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Applied Economic week 3
Introduction to Computing (CC201)
Guimaras State University
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GREEN VALLEY COLLEGE FOUNDATION, INC.
Km, Bo, Gensan Drive., Koronadal City South Cotabato
INSTRUCTIONAL MATERIALS
SCHOOL OF BUSINESS
Issue No: 01 Revision No: 00
Effectivity Date: June 4, 2020
Page No: Page 1 of 1
Subject Description: This course deals with the basic principles of applied economics, and its application to contemporary economic issues facing the Filipino entrepreneur such as prices of commodities, minimum wage, rent, and taxes. It covers an analysis of industries for identification of potential business opportunities. The main output of the course is the preparation of a socioeconomic impact study of a business venture.
Quarter 3: Industry and Environmental Analysis: Business Opportunities Identification
This module discusses the different principles, tools, and techniques used in business to identify commercial opportunities. It also discusses about the business industries operating in the Philippines. Moreover, this module will provide you with information on the nature and types of industry.
I certainly hope that you will be inspired learning the topic. You are also expected to study further on how these industries operated and how these can influence you to be in the business industries in the upcoming years.
Remember that having knowledge on different industries will give you more potentials to excel in the world of business. Read on and find out how you can identify the industries in your locality. This module has two lessons:
● LESSON 1- Industry and Environmental Analysis
● LESSON 2- Types of Industries
When you are done with this module, you are expected to; 1. Identify and explain different principles, tools and techniques in creatinga business. 2. Distinguish the different services/products of business and industry in the locality.
To achieve the objectives of this module, you have to do the following:
1. Read slowly and carefully. Do not proceed to the next page unless
you are done with the previous one.
2. Before you begin working on the activities, take the pretest in the “What I know
“section.
3. Remember of the skills that each activity is helping you develop.
4. When you are done in each activity, recheck your work to find out
the items that you have missed.
5. Work on the Post-test in the “Assessment” section.
6. After you complete in the “Assessment”section, be now ready
for a conference with your teacher. This is the moment when you should ask her/him about the difficulties, if there is any, and clarify your confusion.
7. At the end, you prepare all your outputs. You are expected to
pass them to your teacher. This is usually a learning portfolio, containing all your activitiesdone.
Good luck and enjoy while learning!
GREEN VALLEY COLLEGE FOUNDATION, INC.
Km, Bo, Gensan Drive., Koronadal City South Cotabato
INSTRUCTIONAL MATERIALS
SCHOOL OF BUSINESS
Issue No: 01 Revision No: 00
Effectivity Date: June 4, 2020
Page No: Page 1 of 1
Have you tried to budget your money in order to buy what you want to eat or consume in your daily living? Have you tried to run out of water while you were taking a bath? Have you tried to limit the number of kilos of rice that you will buy for your daily consumption? Have you tried to equally divide the food for your pets? If you have answered yes to at least one of these questions, then you must be facing the trauma of not being able to have enough of what youwanted. Try to look around you. You might also have noticed the rising prices of rice, gasoline, soft drinks and even vegetables, fruits and all other basic needs. The prices continue to increase while we are still struggling with how we should increase our incomes. These situations are common among all of us. Luckily, if you get to read and understand the contents of this module you will be able to understand your frustrations. As you go along the contents, you will learn about the nature of economics and how it is applied in our lives. Applied Economics will help you understand why the prices of the basic needs are increasing and it will help you become a better decision-maker. You will find out that many of the economic problems in our country can actually be solved with a careful study of economics.
Business Organization
There are four ways to form a business:
This is generally the simplest ways to set up a business. A sole proprietorship is owned by a single individual who is singly responsible for running the business and is accountable for all debts and obligations related to the business. Advantage of sole proprietorship is that the owner makes all the decisions like the location of the business, who to hire , what to sell and the owner is not bound to share the profits with anyone else. Disadvantage of sole proprietorship he shoulders all the losses andhas unlimited liability which means payment of his loans will extend to his personal assets. And when he dies, the business will be terminated
- Partnership
A partnership is an agreement in which two or more persons put together their resources in a business for the purpose of making profit. The profits to be earned will divided among the partners according to the terms of agreement. Advantage of partnership is that each owner can help with financing, start-up costs., shared knowledge and experience. Disadvantage of partnership is the equal sharing of profits they put in to start the business.
There are two types of partnership:
1 The general partnership. Is a business arrangement by which two or more
individuals agree to share in all assets, profits and financial and legal liabilities of the business.
1 The limited partnership is consisting of general partnership who manages the
business and has unlimited liability for the debts and obligations of thebusiness.
LESSON 1: Principles, Tools and Techniques
Learning Competency: Identify and explain different principles, tools, and techniques
in creating a business
GREEN VALLEY COLLEGE FOUNDATION, INC.
Km, Bo, Gensan Drive., Koronadal City South Cotabato
INSTRUCTIONAL MATERIALS
SCHOOL OF BUSINESS
Issue No: 01 Revision No: 00
Effectivity Date: June 4, 2020
Page No: Page 1 of 1
Strength
Tt
Weakness
S W
O T
Opportunity Threat
Analysis Template
STRENGTHS WEAKN
ESSES
Government incentives
Low Capital requirements
Market acceptance
Experienced leaders
Difficulty of organization
Costly set- up
Possible pollution problems
Lack of training of workers
Opportunities Threats Project may replace imported good
Will improve employee welfare
Improved company reputation
Entry of competitors
Tie consuming production processes
Opposition from residents in the
community
Porter’s Five Forces of Competitive Position Analysis
Supplier power. It is essential to evaluate how much power the supplier is capable to drive up prices. A supplier benefits this power if there are few supplier of an essential input and they therefore control the supply of that input. The more unique the product, the easier it is for the supplier to drive up price.
Buyer power. An evaluation of how easy it is for buyers to direct prices down. This is directed by the: number of customers in the market; worth of each buyer to the organisation; and cost to the interchange from one supplier to another. If a business has just a less of powerful buyers, they are usually able to dictate terms.
Competitive rivalry. The major driver is the number and competitor’s capability in the market. A lot of competitors, offering common products and services, will reduce market attractiveness.
Threat of substitution. Where common products available in a market, it improves the livelihood of customers switching to alternatives in response to price increases. This lessen both the power of suppliers and the attractiveness of the market.
Threat of new entry. Profitable markets attract new entrants, which destroy profitability. Unless current have strong and long lasting barriers to entry, for example capital requirements or government policies and regulations, then profitability will slow down to a competitive rate.
GREEN VALLEY COLLEGE FOUNDATION, INC.
Km, Bo, Gensan Drive., Koronadal City South Cotabato
INSTRUCTIONAL MATERIALS
SCHOOL OF BUSINESS
Issue No: 01 Revision No: 00
Effectivity Date: June 4, 2020
Page No: Page 1 of 1
Supplier Power- An evaluation of how easy it is for suppliers to drive up prices. a. Run by the suppliers of each input; unlikeness of their service or products; relative size and strength of the supplier; and cost of shifting from one supplier to another
Buyer Power- An evaluation of how easy it is for buyers to control prices down. a. regulated by the buyers in the market; relevance of each individual buyer to the organisation; and cost to the buyer of switching from one supplier to another, when a business has a few powerful buyers, they are usually able to dictate terms.
Number of Competitors- Number and capability of competitors in the market will also impact on the attractiveness of the market. a. If competitors are numerous and offer similar services and products, the market will be less attractive. b. Small capability of competitors to meet the market's current needs will serve as an attractive opportunity for the firm.
Possibility of Substitution- Buyers will switch to alternatives in case of price increases. a. The supplier will benefit less power to drive prices up and the market will be less attractive.
Possibility of New Entrants- Investors join the bandwagon when market is profitable and get a share of the profits. a. If new investors penetrate a market, the share of the participants in the market will be divided amongmore individuals and will therefore decline, thus, lessen profits.
But if a barrier to entry prevents new participants from entering the market, profits will be maintained among the existing participants.
INDUSTRY ANALYSIS
The following important factors are included in the industry analysis in preparing project feasibility studies, and business development.:
Competition- is the rivalry between sellers selling the similar products and services with the aim to win their customers, convince them to buy from you instead, and remain as loyal customers. .
- Who are the major businesses in the industry?
- Are there location close to your proposed business?
- How long they exist or still new entrants?
- What is the market share of these businesses?
Customers – is an individual or groups that purchases goods and services. The target market must be identified.
- To whom are you going to sell the products to?
- Who exactly will buy your products?
- What income groups?
- What age brackets?
- What gender?
- What career group?
- What type of people will you cater to, based on their preferences, lifestyles, and buying habits?
Suppliers – is an entity that supplies goods and services in the market.
- A business may need one or more suppliers.
- A business owners can buy directly from the manufacturers.
- A business owners may also consider buying from distributors.
- Another source of goods for business is through imports.
- It is important to maintain good relationships from one supplier to another.
GREEN VALLEY COLLEGE FOUNDATION, INC.
Km, Bo, Gensan Drive., Koronadal City South Cotabato
INSTRUCTIONAL MATERIALS
SCHOOL OF BUSINESS
Issue No: 01 Revision No: 00
Effectivity Date: June 4, 2020
Page No: Page 1 of 1
What are some business industries do we have in our country? In your locality? Can
you identify what types of industry are they? If you can’t, then, let me help you learn
about different services/products of business and industry in your locality. But before
that, please encircle the word/s in the box that you are familiar with.
The words in the box are some examples of the different types of industry and the products/services that they sell/offer. There are lots of industry classifications which are typically grouped into larger categories like the International Trade where we import and export products. Rice is one of the products where Philippines imports and exports from other countries.
Another sector in industry is the Agricultural Business. This business sector involves with farming and farming-related commercial activities like ranching, piggery and poultry. This business includes all the steps required to dispatch an agricultural products to market: production, processing and distribution. It is an essential component of the economy in countries with land that suitable for growing crops and agricultural products which can be traded abroad like rice, cocoa, banana and the like.
Another sector that can be classified in the business industry is the Service where it offers intangible products like financing services that being offer in the banks and other financing firms. Another example of a service business is the car wash where you can see in almost all places in the country. These service industries are also turning into larger component of economic output like the other industries such as agriculture and manufacturing.
Manufacturing refers to any industry that produces products from raw materials by the use of human labor or machinery and that is normally carried out orderly with division of work. Aside from huge manufacturing firms, we can also consider Bakeshops as one of the manufacturing industry where they make finished product like cakes and pastries.
LESSON 2: Types of Industry
Learning Competency: Distinguish the different services/products of business and
industry in the locality.
Rice Poultry
Rural Bank animal production
Toyota Cars Goldilocks
cocoa Palawan Pawnshop Ranching Financing firm
SM mall Car wash
GREEN VALLEY COLLEGE FOUNDATION, INC.
Km, Bo, Gensan Drive., Koronadal City South Cotabato
INSTRUCTIONAL MATERIALS
SCHOOL OF BUSINESS
Issue No: 01 Revision No: 00
Effectivity Date: June 4, 2020
Page No: Page 1 of 1
Activity 1. Think of some businesses that you can see in your locality. Write them down in the column where they belong.
AGRIBUSINESS SERVICE MANUFACTURING RETAIL
INTERNATIONAL
TRADE
LET US KNOW THE TYPES OF INDUSTRIES
There are five types of industries. These are;
1. AGRIBUSINESS
Agriculture has been defined as the science and art of producing livestock and cultivating plants and. The agricultural sector has been an important component of the Philippine economy. It has been a major source of employment to millions of Filipino workers and it contributed one third of the of the country’s Gross Domestic Product in 1970’s but it declined to 8% in 2016 of this,a number of initiatives have been implemented to enhance the sector’s productivity. One of these is the development of the production of food grains and crops like rice, banana, pineapple, coffee, camote, monggo, corn, coconut and calamansi. The development of fish and animal production have been implemented too. For animal production, there are two types that can be engaged to one is livestock and the other is poultry. These two are commonly engaged by the small entrepreneurs which provide livelihood that can provide income and employment opportunities to poor households.
2. RETAIL
Retail includes the sale of merchandise from a one point of purchase directly to a consumer who tends to utilize that product. The single purchase could be a brick- and-mortar retail store, a catalog, an internet shopping website, or even a mobile phone. The retail activity is at the last point of the chain. Manufacturers sell huge quantities of goods to retailers, and retailers tends to sell those same quantities of goods to customers.
3. SERVICE
A service industry is any industry that produces value that is primarily intangible such as advice, consultation, customer service, knowledge, management, data and experiences. Advanced economies are undergoing a long term shift whereby service industries are turning into a larger component of economic output similar to other industries such agriculture and manufacturing.
GREEN VALLEY COLLEGE FOUNDATION, INC.
Km, Bo, Gensan Drive., Koronadal City South Cotabato
INSTRUCTIONAL MATERIALS
SCHOOL OF BUSINESS
Issue No: 01 Revision No: 00
Effectivity Date: June 4, 2020
Page No: Page 1 of 1
What is an 'Export'? Exports are goods and services made in one country and sold to buyers in another. Exports are important to modern economies, because they provide opportunities to people and firms many channels of distribution for their goods. One of the major functions of diplomacy and foreign policy between countries is to improve economic trade, encouraging imports and exports for the advantage of all trading parties. It is a way o sending products to another country in return of payment. If you are on a plane and you bring 3 bags of chocolates from your country to another, it is not exporting. You are just taking goods with you.
Exporting is done on a huge scale. The opposite of it is importing,which was mentioned earlier, that means a country is receiving goods from another country. It is an essential part of an economy. It permits the residents of the country to produce employ people goods, , and earn money. The country that will receive, on the other hand, will benefit from the goods because they have a short supply of it. For example, there may be places abroad that have a high demand for rice. But since their locations are not ideal for planting, they have to ask another country to supply them with it.
The country that ordered the rice is the importer and the country that supplied it is the exporter.
Activity 2. Directions: Identify which type of industries are the following statements can be associated with. Write the letter that corresponds to your answer in the space provided for.
a. Agriculture
b. international trade
c. Manufacturing
d. Retail
e. Service
- My friend, Lorna, owns a boutique. She buys her stocks in bulk and sells it by piece.
- Anna works in a Spa and Beauty Salon in the city.
- San Miguel Corporation is the largest corporation in the Philippines in terms of revenue.
- Minda bakes cupcakes and sells them at a reasonable price.
- My parcel was delivered by LBC on time.
- Production of livestock and poultry are done mostly by poor households as backyard and livelihood ventures.
- The long coastlines of the Philippines are endowed with marine resourcesfor fisher folks to harness for fish production.
- The import of auto parts from Japan is considerable. 9 oil is one of the Philippines top export. 10 Eleven continues to boom year after year.
Quiz I- Direction: Written below are some of the businesses and industries that we can find in the Philippines. Write the product/s or service/s that they sell/offer.
BUSINESS/INDUSTRY PRODUCT/SERVICE
- Real estate Ex. Houses,buildings,land...
- Travel and Tourism
GREEN VALLEY COLLEGE FOUNDATION, INC.
Km, Bo, Gensan Drive., Koronadal City South Cotabato
INSTRUCTIONAL MATERIALS
SCHOOL OF BUSINESS
Issue No: 01 Revision No: 00
Effectivity Date: June 4, 2020
Page No: Page 1 of 1
- CD-R King
- Prince Hypermart
- San Miguel Food and Beverages Inc.
- Integrated Microelectronics Inc.
- Ana’s Breeders Farm Inc.
- Del Monte Fresh Produce Inc.
- Agua Amigo Trading Co.
- Rayne’s Textile Fabric
Quiz II - Direction: Identify the following of what type of industries that they
do belong to the figure before its number that corresponds to the correct
answer
Agriculture Manufacturing Service International Trade Retail
- Philippine Airlines 6. Furniture and Fixtures
- Gaizano Mall 7. Ford Cars
- Piggery 8. Western Union
- Crops 9. Fish production
- Iphone products 10. Ayala Mall
Quiz III. Having cited the importance of the different types of industries in the process of economic transformation, please identify some of the strengths, weakness, opportunities and threats of a retail business that you can see in your locality. Fill in the illustration below.
SWOT ANALYSIS OF (Business Name)
Strength Weaknesses
Opportunity Threats
Applied Economic week 3
Course: Introduction to Computing (CC201)
University: Guimaras State University
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