Applied Economics Senior High School - ABM

LECTURE NOTE

1. 1 st HALF 1 st QUARTER PERIOD

2. Applied Economics is the application of economic principles and theories to the present economic condition Applying economic theories to current economic conditions can be helpful in the following reasons : It enables the true picture of the situation to show. It helps determine the steps to be taken to improve the present economic condition. It helps to avoid the recurrence of a negative situation or at least minimize the effect.

3. Scarcity is one economic condition and an economic problem of every country, people and nation must choose how to use their available resources efficiently. Business Environment includes all internal and external factors that affect the company’s performance and functions.

4. Environmental scanning is a process used by organizations to monitor their external and internal environments to identify the opportunities and threats affecting the business. Environmental analysis is a strategic tool in assessing the level of threats or opportunities that might affect the business. This eventually helps the management team to make better decisions.

5. Internal Environment consists of factors that are controllable by the management that lies within the organization and any changes to them can affect the overall success of the business. External Environment . There are two elements in the external environment: micro and macro . These environmental factors are beyond the control of the business but they still minimize the impact if the business has an effective strategic plan

6. Micro Environment Factors Suppliers Resellers Customers Competition.

7. Macro Environment Factors Political factors. Economic factors Social Factors Technological Factors Environmental Factors Legal Factors

8. SWOT Analysis SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to evaluate a company's competitive position and to develop strategic planning. It assesses internal and external factors , as well as current and future potential (Grant, 2020). SWOT analysis is a technique for assessing the performance, competition, risk, and potential of a business, as well as part of a business such as a product line or division, an industry, or other entity.

9. Internal Factors: Strengths (S) and Weaknesses (W). financial resources physical resources human resources access to natural resources, trademarks, patents, and copyrights; and current processes Strengths describe what an organization excels at and what separates it from the competition Weaknesses stop an organization from performing at its optimum level where the business needs to improve.

10. External Factors: Opportunities (O) and Threats (T) . These are factors that affect a company, an organization, an individual, and those outside their control. economic trends market trends national and local laws and regulations; relationship with suppliers; and Competitive threats Opportunities refer to favorable external factors that could give an organization a competitive advantage Threats refer to factors that have the potential to harm an organization

11. PORTER’S FIVE FORCES ANALYSIS . Developed by Michael E. Porter of Harvard Business School. It is a framework or a guide for assessing and evaluating the competitive strength and position of a business organization. It identifies the five forces that determine the competitiveness and attractiveness of a market and which seek to locate the power in a business situation, its current competitive position, and the strength of a position that an organization may enter into. According to Porter, the origin of profitability is identical regardless of industry. In that light, the industry structure is what ultimately drives the competition and profitability and not on whether an industry produces a product or service, is emerging or mature, high-tech or low-tech, regulated or unregulated.

12. Competitive Rivalry examines how intense the competition currently is in the market, which is determined by the number of existing competitors and what each is capable of doing. Bargaining Power of Suppliers analyzes how much power a business’ suppliers have and how much control it has over the potential to raise its prices, which, in turn, would lower a business’s profitability. Bargaining Power of Buyers looks at the power of the consumer to affect pricing and quality. Threat of New Entrants examines how easy or difficult it is for the competition to join the marketplace in the industry being examined. Threat of Substitute Products or Services studies how easy it is for consumers to switch from a business’s product or service to that of a competitor.

13. KEY SUCCESS FACTORS (KSFs) or critical success factors as they are sometimes known are the resources, skills and attributes of the organisations in the industry that are essential to deliver success in the market place. As Daft, 2005 reveals, success often means profitability. KSF for organisations are common within industries and do not differentiate between companies. General wage levels in the country Government regulations and attitudes to worker redundancy, because high wage costs can be reduced by sacking employees. Trade union strength to fight labour force redundancies.

14. KSF do however differentiate between industries and that is why it is important to identify them for particular industries. KSFs can be used to assess the ‘health of the business’; the indicators of success or failure. By comparing the organisation’s KSFs with those of the main competitors, the business can identify possible relative strengths and weaknesses which may indicate areas for improvement.

15. Many organisations have already identified a few key success factors. Some of the main areas for KSFs are as follows : business performance quality product or service features marketing operational effectiveness technology and development people

16. 1 ST QUARTER PERIOD

17. ECONOMY’S PRODUCING SECTORS – AGRICULTURE, FISHERIES & MINING; INDUSTRIES; & SERVICE Primary sector   – extraction of raw materials – mining, fishing and agriculture. Secondary / manufacturing sector  – concerned with producing finished goods – manufacturing, construction and utilities. Service / tertiary sector  – concerned with offering intangible goods and services to consumers – retail, tourism, banking, entertainment and  I.T. services. Quaternary sector  (knowledge economy, education, research and development)

18. PERFORMANCE OF PHIL AGRICULTURE IN 2020. Increases in production were noted for crops and fisheries during the period. However, livestock and poultry posted reductions in outputs. The National Year of the Rice is part of the Philippine government’s bid to achieve rice-self-efficiency beginning 2013. It is an advocacy campaign which aims to promote responsible rice consumption for better health and less rice wastage and productive farming through the promotion of efficient rice technologies and inspiring to do better

19. Strengths, Weaknesses, Opportunities of and Threats in Philippine Agriculture Strengths Availability of expertise in agricultural research and development Basic institutions in research are in place Endowed with natural resources Availability of agricultural technologies to boost productio n

20. Strengths, Weaknesses, Opportunities of and Threats in Philippine Agriculture Weaknesses Physical – Climate, Soil Biological – Pest, Nutrient deficiencies and toxicities, Suitable varieties Socio-economic – Low farm input, Small land holdings, Decreasing interest in agriculture, Inadequate support and extension services for optimum production, Inadequate incentives and support for more efficient production, Inadequate farm to market roads, Marketing problems

21. Strengths, Weaknesses, Opportunities of and Threats in Philippine Agriculture Opportunities Drivers of agro-environment for a diverse cropping system Wide range of soils and climate to grow different crops Whole year round growing period Threats Population growth Globalization Weak governance Deteriorating natural resources endowments

22. INTERNATIONAL TRADE. The exchange of goods and services between countries which allows countries to expand their business in the global arena. A product that is sold to the global market is called export , and a product that is bought from the global market is called import . Imports and exports are accounted for in the country's current account in the balance of payments .

23. Comparative advantage refers to the ability of the economy to produce goods and services at a lower opportunity cost compared to trade partners that gives a company the ability to sell goods and services at a lower price than its competitors and realize stronger sales margins. Law of comparative advantage . Global trade allows rich countries to use their resources, whether labor , technology, or capital, more efficiently. Since countries are endowed with different assets and resources, some countries may produce the same goods more efficiently and therefore sell it cheaper than other countries. If a country cannot efficiently produce a good, it can obtain it by trading with another country that can produce more, this is known as specialization in international trade.