Lesson 3 - Environment of Entrepreneurial Venture

The Environment of
Entrepreneurial
Venture
Learning Objectives:
At the end of the lesson, the learners will be able

to:
1. Define environmental scanning
2. Discuss the physical, societal and industry
environment/factors.
3. Identify internal environmental scanning tool.
4. Conduct a SWOT analysis for a business.
2
1. ENVIRONMENTAL
SCANNING
“ Environmental Scanning is the
careful study of various factors
influencing the business.
👉 It is the process by which
organization monitor their
relevant environment to identify
opportunities and threats
affecting their business.
4
Entrepreneurial Process of Creating a New Venture
5
Entrepreneurial Process of Creating a New Venture
6
2. PHYSICAL, SOCIETAL,
INDUSTRY ENVIRONMENT
Three Layers of Environment
INDUSTRY
PHYSICAL ENVIRONMENT
ENVIRONMENT
SOCIETAL
ENVIRONMENT 8
• The first layer of the environment

is the physical environment.
• It is composed of the natural
elements that are inherent in the
Earth.
• It is divided into climate, physical
resources and wildlife.
• These three natural elements of
the physical environment have
significant contributions and
9
effects to the business venture.
Climate Physical Wildlife

The climatic Resources Open business
condition in a venture that will
particular region The availability of not destroy the
where the business raw materials is wildlife reserve.
will be established another major
must be evaluated. factor that can
influence the
success or failure of
the business 10
venture.
SOCIETAL ENVIRONMENT
• Generally composed of social,

political, cultural, economic, legal,
and technological forces.
• There is a positive relationship
between the evaluation of the
societal environmental and the
favorable operating performance
of the entrepreneurial venture.
11
Social Forces Political Cultural

Are elements in society Forces Forces
resulting from human Refer to the integrated
These are the various
interactions that can characteristics of a
influence the thoughts, elements usually
group of people or
behavior, attitude, comprising of the political
ethnic group in a
actions, and even the parties, political systems,
particular activity. It
beliefs and customs of and other related political
includes religion,
the people. groups that substantially
language, beliefs,
influence the political
customs, and 12
stability of a country.
education.
Legal Forces Technological

Economic
Elements and bodies that
Forces
Forces are directly involved in Refer to the trends and
A type of forces that have the legislation and developments in the
direct or indirect effects on interpretation of laws and computer and
the entrepreneurial venture. ordinances directly information technology
Economic forces or factors affecting the business. that have impact on
include the following; business.
interest rates, inflation rates,
fiscal policies, monetary
13
policies, income and
exchange rates.
• The external environmental layer

where the trends and changes are
easily and immediately felt by the
business.
• Considered the immediate
environment of the business where
it conducts its various operational
activities
14
1. Government – refers to the 3. Customers – buyers of

system or institution that goods or services produced
handles the affairs of a or rendered by the business.
particular country.
2. Suppliers - refer to 4. Competitors – forces

individual persons or existing in the industry
companies that provide the environment that produce,
required materials, parts, or sell or render product or
services to the business. services which are similar to
those of the business.
15
5. Employees – workers of the 6. Creditors – refer to banks,

business who are highly financial institutions, and
responsible for the financial intermediaries
production of goods or engaged in the lending of
delivery of services to the money to the borrower
consumers. They help usually for a fee or charge in
ensure the quality and the form of interest.
quantity of products or
services provided to the
customers. They are the
backbone of the business.
16
SWOT
ANALYSIS 17
▪ all the inlying forces and
conditions present within
Internal the company, which can
Environment affect the company's
working.
▪ controllable and it affects
the company only.
▪ constitutes everything
outside a firm that might
External affect the ability of the
Environment enterprise to attain its
goals.
▪ uncontrollable and it affects
all companies in the industry
SWOT ANALYSIS 18
SWOT ANALYSIS
Strength refers to the strong

attributes or capabilities of the Weaknesses are poor
business that provide great attributes or deficiencies that
advantage in exploiting the business give advantages to the
opportunity. business.
Opportunities are business

Threats are possible external
situations in the form of products
events in the environment that
or services that must be exploited may provide harm to the
of their potential in terms of profit business. 19
and growth. :
SWOT ANALYSIS
• Qualified working force • Autocratic form of leadership

• Complete and new physical • Demoralized employees
facilities • Poor and dilapidated
• Democratic leadership style equipment and machineries
• Unskilled workers
• Motivated workers
• Poor technological structures
• Valuable intangible assets
• Innovative products introduced to • Possible entry of competitors

the market • Stiff government regulations
• Higher interest rates
• Increasing the market share
• Entry of cheaper products
because of market advantage • Unstable peace and order
• Providing services to new situation
customers 20
• Shift of customers’ taste and
• New programs of the government preference
SWOT of McDonalds in 2015 21
Let’s check your understanding!!!
22
Identify each condition with the kind of environment it is associated with
(internal or external) and the type of factor classified as in SWOT
(Strengths, Weaknesses, Opportunities, and Threats) Analysis.
SWOT
Environment
Conditions (Strength, Weakness,
(Internal or External)
Opportunities and Threat)
Example: Pandemic External Threat
1. High inflation rate External Threat
2. New Competitors External Threat
3. High employment rate External Opportunity
4. Poor customer service Internal Weakness
5. More sources of raw materials External Opportunity

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6. Good corporate integrity Internal Strength
ACTIVITY 3
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Activity 3
24
CONGRATULATIONS!
You have completed
your journey in this
topic. Great job!
Any questions?
You can private message me thru messenger or email
me at cherrymae.monje@msugensan.edu.ph

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The Environment of

At the end of the lesson, the learners will be able

• The first layer of the environment

Climate Physical Wildlife

• Generally composed of social,

Social Forces Political Cultural

Legal Forces Technological

• The external environmental layer

1. Government – refers to the 3. Customers – buyers of

2. Suppliers - refer to 4. Competitors – forces

5. Employees – workers of the 6. Creditors – refer to banks,

Strength refers to the strong

Opportunities are business

• Qualified working force • Autocratic form of leadership

• Innovative products introduced to • Possible entry of competitors

Example: Pandemic External Threat

1. High inflation rate External Threat

2. New Competitors External Threat

3. High employment rate External Opportunity

4. Poor customer service Internal Weakness

5. More sources of raw materials External Opportunity

Place your screenshot here Check your Moodle for

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