11 SENIOR HIGH SCHOOL

APPLIED ECONOMICS
Quarter 4 – Module 3
Business Principles, Tools, and Techniques
in Participating in Various Types of
Industries in the Locality

NegOr_Q4_AppliedEconomics11_Module3_v2
NegOr_Q4_AppliedEconomics11_Module3_v2
Applied Economics – Grade 11
Alternative Delivery Mode
Quarter 4 – Module 3: Business Principles, Tools, and Techniques in
Participating in Various Types of Industries in the Locality
Second Edition, 2021

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NegOr_Q4_AppliedEconomics11_Module3_v2
Introductory Message

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our dear learners, can continue your studies and learn while at
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I

This module was designed to provide you with fun and meaningful opportunities for
guided and independent learning at our own pace and time. You will be enabled to process
the contents of the learning resource while being an active learner.

The module is intended for you to apply business principles, tools, and techniques in
participating in various types of industries in the locality.

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I

Pretest
Directions: Identify which type of business industry is described in the picture by matching
column A with column B. Write the letter only.
COLUMN A COLUMN B

1.

A. Manufacturing industry

B. SWOT Analysis

C. Porter’s Five Forces

2.
D. Retail or Merchandising

E. Tourism

F. International trade
3.
(export & import)

G. Banking / financial institution

H. Agriculture industry

4.
I. TOWS analysis

5.

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COLUMN A COLUMN B

6.

J. BPO

K. Construction

7.

8.

9.

10.

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’s In

Identification:
Identify the tools and techniques in creating a business mentioned in the statements below.

Porter’s Five Forces PESTLE Analysis

TOWS Analysis SWOT Analysis

1. This stands for Strength, Weaknesses, Opportunities and Threats

2. It is a framework for analyzing competition in the industry and

understanding the forces that shape such competition.

3. It is an acronym for political, economic, social, technological, legal and

environmental, key external forces that may influence a business.

4. One of the tools and techniques which is essential in creating a business

that matches internal factors to external factors to help identify
relevant strategic options that an organization could pursue.

’s New

“TO BE A BUSINESS ENTREPRENEUR”

Pedro is aspiring to become a business entrepreneur. He recently graduated in senior

high school and he has the knowledge of the different principles, tools, and techniques for
business which has become one of his good qualities which can make him a good leader and
a good entrepreneur. But for him to become a successful entrepreneur he has to think of an
idea for a business that can make him profitable. To achieve this, he has to answer few
questions:
1. How can he think of an idea for a business?
2. Which principles, tools and techniques shall he use in order for him to think of a
better idea for a business that will become possibly profitable?

Those are the questions that need to be answered in this lesson for us to help Pedro to
become a successful entrepreneur. In this lesson, we will identify the types of industries in
the Philippines in which we are going to choose from which type of business are we going to
open for us to evaluate and assess the strategies, techniques and tools that we will have to use
to study the current market situation which is important to ensure profitability.

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is It

The Types of Industries in the Philippines

Agriculture
The Philippines has predominantly always been an agrarian economy. Being a
tropical country, the Philippines holds a massive agrarian land mass, extending to 9.7 million
hectares of fertile soil suitable for crops like rice, coconut, pineapple, mango, paddy,
sugarcane, corn, maize, cassava, coffee, tea, bamboo, banana, and cacao. Moreover, the
country also produces healthy poultry and livestock (Business Setup, n.d.).

These are examples of industries in the agricultural sector:

Figure 1. Poultry Figure 2. Aquaculture

(DA Communication Group, 2020) (DA Communication Group, 2020)

Figure 3. Crop Farming Figure 4. Livestock

(DA Communication Group, 2020) (BusinessDiary.ph, 2018)

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Manufacturing

This refers to the processing of raw materials (ex. Ore, wood, and foodstuff) into
finished products and into something more useful through the use of tools and process that
allows individuals and business to add value to the products, selling them at a higher price in
the market thus, marketing manufacturing a profitable endeavor.

Figure 5. Manufacturing Industry (Gonzales, 2020)

Retail or Merchandising

These consist of establishments that purchase products from other businesses or

manufacturers and sell them to customers. Merchandising companies usually have
merchandising inventories in their current assets account. They usually generate profit by
providing markup prices on their goods available for sale (Abrugar, 2011).

These examples of retailers and merchandising companies:

Figure 6. Sari-sari store (Perry, 2012)

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Figure 7. Grocery stores and Department stores (Hunter, n.d.)

Tourism

Tourism industry in the Philippines is very well known since our country has a very
rich biodiversity of tourist attraction. From beaches, heritage towns, monuments, mountains,
resorts, rainforest, island and diving spots. Since our country is endowed with rich natural
resources, the Philippines can promote more nature-based tourism. Tourism provides
significant economic benefits, particularly for small islands and provinces. Being an
archipelago, the Philippines relies heavily on tourism for its livelihood.

Figure 8. Tourism in the Philippines (Abrugar, 2016)

International Trade (Exports and Imports)

The exchange of products and services between countries is referred to as

international trade. It refers to the export and import of commodities and services in basic
terms. Products and services are sold out of the country, while goods and services are
imported into the country.
Since the Philippines is very rich in natural resources the country exports more
products, which also means more production, jobs and revenue are generated for the country.

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Figure 9. International Trade (Veem, n.d.)

Banking / Financial institutions

A financial institution (FI) is a company engaged in the business of dealing with

financial and monetary transactions such as deposits, loans, investments, and currency
exchange. Financial institutions encompass a broad range of business operations within the
financial services sector including banks, trust companies, insurance companies, brokerage
firms, and investment dealers (Hayes, 2021).

Figure 10. Banking / Financial institutions (David, 2018)

Outsourcing
Ever since the last decade, Business Process Outsourcing or BPOs have been one of the fast-
paced and rapidly expanding industries in the Philippines. BPOs have emerged as the top contributors
to the Filipino economy. The Information Technology and Business Process Association of the
Philippines (IBPAP) has forecasted that the BPO industry is bound to generate a revenue of 40 billion
USD, produce 7.6 million direct and indirect jobs within the sector, and account for 15% of the
aggregate global outsourcing market. Thus, making the BPO industry a flourishing sector to invest
into (Business Set up n.d.).

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Figure 11. Sample Outsourcing Industry (Interaksyon, 2017)

Construction

The Department of Trade and Industry (DTI) has recently stated that the Filipino Government
is opening up the construction industry to foreign investors with the idea that these investors can
potentially become local contractors by providing them construction permits. Thus, this is an ideal
time for foreign direct investors to invest in the construction sector. The PSA has reported a growth of
16.1% towards the end of 2018. Taking part in the infrastructural development of the country will
ensure its rise into becoming an infrastructure hotspot for Filipino engineers as well as foreign
investors (Business Set up, n.d.).

Applying Principles, Tools and Techniques in Creating a Business

There are many principles tools, techniques and strategies that can be applied in
creating a business. The challenge is selecting the best approach, tools and techniques to use
in a given business situation / problem or opportunity.
In this part of the lesson, we will be applying some principles tools, techniques and
strategies that are all essential in creating a business, particularly the VMOST analysis,
PESTLE / SWOT / TOWS analysis / Porters five forces. And here are some sample case
problems that will give us a simple detail of how we apply these principles, tools and
techniques.

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Case Analysis:

1. The owner of XYZ Mercantile is having a bad time in the market during this
pandemic since there are only a few people coming in the store lately. He suspected that
some factors might be because of the rise of the buying power of the consumers which enable
them to bargain more to the sellers. In which some of his competitors might have offered
discounts to their customers to gain more sales. What do you think is the best analysis to re-
evaluate the company’s status on the market over his competitors? Support your answer.

Answer: The best analysis to use in this situation is the TOWS and Porter’s Five
Forces. TOWS analysis can be very helpful to use especially when we are talking about a
business that is already standing and which needs to evaluate its currents status in the market
by identifying the current threats and opportunities the company might have to avoid
weaknesses. Porter’s Five Forces is also important since it will identify the bargaining power
of buyer and the supplier which is a big factor in the market and especially the threat of
substitutes as well.

2. Maria is planning to open up a food-stop shop near the bus stop. Since their house is
near the bus stop, she thought that it will be an advantage to open the shop since there are no
rental to pay since the shop she is planning to open is just an extension of the front of their
house. But she is a bit reluctant to this idea since there are already few shops in the locality
which would make them as her competitors. What do you think is the type of analysis best
suited to her situation?

Answer: The best analysis to use in this situation is the SWOT & TOWS analysis.
Considering the situation of Maria, SWOT analysis is best suited since we can lay down all
the strength and opportunities of her business idea and identify all of the weaknesses and
threats she might come across when she will start to operate. TOWS analysis might be very
helpful in her situations since in the statement a few strengths are already mentioned and few
threats as well. All he need is to apply the TOWS analysis in order for her to maximize all his
strength and to capitalize all of her opportunities since her location is favorable. And to
consider all of her internal strength which will help avoid the external threats.

3. Ivan is an IT graduate, who lately resigned from his work to open up a computer shop
which would cater computer servicing and selling of computer equipments, accessories and
computer set as well. He planned this idea since he was still a student in which his mission is
to cater the computer needs within their locality since there are no one yet to open a computer
shop in their rural area. He thought one of the problems that might arise from his plan is that
computer equipments and computer set are bit pricey and technologically the people in the
locality is not yet well exposed to these technologies. He wanted to make sure that this idea
of his is profitable enough. What do you think is the best analysis to prepare to help assess
the marketability of the of his plan?

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Answer: The best analysis to use in this situation is the VMOST, PESTLE, and
SWOT analysis. VMOST analysis will become very important in this situation since Ivan
needs to lay down his mission and vision first to align it to his main objectives. If his mission
is to cater the computer needs within their locality, he needs to make it where people can
afford financially. And to identify that, we also need the PESTLE analysis since this enables
us to identify the current economic status of the area if the people within their area can afford
to buy his products. SWOT analysis might be useful also in this situation since it is important
for us to identify the current strength and weaknesses and the future opportunities it might
have and its weaknesses that might be avoided.

There are many definitions, tools, and techniques that could be addressed in the
application for creating a business. The ones mentioned here are only the tip of the iceberg
for strategy analysis and become a foundational part of the strategy analysis toolkit. In a
short, there is no way to mention them all. But you could create a tool checklist that you
could use in your next planning and analysis engagement to help you and your team define
the present, future, risk and change state that you need to succeed (Lannon, R. n.d.).

’s More

Directions: Answer the following questions. Write your answers in your notebook.

A. List down 10 industries or business establishments found in the locality?

1. 6.
2. 7.
3. 8.
4. 9.
5. 10.

B. List down 5 industries or business establishments which need or should be

improved in the locality?
1.
2.
3.
4.
5.
.
C. Based on the list you have provided, as an economist which business establishment
should be deemed very important or should be prioritized in your locality? Support your
answer.
.

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I Have Learned

Now that we have finished our lesson, let us review the topics we have learned.
Provide what is being asked in each item and write your answer in your notebook.

1. What is the relevance of the types of business in applied economics?

2. Why do have to know the kinds of businesses present in a community?

3. What is the best tools and techniques to identify the current status of your product
within the market?

4. When do we use SWOT and TOWS analysis?

I Can Do

Case Analysis

Direction: Prepare either a VMOST, PESTLE / SWOT / TOWS analysis / Porter’s Five
Forces on the following situation given below. You can choose either 1 to 3 types of analysis
to help in your explanation. Explain thoroughly why you have chosen the tools you used and
support your answer.

Pedro is now planning to open up a business establishment concentrating on

aquaculture called the PASL (Pedro’s Aquaculture of Shrimp Livelihood). His
mission is to provide fresh shrimps for consumer consumption which can also
serve as a livelihood within the area where it is to be placed since he will hire
people to operate the farm and he will buy shrimp / prawns seeds to be cultured in
his farm in which the people within the area will provide. Pedro’s idea is good, but
he needs further study on the different aspects of the plan to evaluate the
advantages and disadvantages he might have in this business venture. What do you

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think is the type of analysis best suited to his situation that will help him produce
more positive advantages and avoid and minimize disadvantages?

The rubrics below will be used to identify your score for this performance task.
Level of General Approach Comprehension
Achievement
•Demonstrates an accurate and
•Addresses the problem. complete understanding of the
•States a relevant, justifiable problem.
Exemplary answer. •Backs conclusions with data and
(20 points) •Presents arguments in a warrants.
logical order. •Uses 2 or more ideas, examples
and/or arguments that support the
answer.
•Does not address the •Demonstrates accurate but only
question explicitly, although adequate understanding of
Adequate does so tangentially. question because does not back
(15 points) •States a relevant and conclusions with warrants and
justifiable answer. data.
•Presents arguments in a •Uses only one idea to support the
logical order. answer.
•Less thorough than above.
•Does not address the •Does not demonstrate accurate
Needs problem. understanding of the question.
Improvement •States no relevant answers. •Does not provide evidence to
(10 points) •Indicates misconceptions. support their answer to the
•Is not clearly or logically problem.
organized.

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I. MULTIPLE CHOICE. Identify what is asked in each item. Write the letter of the correct
answer in your notebook.

1. It is an analysis which is a variant of the classic business tool, SWOT analysis which
matches
internal factors to help identify relevant strategic options that an organization could pursue.
A. PESTLE analysis C. VMOST
B. TOWS analysis D. Porter’s Five Forces
2. It is an essential tool in creating a business which generally aligns your mission, vision
objectives, strategies and your tactics that you will use in your business organization.
A. PESTLE analysis C. VMOST
B. TOWS analysis D. Porter’s Five Forces
3. This type of tools and techniques is used to identify the firm’s competitive advantage
through
its strengths, to fix its weaknesses, recognize opportunities for further growth, and possible
threats that the business may face.
A. SWOT analysis C. PESTLE analysis
B. TOWS analysis D. Porter’s Five Forces
4. This type of analysis used in creating a business focuses in the key external forces that may
influence a business.
A. SWOT analysis C. PESTLE analysis
B. TOWS analysis D. Porter’s Five Forces
5. TOWS analysis is a work of ?
A. Edmund P. Learned C. Kenneth Andrews
B. Roland Christensen D. Heinz Weihrich

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II. TRUE OR FALSE. Write TRUE if the statement is TRUE and write FALSE if the
statement is false. Write your answers in your notebook.

1. VMOST analysis is an essential analysis to align your strategies and your

opportunities with your mission, vision and objectives.
2. In a SWOT analysis, opportunities refer to the external factors that can become an
advantage or can be a big help for the growth of the business.
3. Porter’s Five Forces is one of the tools used to identify the strengths and
weaknesses of a business.
4. SWOT analysis can identify the buying power of the supplier and the consumers.
5. TOWS analysis is a tool that can identify the level of rivalry among the
competitors in the market.
6. VMOST is an essential tool to use for us to identify the economic technological
status of a certain area.
7. SWOT analysis is specifically used for planning.
8. One of the types of industries in the Philippines called the agriculture is one of the
most important industry since the country is rich in agricultural lands.
9. PESTLE analysis is essential tool to be used in the planning stage in creating a
business since it will give us an important datas about the political, economic and
social status of the locality where the business shall be located.
10. To help you identify an idea for business proposal we must be knowledgeable
first of the types of industry within your locality.

Reflection

Complete the following statements. Write your statements in your activity notebook/ answer
sheet.
1. As a student, I have learned… .
2. As a student, it is very important for us to learn… .
3. Using the knowledge I have learned in this lesson, I will be able to… .

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