TLE Cookery Grade 9

QUARTER 1 (WEEK 2)

Learners welcome to your week-2 learning outcome in Cookery. You still have six (6) weeks
to accomplish all the needed requirements this First Quarter. May you have a meaningful
experience doing all the activities. Good luck!

What I Need to Know

Understand Business Environment & Business Ideas

At the end of this lesson, you will be able to:

 define the terms related to business environment;
 identify the tangible and intangible factors in business operations; and
 conduct self-SWOT analysis.

Business Environment, Opportunities, and SWOT

Analysis

What is It

THE BUSINESS ENVIRONMENT AND MARKET

The study of the business environment in a specific area has far-reaching and long-term
implications for the viability of a small or micro business. Business concepts and prospects are
influenced or dictated in part by the location of the company. Unless it is possible to shift to a more
advantageous location, expansion ideas and prospects will often be limited to the nearby vicinity.

The business environment consists of both the tangible and intangible factors that affect either
the external or internal business operations. They may include the land area available for economic
zones, the physical layout and barriers such as rivers, parks, or lakes, and building obstructions as
well as the transportation network; all of which are considered tangible factors.
They also include the demography of clients and suppliers, the competitors in the locale/area,
and the available technology for production. Intangible elements, on the other hand, include
subculture, industrial trends, economic and government activities, as well as local political events.

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Natural & Physical Demography
Environment Potential target
Living conditions, client, migration
Facilities, Barriers pattern

Culture
Government
YOUR Sub-culture,
Regulations
BUSINESS Race, Emotional
Policies
environment

Economy
National Technology
International Trend
- Competitors Production

Natural and Physical Environment. It concerns the physical location of a business store. The natural
environment is those natural and man-made structures that enhance the beauty of the locations,
such as a park or a seafront view. However, a dump site or high-rise structures serve as a barrier
that obstructs a view. The living condition in an area may also serve as a standard for the ambiance
you want to create for your store.

There is also a phenomenon referred to as clustering, where one kind of product is sold and available
in all stores in one location or area. For instance, Filipino craft stores crowd the area under the
Quiapo bridge; or car accessories are available and found in the Banawe area. The keyword to have
in mind when scanning the physical environment is the visibility of your intended store to potential
clients.

Demography. It pertains to the number of people living in the area, their age, gender, socio-
economic status, family size, religion, and even growth trends. These are invaluable information that
can help entrepreneurs in matching their product to the target market, in deciding on the marketing
strategy, pricing, and product packaging among others.

Culture. Culture or sub-culture is the totality of the way of life, ideas, and customs of a set of people
or society that primarily influences the types of products acceptable to a particular locality. For
example, the influence of Japanese culture gave rise to minimalist designs. A sub-culture also
shapes the 'emotional' environment of an area. For instance, the feeling of 'fear' for a specific
location may serve as a barrier for a business; a place where one does not feel safe because of the
prevalence of crime will discourage entrepreneurs.
A business is affected by changes in lifestyle brought about by changes in population demography
and the economy. These lifestyle changes could be due to an increase in women's engagement in
the workforce, a shift in purchasing patterns, or a change in tastes.

Government Regulations. The laws and policies of the national and local government units also
influence business operations. Some examples of policies that directly affect entrepreneurs are the
imposition or removal of taxes for products, the establishment of economic zones, and assistance in
product labeling and packaging of products. Additionally, upgrades to facilities and roads increase
the transportation network, allowing items to be transported from one area to another and increasing
customer accessibility.

Economy. This is the study of the system of product and service production, distribution, and
consumption, as well as resource management. A country's economy influences both the
entrepreneurs and consumers as it relates to the financial matters of business-like taxes and interest
rates and the quality of life, cost of utilities and services, among others. Even small-scale business
owners must learn to analyze economic data to improve business forecasts, such as when to acquire
specific materials and supplies, when to build a store or introduce new items depending on consumer
spending, and when to hire personnel. Some examples of economic indicators include the (a) Gross
Domestic Product (GDP) which increases when a country's economy is doing good; (b)

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Unemployment rate which indicates that more unemployed people usually signal an economy getting
worse; and (c) Price Indexes and Inflation rates which determine the buying power of consumers.
The existing enterprises, who are either direct or indirect competitors, are also part of the business
environment. It is important to scout for products or services that answer a similar need to what you
intend to provide. Think of how you can create a niche that will differentiate your product from the
other businesses – either in specifying a target market or in differentiating your product quality or
price. The key concept to think about is acquiring a reasonable market share despite the
competition.

Technology. Technological changes are inventions based on the application of science that creates
a new product or process improvements. Examples of technological changes are mobile tools that
enable online connection, new business tools for analysis and database, social networks, and
modern, digital equipment. These advances in technology result in efficiency and productivity at a
lesser cost. Sending a message through e-mail provides a cheaper and faster means compared to
hand-delivered mails or snail mails. An entrepreneur can benefit from technological changes by
identifying the appropriate technology solution available in the area or locale.

At this point, it must be clear why an environment scanning of an area considered as a

business site is helpful for the entrepreneur. The impact of the factors in the business environment
does not only include the business operation, instead even relevant at the start of the venture –
during the business idea generation and opportunity identification stage.

Spotting and Identifying Business Opportunities

Spotting business opportunities is one of the essential aspects of entrepreneurship. An

entrepreneur must have a keen eye for identifying opportunities that can potentially turn into a good
product or business venture. At the same time, an entrepreneur should also know which possibilities
to drop and which ones to develop.

Idea Generation
The first step in identifying a good business opportunity is to look for many possibilities. It is
called the idea generation phase (SERDEF, 2007). The following are good sources of business ideas
(Hisrich, Peters, & Shepherd, 2008; Looser & Schlapfer, 2001).

1. Personal hobbies and interests

2. Everyday experiences, travel, and adventures
3. Suggestions from family members and friends
4. Problems that need solutions
5. Problems with existing products
6. Books, magazines, news
7. Observing, listening around you

Screening Business Ideas

Once you have generated several business opportunities and ideas, the next step is to select
and screen these. Though there can be many ways to do this, the best way to proceed is by
screening your ideas based on 1) your personality and personal preferences and 2) the
characteristics of a good business (SERDEF, 2007).
Consider the following criteria:

1. Personality and Personal Preferences

a. Personal Preference
b. Education, Skills, and Experience
c. Work Experience
d. Support from family and friends
2. Characteristics of a good business
a. Demand for Product
b. Availability of skills, raw materials, technology, and capital
c. Profitability

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SWOT Analysis

To be successful in any business venture, potential entrepreneurs should look closely at the
environment and market. They should always be watchful of existing opportunities and constraints
and take calculated risks. Opportunities in the business environment are factors that provide
potentials for a business to expand and make more profit. Constraints are factors that limit business
growth, hence reduce the chance of generating profit. One of the best ways to evaluate opportunities
and constraints is to conduct a Strengths, Weaknesses, Opportunities, and Threats (SWOT)
Analysis.

SWOT Analysis is a managerial tool used to assess the environment. It is to gather important
information needed in strategic planning. Strengths and weaknesses are internal in an organization.
They relate to resources owned by an organization that you have control over and also the extent of
its marketing.

Opportunities and threats exist in the external environment. The opportunities related to the
market, new technologies, and external factors such as government policies, climate, and trends.
Threats replace what the competitors are doing. It also includes legal and other constraints.

Once you have chosen your business idea, the next step is to conduct a SWOT analysis. This
step will help you improve your business of choice and prepare for challenges. The table below will
help you differentiate among these four features.

Positive Negative
Strengths Weakness

positive factors that contribute to set of problems, difficulties, or

the favorability of a business shortcomings encountered by the
Controllable opportunity business
Factors
Examples: Examples:
Cheap raw materials Inexperienced owner Lack of
Skilled employees working capital Poor location
Ease of management
Small capital outlay
Opportunities Threats
positive factors that are not within negative factors that are beyond
the control of the business. the control of the business

Uncontrollabl Examples: Examples:

e Factors Absence of similar products in Rising costs Raw material
the market New markets is being shortages Too many competitors
developed
Growing demand for similar
products Favorable government
policy

- end -

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