Applied Economics: Industry and Environmental Analysis

Module Overview

• This module focuses on Applied Economics, specifically Chapter III: Industry and Environmental Analysis: Business Opportunities Identification.
• The module aims for Grade 12 Accountancy, Business, and Management (ABM) students to identify and explain principles, tools, and techniques for creating a business.
• Emphasis is placed on distinguishing different services/products across various businesses and industries at a local level.
• The module is structured into 3 lessons that cover core content standards related to industry analysis and its tools, leading to business opportunity identification.
• Success in this subject is demonstrated through the ability to apply tools like SWOT/TOWS analysis and to survey macro and micro environments affecting local businesses.

Module Structure

• Introduction and Motivation: Highlights key concepts and essential questions and connects learning to real-life through examples and activities.
• Lesson Proper: Offers demonstrations, lectures, and step-by-step solutions to problems, applying theory to real-life situations.
• Practice and Assessment: Includes worked-out examples, various difficulty questions, hands-on activities, formative assessments, and diverse written assignments.
• Enrichment and Summary: Provides additional examples, generalizations, reflection questions and encourages higher-order thinking.
• References: Each lesson includes references and definitions of key terms.
• Pre-tests should be taken before each lesson. If the test result is 99-100% correct, you may proceed to the next lesson. If not, you must review the content of the lesson again.

Competition

• Competition involves striving for superior results within a specific field, business, sport, or social activity environment.
• The goal of competition is often to win limited resources, prizes, or awards, abiding by agreed-upon rules.
• It can be a rivalry where parties fight to dominate a market or win first place, which relies on demand for a reward or resource.
• Excellence comes into play when competing with oneself, which becomes more about personal improvement than beating others.
• Key principle is giving your very best effort in every situation, regardless of external rewards or recognition

Tools of Competition

• Comparing a business to competitors helps assess market position, customer base growth, and market share.
• Positioning involves defining branding and presentation in the market relative to competitors, highlighting strengths and informing development.
• Comparing advertising campaigns, discounts, and special offers helps understand what competitors are offering and what works for them.
• Analyzing a competitor's website: user-friendliness, number of pages, content, etc.
• SEO: Analyzing website performance provides a better view of your market share.
• Social Media: Examines buttons, competition etc.
• Blogging: Reviews website traffic based on blogging.

Techniques of Competition

• Creating utility and usefulness with products is a key marketing technique to outperform competitors.
• Modifying prices to make goods and services more affordable can tap into new markets and increase market share.
• Emphasizing a product's key benefit addresses customer needs and reduces fear, driving purchasing decisions.
• Delivering true value involves working closely with customers to tailor product or service offerings to their specific needs.

Understanding Customers

• A core principle of understanding customers is adaptability for continuous improvement as guided by core principles.
• Speed and responsiveness: key determinants of service quality, influencing customer satisfaction or dissatisfaction.
• Accuracy in service answers is a foundational expectation; inaccuracies lead to customer dissatisfaction.
• Transparency: keeps customers informed and feeling secure
• Accessibility: make it easy for a customer to get in touch
• Self Service: some customers prefer to structure well with self service options
• Transparency: keeping the customer informed at all times
• Friendliness: helps to improve relationships
• Efficiency: best service and profits

Tools of Customers

• Online communities: allow customer engagement, feedback, and brand passion sharing, enhancing customer-brand interaction.
• Forums: collect and respond to customer feedback and resolve issues, fostering community and allowing insight to customer solutions.
• Social media: businesses must maintain an active presence and engage with customers.
• Automatic callback option: users can enter their phone number to avoid unpleasant period of time
• Live Chat option fosters a more online experience for customers
• Customer satisfaction surveys provide valuable details on brand success.

Customer Techniques

• Engage in active listening, understanding the customer's needs, and showing a willingness to help.
• Highlight understanding by using active listening techniques and asking relevant questions to show effort.
• Being polite and respectful creates a positive environment for the customers.
• Call the customer by their name to ensure they feel important
• Taking initiative to go above and beyond expectations so that the customer feels valued
• Ask instead of demand to make a better conversation
• Empower customers with enough information to make an informative decision.
• Take Proactive steps to satisfy customer's needs
• Highlight pros and cons to ensure trust with the best recommendations

Managing Suppliers

• A strong relations with suppliers is a key part of business success
• Suppliers offer raw goods to produce goods and services.

Principles of suppliers

• Build a relationships with industry sales representatives
• Monitor financial position of your supplies
• The supplier respects labour rights and working conditions
• The supplier takes a precautionary approach to environmental and climate challenges.
• The supplier recognises data protection and freedom of expression.

Supplier Techniques

• Regular communicaton
• Communicating all objectives for the company to manage relationships better.

Analyzing Competitors

• Understanding a competitor's strengths and weaknesses is fundamental to business strategy.
• Online activity has caused competitor analysis, methods, metrics and tools to grow.

Tools of Competitor's:

• Using Similar Web as a traffic estimation
• Monitor the competition's Twitter followers to analyse an audience.
• Use BuiltWith to assess website technologies
• Simply Measured compares facebook pages with rival.

Types of Industries

• Industry is defined as the production part of a business
• Activities related to the manufacturing of products

Agribusiness industry

• Encompasses enterprises that take place inside and outside that takes place the farm gate
• Some examples: Deere & Company; Monsanto Company or Dow AgroSciences LLC.

Manufacturing Industry

• Refers to those industries which involves the manufacturing and processing of items
• Account for a significant share of industrial sectors in developed countries

Retail Industry

• The sale of goods in a large quantity to consume
• Types include E-tailers malls; sper markets; and mom and pop general industries.
• Categories include hadlines; good and consumables; food and art.

Service Industry

• Produces value through non-material entities such as support, advice and data
• An important component that produces more output relative to other industries such as manufacturing.
• Examples include, transportation, travel or information technology

International Trade Industry

• Exchanges and capital goods and services with borders territories
• A more complex process than domestic trade.
• Factors to consider: Government policies; markets; laws; and judicial system.

Business Opportunities

Business opportunities

• The sale or lease of the any product to help help a customer begin a business
• Technically franchises are an example of this
• Types include: Buying a franchise; network marketing licencing and filling a niche.

Selecting the Right Opportunity

• 6 steps:
  • Identify Your Business and Personal Goals
  • Research Your Favorite Industries
  • Identify Promising Industry Segments
  • Identify Problem Areas and Brainstorm Solutions
  • Compare Possible Solutions with Your Objectives and Opportunities in the Marketplace
  • Focus on the Most Promising

Idea Generation

• Generating good idea and opportunity must co-align for proper identification
• Entrepreneurs select products to pursue depending on past experience.

Generating product methods

• Must identify potential customer needs
• Observe emerging trends in demands
• Scope the product to determine an alternative
• Visit trade fairs and talk with industry representatives

Methods of generating ideas:

• Conduct focus groups
• Use brainstorming
• Use problem inventory analysis