PRACRES for Quiz#2 (ABM)

Module 3C: Analyzing Business Opportunities

PESTLE Analysis

PESTLE is a strategic model for analyzing six segments of the general environment:

  • Political: Tax policies, trade restrictions, tariffs, immigration policies, government stability.

  • Economic: Interest rates, inflation, GDP, unemployment, disposable income.

  • Social: Population size, age, ethnic mix, cultural trends, health and safety consciousness.

  • Technological: Product and service improvements, automation, new product development.

  • Legal: Employment laws, health and safety regulations, discrimination laws, antitrust laws.

  • Environmental: Climate change, natural disasters, pollution, weather patterns.

PORTER’S FIVE FORCES

A model introduced by Michael Porter to analyze industry competition:

  • New Entrants: Barriers to entry and impact on competition.

  • Substitutes: Availability of alternative products or services.

  • Rivalry: Number of competitors and their aggressiveness.

  • Suppliers: Supplier power in driving prices.

  • Consumers: Customer power in driving prices down.

McDonald's PESTLE and Porter’s Five Forces Analysis

  • PESTLE: Identifies opportunities and threats in political, economic, social, technological, legal, and environmental factors.

  • Porter's Five Forces: Analyzes the strong forces of rivalry, consumers, substitutes, and new entrants, with weak supplier power.

Module 4: Sustainable Development Goals (SDGs)

Seventeen SDGs aim to address global issues like poverty, inequality, and climate change by 2030, building on the Millennium Development Goals (MDGs). Key SDGs include:

  • No poverty

  • Zero hunger

  • Good health and well-being

  • Quality education

  • Gender equality

  • Clean water and sanitation

  • Affordable and clean energy

  • Decent work and economic growth

  • Reduced inequalities

  • Climate action

  • Life below water and on land

  • Peace, justice, and strong institutions

  • Partnerships for the goals

Business Model Canvas

A tool for designing business models, including elements such as:

  • Customer Segments: Different groups served.

  • Value Propositions: Solving customer problems and satisfying needs.

  • Channels: Communication, distribution, and sales methods.

  • Customer Relationships: Types of relationships with customer segments.

  • Revenue Streams: Cash generated from customer segments.

  • Key Resources: Essential assets for the business.

  • Key Activities: Critical activities for the business model.

  • Key Partnerships: Network of suppliers and partners.

  • Cost Structure: All costs to operate the business.

Social Business Model Canvas

Adapts the business model canvas for social enterprises, focusing on:

  • Mission: Social or environmental change goals.

  • Customer Relationships: Value creation for targeted customers.

  • Social Innovation: Effective solutions to social problems.

  • Value Proposition: Benefits to customers.

  • Channels: Effective communication and distribution methods.

  • Consumer Benefits: Emotional, social, and functional benefits.

  • Key Activities and Resources: Essential tasks and assets.

  • Key Allies: Important partners and supporters.

  • Cost of Delivery: Major cost elements and management.

  • Revenue Streams: Mix of income sources for sustainability.

  • Community Reinvestment: Surplus generation and reinvestment.

Feasibility Analysis

Determines the viability of a business idea, consisting of:

  • Product/Service Feasibility: Desirability and demand.

  • Industry/Target Market Feasibility: Industry and market appeal.

  • Organizational Feasibility: Management expertise and resources.

  • Financial Feasibility: Financial requirements and performance.

Module 5: Entrepreneurial Creativity and the Business Idea

Emphasizes creativity and innovation in a free market economy. Creativity is defined as generating useful new ideas and can be developed at personal, group, or contextual levels. Sources of new ideas include:

  • Consumers: Monitoring and soliciting feedback.

  • Existing Products: Analyzing and improving offerings.

  • Distribution Channels: Suggestions from channel members.

  • Government: Regulatory responses.

  • Research and Development: Formal and informal innovation efforts.

Methods of Generating New Ideas

  • Focus Groups: Discussions to generate ideas.

  • Brainstorming: Encouraging creative idea generation.

  • Brainwriting: Written idea generation within groups.

  • Problem Inventory Analysis: Identifying product problems.

  • Creative Problem Solving: Techniques to unlock creativity, such as reverse brainstorming, checklists, free association, and forced relationships.

Factors Influencing Creativity

  • Encouragement: Support for creative efforts.

  • Autonomy: Freedom to explore ideas.

  • Resources: Availability of necessary resources.

  • Pressures: Managing stress and expectations.

  • Mental Blocks: Overcoming barriers to creativity like over-management, competition, fear of criticism, stress, and limiting personal beliefs.