5 THINGS

to consider in creating a business

Competition &
Competitors
 Industry rivalry among companies of the same or
related industry is an inevitable part of the business
world of any business size. Intense competition leads
to reduced profit potential for companies in the same
industry. Businesses seek constantly competitive
advantages.
 COMPETATIVE ADVANTAGES

It is is what sets your business apart from your

competition. It highlights the benefits a customer
receives when they do business with you. It could be
your products, service, reputation, or even your
location.
 Different methods of competitive advantage which it can
be done and are classified into four categories:

1. Cost Leadership - an advantage occurs when business is able to offers same products at a
lower price.
2. Differentiation - Find a tributes that is important and set them apart from their competitors.
3. Defensive Strategies - used a defensive strategy to distance themselves from competitors.
4. Alliances – advantage of seeking strategic alliance with other within related or within
businesses.
Customers
 Individuals or companies who desires to possess or
make use of products and services. They play a huge
role in the success of your business. Customers like
wise can force down prices, demand higher quality or
more service, and play competitors off against each
other—all at the expense of industry profits.
Suppliers
Provide inputs that the firms in an industry need to create the goods and services that
they in turn sell to their buyers. Suppliers can exert bargaining power on participants
in an industry by raising prices or reducing the quality of purchased goods and
services.

A business may need one or more suppliers. It is important to develop suppliers who
are reliable in term s of quality of what they supply and their dependability in coming
up with the things you order from them. It is important to maintain good
relationships with one’s suppliers; they are the key to one’s continued
SUBSTITUTES
Goods/services that can be used in place for another. These goods may even if partly,
satisfy the same needs of a consumer such that the consumer may use one for instead
for another.
Substitute products or services limit the potential of an industry. (Margarine can be a
substitute for butter. Likewise Coke for Pepsi)
But not everybody will be wiling to switch brands because they have
developed a taste for a particular cola. This is why manufacturers try to differentiate
their products from their competitors so that the customers will develop product
loyalty from their brand.
 Types of
Industries
CLASSIFICATIONS OF
INDUSTRIES
 PRIMARY
Working with or extraction of raw
materials/natural resources

Mining activities, Fishing, Forestry and Agriculture

 SECONDARY
Making or converting raw materials into
usable products through processing and
manufacturing.
Car manufacturing & Bakeries
 TERTIARY
Service industries or providing essential
services and support to allow other levels of
industry to function.
Transportation, Finance, Utilities, Retail, Housing,
Banking, and other services
 QUATERNARY
Dramatic growth of this new sector. Working with
creation and transfer of information (ICT, media
sharing) including research and development. As well
as knowledge based services like consultation.
ICT industries, R & D industries (Synergy, Lexmark R & D,
STRAND)
 QUINARY
Control the industrial and government decision-making
processes includes industry executives and
management and bureaucrats and elected officials in
government.
Government Owned Controlled Corporation Executives
 In the Philippines, we use the Philippine Standard Industrial
Classification (PSIC). The PSIC is a detailed classification of
industries prevailing in the country according to the kind of
productive activities undertaken by establishments. The 2009 PSIC
was patterned after the UN International Standard Industrial
Classification (ISIC) Rev. 4, but with some modifications to reflect
national situation and requirements.
Major industries in the
Philippines
 Agribusiness
A business that earns most or all of its revenues from
agriculture. An agribusiness tends to be large scale
operations and deals with farming, processing and
manufacturing, packaging and distributing agricultural
products.
 Manufacturing
The process of converting raw materials, components, or
parts into finished goods that meet a customer’s
expectations or specifications. There are many laws and
regulations that govern the manufacturing industry. The
business will be require to conform to all the licensing
bodies may it be the government or the local authority’s
requirements.
 Some of the best small manufacturing businesses
that can be carried out at your residence are:
Furniture Making – make or create furniture such as lockers,
bookshelves, showcases, chairs, tables, etc.
Drinking Water Business - Business that sell drinking water package in a
plastic bottles or container.
Soap Manufacturing business - business that produce different soap
products.
Commercial Bread Making - bread making is easy and simple business
that can be done at home
 Retail and Services
Retail is the process of selling consumer goods or services to customers
through multiple channels of distribution to earn a profit and usually it’s
done directly to its final consumer. Retailing includes subordinated
services, such as delivery. The term “retailer” is also applied where a
service provider services the small orders of a large number of
individuals. Recently, online retailing, a type of electronic commerce
used for business – to – consumer (B2C) transactions and mail order, are
forms of non – shop retailing.
 Types of retailing products:
1.Food products – typically require cold storage facilities.
2.Hard goods or durable goods – these are automobiles, appliances, electronics,
furniture, sporting goods, lumber, etc., and parts for them. Goods that do not quickly
wear out and provide utility over time.
3.Soft goods or consumables – clothing, other fabrics, footwear, cosmetics, medicines
and stationery. Goods that are consumed after one use or have limited period (typically
under three years) in which you may use them.
4.Arts – Contemporary art galleries, Bookstores, Handicrafts, Musical instruments,
Gift shops, and supplies for them.
The typical service business provides intangible products, such
as accounting, banking, consulting, cleaning, landscaping,
education, insurance, treatment, and transportation services.
 International Trade
International trade is the exchange of capital, goods, and services across international
borders or territories, significant share of gross domestic product (GDP). While
international trade has been present throughout much of history its economic, social, and
political importance has been on the rise in recent countries. It is the presupposition of
international trade that a sufficient level of geopolitical peace and stability are prevailing in
order to allow for the peaceful exchange of trade and commerce to take place between
nations.
 International Trade
Trading globally gives consumers and countries the opportunity to be exposed to
new markets and products. Almost every kind of product can be found on
international market: food, clothes, spare parts, oil, jewelry, wine, stocks,
currencies, and water. Services are also traded: tourism, banking, consulting, and
transportation. A product that is sold to the global market is an export, and a
product that is bought from the global market is an import. Import and exports are
accounted for in a country’s current amount in the balance of payments.