LESSON Executive Summary,

Environment Analysis,
2
And Business DescriptioN
At the end of this lesson, the learners should be able
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.
1. EXECUTIVE SUMMARY
 Its point out the overall highlights of the business plan as well as a 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.
 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 all the introduction.
 It must be written in simple language that can 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 of the business plan once
they find the executive summary interesting, convincing, and worthy of further reading.
 There are no standard format as to its sections and contents, the executive summary must include the
following sections:
1. Vision, mission, goals, and objective of the business
2. Business model
3. Business and product position
4. Wealth improvement approaches
5. Parties supporting the business
Vision, Mission, Goals
 At the very outset, the business plan must depict the fundamental characteristics, nature, philosophical
values, identity and image of the business. This important concerns are embodied in the (VMGO) of the
business.
 (VGMO)-Must be clearly stated and easily understood.
 They must be reviewed and revisited at least three yrs. 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 activities Costumer Costumer

nertwork relationship segments
Officer
Key resources Distribution
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 dff.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, suppliers, and
internal human resources.
Business and Product Position
 It will help determine how the business defines its course and the process of accumulating wealth.
 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 direct relationship with the business are as follows:
1. Consumers
2. Creditors
3. Suppliers
4. Employees and staff
 It is important since the proposed business may conduct transactions with them later
 The executive summary must cover at least three pages but must not go beyond five pages
 Is either too short or too long may discourage the reader to continue reading.

2. ENVIRONMENTAL ANALYSIS
• A strategic tool that helps determine the external and internal factors affecting the performance of the business.
These factor may be political, economic, social, or technological in nature.
• May consist of at least 20 pages including the graphical representations, stables, and computations
• It is considered as the heart of the business plan.
• Since the business that you intend to open 9in 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 todays competitive business environment, an environmental analysis is ready a necessity. It is perceived as the
basic element for business survival. It may consist of global analysis, societal analysis, and industry analysis.
1. GLOBAL ANALYSIS

• 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 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
• Global trend simply acts as an indicator of any favorable sign for a business idea, however there is a direct
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 it is worth to
exploit the business idea or opportunity based on the global business trend.
2. SOCIETAL ANALYSIS
Dff. Variables affecting the societal environment
i. Political forces
ii. Economic forces
iii. Socioeconomic forces
iv. Technological forces
v. Ecological forces
vi. Legal forces
Societal analysis – must tell how the environmental forces affect the proposed new business and great their effect
are.

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

 Economic environment. The prevailing interest rate by given by most commercial and industrial banks
ranges between 10 and 12% and is expected to increase to 15% with in 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 business 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. According to National Economic
Development Authority & National Statistics Office

The disposable income of Filipino consumers has substantially increased which has been attributed
mainly to 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%
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.

3. Industry Analysis
Basically involves the three important related tasks as follows;
a. Conducting a critical evaluation of the forces in the industry that affect the proposed business
b. Evaluating the probable position of the business in the industry
c. Determining the most appropriate strategy that may adopted by the proposal business

Conducting a Critical Evaluation

• The most delicate, tedious, and difficult task in industry analysis.
• 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.
o Industry analysis in all instances must not fail to evaluate and described the target consumer and
competitors. Data and information on these two 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.
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.
o Industry analysis needs substantial work in the process of establishing the project demand and supply.
Demand and supply analysis, also called the consumer and competitor analysis,
-the back bone or the foundation of all other analysis
- there are no consumers or buyers of the product, the business will never be created .
-presence of the consumer 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

-deals with market share and growth
-may use perceptual map/positioning map to help them understand their position against their competitors in the
market. It shows how the costumer respond to their products and services.
This sample perceptual map shows comparison among competing products in the market, their attributes, and the age and
gender of their target consumers.

High in
Pepsi caffeine
max Coke
Coke
zero
Pepsi
Male, 15-
Diet coke
Female, 15- 30 years
30 years
Pepsi
light

High in caffeine High in sugar

30-50 years

5-15 years
Fanta
50+ years 7 Up

Low in
caffeine

Figure 6.2.2 Sample Perceptual Map (segmentation study guide)

Determining the most Appropriate Business Strategy
-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.
3. BUSINESS DESCRIPTION
-Presents the nature and form of the business to be undertaken, and may cover 2-3 pages.
-may be merchandising, service, manufacturing, or a hybrid. The description must include the innovative features of the
business. As to form it may either be sole proprietorship, partnership, or corporation.
The reason/s for the selection of the form must also be indicated.

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