PRINCIPLES, TOOLS AND

TECHNIQUES IN
CREATING A BUSINESS
ACTIVITY 1: THIS ME
As grade 12 students evaluate yourself identify your strengths
Weaknesses, the opportunities and threats that will come your way
STRENGTHS WEAKNESSES
Ex. good in oral communication Ex. Can’t memorize long statement in a short period

OPPORTUNITIES THREATS
Ex. Attended trainings Ex. Lack of Financial support
FROM A LEGAL POINT OF VIEW, THERE
ARE FOUR WAYS TO FORM A BUSINESS:
• 1. Sole Proprietorship
• - this is generally the simplest way to set up a business. It is by a single
individual who is singly responsible for running the business and is accountable
for all debts and obligations related to the business.
FROM A LEGAL POINT OF VIEW, THERE
ARE FOUR WAYS TO FORM A BUSINESS:
• 2. Partnership- is an agreement in which two or more persons combine their
resources in a business to make a profit. A partnership agreement is drawn up
and profits are divided among the partners according to the terms of the
agreement.
• There are two types of partnership:
• a. General Partnership-partners divides responsibility for management and
liability.
• b. Limited Partnership- other partners are limited and contribute only capital,
take no part in control or management and are liable for debts to a specific
extent only.
FROM A LEGAL POINT OF VIEW, THERE
ARE FOUR WAYS TO FORM A BUSINESS:
• 3. Corporation- is a legal entity that is separate from its owners, the
shareholders. No shareholder is personally liable for the debts, obligations, or
acts of the corporation. Directors and officers can bear liability for their
involvement with the corporation.
• 4. Cooperative- is an entity organized by people with similar needs and is
operated for their mutual benefit.
MICRO, SMALL, MEDIUM AND
LARGE SCALE BUSINESSES
• a. Micro- total assets are worth below Php 1, 500, 001
• b. Small- total assets are worth from Php 1, 500, 001 to Php 15, 000,
000
• c. Medium- total assets are worth from Php 15, 000, 001 to Php 60,
000, 000
• d. Large- total assets are worth Php 60, 000, 001 and above
TOOLS IN EVALUATING A
BUSINESS
• Size and outlook of the industry
• Is particularly useful in understanding the current and expected
trends in the environment that your industry operates in. these are
your costumer , competing and suppliers’ industries
TOOLS IN EVALUATING A
BUSINESS
• Geographic area
• Geographic Segmentation is when a business divides its market on
the basis of geography. You can geographically segment a market by
area such us cities, countries regions. You can also break a market
down into rural ,suburban urban areas
TOOLS IN EVALUATING A
BUSINESS
• Description of the product
• A product description is the marketing copy that explains what a
product is and why its worth purchasing. The purpose of a product
description is to supply cutomers with important information about
the features and benefits of the product so they’re compeeled to buy
TOOLS IN EVALUATING A
BUSINESS
• Identification of buyers (target market)
TOOLS IN EVALUATING A
BUSINESS
• Regulatory environment
TOOLS IN EVALUATING A
BUSINESS
• Knowing the competition
• The fighting around abilities and skills often takes place as a somehow organized contest
with rules that are agreed upon to be followed in order to accurately measure the results.
Other competitions are based on rivalry — two parties are fighting to dominate a market
• Comparing your business to competitors is a great way of seeing where you are in the
market. For example, who is your biggest competition? Is their customer base growing faster
than yours? Do they have the majority of the market? How does your market share compare?
THE SWOT ANALYSIS
• A SWOT Analysis is an analytical framework used to determine and define
your Strengths, Weaknesses, Opportunities and Threats (SWOT). The
framework can help a company meet its challenges, identify new markets, and
identify the business’s risks and rewards. It is also a means of identifying the
internal and external forces that may affect the business.
PORTER’S FIVE FORCES
ANALYSIS
• Porter’s Five Forces analysis is a framework or a guide for assessing
and evaluating the competitive strength and position of a certain
industry. It was developed by Michael E. Porter in 1979 and
identifies the five basic forces: Threat of new entrants, Bargaining
power of suppliers, Bargaining power of buyers, threat of substitute
products or services, and Existing industry rivalry.
INDUSTRY ANALYSIS
• Industry Analysis is a market assessment tool used by businesses and analysts to understand
the competitive dynamics of an industry. Industry Analysis includes the following important
factors:
• 1. Competition-it is very important that you know your competitors are and be ready for
them. Who are the major businesses in the industry?
• 2. Customers- Who will you sell your product to?
• 3. Suppliers – every retail business needs suppliers from whom one can source raw
materials, intermediate products, or even the finished goods one intends to resell.
• 4. Substitutes- are goods that can be used in place of another.
ENVIRONMENTAL ANALYSIS
• Environmental Analysis is described as the process which examines all the components,
internal or external that influences the performance of the business organization. An
environmental analysis includes a thorough study of:
• 1. Economic forces-this involves a look at economic factors such as income of the people,
specifically the target market, economic conditions such as inflation, recession, prosperity,
demand, and supply in the market.
• 2. Physical environment-this includes a look at the population size, the geography of the
place where the business will be located, land distribution, climate and in today’s global
warming situation, whether or not the area is prone to flood or earthquake.
ENVIRONMENTAL ANALYSIS
• Environmental Analysis is described as the process which examines all the components,
internal or external that influences the performance of the business organization. An
environmental analysis includes a thorough study of:
• 3. Political factors- the type of government, the stability and strength of the government, and
good leadership are factors that can be an advantage to a business.
• 4. Cultures and Lifestyles- it is important to study cultural practices such as fiestas,
celebration of Christmas season, trends in consumption patterns, as means to identify the
goods and services that will fit into these celebrations and spending behaviour.
• 5. Competition- the degree of competition in the market and the extent and strength of
competition are all vital in determining the success or failure of a business.
ENVIRONMENTAL ANALYSIS
• Environmental Analysis is described as the process which examines all the components,
internal or external that influences the performance of the business organization. An
environmental analysis includes a thorough study of:
• 5. Competition- the degree of competition in the market and the extent and strength of
competition are all vital in determining the success or failure of a business.
ACTIVITY 1: WIKARAMBULAN
• 1. IS TRE ENGCKS _________________________
• 2. OP FORTUNE NI TEAS _________________________
• 3. WEEK NEST CES _________________________
• 4. THREE EATS _________________________
• 5. IN DUST TREE _________________________
• 6. END BY RON MEANT ALL _________________________
• 7. PIE HAVE FOUR ZEST _________________________
• 8. ECHO NO MEEK _________________________
• 9. SOAP FLYER _________________________
• 10. COST TOO MHER _________________________
ACTIVITY 2: FILL IN THE BLANK
• Instructions: Read each statement or question below carefully and fill in the blank(s) with
the correct answer.
• 1. ___________________ is the aggregation of the different businesses engaged in the same
line of undertaking.
• 2. ___________________ is a type of a partnership which all general partners have
unlimited liability and loan payments will extend to their personal property.
• 3. ___________________ is a significant tool or a guide for assessing and evaluating the
competitive strength and position of a business organization. 4. ___________________ is a
means of identifying the internal and external forces that may affect the business.
• 5. ___________________ is a means to evaluate the possible or probable effects of external
forces and conditions on the survival and growth of the business.
ACTIVITY 2: FILL IN THE BLANK
• Instructions: Read each statement or question below carefully and fill in the blank(s) with the correct
answer.
• 6. ___________________ is the one who developed Porter’s Five Forces Competitive Position Analysis.
• 7. ___________________ is a means to understand the business’ position relative to other participants in
the industry.
• 8. ___________________ refers to the type of government, the stability and strength of the government
and good leadership factors than can be an advantage to a business.
• 9. ___________________ involves a look at income of the people, economic conditions such as inflation,
recession, prosperity, demand, and supply in the market.
• 10. ___________________ includes a look at the population size, location of the business, land
distribution, climate and global warming situation, whether or not the area is prone to flood or earthquake.