BICOL COLLEGE INC.

Senior High School Department

Daraga, Albay

SELF LEARNING MODULE

IN
ENTREPRENEURSHIP

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

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

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
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.
7. Take time to Read Young Entrepreneur !

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

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.
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.
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
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.
 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.
 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.
 Low in caffeine
Pepsi Max
Coke Zero Coke
Pepsi

Diet Coke Male, 15-30 years

Female, 30-
Pepsi Light 50 years

Low in sugar High in sugar

30-50 years

5-15 years Fanta

30-50 years
7 up

Low in
caffein
e

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.
 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. Future parties with whom contracts may be necessary
4. Personal requirement
5. Administrative operation
VI. Practice Tasks

Practice Task 1
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?

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.

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:

 h

 ttps://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
 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. 9-14 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

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

nts the VGMO, the business model, the business and production positions, wealth improvement approaches, and the parti

Vision, Mission, Goals, and Objectives

 Business Model

Business and Product Position

ENVIRONMENTAL ANALYSIS
Wealth Improvement Approaches

This section presents the industry analysis covering the following

forces directly affecting theParties
proposed business:
Supporting the trend in the industry, the
the Business
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
 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
 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 Some There are There is 1 There are
is full of questions/tasks 2 or 3 error in the 0 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.
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.pd