Tools in Evaluating

a Business
Objectives:
1. Identify the principles and tools in creating a business.
2. Apply SWOT analysis as a tools in creating a business
opportunity.
3. Apply Porter’s five Forces of Competitive Position
Analysis can be Applied as a tool in evaluating a
business opportunity.
 THE SWOT ANALYSIS
SWOT, which stands for Strengths, Weakness, Opportunities,
and Threats is an analytical framework that can help a company
meet its challenges and identify newmarkers. The framework can
help identify the businesses risks and rewards. It is also ameans
of identifying the internal and external forces that may effects the
business. It is very helpful in assessing new ventures.
SWOT ANALYSIS
SWOT ANALYSIS
(Template)
 Strengths
• Government incentives
• Low capital requirements
• Market acceptance
• Experienced leaders
Opportunities
• Project may replace imported
• Will improve employee welfare
• Improved company reputation
Weaknesses
• Difficulty of organization
• Costly set-up
• Possible pollution problems
• Lack of training of workers
Threats
• Entry of competitors good
available in the market.
• Opposition from residents in
the community
 PORTER’S FIVE FORCES OF
COMPETITIVE POSITION ANALYSIS
• Another analytical tool that can be used to assess a
business is Porter’s Competitive Position Analysis. It was
developed in 1979 by Michael E. Porter of Harvard
Business School as a framework or a guide for assessing
and evaluating the competitive strength and position of a
business organization.
 Threat of new
entrants

Rivalry
Bargaining power among Bargaining power
of suppliers existing of buyers
competitors

Threat of substitute
products or services
 PORTER’S FIVE FORCES
• Supplier power. It is imported to assess how much power the
supplier has in his ability to drive up prices.
• Buyer power. If a supplier can enjoy the power to drive prices
up, it is also possible for a buyer to drive prices down.
• Number of competitors. The number and capability of
competitors in the market will also impact on the attractiveness
of the market.
• Possibility of substitution. When it is easy to substitute
products in a market, it is expected that buyers will switch to
alternatives in case of price increases.
• Possibility of new entrants. When investors see that a market
is profitable, they will desire to join the bandwagon and get a
share of the profits.
Thank you For
Listening