MODULE 4: Environmental Scanning and Opportunity Identification
Armed with your personal entrepreneurial competencies and entrepreneurial mind, you
are now ready to assess your environment and able to identify opportunities related to
your field of discipline. The emphasis is to search for opportunities that resolve problems in
your specific program, as well as problems in society.
Unit 1: Understanding Your Environment
An Entrepreneurial mindset influences our critical thinking and problem-based
learning. Knowing the business environment guides you in your search for problems that
can be turned into opportunities. The opportunities are present in our environment. Hence,
the need for scan and assess our environment.
Topic Learning Outcomes:
The topics in Unit 1 will enable you to:
1. Understand the different elements of the business environment
2. Apply techniques in environmental scanning; swot analysis
PREASSESSMENT
Create your personal flag. In a bond paper, create a quadrant. In each box, then write
your answers to the following:
A. Your strengths B. Your weaknesses
C. What you can give to other people D. How can you turn your weaknesses
into achievements
Environmental scanning
• An analysis and evaluation process that businesses use to understand their current
environment
• The aim is to identify trends, gaps, events, developments, and issues that will impact the
businesses.
• An analysis and evaluation process that businesses use to understand their current
environment
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Macro Environment
Political
Legal
External Economic
Environment
Socio-cultural
Analysis
Technological
(opportunities
and threats)
(Porter’s 5 forces Micro Environment
model) The customers
Environmental The suppliers
Scan
The competitors
The society
Plans
Internal Policies
Environment Human Resources
Analysis
Financial Resources
Organizational Culture
(strengths and Machineries
weaknesses )
Business environment
This consists of the internal and external factors that affect how the company functions
including, but not limited to, the customers, management, supply and demand, and
business regulations. These are beyond the control of the business and they affect the
functioning of a business enterprise.
Micro environment
• Refers to the environment which is in direct contact with the business organization and
can affect the business straight away.
• Is a collection of forces that are close to the firm and these forces are very particular to
the firm.
Elements of the Microenvironment
• Suppliers
Provide to the business such inputs as manpower, money, materials, machines,
methods, information and so on.
• Competitors
Are the rivals which compete with the firm in the market
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• Marketing Intermediaries
Wholesalers, distributors and retailers that make a link between the firm and its
customers.
• Customers
Are the ones who purchase the firm’s goods and services for their own consumption
• Firm
Includes shareholders, Investors, employees and board of directors
Macro-environment / General Environment
• Is an important dimension of the business environment as the businessman cannot
directly influence or change the components of the general environment; rather he has
to change his plans and policies according to the changes taking place in general
environment.
Elements of the General Environment
Political Environment
• Centers on the role of the governments in shaping business
• Tax policies, changes in trade restrictions and tariffs
• Stability of the government and immigration policy
Economic Environment
• Centers on economic conditions
• Interest rates, inflation rates, gross domestic products, unemployment rates, levels of
disposable income, and the general growth or decline of the economy
Social Environment
Consists of the customs and traditions of the society
Includes the following:
• Standard of living
• Taste
• Preferences
• Education level of people
Technological Environment
• Changes taking place in the method of production
• New equipment and machineries to improve the quality of product
Physical/Natural Environment
Physical conditions within which the organization operates.
Includes the following factors:
Natural disasters
Pollution level
Weather pattern
• Legal Environment
Centers on how the law influence the business activity
Includes the following factors;
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Employment laws
Health and safety regulations
Discrimination laws
Anti-trust laws
Why is environmental scanning important to business?
• It helps with the identification of a number of broad factors and issues that will have a
significant impact on businesses and their plans for the future.
• Aids in anticipating changes
• Answers the question, “Where are we now?”
• Provides a starting point for businesses’ planning of goals, objectives, and
actions that answer the question, “Where do we want to be?”
Environmental Scanning tools
The SWOT analysis will be used to assess your macro environment and your internal
environment. Thus, you will able to identify the strengths and weaknesses which are found
within the organization; and opportunities and threats that are present in the external
environment. The Porter’s 5 forces model is a tool used to assess your micro or competitive
environment.
SWOT Analysis
• Is a useful technique for understanding your Strengths and Weaknesses, and for
identifying both the Opportunities open to you and the Threats you face.
• The SWOT Analysis is sometimes called Internal-External Analysis
• Helps you to craft a strategy that distinguishes you from your competitors
• When carrying out your SWOT Analysis, be realistic and rigorous.
ACTIVITY
Activity 1:
Identify a new business concept that is related to your field of discipline and suitable in the
current situation (pandemic, new normal) we are into. Conduct a SWOT analysis for this
business idea. For the strength and weaknesses of this business, you consider your strength
and weaknesses related to this business idea.
Strengths Weaknesses
(factors internal to you that are favorable (factors internal to you that serve as
to the identified business idea; what you weakness of the business idea; what you
have) don’t have, but are necessary for the
business idea in mind)
Opportunities Threats
(happening in the external environment (happening in the external environment
that makes the idea favorable) that brings negative impact to the business
idea)
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Unit 2: Opportunity Identification and Evaluation
Topics here will introduce you to the generation of business opportunities from scanning the
environment and then screening these ideas generated to be able to select the idea that
can be turned into business ideas.
Learning outcomes:
The topics in Unit 2 will enable you to:
1. Understand the relations of opportunity identification and evaluation in the area of your
specialization.
2. Understand the role of opportunity seeking competency and opportunity recognizing
mindset in business ideation
3. Use the approaches in identifying business opportunities
Key factors that will influence your business ideation process are your opportunity
seeking competency and opportunity recognizing mindset. With these competency and
mind, you can easily recognize opportunities around you. Hence, the need to acquire
them. As a future Information Technologist, Hospitality or Tourism Manager or Marketing
Manager, you can easily recognize employment and project opportunities.
Looking back at the personal entrepreneurial competencies, opportunity-seeking
competency drives you to:
• look for things that you need to be done.
• do things that need to be done before being asked by others.
• like challenges and new opportunities.
• prefer activities that you know well and with which you are comfortable.
• try things that are very new and different from what you have done before.
In addition, the opportunity-recognizing mindset drives you to:
• be curious and inquisitive
• be empathetic and sensitive to the beliefs, feelings, needs, and motivations of other
people
• be sensitive to problems and desires to solve them
• be sensitive to available, yet idle, resources
Difference between a Business Opportunity and a Business Idea
• A business opportunity is a favorable set of internal or external circumstances that
creates a need for a new business. It usually presents itself as a gap to be filled: a need
to be satisfied or a problem to be solved.
• A business idea is a thought, impression, or notion of a business venture that could fill
the gap; that is, satisfy a perceived need or solve a perceived problem.
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“Great ideas are everywhere, hiding in plain sight. You just need to know where to
find them and mine them!” Stephen Key
OPPORTUNITY IDENTIFICATION
Internal Environment- scanning your internal environment to search for business ideas. As
the enterprise is not yet existing, the internal environment that you will scan will be yourself.
So, identify ideas from your passion, skills, talents and hobbies. Business ideas may sprout
within you.
External Environment. Identify business ideas through an analysis of the current situation in
the external environment. This is the primary reason why you internalize the different
business environment. Approaches to business opportunity identification through study of
the external environment are:
1. Observing Trends: Trends create opportunities for entrepreneurs to pursue.
The most important trends are:
o Social forces.
o Technological advances.
o Economic forces.
o Political action and regulatory change.
It’s important to be aware of changes and trends in these areas. Examples of
business ideas from observation of trends are as follows:
Business Opportunity Business Idea
2. Solving Problems
• Sometimes, identifying opportunities simply involves noticing a problem and
finding a way to solve it.
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• These problems can be pinpointed by observing what’s lacking that causes
people to suffer or be inconvenienced; sometimes, this could be done
through more simple means, such as intuition, serendipity, or change.
Entrepreneur Year Problem Solution Business Name
Business Opportunity Business Idea
3. Finding Gaps
A gap in the marketplace often exists when a product or service is needed
by a specific group of people that doesn’t represent a large enough market to be
of interest to mainstream manufacturers, retailers or service providers.
For example, in 2000, Tish Cirovolv realized there were no guitars on the market
made specifically for women. To fill this gap, she started Daisy Rock Guitars, a company
that makes guitars just for women.
4. Maximize Use of Idle Resources
Abundant, available, untapped raw materials
Idle local skills
OPPORTUNITY EVALUATION
A critical element of opportunity recognition is assessing to what extent an opportunity is
viable in the marketplace. For an opportunity to be viable it must meet four criteria:
1. Attractive: There must be market demand for the product or service;
2. Achievable: It must be practical and physically possible;
3. Durable: It must be attractive long enough for the development and deployment
to be successful; and
4. Value-creating: It must add value to the market.
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ACTIVITY
Activity 2:
Observe the trend or the current situation in each of the elements of the general
environment. Then think of a new business idea suitable for that trend or current situation.
Example: Socio-cultural environment: people are health conscious, so a business idea is
organic restaurant.
Environment Current situation/trends Business ideas
Political
Legal
Economic
Socio-cultural
Technological
Environmental
Activity 3:
Using solving a problem approach, identify business ideas. Identify at least 3 problems
during this CoVid 19 crisis then think of a business idea that will solve the problem. Briefly
describe the problem as well as the business idea.
Problem Business idea
1.
2.
3.
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