APPLIED ECONOMICS

Quarter 2 – Week 1 & 2

Learning Activity Sheet
Name: __________________________ Grade & Section: _____________

Lesson 1: Analyze Different Principles, Tools and Techniques in Creating a Business

Business entities are important to country’s economic growth. It enables to create goods and
services, provide jobs for individuals to generate income and accumulate wealth and generate revenue
for the government which enables to provide basic social services. Moreover, it produces goods and
services that individuals need and wants.
Business to thrive and grow need to used tools and techniques to continuously exist thus best
practices and techniques need to be employed.

WHAT’s IN!
In the previous lesson, you have learned about the challenges and current problems of the
Filipino entrepreneurs face in the Philippines. Based on what you have learned, choose among the
images below two (2) current problems that Filipino entrepreneurs faced and write down 5 best practices
that can be used for the business to continuously operate and grow.

______________________ & _____________________

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What’s New
Principles, Tools, and Techniques in Creating a Business
To start a new business, an entrepreneurs needs to have a plan to start a business, as one of the best
practice entrepreneurs to identify needs of the community to start a business. Based on your inquiry
whether by interview or survey through print or online, now, I would like you to identify 5 major needs of
your community and rank them according to order of priority from 1 being the highest and 5 lowest and
describe business opportunities that can be created.
Activity 1. Fill the table below

Needs of the Community Business that can be created Rank

1.

2.

3.

4.

5.
What is It
 Principles, Tools, and Techniques in Creating a Business
In planning a business, a thorough study needs to be made from the creation of business. Understanding
how the business will operate and co-exists in the business world thus one needs to study principle, tools
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and techniques in creating business
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Principles in Creating a Business
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The principles of a business are the driving forces that make it successful. Below the ten key principles
Meeo
r to make a business a success:
no

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u 1. Scalability- A business must be scalable for it to be successful. Scalability is the capability of a
c company to sustain or improve its performance in terms of profitability or efficiency when its sales
e
volume increases.
2. Big Ideas- A business is no more effective than the idea upon which it is built. Business creates its
own plan to expand its economic growth.
3. Systems- A business is a system in which all parts contribute to the success or failure of the whole.
In this system, everything must work together from employee to president; from equipment to
resources.
4. Sustainability- A business must be dynamic- able to thrive through all economic conditions, in all
markets, providing meaningful highly differentiated results to all of its customers. Such differentiation
is the key to survival.
5.Growth- Growth is essential in business. Without continued growth, operations will stagnate.
This can result in lowered standards of quality for products or services, decreased customer service,
and poor employee morale.
6. Vision- A business must manifest the higher purpose upon which it was seeded, the vision it was
meant to exemplify, the mission it was intended to fulfil.
7. Purpose- A business is the fruit of a Higher Aim in the mind of the person who conceived it.
8. Autonomy- A business is not part of the owner's life, but is, in fact, its own entity.
9. Profitability- A business is an economic entity, driving an economic reality, creating an economic
certainty for the communities in which it thrives.
10. Standards- A business creates a standard against which all businesses are measured as either
successful, or not.

Tools in Evaluating a Business

It's the Holy Grail for small business owners – finding ways to make efficiency savings in all aspects of their
operations. The good news is there are plenty of tools, tips and techniques available to help them make cost
savings and boost productivity. Here are 10 of them.
1. Use technology to speed up workflow- Businesses should be looking to innovations in technology to
solve day-to-day inconveniences and to increasee efficiency.
2. Shorter meetings fuel efficiency- Hold a brief meeting standing up, every morning, where each person
explains what they are going to work on that day to ensure everyone is on the right track and not wasting
time on non-urgent tasks.
3. Smart office space pays- Office space can involve a big outlay for SMEs, but it is also an area where some
smarter thinking can make a real difference.
4. Advertisement- Advertising keeps your business top of mind so consumers think of it when they require
or need a service or product.
5. Small changes, big savings--One way of improving efficiency is for business owners to make small
changes to the way they handle their company's expenses.
6. Keep a firm grip on cash flow-"Cash is King not profit”. Ensure the right management of your inflow and
outflow of cash.
 7. Stay connected on the move- The growing trend towards mobile and flexible working means that employees
are permanently connected and on the go.
8. Use time more efficiently-Being more efficient is more about being than doing. It's probably 90% mindset,
(Allan, 2013). In addition, “The shorter the amount of time you allow yourself, the more you will get done”.
9. Get the best deal on insurance- Businesses need insurance because it helps cover the costs associated with
property damage and liability claims.
10. Don't be lax with the legal
In the hectic process of starting up a business, the founders often put off sorting out the legal matters until later,
or not at all.

Since business is a commercial activity and its main purpose is profit, in the book published by the
Development Academy of the Philippines, how to prepare project feasibility studies, it includes an industry
analysis of the following important factors.

COMPETITION AND COMPETITORS

Industry rivalry among companies of the same or related industry is an inevitable part of the business
world of any business size.Intense competition leads to reduced profit potential for companies in the
same industry. Businesses seek constantly competitive advantage.

Competitive Advantage
 is what sets your business apart from your competition.
 highlights the benefits a customer receives when they do business with you.
 It could be your products, service, reputation, or even your location.

Different methods of competitive advantage which it can be done and are classified into four
categories:

1.Cost Leadership-an advantage occurs when business is able to offers same products at a lower
c price.
2.Differentiation-Find attributes that is important and set them apart from their competitors.
3.Defensive Strategies-used a defensive strategy to distance themselves from competitors.

CUSTOMERS
Individuals or companies who desires to possess or make use of products and services.
They play a huge role in the success of your business. Customers likewise can force down
prices, demand higher quality or more service, and play competitors off against each other—
all at the expense of industry profits.

SUPPLIERS
Provide inputs that the firms in an industry need to create the goods and services that they in turn sell
to their buyers.Suppliers can exert bargaining power on participants in an industry by raising prices or
reducing the quality of purchased goods and services. 

A business may need one or more suppliers. It is important to develop suppliers who are reliable in
terms of quality of what they supply and their dependability in coming up with the things you order
from them. It is important to maintain good relationships with one’s suppliers; they are the key to
one’s continued access to goods and to raw materials that will be needed for the business.
 SUBSTITUTES
 Goods/services that can be used in place for another. These goods may, even if partly, satisfy
the same needs of a consumer such that the consumer may use one for instead for another.
 substitute products or services limit the potential of an industry.
 margarine can be a substitute for butter. Likewise Coke for Pepsi
 But not everybody will be willing to switch brands because they have developed a taste for a
particular cola. This is why manufacturers try to differentiate their products from their
competitors so that the customers will develop product loyalty from their brand.
.

What’s More
Activity 1.Modified True or False. Write True if statement is correct, write False if statement is incorrect
and underline the incorrect word and write the correct answer.
___________1. One of the strategies of suppliers is to provide discounts to clients who buy small quantities
of a specific good or service.
___________2. In business, competitors are a must to ensure quality products and services.
___________3. Affordable price means lesser market share.
___________4. Soya milk is an example of substitute product for fresh milk.
___________5. Low quality means high satisfaction to customers.
Activity 2: Read the story carefully. Analyze the business. Then answer the questions at the end of the
story.
Anne and Cherry are friends since high school. Anne is good in baking and Cherry is good
in selling. To increase their income, they decided to put up an online business of bakery products. They
contributed 10,000 each to start the business and decided to split the profit equally as business partners.
The friends agreed that Anne will be in charge of the production while Cherry will be in charge of the
online site for taking marketing and promotion. Cherry started taking orders while Anne is busy on
baking products. The business started to get big orders from their regular clients and other who visited
their online site. After one year of operation, while Cherry continue with her regular work Anne as in-
charge of the production, started getting sick and advised to rest. Now, Anne can no longer continue
baking for their business.
1. What went wrong with the business?
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2. Do you think Anne and Cherry were right in how they manage their business?
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3. Are they right in their decision of equal sharing of profit? Explain your answer.
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 Rubric:10 points- comprehensive and analytical 8-9 points- well written and some includes analysis; 5-7
points-well written but lacks analysis; 2-4 points- weak essay; 1 point Poorly written and lack strength

Activity 3. Now, I want you to think of a product/service business that is needed in your locality. List down
your competitors, competitive advantage customers and suppliers. Use the figure below.(10pts)

PRODUCT

What I Can Do
Essay.As a student of economics, what business can you recommends in this pandemic crisis Covid 2019
and why?
.(Rubric:10 points- comprehensive and analytical 8-9 points- well written and some includes analysis; 5-7
points-well written but lacks analysis; 2-4 points- weak essay; 1 point Poorly written and lack strength)
Write your essay in a short bond paper.

Assessment: Choose the letter of the best answer. Write the answer on the space
provided.

______1. These are individuals/group of individuals who buy goods and services for personal and
business use.
a. Consumer c. Government
b. Creditors d. Suppliers
______2.The capability of a company to produce or increase output when resources are added is called ___
a. Autonomy c. Profitability
b. Durability d. Scalability
______3.Business is a legal entity that is separate and distinct from owner.
a. Autonomy c. Profitability
b. Durability d. Scalability
______4.Ford and Toyota sells the same products; it evident that there is a ____________ .
a. Competition c. Alliance
b. Distribution d. Threats
______5.Competitive advantages can also be gained by business that seeks association or cooperation with
other business:
a. Alliance c. Defensive strategy
b. Cost leadership d. Differentiation
______6. Individual or firms who desire products and services in the market for consumption or business.
a. Consumers c. Government
b. Creditors d. Supplier
______7. Which does not belong to the group?
a. Colgate c. Close-Up
b. Head and Shoulders d. Hapee
______8. A strategy that businesses use to distinguish themselves apart from their competitors.
 a. Differentiation c. Defensive Strategy
b. Alliance d. Cost Leadership
______9. This method occurs when a business is able to offer the same quality product as its competitors
and sell it at a lower price.
a. Differentiation c. Defensive Strategy
b. Alliance d. Cost Leadership
______10. The advantage gained by this type of strategy is that it allows the business to further distance
itself by using defensive method.
a. Defensive strategy c. Diffrerentiation
b. Alliance d. Cost Leadership
______11. An economic activity that is engage in buying and selling of goods and services in exchange of
money.
a. Business c. Trade
b. Commerce d. Partnership
______12. Business ability to use its resources to produce profit.
a. autonomy c. profitability
b. big idea d. scalability
______13. These are alternative goods that can easily replace by other products either perfectly or in part.
a. brand c. original
b. clone d. substitutes
______14. Printed and online promotion is needed in starting your business.
a. advertising c. profitability
b. big ideas d. scalability
______15. Entrepreneurs think big and make this idea into a reality for the success of their business.
a. autonomy c. profitability
b. big idea d. scalability

Additional Activities
Think Big. In the recent ECQ, many businesses suffer a loss due to lockdown. In at least five (5) sentences,
what solutions can you suggest to make their businesses thrive?
(Rubric: 5 points- comprehensive and analytical 4 points- well written and some includes analysis; 3
points-well written but lacks analysis; 2points- weak essay; 1 point- poorly written and lack strength)

Prepared by: Noted by:

CLARISE D. LAUREL MYLA V. COMBALICER, EdD

Subject Teacher Principal II