options that overcome
weaknesses, and then take advantage of opportunities. So,
you mitigate weaknesses, to exploit opportunities.
3. Strength/threat (ST).
 One would exploit strengths to overcome any potential
threats.
4. Weakness/threat (WT).
 The final option looks least appealing; after all, would
relish using a weakness to overcome a threat
 One is attempting to minimize any weaknesses to avoid
possible threat.
SWOT ANALYSIS
 SWOT ANALYSIS
 SWOT stands for Strengths, Weaknesses,
Opportunities, and Threats
 Tool for auditing an organization and its environment
 First stage of planning

 Strengths & Weaknesses = INTERNAL factors

 Opportunities & Threats = EXTERNAL factors
 SWOT ANALYSIS

Used to:

 build on strengths
 minimize weaknesses
 seize opportunities
 counteract threats
o The main purpose of a SWOT analysis is to
add value to products and services

o STRENGTHS-- Positive tangible and

intangible attributes, internal to an
organization, they are within the
organization’s control.
PORTER’S 5-FORCES
ANALYSIS
PORTER'S FIVE FORCES ANALYSIS

 a tool for analyzing competition of a business

 derive five forces that determine the
competitive intensity and the attractiveness
(or lack of it) of an industry in terms of its
profitability
 Porter refers to these forces as the
“microenvironment”
PORTER'S FIVE FORCES MODEL
1. THREAT OF NEW ENTRANTS
New entrants eventually will decrease
profitability for other firms in the industry.
Factors that affect how much of a threat new
entrants may pose:
a. Government policy
b. Capital requirements
c. Absolute cost
d. Customer loyalty
e. Industry profitability
2. THREAT OF SUBSTITUTES
o A substitute product uses a different
technology to try to solve the same
economic need
(Examples of substitutes are meat, poultry,
and fish; landlines and cellular telephones;
airlines, automobiles, trains, and ships; beer
and wine; Pepsi and Coke)
3. BARGAINING POWER OF CUSTOMERS
 Also described as the market of outputs:
the ability of customers to put the firm
under pressure, which also affects the
customer's sensitivity to price changes.
 Firms can take measures to reduce buyer
power, such as implementing a loyalty
program.
4. BARGAINING POWER OF SUPPLIERS
 described as the “market of inputs”
 suppliers of raw materials,
components, labor, and services (such
as expertise) to the firm can be a
source of power over the firm when
there are few substitutes.
5. INDUSTRY RIVALRY-- the
intensity of competitive rivalry is the
major determinant of the
competitiveness of the industry.

 POSITIONING pertains to how the

public perceives a product and
distinguishes it from competitors.
THANK YOU FOR LISTENING!