ENTREPRENEURSHIP

GUNDAN, ASCHLEIGH KLARIZZE A. GUNDAN

LESSON 8: BUSINESS PLAN

At the end of the lesson, students shall be able to:

1. discuss business model and the concept of business plan;
2. develop a winning business plan.
 BUSINESS MODEL
• Describes how the business will generate revenue and support financial
projection/s.
• Its 2 primary levers are pricing and costing.
• Supposed to answer who your customer is, what value you can
create/add for the customer and how you can do at reasonable costs
(Peter Drucker).
• Defines the foundation of it’s company’s core value proposition, target
customers, key resources, and assumed revenue streams.
 BUSINESS MODEL
• An abstract representation of an organization, be it conceptual,
textual, and/or graphical, of all core interrelated architectural,
co-operational, and financial arrangements designed and
developed by an organization presently and in the future, as well
as core products and/or services the organization offers, or will
offer, based on this arrangements that are needed to achieve its
strategic goals and objectives (Al-Debei, El-Haddadeh and Avison,
2008).
 Offline
Online
Target Market:
Target Market:
Employees within the area
Employees within the area
of Santa Rosa, Laguna
of Santa Rosa, Laguna
Location:
Location:
Target Mall, Balibago
Website
Complex
Transaction: Online Selling
Transaction: Personal

Marketing Strategies

• Product
Grilled Seafoods
• Price
Cost Plus Pricing
• Place
Store Location, Website
 DIFFERENT TYPES OF BUSINESS
MODELS
Traditional business models:
1. Manufacturer – makes the finished products which are later
distributed to wholesalers and retailers who then sell them
directly to customers.
Examples: Ajinomoto Philippines, Alaska Milk and Century
Pacific Foods
2. Distributor – is an entity or company that purchases
noncompeting products or product lines, stores them in
warehouses, and resells them directly to the customers.
Unilever uses distributors
3. Retailer – is a person or a business that purchases goods
from the wholesaler or directly from the manufacturer which
will later be sold in small quantities to consumers.
Examples: Best Buy and Wal-Mart
4. Franchise – can be a manufacturer, distributor or retailer. It is
also a method of distributing products involving a franchisor
who provides access to his business’ proprietary knowledge,
processes business systems and a brand’s trademark and
trade name to let the franchisee sell a product or provide a
service under his business’ name.
Examples: Jollibee, McDonald’s and Pizza Hut
5. Brick-and-mortar – refers to the old-fashioned street side
business that sells products and services to its customers
face-to-face in an office or store that the business owns or
rents.
Examples: Grocery stores, gas stations and walk-in banks
6. Bricks-and-clicks – is a model where a company combines its
online and a physical presence.
7. Direct Sales – a model wherein products are directly sold to
the customers.
8. High Touch – a model that uses a lot of human interaction and
involvement to experience highly personalized service.
Example: Hair Salon
9. Family-owned – refers to business that is owned and operated
by a family.
Examples: National Bookstore, Jollibee and Robinsons
Modern business models:
1. Nickel-and-dime – makes use of the lowest price strategy in
selling basic product to the customers.
Example: Cebu Pacific
2. Freemium – is a combination of free and paid services usually
used by tech companies in the Software as a Service or apps
business model.
Examples: Zoom, Spotify and Dropbox
3. E-commerce – is an upgradation of the old-style
brick-and-mortar and this focuses on buying and selling
products creating a web-store using the internet.
Examples: Amazon, Alibaba and Ebay
4. Subscription – offers a long term contract to customers by
paying a fixed amount every month or year.
Examples: Netflix, Amazon Prime, and LinkedIn
5. Aggregator – is a network model wherein the company acts as
middleman between 2 individual parties.
Examples: Airbnb and Uber
6. Online Marketplace – there is a collection of different sellers
into one platform.
Examples: Amazon and Alibaba
7. Hidden Revenue – offers its services for free but the business
earns revenue streams from advertisements.
Examples: Google, Facebook, Instagram and Twitter
8. Data Licensing/Data Selling – it is where the internet has
given rise to the importance of data.
Example: Twitter
8. Affiliate Marketing – is a commission-based model where
companies make profit by promoting a partner’s product and
convince its followers.
 9. Dropshipping – a model where the owner has no ownership of
the product or hold any inventory but has an E-store.
Examples: Doba and Wholesale 2B
9. Network Marketing – works on direct marketing and direct
selling philosophy.
10. Crowdsourcing – solicits intellectual information of users on
what value-added concepts can be inputted in the product
offering.
11. Blockchain – is a digital ledger that is irreversible and
decentralized and no one owns and monitors this digital
database but anyone can contribute to it.
Example: Crypto-currencies (Bitcoin, Ethereum, etc.)
12. Low Touch – there is minimum human assistance and
intervention in selling a product.
Example: Ikea
13. Razor and Blade – a business in which one item is sold at low
price or free to intensify the sales of a complementary good.
14. Consulting – the business is composed of experienced and
qualified professionals that offer services based on their line
of expertise.
Examples: Mckinsey and Deloitte
14. Social Enterprise – a model that aims to put a business to
create a positive change but with profit.
Examples: Bayani Brew, Coffee for Peace, and First Harvest
Key partners – are the network of suppliers and partners that
may provide the business model more effective.
Key activities – are the most essential activities in achieving
business’ value proposition and its successful operation.
Examples: Marketing, sales, design, development,
distribution, and customer service.
Key resources – describes the most important assets to make
the business model work.
4 categories: Physical, Intellectual, Human and Financial
resources.
 CUSTOMER VALUE PROPOSITION
• Is a way of generating value in the product when targeting
potential customers.
Factors in the development of customer value proposition:
a) Functional Value – the product offers the solution to a
particular problem.
b. Emotional Value – the product is pleasant to look or
attractive or customers are persuaded due to sentimental
reasons.
c. Economic Value – the product offers a financial advantage
saves time or is innovative.
d. Symbolic Value – the product is valuable because of a
certain type of status given to the customer.
References:
Agustin-Acierto (2017). Entrepreneurship
Camillar-Serrano (2021). Entrepeneurial Mindset
Morato Jr. (2016). Entrepreneurship First Edition