APPLIED ECONOMICS REVIEWER

Common Tools and Techniques

SWOT ANALYSIS - The standard analysis tool, defined as Strength, Weakness, and
Opportunities and Threats.

STRENGTH - Are internal, positive attributes of your company. There are things that are within
your control.

WEAKNESS - are negative factors that detract from your strength. These are the things that you
might need to improve to be competitive.

OPPORTUNITIES - external factors in your business environment that are likely to contribute
to your success.

THREATS - external factors that you have no control over. You may have to consider putting in
place contingency plans for dealing with them if they occur?

PESTLE ANALYSIS - Political, Economic, Social, Technological, Legal, Environment.

POLITICAL FACTORS - determine the extent to which a government may influence the
economy of a certain industry,

ECONOMIC FACTORS - these are the determinants of an economy’s performance that

directly impacts a company and have resonating long term effects.

SOCIAL FACTORS - these factors filters the social environment of the market and gauge the
determinants like culture trends, demographic, population, and analysis.

TECHNOLOGICAL FACTORS - these factors pertain to innovation and in technology that

may affect the operations of the industry and the market favorably and unfavorably.

LEGAL FACTORS - these factors have both external and internal sides. There are certain laws
that affect the business environment in certain policies that companies maintain for themselves.

ENVIRONMENTAL FACTORS - includes all those that influence or are determined by the
surrounding environment.
VMOST ANALYSIS - (Vision, Mission, Objectives, Strategy, Tactics) - Also known as the
MOST ANALYSIS, is a framework evaluation technique for strategic planning in an
organization.

VISION - The set of ideas that describes what the future should look like is called vision.
(‘WII’ or ‘SHALL’)

MISSION - Once the vision has been created, mission statements are concise action of changes
to help the company accomplish its vision. Missions are action-oriented and contain specific,
feasible plans, often at a high level.

OBJECTIVES - After the mission has been established, goals are linked to them, in order to
help the user measure their success rate. Goals are checkpoints that let the user know whether an
individual mission statement has been completed or not.

The SMART acronym (specific, measurable, achievable, relevant, and time bound), is a
convenient tool to formulate realistic goals.

STRATEGY - To achieve one’s goals, a strategy must be linked to at least one mission
statement goal.

TACTICS - are actions that need to be completed in order to fulfill the strategy.

Type of Taxes

PERCENTAGE TAXES - imposed to sold

VALUE INCOME TAX (VAT) - consumption levied.
INCOME TAX - Government pay
Some Example of Business Opportunities

E-LEARNING - Referred to as online learning or electronic learning, is the acquisition of

knowledge that takes place through electronic technologies and media.

DROP SHOPPING - A business model primarily used by e-commerce retailers that do not
stock the inventory themselves.

ONLINE GAMING - is playing an electronic video game, which is often done on a dedicated
gaming console, PC, or smartphone.

PUBLIC RELATION CONSULTANT - An advisor who businesses and public figures rely on
to shape and improve their public image,

PRINT-ON-DEMANDS-SERVICES - Is where you work with a third party supplier and

customize white label products by adding your own design to them.

FREELANCE BUSINESS - An independent contractor who earns wages on a per-jobs or

per-task basis. Typically short-term work.

DIRECT SELLING - A mode of doing business where the seller sells its products directly to
the customers.

INFORMATION PROFESSIONAL - This is someone who deals with handling

(COLLECTS, RECORDS, ORGANIZES, STORES, PRESERVES, RETRIEVES, and
DISSEMINATES) printed or digital information.

TRIVIA
FOREVER LIVING PRODUCTS is the number 1 business opportunity in the world. Sells aloe
vera and bee-hive-based cosmetic and other personal products.

Socioeconomic Factors Affecting Business and Industry

SOCIOECONOMIC - field of the study that examines social and economic factors to better
understand how the combination of both influences something.
ECONOMIC FACTORS - are an essential part of all business analysis, these are the main
factors considered when a company makes financial decisions.

1. INTEREST RATE - are everywhere, and are imposed by many different people. In fact,
banking institutions are obsessed with knowing the status for interest rates in the
economy for a good reason.
2. EXCHANGE RATE - are important factors to consider for any business involved in
importation and exportation of various goods and services.
3. RECESSION - Is a significant decline/downfall in economic activity that lasts for
months or even years.
4. INFLATION - A rise in price, which can be translated as the decline of purchasing
power over time.
5. DEMAND AND SUPPLY
● DEMAND refers to how much of that product, item, commodity, or service
customers are willing and able to purchase at a particular price.
● SUPPLY refers to how much a certain product, item, commodity, or service
suppliers are willing to make available at a particular price.
PRICING - A lack of market demand will force you to lower prices in order to move products
off the shelves, while a lack of supply may cause prices to skyrocket.

COMPETITIVENESS - Supply and demand has a big impact on the competitiveness of a

company.

EXPANSION - An organization’s ability to expand is highly dependent on supply and demand.

Greater demand for a product or service gives the firm the opportunity to grow the business.

MARKETING - A good marketing campaign can make a customer aware of a product or

service and create a desire for it, causing demand to emerge out of nowhere.

SALARIES - Strong demand and supply to handle it will cause extra revenue to flow into a
company’s coffers, giving it more freedom to pay higher salaries in an attempt to attract top
talent.