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ENTREPRENEURSHIP
Module 2
EXECUTIVE SUMMARY, ENVIRONMENT
ANALYSIS, AND BUSINESS DESCRIPTION

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ENTREPRENEURSHIP – Grade 11

Module 2: Executive Summary, Environment Analysis, and

Business Description

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work of the Government of the Philippines. However, prior approval of the government
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the payment of royalties.

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Every effort has been exerted to locate and seek permission to use these materials
from their respective copyright owners. The publisher and authors do not represent
nor claim ownership over them.

Regional Director: Gilbert T. Sadsad

Assistant Regional Director: Jessie L. Amin

Development Team of the Module

Writer: Marijo S. Balin

Editor: Cynthia C. Competente

Reviewers: Edwin L. Mias

Christie L. Alvarez

Illustrator/ Layout Artist: Jaypee M. Ignacio

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I. Title of Material/Introduction

EXECUTIVE SUMMARY, ENVIRONMENT ANALYSIS, AND

BUSINESS DESCRIPTION PREPARATION

This module discusses three other major parts of the business plan namely the
executive summary, environmental analysis, and business description.

II. Objectives

At the end of this lesson, the learner should be able to implement the business
plan. Specifically, the learner must be able to :

1. Describe the executive summary,

2. Identify the major areas of an executive summary included in the
environmental analysis, and
3. State the important areas to be included in the business description

III. Vocabulary List

Executive - relating to or having the power to put plans or actions into effect.

Summary - a brief statement or account of the main points of something.

Environment - the circumstances, objects, or conditions by which one is

surrounded

Analysis - detailed examination of the elements or structure of something.

Model - a description or analogy used to help visualize something that

cannot be directly observed.

Business Model – defines the perspective of the business in terms of its

structure, production, operation, and financial activities that will lead to
the achievement of the Vision, Mission, Goals, and Objectives.

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Environmental Analysis - is a strategic tool that helps determine the external
and internal factors affecting the performance of the business.

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IV. Pre-Test

Multiple Choice. Write the letter of your answer.

1. ___________ is commonly the last section to be written after all

other major parts have been completed.
a. Introduction c. Executive Summary
b. Environment Analysis d. Business Description

2. What is the most important part of your business plan?

a. Executive Summary c. Background
b. Table of Contents d. Financial Plan

3. True or False: If your executive summary is more than three pages it

will most likely not be read.
a. True: too much is not needed when writing an executive
summary, the readers will be bored
b. False: More is always needed when writing an executive
summary
c. Both of the above
d. none of the above

4. Entrepreneurs may use a _______________ to help them

understand their position against their competitors in the market.
a. Business model c. Business Strategy
b. Positioning map d. Business Description

5. According to this analysis where there are no consumers or buyers

of the product, the business will never be created. What analysis is
this?
a. Global Analysis c. Consumer and
competitor analysis
b. Societal Analysis d. Industry analysis

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V. Learning Activities:

1. Read about all the things related to Executive Summary.

2. Be familiar about the content/parts of Executive Summary and study the
sample business model.
3. Identify the Basic Elements of Environmental Analysis.
4. Study how to make a critical evaluation and evaluate a business position.
5. Read about how to determine the Most Appropriate Business Strategy.
6. Read about Business Description.

Take time to Read Young Entrepreneur !

EXECUTIVE SUMMARY

Although the executive summary is commonly the last section to be written

after all other major parts have been completed, it is the next major part of the business
plan after the introduction. It points out the overall highlights of the business plan as
well as bird’s eye view of its sections. However, the executive summary must not, in
any manner, provide a summary of the different major sections of the business plan.
It must be written in a simple language that can be easily understood and at the same
time attract the attention and influence the decision of the reader.

Investors, creditors, and other significant parties usually proceed to the details
usually proceed to the details of the business plan once they find the executive
summary interesting, convincing, and worthy of further reading. Although there is no
standard format as to its sections and contents, the executive summary must include
the following sections:

1. Vision, mission, goals, and objectives of the business

2. Business model
3. Business and product position
4. Wealth improvement approaches
5. Parties supporting the business

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VISION, MISSION, GOALS, AND OBJECTIVES

At the very outset, the business plan must depict the fundamental
characteristics, nature, philosophical values, identity, and image of the business.
These important concerns are embodied in the vision, mission, goals, and objectives
(VMGO) of the business. The VMGO must be clearly stated and easily understood.
They must be reviewed and revisited at least every three years to determine whether
they are still reasonable and achievable in view of the rapid changes in the business
community.

BUSINESS MODEL

Business Model Template

BUSINESS MODEL

Partner Key Offer Customer Customer

network Activities Relationship Segments

Key Distribution
Resources Channels

Cost structure Revenue statements

Figure 6.2.1. Sample Business Model

The business model defines the perspective of the business in terms of its
structure, production, operation, and financial activities that will lead to the
achievement of the VGMO. There is no standard model that will exactly fit all types of
business because they have different strengths and weaknesses, infrastructures,
networks, and value propositions. The business model must basically reflect certain
innovations that will indicate the competitiveness of the business in the industry. It
must define how the business gives importance to its relations with customers,
creditors, supplies, and internal human resources.

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BUSINESS AND PRODUCT POSITION

The business and product position will help determine how the business defines
its course and the process of accumulating wealth. It tells the size of the market and
the target market share of the business and product. The business and product
position must be able to convince the readers that the proposed business has a
competitive advantage in the market.

WEALTH IMPROVEMENT APPROACHES

This section of the executive summary describes the methodologies or

approaches that will be taken by the business in order to

1. Maintain a competitive advantage,

2. Position the business in the market,
3. Improve the market share, and
4. Maximize the utilization of resources.

This section also includes a brief discussion of the marketing policies and
financial operations of the business, and the profitability level of the industry and of the
business. Standard benchmarks are good indicators in assessing the economic
performance of the business.

PARTIES SUPPORTING THE BUSINESS

The last section of the executive summary is a description of the parties that
strongly support the business. The parties that have a direct relationship with the
business are as follows:

1. Consumers
2. Creditors
3. Suppliers
4. Employees and staff

Relevant information about individuals and parties that support the business is
important since the proposed business may conduct transactions with them later.

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The executive summary must cover at least three pages but must not go
beyond five pages. An executive summary that is either too short or too long may
discourage the reader to continue reading.

ENVIRONMENTAL ANALYSIS

The next major part or section of the business plan after the executive summary
is the environmental analysis. It is a strategic tool that helps determine the external
and internal factors affecting the performance of the business. These factors may be
political, economic, social, or technological in nature. The environmental analysis may
consist of at least 20 pages including the graphical representations, tables, and
computations. The environmental analysis section is considered the heart of the
business plan.

Since the business that you intend to open in this entrepreneurial course is
considered small in terms of capitalization, the industry analysis will focus mainly on
the consumers and competitors. The presence of the consumers, after all, is the
ultimate reason for the existence of any business endeavor.

In today’s competitive business environment, an environmental analysis is

already a necessity. It is perceived as the basic element for business survival. It may
consist of global analysis, societal analysis, and industry analysis.

GLOBAL ANALYSIS

The environmental analysis section may begin with a description of the global
business situation to provide enough knowledge about the global perspective or
horizon if the business. A common mistake in this section is describing a business
entity that operates in the global environment because a global analysis evaluates the
business trend in the worldwide market. As a future entrepreneur, you should not
devote the whole section of the global analysis by simply describing the business
trends, for example, in the whole Asian region, in European communities, or even in
mainland USA. Remember that it is not the business trend that has the most significant
bearing on the global analysis but rather the possible business opportunities or ideas
that the global business trend offers.

The trend in the global market is the result of what happened in the past, while
a possible business idea is the expected event that may happen in the future. Investors
are more interested in what will happen in the future. The global trend simply acts as
an indicator of any favorable sign for a business idea. However, there is a direct

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relationship between these two concepts. Once the world market is properly
described, the business opportunities that the global trend provides must also be
described. The reader, therefore, must be convinced that is its worth to exploit the
business idea or opportunity based on the global business trend.

SOCIETAL ANALYSIS

After describing and possibly convincing the reader of the bright business
prospect in the world market, the next step is to present the societal analysis and
determine the different variables affecting the societal environment. These variables
include

1. Political forces,
2. Economic forces,
3. Socioeconomic forces,
4. Technological forces,
5. Ecological forces, and
6. Legal forces.

Most business plans fall to mention the probable levels of effects of the various
forces to the proposed business, and the frequency of occurrence of the environmental
factors. They simply describe the different variables or forces. A mere description of
the various environmental factors does not provide any brilliant idea to the reader. The
societal analysis must tell how the environmental forces affect the proposed business
and how great their effects are.

Assuming that you consider the interest rate and disposable income as
economic variables that may effect on the proposed new business, the description of
the analysis may appear as follows:

Economic environment. The prevailing interest rate given by most

commercial and industrial banks ranges between 10 and 12 percent and is expected
to increase to 15 percent within a two-year period because of the new monetary policy
of the Bangko Sentral ng Pilipinas (BSP). The move of the BSP has a substantial or
very high effect on the financial operation of businesses that have high financial
leverage. However, since the start-up capital requirements of the new business will be
funded solely by the owners, the interest rate may appear to have a low effect on the
proposed business.

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The disposable income of Filipino consumers, according to the latest data
released by the National Economic Development Authority and the National Statistics
Office, has substantially increased which has been attributed mainly to the new salary
rates of all employees, both public and private, coupled with the high remittances of
overseas contract workers. It is expected that the remittances will continue to increase
at the rate of 10 percent for the next 6 to 8 years. This present trend on the disposable
income may appear to have a very high favorable effect on the operations of new
businesses.

INDUSTRY ANALYSIS

The third level of environmental analysis is the industry analysis. The industry
analysis basically involved three important related tasks as follows:

1. Conducting a critical evaluation of the forces in the industry that affect the
proposed business

2. Evaluating the probable position of the business in the industry

3. Determining the most appropriate strategy that may be adopted by the

proposed business

Conducting a Critical Evaluation

Conducting a critical evaluation is the most delicate, tedious, and difficult task
in industry analysis. There are some business plans that do not even show any
indications that a critical analysis has been conducted, but rather, the evaluation
appears to be a mere play of words. Nevertheless, not all forces in the industry, even
in the societal analysis, must be analyzed and described. Only those forces that are
deemed to have substantial effects, either positive or negative, to the proposed
business must be critically analyzed and properly described.

The industry analysis in all instances must not fail to evaluate and describe the
target consumers and the competitors. Data and information on these important
forces in the industry are usually the results of research work. Research work on the
target consumers applies the concepts of market segmentation, market targeting, and
market positioning to determine the total demand of the industry. Research work on
the competitors identifies the total expected supply. The gap between the consumer
demand and the competitor supply represents the unsatisfied demand.

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The unsatisfied demand may be considered the market share of the proposed
business under the following conditions:

1. The proposed business has the capability to produce the product.

2. There are no expected new entrants to the industry other than the proposed
business.

The industry analysis needs substantial work in the process of establishing the
projected demand and supply.

The demand and supply analysis, also called the consumer and competitor
analysis, is the backbone or the foundation of all other analyses. Where there are no
consumers or buyers of the product, the business will never be created. The presence
of the consumers is the ultimate reason for the existence of any business endeavor.

The entrepreneur must choose the scanning tools that best suit his/her
business venture.

Evaluating the Business Position

After conducting a critical analysis of the factors in the industry environment

that primarily affect the proposed business, the next step is to evaluate the possible
business position in the industry. This deals with market share and growth.
Entrepreneurs may use a perceptual map, also called positioning map, to help them
understand their position against their competitors in the market. It shows how the
consumers respond to their products and services.

The sample perceptual map shows a comparison among competing products

in the market, their attributes, and the age and gender of their target consumers.

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Pepsi Max Low in
Coke Zero caffeine Coke
Pepsi

Diet Coke Male, 15-30

Female, 30- years
Pepsi 50 years
Light

Low in sugar High in sugar

30-50 years

5-15 years Fanta

30-50 years
7 up

Low in
caffeine

Determining the Most Appropriate Business Strategy

The last important task in the industry analysis is to describe the most
appropriate strategy that may be adopted by the business. The strategy is highly
influenced by the analysis of the business strengths, weaknesses, opportunities, and
threats. The reason for the selection of the strategy must likewise be clearly indicated.

BUSINESS DESCRIPTION

The business description section presents the nature and form of the business
to be undertaken, and may cover two to three pages. As to nature, the business may
be a merchandising, service, manufacturing, or a hybrid. The description must include
the innovative features of the business. As to form, it may either be a sole
proprietorship, a partnership, or corporation. The reason/s for the selection of the form
must also be indicated.

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In case the study is about an already existing business, the present status of
the business must be provided, including the intended innovation.

In addition, the business description also includes the following:

1. Product or service that it plans to produce or serve

2. Various plant and office equipment
3. Size of the proposed business
4. Future parties with whom contracts may be necessary
5. Personal requirement
6. Administrative operation

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VI. Practice Tasks

Practice Task 1 - RESEARCH ME!

Research about the following questions.

• What do you think is the purpose of writing an executive

summary in a business plan?
• What is the use of environment analysis?
• How about business description?

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Practice Task 2 - JUSTIFY ME.

Write True if the statement is correct. Otherwise write False and state
your reason briefly.

1. The executive summary is the first major section that is

prepared in writing the business plan.

2. The executive summary is the summary of the different

sections in the business plan.

3. The executive summary appears at the end of the business

plan and summarizes the details of the plan.

4. The business model defines the perspective of the business

in terms of its structure, production, operation, and financial
activities that will lead to the achievement of the VGMO.

5. It is necessary that the executive summary presents the

business and product position to the reader.

6. In conducting the global analysis, the primary consideration is

the trend in the world scenario followed by the business idea
or opportunity that the trend may present.

7. All forces in the societal environment must be critically

evaluated.

8. The foundation of the industry analysis is the evaluation or

study conducted on the customers and competitors.

9. The primary objective in conducting the consumer analysis is

to determine whether there is a demand for the product.

10. It is enough to describe the proposed business as a sole

proprietorship in the business description section.

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Practice Task 3 – LOOK FOR SAMPLES!

Look for samples of Executive Summary, Environment Analysis,

and Business Description in the web and study it. Take notes about
some observations that you can get from those samples and share it in
the class.

Here are some suggested links :

• https://www.uvm.edu/vtvegandberry/Pubs/SampleFoodBusiness
PlanOklahomaState.pdf

• http://www.spmvv.ac.in/ecell/docs/business-models/3.pdf

• https://www.hbs.edu/newventurecompetition/Documents/SE-
TrackAppSuccess_BusPlan.pdf

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VII. Post Test

Enumerate the following :

1-5 Important areas to be included in the executive summary of the

business plan.

6-8 Three major sections of the environmental analysis.

9-10 Different variables in the societal analysis.

15-17 Three related tasks in the industry analysis.

18-20 At least three(3) Content of Business Description

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VIII. Assignments

EXECUTE ME!

With your the same group in the previous lesson, do the following:

1. Prepare the executive summary of your proposed business

plan. Use the example on the next page as a guide.

Scoring rubrics for each activity will be used.

EXECUTIVE SUMMARY

This section presents the VGMO, the business model, the business and
production positions, wealth improvement approaches, and the parties supporting
the study.

Vision, Mission, Goals, and Objectives

Business Model
2. After preparing the executive summary, you may now prepare the next major
section of the business plan which is the environmental analysis. Follow the
example below.

Business and Product Position

3. After preparing the environmental analysis, prepare the business description. The
example below can be used as a guide.

Wealth Improvement Approaches

Parties Supporting the Business

SCORING RUBRICS

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ENVIRONMENTAL ANALYSIS

This section presents the industry analysis covering the following forces
directly affecting the proposed business: the trend in the industry, the consumers,
the competitors, market forecast, market share, market position, and marketing
strategy.

Trend in the industry

Consumer Analysis
• Markey segmentation and targeting
• Demand analysis

Competitor Analysis
• Supply analysis

Market Forecast
• Demand and supply forecast

Market Share

Market Position

Marketing Strategy

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BUSINESS DESCRIPTION

This section shall describe the product to produce, the equipment needed in
the small business, the size of the business in terms of capitalizations and scope,
and the personnel required to handle the operation.

Product Description

Equipment/Materials Needed

Size of the Business

Personnel Requirement

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Category Beginning Developing Proficient Highly Excellent
Proficient
2 4 6 8 10

Completeness The work is Many questions Two or One All

very are more question is questions
incomplete. missing/partially questions partially are
complete. are answered answered
missing or or completely.
partially completely
complete. missing.
Correctness The work is Some There are There is 1 There are 0
full of questions/tasks 2 or 3 error in the errors in
errors. were not errors in output. the output.
answered the
correctly. output.
Collaboration We did the Only some of We We worked Everyone
work by the group worked together so worked
ourselves. members are together that together
We talked cooperative. most of everyone using
a little the time. contributed his/her
among Sharing to the final knowledge
group ideas output. and
members regularly. abilities to
make the
output
come
together.
Cleanliness Our final There are some Our work Our final There are
output is erasures. is clean. output is no
full of very clean erasures.
erasures.

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IX. ANSWER KEY

Pre-test

1. C 2. A 3. A 4. B 5. C

Practice Task 1 - RESEARCH ME!

1. The purpose of writing an executive summary in a business plan is

to point out the overall highlights of the business plan as well as bird’s
eye view of its sections. Moreover, attract the attention and influence
the decision of the reader.
2. The use of environment analysis is to determine the external and
internal factors affecting the performance of the business.
3. Business description presents the nature and form of the business
to be undertaken.

Practice Task 2 - JUSTIFY ME.

1.False, last

2. False, must not

3.False, beginning
4. True

5.True
6. False, business idea first
7. True

8. True
9. True
10. false, not enough

Practice Task 3 – LOOK FOR SAMPLES!

Students’ response will vary.

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Post Test

1. Vision, mission, goals, and objectives of the business

2. Business model
3. Business and product position
4. Wealth improvement approaches
5. Parties supporting the business
6. Global Analysis
7. Societal Analysis
8. Industry Analysis
9. Political forces
10. Economic forces
11. Socioeconomic forces
12. Technological forces
13. Ecological forces
14. Legal forces
15. Conducting a critical evaluation of the forces in the industry that
affect the proposed business
16. Evaluating the probable position of the business in the industry
17. Determining the most appropriate strategy that may be adopted
by the proposed business
18. Product or service that it plans to produce or serve/Various plant
and office equipment
19. Size of the proposed business/Future parties with whom
contracts may be necessary
20. Personal requirement / Administrative operation

Assignments

Students’ response will vary.

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References:

Aduana, Nick L (2017).Entrepreneurship in Philippine Setting for Senior High

School, Quezon City, Philippines : C & E Publishing Inc. pp. pp.221-232.

https://www.merriam-webster.com

https://www.lexico.com/definition

https://www.uvm.edu/vtvegandberry/Pubs/SampleFoodBusinessPlanOklahom
aState.pdf

http://www.spmvv.ac.in/ecell/docs/business-models/3.pdf

https://www.hbs.edu/newventurecompetition/Documents/SE-
TrackAppSuccess_BusPlan.pdf

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