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MODULE 2
ENVIRONMENT AND MARKET
This module is intended for students who are currently enrolled in the different specialized subjects in
Technology Vocational and Livelihood Track (TVL)
INTRODUCTION:
Aspiring entrepreneur need to explore the economic, cultural, and social conditions prevailing in an area.
Needs and wants of the people in a certain area that are not met may be considered business opportunities. Identifying
the needs of the community, its resources, available raw materials, skills, and appropriate technology can help a new
entrepreneur seize business opportunities.
Directions: Write N if the example is pertaining your needs, write W if the example is pertaining your wants. Write
your answer in space provided.
Everyone has his or her own needs and wants. However, people have different concepts of needs and wants.
Needs in business are important things needed by an entrepreneur as an enterprising member of a community.
These include:
1. Basic commodities for consumption,
2. Clothing and other personal belongings,
3. Shelter, sanitation and health, and
4. Education and relaxation.
Basic needs are essential to every individual so one may be able to live with dignity and pride in the community.
Focusing on these needs can obviously help generate business ideas.
Wants are desires, luxury and extravagance that signify wealth and an expensive way of living. Wants or
desires are considered over and above the basic necessities of life. Some examples are fashion accessories: designer
shoes and clothes; travelling around the world; eating in an exclusive restaurant; watching movies, concerts, plays;
having luxurious cars; wearing expensive jewelry and perfume, living in impressive homes, and others.
Needs and wants of people are the basic indicators of the kind of business that you may engage into because
it can serve as the measure of your success.
Despite their basic differences, needs and wants have one thing common. They are both examples of overall
concept of demand which refers to the level of desire or need for a particular good or services. It will be helpful to
remember that a want becomes a demand when an increasing number of people acquire the purchasing power to buy
Product and Services that Satisfy the Needs and Wants of the Market
All businesses are established to meet a demand. A demand may either be a product or services that the
market is continuously seeking for. Because of the, one of the requirements of a successful business is to be able to
identify a demand without which there will hardly be anyone to buy the product or services he intends to offer
A demand may be a need or a want. It is also important to distinguish one from the other when deciding a
demand to offer the market. As we have discussed, a need is something that is necessary in one’s life while a want is
something that a person desires but can live without.
NEEDS WANTS
Medicines Anti- aging Cream
Transportation means Luxury Car
Clothes Signature Clothes
A. Directions: Answer the following statements. Write your answer in the space provided.
1. As an (field of specialization) students, assess your selves by using the following question
Am I interested in this field?
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Am I knowledgeable in this field? If so, where does my knowledge fall within the range 1 to 10.
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Have I worked or hand an exposure to a job or activity related to this field? If so, what type of work is
exposure was it and for how long?
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Am I willing to study and acquire work experience to be ready for a business related in my specialization?
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Environment and Market
-Technology Vocational and Livelihood Track-
2. Based on the result of the first activity, try to picture what particular specialize- related business you are going to
set up. Also, assess if that business will be viable or successful based on your observation of the needs of the people
in the community where you propose to establish it.
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3. Complete the table below based on the example given. This time, provide needs and wants that are related to
your field of specialization?
NEEDS WANTS
4. What is the importance of knowing the needs, wants as well as the demand of the people of your community?
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INTRODUCTION:
Before an entrepreneur engages in any form of business, he/ she first Product may refer to the
determines the form of business he/she must set up. A business firm can be goods as well as the services
classified according to the product or services it sells, or to the kind of its ownership
produced by a company.
under which it operates including the type of management.
When determining what type of business to engage in one must always
consider his/her aptitudes- his/her knowledge, skills, interests, and work experience- to be at an advantage with
regards to the business he/she is planning to establish. Being aware of these factors can play an important role in
determining what product line is best for an entrepreneur.
After determining whether to manufacture and sell products or services, an entrepreneur is now set to choose
what type of business according to ownership and management.
Production involves all the process and methods used in turning goods like raw materials into goods or
services. There are many factors that contribute to the production process. All these factors, however, can be summed
up into four major categories widely known as 4M’s of production.
Directions: Match the column A with column B. Column A is the statements pertains to column B. Write your answer
in the space provided.
Column A Column B
1. The set of related product sold by the company. A. Sole Proprietorship
2. It is a type of ownership wherein only one person owns and is
B. Manpower
responsible business.
3. This is a kind of business setup wherein two person combine
C. Subcontracting Industries
their resources and skills to establish a firm together
4. This type of business ownership usually involves more than
D. Products
two parties.
5. This is duly- registered association of persons with a common
interest who joined voluntarily to achieve a certain social or E. Money
economic goal.
6. The total manufacturing requires bigger capital to turn out
F. Corporation
products.
7. Life blood of the business G. Materials
8. Root of the business F. Service Industries
9. It refer to the goods as well as the services produced by a
H. Product Lines
company.
10. These are the supplies that may be used to produce or are
I. Cooperative
attached to an end product.
J. Process Industries
K. Partnership
1. Product Lines
The set of related product sold by the company is called product line. An individual or company may decide to
go into manufacture of a product. This product may be created in big volumes or mass produced, or it may be produced
for individuals or what is called specialized production. Electric appliances, canned goods and ready- to- wear- clothes
are examples of products sold to the mass market or the buying public. On the other hand, made- to- order- furniture
and instruments are included in the individualized production.
3. Service Industries
If you feel you excel in socializing with others and can easily convince people to your way of thinking you can
choose a service line for your business. These include car repair and maintenance and food retailing and catering
services. Self- improvement and recreation enterprises such as beauty parlors, dress and tailoring shops, bowling
alleys, billiard halls, badminton courts and theaters, bars are also considered service businesses.
The high technology computer- centered industry, which is widely in- demand nowadays, is a good example
of a service line. Call centers, internet café, computer hardware and software shops, and business solutions
programming companies fall under this form.
3. Process Industries
Total manufacturing requires bigger capital to turn out products. Funds must be allocated for expenses like
machinery, manpower work force, and raw materials. If an entrepreneur is not yet ready to invest a large amount of
money in manufacturing for whatever reasons, he/she can opt to perform only one or two of the entire manufacturing
processes.
A firm that engages in the process mentioned above is not strictly in the manufacturing business but rather a
“process enterprise”. The actual operations of such as business can be on the processing of raw materials like milling,
sawing, or cutting, and final operations like finishing, assembly, packing or design touches.
4. Subcontracting Industries
Big companies sometimes “subcontract” the manufacture of components, supplies, or other specialized
operations to smaller shops because the quantity to be produce is not cost effective for their high-capacity operations.
A starting entrepreneur who acts as a subcontractor is assured of a market for his products. There is however,
a flow to subcontracting. The firm may tend to rely on only one or two partner firms to stay in business and this will
not help in expansion and growth of the subcontracting firm.
1. Sole Proprietorship
Sole proprietorship is a type of ownership wherein only one person owns and its responsible for entire
business. Aside from being the proprietor, he can also be manager, the finance officer, and the worker of the business
rolled into one.
Advantage Disadvantage
2. Partnership
This is a kind of business setup wherein two persons combine their resources and skills to establish a firm
together. A partner may act as the financier in setup while another may serve as the manager, or they may share the
same responsibilities and roles in running the business.
Advantage Disadvantage
It is relatively easy to establish Decision making depends on the agreement
Check and balance is maintained by the two between the two owners.
owners Partnership and the entire business is always at
risk anytime a conflict between the owners
arise.
The business may not be as stable as a bigger
setup because of limited funding.
3. Corporation
This type of business ownership usually involves more than two parties. Commonly, this form is applied to
huge companies wherein the persons engaged in the firm are commonly called shareholders and their investments
are converted and referred to as stocks or shares.
Advantage Disadvantage
The risk and possible losses will not be There is a complicated setting-up process
accounted to a single person because it is shared because different, sometimes conflicting ideas
by all partners may arise.
The firm’s chances of growth are maximized Decision making is not easily carried out due to
because financial support is greater, and the opposing convictions of the shareholders.
business will be under various management
style.
4. Cooperative
This is a duly registered association of persons with a common interest who joined voluntarily to achieve a
certain social or economic goal. A cooperative is operated collectively as it is owned jointly by all its members or
workers who share all profits equally.
Advantage Disadvantage
It is less likely to be dissolved, there is limited Management skills are not individually shown
and shared liability because it is managed because there is a shared control of the business
collectively. operation.
It benefits more people and due to the extensive As in a corporation, decision making takes time
sources of financial support, the members can because the concerns and welfare of the
afford to employ professional manager for the majority is considered.
business.
This is the entire human resources of a business. Also known as labor force, manpower includes the
entrepreneur himself and the employees who share the common goal set by the organization. Each one is responsible
for either the management or the operation of the business. Labor can be classified as the physical and mental
contribution of an employee to the production process. Among 4M’s manpower can be considered as the root of the
business.
2. Money
Money can be considered as the “lifeblood” of the business. Commonly in the form of paper bills and coins,
money is anything of value that is generally debts, and for saving or restoring purchasing power for the business.
Profits and losses are usually measured in monetary terms which determine the economic status of a business
3. Materials
These are the supplies that may be used to produce or are attached to an end product. Materials, which
include raw and processed materials like cloths for making clothes or agricultural crops for food related ventures, are
mostly used up during the manufacturing process.
4. Machines
Machines are semi- or fully- automated devices that are used in processing the raw materials through various
methods like milling, cutting, assembling, sewing, cooking, or printing. The use of machines makes work more efficient
and lessens the physical burden on the workers’ part.
A. Directions: Answer the following statements. Write your answer in space provided.
1. In 4M’s of production, which M do you think is the most indispensable in a business operation? Explain your answer.
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2. Can a business operate if one 4M’s of production is not available? Defend your answer?
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B. Directions: Identify the following statements. Write your answer in the space provider before each number.
INTRODUCTION:
To be successful in any kind of business venture, potential entrepreneurs should look closely at the
environment and market. They should always be watchful of existing opportunities and constraints, and to take
calculated risks. The opportunities in the business environment are factors that provide possibilities for a business to
expand and make more profit. Constraints, on the other hand, are factors that limit business growth, hence reduce
the chance of generating profit. One of the best ways to evaluate opportunities and constraints is to conduct a
Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis.
SWOT Analysis is a managerial tool used to assess the environment. It is used to gather important information
which is then used in strategic planning. Strengths and weaknesses are internal in an organization. They relate to
resources owned by an organization that you have control over and also the extent of its marketing.
Opportunities and threats exist in the external environment. Opportunities relate to the market, new
technologies, and the external factors such as government policies, climate, and trends. Threats replace what the
competitors are doing. It also includes legal and other constraints.
Directions: Give the meaning of the following words. Write your answer in the space provided.
1. SWOT Analysis:
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2. Strength :
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3. Weakness:
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4. Opportunities:
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5. Threats:
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Before an entrepreneur fully engages in a certain business, he/she initially needs to determine whether the
venture is feasible and profitable. One process of confirming the competitiveness of the firm is the utilization of SWOT
analysis. It is a strategic planning method used to evaluate Strengths, Weaknesses, Opportunities and Threats involved
in an enterprise.
Based in a realistic point of view, it is more advisable to know the initial opportunities and threats for the
establishment of a certain business. Bear in mind that a need or a want determine what product or services is being
demanded.
Strengths Weaknesses
Characteristics of the business that gives it Characteristics that post disadvantage on
advantage and edge over the others in the same the part of the firm as compared to others.
industry.
Opportunities Threats
These are external chances that can yield These are the external factors that can
greater profits and sales for the business. subject the business to conflicts and possible
trouble
The process of analyzing the feasibility of the business is important because its result can be used as a
subsequent step in future planning. An entrepreneur will be guided to settle in either of the two outcomes- make
significant modification in the plans to make the business more viable, or drop the business idea completely.
This analysis can also be done through analysis of the internal (strengths and weakness) and external factors
(opportunities and threats). This can offer more detailed information which the entrepreneur may act upon.
Points Interpretation
POSITIVE results strongly mean the business is VIABLE
NEGATIVE results imply that the business NEEDS FURTHER STUDY AND MODIFICATIONS.
Be realistic about the strengths and weaknesses of your business when conducting SWOT Analysis.
SWOT Analysis should distinguish between where your business is today, and where it can be in the future.
SWOT Analysis should always be specific. Avoid any gray areas.
Always apply SWOT Analysis in relation to your competition, i.e. better than or worse than your
competition.
Keep your SWOT Analysis short and simple. Avoid complexity and over analysis.
SWOT Analysis is subjective.
Directions: List down all your observations for your business idea. Categorize your observations according to strengths,
weakness, opportunities and treats. After carefully listing them down, use the stated strategies to come up with a
sound analysis, activities and best business idea.
Strategies:
Analysis:
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Activities:
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My Business Idea:
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INTRODUCTION:
Before an enterprise, small or large scale, can formally start its operations, it should be first registered
in various government agencies for legalization. The complexity of the registration process depends on the form of
business. The bigger the business is, the more elaborate are the procedure.
1. For your own idea, what is the steps to be our business can have legalized?
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2. What are the government agency involve in legalization of our business?
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The following are the simplified outline of the registration process flow of a business whether it be sole
proprietorship, partnership, corporation, and cooperative.
STEP Procedure
Seek approval or clearance from the Barangay where the business will be situated
Step 1 as a way of paying courtesy, more so. It is a product that the community is well-
informed and is in favor of the establishment of your enterprise.
Secure Tax Identification Number (TIN) from the Bureau of Internal Revenue (BIR)
Step 2
District Office where the business will be situated
For Sole Proprietorship: Register with the Department of Trade and Industry (DTI)
for Business Name Certificate
Step 3
For Partnership: Register with the Securities and Exchange Commission (SEC)
For Cooperative: Register with the Cooperative Development Authority (CDA)
Apply for business and license to permit from the City/Municipality where the
Step 4
business will be put up.
Travel Agencies: Department of Tourism (DOT)
Step 5
Food/ Cosmetics/ Medicine Shops: Bureau of Foods and Drugs (BFAD)
Environment and Market
-Technology Vocational and Livelihood Track-
Pawnshop/Bank: Bangko Sentral ng Pilipinas (BSP)
Education
College: Commission on Higher Education (CHED)
High- School / Elementary: Department of Education (DepED)
Technical Education Centers: Technical Education and Skills Development Authority
(TESDA)
Register with the Bureau of Internal Revenue (BIR) District Office where the
Step 6
business be located for Authority to Print Invoice and Book of Journal
Register your business with the following offices for compliance to good employer-
employee relationships, incentives, and benefits, and social, community, and
environmental responsibilities.
Social Security System (SSS)
Step 7
Department of Labor and Employment (DOLE)
Department of Environment and Natural Resources (DENR)
PAG- IBIG
PhilHealth
Step 8 Start the Business
Exclusivity. One of the immediate advantage of registering a business with the local and national government is
safeguarding your business name. No else can register a business with that same name. This prevents others from
capitalizing on the reputation of an established company by using its name.
Professionalism. Registering a business gives the impression of professionalism. Companies and individuals tend to
take you more seriously. On the other hand, the lack of a formal business name could suggest that you don’t take your
own business enough to legitimize it.
Support for Institutions. Unlike an unregistered firm, a registered company has better chances of receiving support
from institutions of various nature. Government and private institutions prefer to give services, like industry- related
training, market exposure, and financial assistance to legal and properly registered business outfits.
Legal Liability Protection. Another benefit of registration is receiving some legal liability protection. In a corporation,
for example, you will not be held personally responsible for certain accidents and other liabilities. You may therefore
find it easier to get business insurance or att0ract0 investors since they will know you are not personally responsible
for the company’s well- being.
Directions: Answer the following statements. Write your answer in space provided
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