The Environment of Entrepreneurial Venture

• • Physical Environment

  -is the primary layer of the environment. 

  -It is composed of the natural elements that are inherent in the earth.
• • Societal Environment

  -is usually composed of social, political, cultural and economic, legal, and

  technological forces.
• • Social Forces

  -are elements in society resulting from human relations that can affect the

  thoughts, behavior, attitude, actions, and even the beliefs and customs of the people.
• • Political Forces 

  include the following;

  -Trade regulations

  -Taxation

  -Government stability

  -Unemployment

  -Workers benefits

  -Election practices
• • Cultural Forces

  -refers to the combined characteristics of a group of people or ethnic groups in a specific society.

  -Religion

  -Language

  -Beliefs

  -Customs

  -Education
• • Legal Forces

  -are elements and forms that are implicated in the regulation and explanation of laws and ordinances affecting the business.

  -Product Control

  -Pricing and Labeling

  -Health and Safety of Workers

  -Advertising and Promotion
• • Technological Forces

  -refer to the trends and developments in computer and information technology that have an impact on business.

  -Internet

  -Social Media

  -E-commerce

  -Technological Advancement

  -Technological Infrastructure
• • ENVIRONMENTAL SCANNING

  -The evaluation and full study of the environment where the business works.
• • Industry Environment

  -is the external environmental layer where the trends and changes are simply and directly handled by the business.

  -GOVERNMENT

  -SUPPLIERS

  -CUSTOMERS

  -COMPETITORS

  -EMPLOYEES

  -CREDITORS
• • Government

  -refers to the system or institution that handles the affairs of a particular country.

  -Monarchy

  -Democracy

  -Republic

  -Autocracy
• • Suppliers

  -refers to individual persons or companies that provide the required materials, parts, or services to the business Quality, proximity, stability, terms of payment, etc.
• • Competitors

  -are the forces existing in the industry environment that produce, sell or render

  products or services which are similar to those of the business.
• • Employees

  -are the workers of the business who are highly responsible for the production of

  goods or delivery of services to the consumers
• • Creditors

  -refer to banks, financial institutions, and financial intermediaries engaged in the lending of money to the borrower.
• INDUSTRY SCANNING TOOLS

  • SWOT MODEL
  • FORCES OF COMPETITION MODEL
  • COMPETITIVE FORCES MATRIX
• INDUSTRY SCANNING TOOLS

  • SWOT MODEL
  • FORCES OF COMPETITION MODEL
  • COMPETITIVE FORCES MATRIX
• • SWOT MODEL

  -is the popular tool to evaluate the internal environment.
• • FORCES OF COMPETITION MODEL

  -”five forces of competition”

  -Identifies and analyzes forces that shape every industry and helps determine an industry’s weakness and strength.
• • COMPETITIVE FORCES MATRIX

  -Can be used by the entrepreneur to plot when after all the competitive forces have been identified by which the entrepreneur can view the total perspective of the competition within the industry where the business operates.