Module 2 - Business Enterprise Simulation-1

Republic of the Philippines
MARINDUQUE STATE COLLEGE

LABORATORY HIGH SCHOOL
Main Campus: Boac / Branches: Santa Cruz • Torrijos • Gasan
Panfilo P. Manguera Sr. Rd., Tanza, Boac, Marinduque 4900
Tel. No.: (042) 332-2028 Email Address: sucpresident.msc@gmail.com LHS Tel. No: (042) 332 – 0351
Website: www.marinduquestatecollege.edu.ph LHS Email Address: mscssted.labschool@yahoo.com
WHAT I NEED TO KNOW
LESSONS
Preparing the Business Plan:
1. Preparing Strategy plan for competitive advantage
2. The competitive environment
3. Industry analysis
4. Competitive analysis and strategies
5. Preparing a marketing plan
6. Sales forecast
7. The operations plan
8. Crafting a financial plan.
CONTENT STANDARD
The learners demonstrate the key concepts Accounting, Business and Management through the
preparation of a business plan, which outlines the different management aspects of the business
particularly those essential to execution
PERFORMANCE STANDARD
The learners shall be able to apply knowledge from his/her previous business courses through the
preparation of a business plan that will guide the eventual implementation of the venture
MOST ESSENTIAL LEARNING COMPETENCIES

After going through this module, you are expected to:
prepare a strategic plan outlining the competitive environment and focusing on the appropriate
competition strategy draw conclusions and formulate recommendations
prepare a marketing plan that will describe the product offering, the value it brings to the
consumer, and the subsequent tactical plan on how to reach consumers (4Ps), and conclude with
a sales forecast
design an operating plan to ensure that the inputs and processes required to deliver the product
or service are identified, and estimate the costs needed for production
craft a financial plan, the inputs of which are from the results of the marketing plan (sales) and
operations plan (operating costs), and which will define the financial goals that will be his/her
target upon eventual execution
craft a full business plan for review of mentors before actual execution
Vision: Marinduque State College is a research-driven higher education institution pursuing excellence and innovation by 2025.
Mission: Marinduque State College is committed to pursue progressive and innovative lifelong education founded on
humanistic, professional and technologically advanced programs across cultures and communities by establishing centers of
excellence and development and research-driven outreach program.
SERVING BEYOND EXCELLENCE! 1
PREPARING THE BUSINESS PLAN

In this module, you will be introduced to a comprehensive but practical way to prepare a
business plan that covers the following: a strategy plans for competitive advantage a marketing
plan, an operations plan, and a financial plan. Those plans will then be consolidated and reviewed
by your teacher who will give the go-signal if the business plan is ready for execution. Otherwise,
the business plan must be revised until it is approved for implementation.
Before you proceed, keep in mind first that preparing a business plan is a serious
responsibility. If even the smallest of details are not given proper attention or if unnecessary
details are included, then the business will be at risk of failing. In addition, you should try to be
objective, strategic, and determined when preparing your business plan. Lastly, keep in mind that
if done conscientiously, a business plan will be helpful in ensuring the success of a business.
A business plan is like an

engineer's blueprint which contains
precise complete details of the project
to be followed in order to come up with
accurate, sensible, and successful
outcomes.
Preparing a Strategy Plan for Competitive Advantage
Strategy plan for competitive advantage – deals with the competitive environment where the
entrepreneur will participate in.
The Competitive Environment
 the dynamic external system in which a business competes and functions.

 Therefore, the entrepreneur will have to adjust to the state of the competitive environment
where the business operates.
 In order to scrutinize this competitive environment, the entrepreneur has to conduct
industry analysis and competitive analysis.
Street vendors selling the same goods

Source: https://thumbs.dreamstime.com/z/street-vendors-selling-products-large-bazaar-market-xanthi-greece-open-
air-clothes-other-merchandise-stalls-every-143076871.jpg
Industry analysis
- The examination of the industry where the entrepreneur’s business will participate in,
usually in the next three to five years.
- It compasses the opportunities and threats in the industry as well as the major trends
that could affect the growth or decline of the industry.
Competitive Analysis
- the examination of what the direct and indirect competitors are doing and what they can
possibly do in the future.
- It also shows the driving forces and the rationale on why the competitors are doing what
they are doing.
Reflect Upon
1. What business do you have in mind that you are very interested in? Why?
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
2. How competitive is the environment of the business you have in mind? Why do you say
so?
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Below is the format of a Strategy Plan for Competitive Advantage (SPCA):
A. Executive Summary
B. The Competitive Environment
1. Industry Analysis
(Porter’s Five Forces Model of Competition)
2. Competitive Analysis
(Competitive Profile Matrix)
C. Competitive Strategies
Industry Analysis
The most practical way to conduct an industry analysis to test its attractiveness is to follow
Porter’s Five Forces Model of Competition, a framework developed in the 1980s by American
academic Michael E. Porter. This framework is illustrated below:
Source:https://www.reddit.com/r/Bitcoin/comments/1d16pm/porter_5_forces_of_competition_model_not_btc/
To illustrate Porter's Five Forces using a real-life example, refer to Case 2 from the
previous module:
Case 2: Mrs. Maritess Bonifacio had been a banker for five years. But she resigned from work
she got married and had her first child. She resigned so she could focus on raisin her son. One
day, while her son was sleeping, Mrs. Bonifacio was channel surfing when she chanced upon a
news feature. The news feature was about virtual assistants, or freelancers or home-based online
employees. While watching the program, Mrs. Bonifacio discovered that virtual assistants work at
home using a computer connected to the Internet to serve the needs of foreign employers.
According to the program, foreign employers prefer this setup because it is cheaper for them to
operate rather than to hire regular employees. Mrs. Bonifacio also found out from the program
that the Philippines is currently one of the major sources of virtual assistants in the world with over
more than 1 000 000 Filipinos serving various foreign markets worldwide. After watching the news
feature, Mrs. Bonifacio did more research and she found out that virtual assistants in the
Philippines earn an average of $5 per hour and that most of the jobs were related to accounting,
finance, marketing, and sales. She also discovered that this trend of hiring virtual assistants is
expected to continue for the next 5 to 10 years, thus giving opportunities for Filipinos to work
online instead of going abroad or working in office-based jobs.
The following is a sample industry analysis of Case 2 using Porter's Five Forces Model
Competition:
1. Threat of New Entrants/Potential Competitors
Assessment: Medium Pressure

According to The Philippine Star article "Further Growth Seen in Philippine Online
Freelance Market," more Filipino professionals are venturing into freelance work. The
article also mentions that there are more than 500 000 businesses in 170 countries that
hire online freelancers. Despite the threat of new entrants, the demand for this type of
service business is relatively big enough such that it will not be threatened yet.
2. Threat of Substitute Products
Assessment: Low Pressure

The threat of a substitute product is low because online freelancing is still on the
rise based on the latest article from The Philippine Star. In fact, online freelancing itself is
a threat to domestic businesses that hire regular employees because more Filipino
professionals are venturing into online freelancing due to its flexibility.
3. The Bargaining Power of Buyers (Online Businesses)

Assessment: Medium to High Pressure
 Despite the influx of online businesses, online employers are still picky on who to hire
because they require an online employee who has a specific set of skills to accomplish
a particular job. For example, online English tutors should have at least an English
degree from a reputable university or at least some experience in teaching English
classes.
 Online employers dictate the salary of their online employee, and this salary is
nonnegotiable most of the time. In addition, online employers do not provide benefits
as compared to regular employment. Moreover, they can easily replace an online
employee if he or she does not deliver on time or the desired output.
4. The Bargaining Power of Suppliers (Online Freelancers)
Assessment: Low to Medium Pressure
Online freelancers, being the suppliers, have low to medium bargaining power
since online employers are meticulous in hiring online freelancers. Despite the influx of
online jobs, the online freelancers must still be equipped and qualified to do the job that
they are applying for. Some even undergo training or get short course before applying for
certain online job vacancies. Others use their work experience as qualification.
5. Rivalry among Existing Firms
Assessment: Low Pressure
Rivalry against other online freelancers is low because the number of online jobs is way
higher than online freelancers. The rivalry is actually between the online freelancer and
himself or herself (if he or she has the skills needed to do the job required). As mentioned
several times already, the online freelancer must be equipped and skilled to perform the
online job.
The online freelancer must also continue with other online jobs or projects after the
contract with the previous one ends so the skills can be enhanced further. Doing so will
also boost the credibility of the online freelancer because past projects and ratings are
posted in his or her profile. Getting positive ratings will give him or her the edge to be
competitive in the online freelancing world.
One of the most practical tools to analyze competition is to prepare a Competitive Profile
Matrix (CPM).
 A CPM is an essential strategic management tool that compares the entrepreneur s

business with the major players in the industry.
 It encompasses both external and internal factors in evaluating the overall position of the
business.
 These factors are more clearly defined as critical success factors (CSF) and are the bases
for the CPM score.
 Critical success factors encompass all important elements to achieve business objectives,
including how to ultimately provide value to target customers.
 Each CSE is assigned a specific weight depending on the compelling industry factors
present at the time of CPM preparation. These CSFs are scored according to the following
scale
4 - Major Strength
3 - Minor Strength
2- Minor Weakness
1 - Major Weakness
To better understand CPM and how it helps entrepreneurs analyze the competitive
environment, refer to Case 3 from the previous module.
Case 3: Mr. Marvin Miranda is a fresh graduate of marketing management. He has observed that
the current administration has brought about a number of drastic changes, including the
implementation in Baguio City of a curfew for minors and a 1:00 AM liquor ban. Marvin believes
that a number of bars in Baguio City might be affected by these new policies. Additionally, he has
also noticed that most of the coffee and tea shops in Baguio City are always full. An aspiring
entrepreneur ever since he was young, Marvin wants to tap the market which he believes he
knows the most the youth.
After the FGD session where he gathered insightful details, Marvin plans to make a
competition analysis for the top coffee and tea shops in Baguio City through a CPM. He believes
a CPM will help him devise appropriate competition strategies. Based on his scan, there are three
potential competitors: Nova Coffee Shop, Bueno Coffee Shop, and Milla Coffee Shop. He will
name his coffee shop Miranda Coffee Shop.
Enumerated below are critical success factors for coffee and tea shops that Marvin was
summarize from FGD he conducted.
Competitive Profile Matrix

Miranda Nova Bueno Milla
Critical
Coffee Shop Coffee Shop Coffee Shop Coffee Shop
Success Weight
Weighted Weighted Weighted Weighted
Factors Rating Rating Rating Rating
Score* Score Score Score
Coffee and
Tea 15% 2 0.30 3 0.45 3 0.45 3 0.45
Products
Price 10% 3 0.30 3 0.30 3 0.30 3 0.30
Servicescap
e
(Overall 15% 3 0.45 4 0.60 2 0.30 1 0.15
Service
Ambiance)
Service 3
20% 3 0.60 4 0.80 0.60 2 0.40
Personnel
Brand Image 10% 2 0.20 3 0.30 3 0.30 2 0.20
Location 10% 4 0.40 4 0.40 3 0.30 3 0.30
Coffee/Tea 3
5% 2 0.10 3 0.15 0.15 2 0.10
Packaging
Non-coffee/ 3
Tea 5% 4 0.20 3 0.15 0.15 2 0.10
Products
Digital 3
5% 4 0.20 3 0.15 0.15 3 0.15
Promos
Loyalty 3
5% 3 0.15 3 0.15 0.15 3 0.15
Programs
Total 100% 2.90 3.45 3 2.85 2.30
Weighted Score = (Weight x Rating)
The results show that Miranda Coffee Shop can generally compete with the existing
competitors which garnered a score of 2,90 (2.50 is the median score based on the CSF scale of
I to 4). Miranda Coffee Shop is strong in terms of strategic location, non-coffee/tea products, and
digital promos. However, it needs to be competitive on basic coffee and tea products, brand image
since it is still new, and coffee/tea packaging. Miranda Coffee Shop must be vigilant with its
competitors, especially Nova Coffee Shop which is strong in overall service ambiance and service
personnel.
Competitive Strategies
After assessing and evaluating the competitive strength and position of your business
against the competitors, you, as the entrepreneur, have to come up with competitive strategies to
counter the challenges posed by the competition. Aside from his Five Forces Model of
Competition, Michael E. Porter also devised three generic competitive strategies collectively
called Porter's Generic Competitive Strategies-that can be applied in any business: cost
leadership strategy, differentiation. Strategy, and focus strategy. Refer to the following chart.
Source: https://i.ytimg.com/vi/HiBRviA3lnI/maxresdefaul]t.jpg
 According to http://www.businessdictionary.com/definition/cost-leadership.html, cost

leadership is a strategy used by businesses to create a low cost of operation within their
niche.
 The use of this strategy is primarily to gain an advantage over competitors by reducing
cost of operations below that of the industry.
 The cost leadership strategy is applied when a business will produce goods or perform
services in bulk, achieving economies of scale in aspects of production and even in
marketing (i.e., undifferentiated or mass marketing).
 This means that if a business applies the cost leadership strategy, it automatically
produces goods or performs services in bulk; hence, it is more efficient and effective in its
operations.
 As a result, it achieves economies of scale (producing more is more cost-efficient than
producing principle applies in marketing: when a marketing strategy is implemented,
cannot be applied by businesses that are relatively new and with lesser financial capability.
 Cost leadership strategy is a strategy that revolves around effective and efficient pricing
and is usually utilized by more established businesses with established markets.
Differentiation strategy - a strategy that highlights the uniqueness or difference of a

product/service or an attribute of a product/service that the competitors are weak at or have none
at all. This strategy makes a product/service stand out from the rest.
Focus-strategy - a strategy applied when the entrepreneur focuses on a certain or specific target
market segment in mind. The previous two strategies are into the undifferentiated market while
the focus strategy has a differentiated market. The entrepreneur could apply either a cost focus
or differentiation focus strategy.
The cost focus strategy positions low cost as a competitive advantage to the target segment
while the differentiation focus strategy positions a unique product/service or a unique feature of a
product/service to the target segment.
 In the case of Mr. Miranda, it was clearly shown in the CPM-based on Mr. Miranda's FG that
more weight was given to service personnel (20%) in a coffee and tea shop business. This
was the consolidated result of the FGD session he conducted. Therefore, to be competitive
with Nova Coffee Shop, which got a rating of 4 points, Miranda Coffee Shop must devise a
differentiation focus strategy with emphasis on excellent coffee and tea shop service. The
differentiation focus strategy is the most appropriate because there is a target segment that
wants an excellent service experience from a coffee and tea shop the main reason why they
take their coffee at a coffee shop than at the comfort of their homes.
BEYOND WALLS 2.1 Read and Answer

Read "Competing with Giants: Survival Strategies for Local Companies in Emerging
Markets" on https://hbr.org/1999/03/competing-with-giants-survival-strategies for-local-
companies-in-emerging-markets. Then answer the following questions:
1. What do you think are the challenges being faced now by micro, small, and medium
enterprises (MSMEs) in the Philippines in dealing with industry giants? Are these
challenges a threat or an opportunity to budding entrepreneurs? Justify your answer.
2. Can you name two real-life MSMEs in the Philippines which were able to compete with
industry giants? How do you think they succeeded?
3. How will the ASEAN integration change the competitive landscape of business in the
Philippines given that there are a number of industry giants in these countries, especially
the progressive ones?
What Have I Learned So Far?

Choose from the following one product or service business in your barangay or locality.
Prepare an industry analysis, competitive analysis, and competitive strategies for your chosen
business.
 sari-sari store
 laundry shop
 barber shop
 ihaw-ihaw
 carinderia
 water station
 LPG business
 cell phone load business
 rice retailing business
 spa business
Chosen product or service: _______________________________________________________

Industry Analysis
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
Competitive Strategies
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
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Preparing a Marketing Plan
Marketing Plan
 a business document outlining your marketing strategy and tactics.

 It is often focused on a specific period of time – for over the next year, for instance - and
includes a variety of marketing factors including costs, goals, and action steps.
 It is basically a plan on how to woo the primary target market of a business.
 It must be targeted, effective, and efficient and it would work only with effective execution
and strict adherence to the set plan.
Below is a sample simple format of a marketing and sales plan.
A. The Product or Service Offering
B. The Value Proposition and Unique Selling Proposition
C. The 7Ps of Marketing (Marketing Mix)
1. Product
2. Place
3. Price
4. Promotion
5. Packaging
6. People
7. Process
D. Sales Forecast
Product or Service Offering
Strategic marketing efforts are made based on the nature of the product or service that will
be offered. Product or service offering refers to the value that the business will give to a customer.
The marketing strategy also influence’s the target customers' decision-making process whether
your product/service or those of the competitors. In offering a product or service, there are specific
questions that you need to answer in order to be certain in terms of what you will offer and what
the customer will expect from you. These questions are as follows:
 Will you offer a product, a service, o a hybrid (product and service)?
Examples:
Product: Smartphones
Service: Smartphone repair service
Hybrid: smartphone distribution and repair service
 What is your product/service mix (i.e., business that offers more than one good or
service)?
Example: Smartphone distribution business selling brand new smartphones and at the
same time offering smartphone repair service
 What is the depth of your offering (i.e., number of products or services available in each
product line?)
Example: Smartphones for Class AB worth P 30 000 - P 50 000; for Class C worth P I5
000 - P30 000; and for Class DE worth P3 000 - P15 000
 What is the width of your offering (i.e., the number of lines available in your offering?
Examples: Smartphone products, air-conditioning units, televisions, refrigerators, \
To better understand how to craft a product/service offering, refer to Case 4 from the
previous module.
Case 4: Mr.: Carl Aquino has a degree in literature and has been into poetry ever since he was a
kid. He is a tremendously talented poet who specializes in composing love poems for
couples. Last Valentine's Day, he and his friends set up a poem booth during the college
fair. In their booth were a netbook, specialty paper, envelopes, and a printer. He was
pleasantly surprised when several couples proceeded to their booth and asked him to
compose love poems. He charged P 100 for each love poem. He typed each poem on
his netbook using a free desktop publishing software. He added designs and graphics
sometimes pictures of the couples themselves passed on through a flash drive or via
Bluetooth -to the poem before printing it on specialty paper. Carl felt appreciated every
time a couple came by their booth to ask for a poem.
 Will you offer a product, a service, or a hybrid (product and service)?

Answer: Mr. Aquino will offer a product - poem.
 What is your product/service mix (i.e., business that offers more than one good or
service)?
Answer: At the onset, Mr. Aquino will just offer a product, that is, a poem due to creative
limitation. In the future, Mr. Aquino can offer delivery of poems as a service.
 What is the depth of your offering (i.e., number of products or services available in each
product line)?
Answer: Mr. Aquino can cater to couples, couples-to-be, and poem lovers.
 What is the width of your offering (i.e., the number of lines available in your offering)?
Answer: In the future, Mr. Aquino can offer other creative romantic products like balloons
or a combination of flowers and poems.
In Case 4, therefore, the product offering of Mr. Aquino's business is a poem for, among
others, couples, couples-to-be, and poem lovers.
The Value Proposition and Unique Selling Proposition
Value Proposition (VP) refers to a definitive statement which promotes the benefits value that a
product or service can cater to the customers. It is made to create a customer perception about
the value that the product/service will offer to the customer.
Unique Selling Proposition (USP) refers to a statement that promotes the most compelling
attribute of a product or service and what makes it different from the rest of its competitors. It is
made to differentiate an attribute of a product or service.
It is imperative to craft a VP and USP as both will be the core reasons why the business should
exist and why the business should continue.
To better understand VP and USP, Case 4 will be used again as reference for the following
example.
Proposed VP: Poem for you and your significant other in an instant!
Justification: The VP is specific and straight to the point. It describes what the business is
offering, opening with the product right away. The value or benefit of the customers
is that they can receive a poem from poet for their own creative satisfaction or as
a gift to their significant others. The language used is easy to understand,
specifically geared toward attracting couples, couples-to-be, and poem lovers. The
compelling assurance from this VP comes from the word instant which emphasizes
that the customers will receive the poem immediately. Lastly, a poem given in an
instant is a unique concept that is not yet common in the marketplace.
Proposed USP: Printed poem for you and your Significant other in an instant
Justification: The proposed USP is also specific, short, and simple. It clearly specifies that the
customers will get a printed poem in an instant. The concept of making
personalızed poems for couples is relatively new and is virtually unique in all
aspects.
In crafting a VP and USP, keep in mind that even a catchy and strategic VP and USP will
not work if they are not effectively communicated to the target customers. These days, digital
channels are the emerging platforms to relay these marketing messages to the target customers.
Nevertheless, traditional ways such as signage, print advertisements, flyers, and radio
advertisements still remain useful and effective in many cases.
Reflect Upon
1. What VP of a business/product/service has struck you the most? Why?
2. What USP of a business/product/service has struck you the most? Why?
The 7Ps of Marketing

You have learned in the previous level that the 4Ps or marketing mix is a widely accepted
strategic marketing tool. But aside from the original 4Ps of product, place, price, and promotion
you should also consider the new 3Ps of people, packaging, and process for service businesses
in formulating marketing strategies and tactics for a product or service. These 7P's are combined
until the entrepreneur finds the right combination that will most effectively serve the customers’
needs and wants and at the same time help achieve the profitability objective of the business.
To better understand the marketing mix, Case 5 from the previous module will be used for
the next example.
Case 5: Mr. Ron Valdez is a fresh accountancy graduate from a reputable university. Ron's family
makes and sells bagoong (fish paste). It is the major source of the family's income and
the reason why he was able to finish his education. Ron knows firsthand how his father
runs the business-from production to packaging all the way to distribution. Ron, who had
shown at an early age an interest in the family business, has also been trained by his
parents on how to manage the family business.
Unfortunately, the business has been on a decline due to stiff competition and
ineffective marketing initiatives, including unattractive packaging. Ron's parents tasked
him to help out in marketing the product in a more creative and appealing way. The family
is hoping to reverse the downward trend so that they can fulfill their dream to export their
bagoong to Thailand, a country where fish paste is commonly used in preparing various
dishes.
The challenge for Mr. Valdez 1s to effectively utilize the 7Ps of marketing for the bagoong
business both in the Philippines and in Thailand
Product: Fish paste (bagoong isda)
Brand Name: The brand name is Mang Bagoong. The inspiration of this brand name is Ron's
father, Mr. Norberto Valdez, the family patriarch who makes the fish paste. The
word mang loosely means "mister", therefore, Mang Bagoong refers to Mr. Valdez
himself. In Thailand, the word mang has a positive meaning as it refers to the
queen of Thailand whom people respect and love.
Product Bagoong isda is prepared by mixing salt and a
Description: volume of fish such as dilis, galunggong, inglis, and
tulingan. The mixture is kept inside a large earthen
fermentation jar and tightly covered and sealed to
keep insects and parasites from mixing with the
salted fish.
Place: Due to the stiff competition of the local players, Mr. Ron Valdez plans to export
Mang Bagoong to Thailand where fish paste is an essential condiment. Mang
Bagoong will be produced in Mamburao, Occidental Mindoro and from there, the
finished products will be exported to Thailand. The import partner of Mang
Bagoong in Thailand will be Food Gallery, which imports over 50 brands from
around the globe then distributes these to 150 retailers and more than 500 chains
of restaurants, quick service restaurants, and hotels throughout Thailand.
Price: To compute for the price, Mr. Ron Valdez delineated first the variable costs and
fixed costs as presented in the matrix below. It was also converted to Thai baht
since it is the official currency in Thailand. The computation below is for 600 bottles
(265 mL) of Mang Bagoong.
Variable Cost Fixed Cost

Price Price
Fish (dilis, P 50/kilogram (kg) Water P 1 000
galunggong, tulingan, x 30 kg
inglis) P 1 500
Salt P 30 kg Electricity P 800
x 10 kg
P 300
Bottles P 10/bottle Wages P 7 500/month
x 600 (5 workers, P100/day
P 6 000 for 15days
Drum P 400/drum Rental P 1 500/month
x3
P 1 200
Label P 2/label Tax P 1 500
x 600
P 1 200
Package P 120/box Truck Services P 1 000
(12L x 12W x 15D x 20 (Batangas to Manila)
box) P 2 400
(Myanmar to Bangkok) P 2 000
Box (bottle P 100/box Shipping Fees P 1 500
separators) x 10 (Oriental Mindoro to
P 1 000 Batangas)
(Manila to Myanmar) P 2 000

Bubbles wrap P 500 Total P 18 800
0.5 inches (in) x 125
feet (ft) x 12 in
Total P 14 150
Converted Thai Baht 10 664.72 Converted Thai Baht 14 169.39
Below is a detailed computation for the price of Mang Bagoong.
1. Add Variable Cost and Fixed Cost to get Total Cost.
P14 150 + P18 800 = P32 950
2. Compute for the Unit Cost by dividing Total Cost over Units Produced.
P32 950
600 bottles = P54.92 for 9 oz. or 265 ml per bottle
3. Decide on the pricing Strategy and the actual price per unit.
Mr. Ron Valdez will use the penetration pricing strategy where he will first set a low
price to penetrate the Thai market. Thailand also specializes in fish-based condiments;
therefore, it will be difficult to use competitive pricing strategy right away. The current
prices of direct competitors in Thailand range from P180 to P450 if converted to Philippine
peso. Since Mang Bagoong will be exported, the minimum number of order is 2 000
bottles. The price will be P90 for a 9 oz or 265 mL bottle which is equivalent to P180 000
per order. The competitors offer 12 oz bottles of fish paste. Mr. Ron Valdez does not want
to compete directly against those offering fish paste in 12 oz bottles because based on his
observation and research, a smaller bottle is used more often than the larger ones. The
gross profit per unit is computed as follows:
Selling Price P90.00
Cost Per Unit P54.92
Gross Profit per Unit P35.08
Promotion: Promoting a product abroad is way different than promoting it in the

Philippines. Therefore, Mr. Ron Valdez will need to come up with strategic
marketing initiatives specific for the Thai markets that are into spices,
including separate marketing promotion to the importer(s). Here are the
potential promotion strategies for Mang Bagoong in Thailand.
Below are examples of two of the direct competitors in Thailand

Bu Do Sauce Bu Do sauce is a traditional southern Thai sauce made from fermented fish with
salt. It is one way to preserve fish so it can be kept for quite a long time. Bu Do
sauce also goes well with southern style rice spicy salad (kao yahm pahk dty)
and with Fresh local vegetables as side dish.
Nam Pla Rah Fish Sauce Highly popular in the Isaan province of Thailand, nam pla rah is frequently added
to green papaya salad (som tam) in order to give it a unique taste, In
Northeastern Thai cuisine, nam pla rah is an essential ingredient in nearly every
recipe that originated from that area (hot pots, bamboo curry, and spicy minced
pork, to name but a few).
In the preparation of Nam Pla Rah Fish Sauce, mud fish is pickled, cleaned, and
then diced up with salt and rice bran. Once mixed, the fish is then carefully
fermented until it produces the desired consistency and flavor. The use of nam
pla rah is a distinctly Thai practice mastering the use of this ingredient will open
up a whole new range of Thai cuisine that is not frequently celebrated outside
Isaan.
Sources: http:/www.templeofthai.com/food/sauces/bu-do-sauce-5160000508.php
http://www.templeofthai.com/food/sauces/namplarah-5110000509.php
The following are some ways for Mr. Valdez to promote Mang Bagoong.
1. Food Expositions (Sales Promotion) - Mr. Valdez will participate in international food
expositions, festivals, and conferences where the different dishes and products of various
exporters, international retailers, and distributors are displayed. Doing so will give Mr.
Valdez various opportunities to prove that Mang Bagoong is a high-quality product. Events
such as food expositions and festivals showcase food products from all over the world,
and participating in them will definitely help increase people's awareness of Mang
Bagoong
2. Online Engagement (Digital Marketing) - Mr. Valdez will present Mang Bagoong in
strategic social media pages and accounts in Thailand to gain substantial visibility in the
Thai market. Below are examples of Thai Cuisines that can best be partnered with Mang
Bagoong. These Thai cuisines will be posted in social media accounts with customer.
Nasi Goreng Ikas Bilis Crostini with crushed eggs and

Mang Bagoong
Crispy Chicken covered Pad Cha with Mang Bagoong

with Mang Bagoong
3. Food Magazines and Newspapers in Thailand - Mang Bagoong will also be presented in
strategic food magazines and newspapers in Thailand to gain substantial visibility in the
Thai market. For example, Mr. Valdez will have an article about Mang Bagoong written
and then featured in two popular food magazines in Thailand -Thailand's Best Street Food
and Tong's Thai Kitchen This article, which will present Mang Bagoong as a quality fish
paste product of the Philippines will help promote the product to the Thai market, most
especially to food enthusiasts.
The marketing strategies budget is set by the entrepreneur based on its marketing
objectives and current resources. The marketing objectives and current resources must
meet and be very realistic so that implementation will be seamless. In this case, the total
marketing strategies budget set for Mang Bagoong is P167 703.58 which is detailed in
computation below. (The given figures are assumed marketing costs only.)
 Food Expo (ThaiFex - World of Food Asia)
P16 283.93 per m
P16 283.93 per m x 6 m (size of the standee)- P97 703.58 (For the stall that will be
designed to stand out and leave a catchy impression to potential customers)
Transportation and Lodging Expense - P50 000.00
 Online engagement
Mang Bagoong will actively engage in showcasing the product through pictures in
social media.
Budget: Free (This is on the assumption that Mr. Valdez will utilize free social media
platforms only.)
 Article placement in Food and Beverages Magazine by Tuttle Publishing
P5 000.00 x 4 months/year = P20 000.00
Reflect Upon
1. What promotional strategy do you think is very effective? Why do you say so?
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
2. Do you think it is mandatory nowadays to promote a product or service on social media?

Justify your answer.
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
People: Along with his dad, Mr. Ron Valdez will manage the overall supervision of the Mang
Bagoong business. He will also seek assistance from his three classmates who are
experts in the export business - Ms. Marielle Servan, Ms. Louis Esguerra, and Mr.
Jean Capistrano. The three will be in charge of the negotiation strategies and in
handling trade fairs in Thailand. The three initially agreed to work pro bono for the
negotiation tactics and trade fair management, but Mr. Valdez will shoulder their travel
fare and expenses. Thereafter, they will be compensated based on the outcome of
their export initiatives. The Mang Bagoong export team will employ negotiation
strategies suited to a Thai customer. There are four principles in doing business in
Thailand as enumerated in http://www.leadershipcrossroads.com/mat/
cou/Thailand.pdf:
1. Physical presence is important to Thais because it shows the serious intention of the
businessperson (exporter) in dealing with his or her clientele.
2. The exporter should present the product professionally and exude the attitude of a
professional businessperson who must adapt to the culture, ethics, and beliefs of the
Thais.
3. A sticky business relationship (one that is mutually beneficial) must be developed since
it takes a lot of time to forge a successful partnership in Thailand.
4. Communicate well and be straight to the point as Thais do not waste time.
Packaging: The export business is more complicated compared to doing business domestically.
Therefore, all international standards must be met or followed by Mang Bagoong,
especially the packaging.
The following are the international standards in packaging products similar to Mang
Bagoong.
1. The exporters must use fiberboard box or carton (size: 28 in x 18 in x 18 in) in packing
Mang Bagoong. One box will have 50 bottles. To secure the bottles from breaking, each
box must have a box partition, with each bottle covered with bubble wrap to make it stable
and to avoid getting damaged. The product will be transported by sea freight
The exporters also need to consider the climatic conditions during the journey, possible
susceptibility to pilferage, customer's requirements, and cost of packing materials to
maintain the good quality of the product that will be shipped from the Philippines to
Thailand. The exporters must make sure that they meet the packing specifications of their
customer.
Sample box partition
Each product placed in an

individual bubble wrap
Products placed in a box.
2. Export marking is a sign or symbol indicated in export boxes. Such markings show the
essential data and other data of the products to be exported, including the details of the
exporter and the customer.
 Essential data are the basic information and nature of the products inside an export
box. It also includes the name and address of the exporter and the name and address
of the customer
 Name of Exporter (Mang Bagoong)
 Address of Exporter (Brgy. 7, Mamburao, Occidental Mindoro, Philippines)
 Name of Customer (Food Gallery Ltd.)
 Address of Customer (396 Chockchai 4 Rd., Lardprao Bangkok, Thailand 10230)
 Case/Crate/Package Number (1)
Distributed by and manufactured in: Contact details
Distributed by: E-mail: info@foodgallery.co.th

Food Gallery Ltd You may also call us directly at these
396 Chockchai 4 Road, Lardprao, numbers:
Bangkok, Thailand 10230
+66 (02) 538-3977 +66 (02) 538-6287
Manufactured in: +66 (02) 538-3979 +66 (02) 538-3028
Brgy. 7, Mamburao, Occidental
Mindoro, Philippines
3. Other data or other pertinent export details required by the country of origin, country of
destination, or both
 Package Weight
 Order Number
 Port of Shipment (Yangon Port)
 Destination (396 Chockchai 4 Rd., Lardprao Bangkok, Thailand 10230)
 Origin of Goods (Brgy. 7, Mamburao, Occidental Mindoro, Philippines)
Halal logo and barcode: Ingredients and social media page:
Ingredients: fermented fish, salt, and

water
Like us on Facebook.com/
MangBagoong Ph
Nutrition Facts Serve Size: 1 tbsp (20 g)

Serving per container: 18
Amount per serving 25 kcal
Total Fat: 0g Sodium: 17 mg
Total Carb: 0g Protein: 5 g
Vitamin A: 0% Vitamin C: 0%
Iron: 8%
*percent Daily Values (DV) are based on a 2 000 calorie diet
4. Marking symbols are symbols that are used in export boxes to signal special handling
for the products inside the box. These symbols are crucial in exporting to preserve the
original physical state of the product, including its freshness.
Reflect Upon
1. What product or service in the market has an effective and efficient packaging? Explain.
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
2. Do you think packaging really affects the purchase decision of a consumer? Justify your
answer.
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Process: Export businesses entail seamless processes because of the international

requirements of the industry. Therefore, Mt. Ron Valdez must follow strictly the export
processes starting from the production process to shipment all the way to the delivery
of Mang Bagoong to Thailand. As a differentiator (akin to USP), the business should
not just comply with the basic processes but be more efficient and use this
differentiator as a unique selling proposition to exceed the expectation of the
customers. (Processes will be further discussed in operation plans under Methods.
The same case will be used for continuity of thought.)
\
Read the article on http://www.entrepreneur.com.ph/startup-tips/a-successful
entrepreneur-shares-his-marketing-strategies. It is about a successful entrepreneur sharing his
marketing strategies. After reading the article, answer these questions:
1. What were his marketing strategies?

______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
2. How did these marketing strategies help make his business successful?
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Sales Forecast
A sales forecast is a projection of potential sales that the business will generate as a
result of the marketing efforts to be implemented and the general condition of the industry to
where the business belongs. it also provides the entrepreneur a production forecast, a projection
of the potential number of products to be manufactured based on the sales forecast, and prepares
the capacity materials, manpower, machine, and methods for operations needed to produce the
sales forecast. As a contınuation, the Mang Bagoong business of Mr. Ron Valdez will be used as
example.
In preparing a sales projection, the entrepreneur should take into account the industry
trends, the competitors, and his or her own resources to come up with a realistic one.
On Year 1, Mang Bagoong is expected to sell 10 000 bottles only as this will be a trial
balloon setup first. Food Gallery will order 10 000 bottles as initially negotiated and will distribute
these to its clientele.
Computation: 10 000 bottles x P90 P900 000
Year 1 Year 2 Year 3 Year 4

Mang Bagoong Sales P900 000 P990 000 P1 138 500 P1 366 200
These are the sales projection for the next four years for Mang Bagoong with the
marketing efforts to be implemented:
 The sales will increase by 10% in year 2.
Mr. Ron Valdez projected that there will be an increase of 10-20 percent in sales since
the demand in sauces and condiments in Thailand is constantly growing. This 10-20 percent
projection is also based on an industry estimate from a reputable Thai journal. The behavior of
tourists also shows that they are into trying new condiments. In addition, various Thai food are
extremely popular, most especially to tourists Reuters estimates that around 30 million tourists
per year visit this Southeast Asian nation. Thai delicacies are also very popular due to their
appetizing combination of the four fundamental tastes: salty, sour, spicy, and sweet. The
challenge then for Mang Bagoong is how to differentiate itself since the competition is very stiff.
Aside from lower price and smaller packaging, it should also focus on product quality to
compete with local Thai condiments/sauces.
What Havel Learned So Far?

Prepare a marketing plan for the product or service business you have chosen in the
first What Have I Learned So Far? in this module. Use a separate sheet of paper for this activity.
The Operations Plan

An operations plan is a plan that contains the specific details of a business operation,
including production or manufacturing, inventory, and distribution, to name a few. It is at this point
where the entrepreneur must be vigilant in observing all the necessary details of a business
operation that should be accounted for. The goal in making an operations plan is to come up with
optimal processes that will save the business operational costs and in turn will make the
customers happy.
An operations plan has four aspects methods, manpower, machines, and materials
(collectively called 4Ms of Operations). These four Ms are equally important to produce efficient
and effective operations.
Below is the format of an operations plan:
I. Methods
A. Manufacturing/Sourcing off Goods or Service Delivery Process

B. Distribution Method
C. Payment Process
II. Manpower 1
A. Job Description
B. Employee Qualification
C. Selection of Job Applicants
D. Job Offer
E. Employee Development
III. Machines
A. Equipment and Other Physical Facilities

B. Telecommunications and Information Technology
IV. Materials
A. Suppliers
B. Logistics
For continuity, the Mang Bagoong business of Mr. Ron Valdez will again be used in the
example. The operations plan of Mang Bagoong will be more complex since it involves the
delivery of goods abroad.
I. Methods are simply the daily processes that a business conducts. Depending on the type
of business, methods include manufacturing of a physical product, rendering of services,
product distribution, and inventory management.
A. For the Mang Bágoong business, one of the crucial methods is manufacturing since Mang
Bagoong will be produced at an assembly plant near Mr. Ron Valdez's home in
Mamburao, Occidental Mindoro. He chose an assembly plant for manufacturing because
it offers a more specialized and suitable manufacturing site compared to making the
product at home. In addition, fishing is a significant economic activity in Mamburao. The
municipality, in fact, exports tuna to mainland Luzon and other countries. It also markets
yellow fin (tambakol), gulyasan, tulingan, and other coral fish like lapu-lapu to other
provinces such as Cavite, Quezon, and Batangas. Since Mamburao is a coastal area, the
common industries are dried fish processing and bagoong and patis making.
Manufacturing elements are the elements needed to manufacture a product:
 Inputs are the ingredients or materials needed to manufacture a product fish (dilis,
galunggong, inglis, or tulingan), salt, water, drum, packaging materials.
 Process is the manufacturing of inputs (mixing of ingredients, fermentation, etc.).
 Output is the result of a processed or manufactured input-Mang Bagoong.
Below is the simple manufacturing process of Mang Bagoong.
1st step Segregate the fish according to size.
 Clean the fish.

2nd step
 Put the fish in the container.
 Mix the salt (1 sack) and the fish (40-50 kg)

3rd step
 Put the fish in the container.
4th step Add water.
 Fermentation process (30-90 days)

5th step
 Cover the drums properly.
6th step Finished product.
B. The chart on the next page depicts the distribution method to be employed by Mr. Ron
Valdez. The distribution method is the step-by-step process on how a product will reach
the customers. The distribution channel, on the other hand is where the goods or services
pass through to reach the customers. The distribution channel will be indirect since Mang
Bagoong will go through several ports or locations before reaching the target place or
recipient. Mr. Valdez will rely on an importer/wholesaler from Thailand who will then be
the one to distribute the product to 150 retailers and over 500 chain restaurants, quick
service restaurants, and hotels throughout Thailand. The finished product will be shipped
from Abra de Ilog to Batangas Port via RoRo Car Port. The shipping company will be
Montenegro Shipping Line, Inc. From Batangas Port, Mang Bagoong will be delivered to
Manila Port via Mendoza Trucking Services. From Manila Port, Mang Bagoong will be
shipped to Yangon Port in Myanmar. From Myanmar, Bangkok Shipping Service will
deliver Mang Bagoong to the wholesaler/importer company in Thailand which, in this case,
is Food Gallery Limited (refer back to the discussion on the 7Ps of Marketing).
Distribution Channel of Mang Bagoong
C. Payment process in export involves the method on how the importer will pay the exporter
The payment process for export businesses is also more complicated than local
businesses. The process below details how the importer pays the exporter (Mang
Bagoong). The key premise for the payment process is that it should be prepared and
implemented in the most efficient and hassle-free way to avoid delays and losses.
II. Manpower
Manpower is basically the labor force needed in business operations. It is a vital part
of an operations plan. Getting the right people with the required skills, good attitude, and
exceptional character will help the business reach its full potential. In the case of Mang
Bagoong. the credentials of Mr. Ron Valdez were explained already in Module 1. His
friends (Marielle, Louis, and Jean), who will handle the negotiations, trade fairs, and all
export-related activities in Thailand, are graduates of BS Marketing Management and
have been interested in this business ever since they were in college. In fact, the Mang
Bagoong export business was their project for their International Marketing subject in
college. It won for the group several awards in competitions. They used the existing Mang
Bagoong business of Mr. Norberto Valdez, Ron's father, as their inspiration in crafting their
International Marketing paper. They also have a close business relationship with Food
Gallery. They are leveraging their experience in trade fairs and negotiation sessions in
Thailand as their investment/training in export business.
For the manufacturing side, they will contract five workers for P300 per day. These
workers should be adept in the manufacturing process of bagoong. They will undergo
training tor five days before immersing n the actual manufacturing plant.
.
III. Machines are equipment (soft or hard) needed to manufacture a product.
The following hard and soft machines will be used by Mr. Ron Valdez for his Mang
Bagoong business:
a. Equipment and Other Facilities (Hard Machines)
 Delivery truck - The delivery truck will carry the Mang Bagoong products from the
production plant to Abra de Ilog. [t will also be their official service for the business.
There is already an available truck the one used for the Mang Bagoong domestic
business.
 Fully sanitized drums- These drums will be used for the fermentation of Mang
Bagoong.
b. Telecommunications and Information Technology
 Laptop-This will be used to monitor orders and make reports and for accounting.
research, administrative tasks, digital marketing, and online banking,
 Smartphones-Smartphones and similar gadgets will be used for digital

communication, mobile applications, mobile marketing, teleconferencing research,
and mobile banking.
 Web sites and social media pages - These will be created to promote Mang
Bagoong online.
IV. Materials are the inputs or ingredients needed to manufacture a product.
The materials needed are basically the inputs of production mentioned previously:
fish (dilis, galunggong, inglis, or tulingan), salt, water, drums or barrels, and packaging
materials.
Bagoong is fermented for 30-90 days. The prepared solution is mixed every day to
maintain the consistency of the flavor. Mang Bagoong is prepared by mixing th fish, and
salt in a 25 percent salt to 75 percent fish ratio by weight.
During the preparation process and fermentation period of bagoong, workers must
maintain proper hygiene to conform to the highest international standards. The shelf life
of Mang Bagoong lasts up to two years with proper handling and prevention of spoilage.
The supplies will come from the local market in Mamburao, Occidental Mindoro which is
500 meters away from the manufacturing plant
Read the article "Top Tools and Techniques to Make Your Business More Efficient" on
http:/www.theguardian.com/small-business-network/2013/oct/18/top-tools-techniques-efficient-
business. Which do you think among these tools and techniques should be utilized by Filipino
entrepreneurs? How will these tools and techniques help them?
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
Other Operational Costs

Other operational costs are costs not directly associated with manufacturing a product.
The cost of operations should be calculated from the onset, accounting for all aspects of
operations including the depreciation of equipment. The cost per unit calculated based on Price
of the 7Ps of Marketing already include total costs associated in producing Mang Bagoong which
is P54.92 per bottle. For Year 1 marketing expense, the amount is P167 703.58 while P170 000
per year will be allocated for the next three years. Mang Bagoong will devise strategic marketing
tactics every year depending on importer/customer behavior
Here are the costs of smartphones and laptops to be depreciated for three years:
Smartphone P30 000

Laptop P40 000
Total P70 000 (÷ 3 years)
Year 1 Expense for smartphone and laptop = P23 333.33

Prepare a marketing plan for the business you have chosen in the first What
Have I Learned So Far? in this module. Use a separate sheet of paper for this activity.
Crafting a Financial Plan

A financial plan is a plan that details where the entrepreneur wants to take his or her
business in terms of profitability, cash flow, and net worth. The basic rule for a financial plan or a
financial projection of a business is that it should be neither overly optimistic nor overly
cautious. In short, it must be realistic. Below is the format of a financial plan.
A. Projected Income Statement (three to five years)
B. Projected Balance Sheet (three to five years)
C. Projected Cash Flow Statement (three to five years)
Check the projected income statement for four years of Mang Bagoong. The figures ay
are based on the results of the Mang Bagoong sales forecast driven by marketing and negotiation
strategies plus the operational plan with the costs to be incurred. This is the most realistic high-
level financial plan appropriate for Mang Bagoong given the internal and external circumstances
facing the business. It is assumed that funding for the business is available and sourced from the
current capital of the Mang Bagoong business in their domestic operations and loans from local
banks.
Projected Income Statement for Year 1 to 4
Year 1 Year 2 Year 3 Year 4

Mang Bagoong
Sales at P90 per P 900 000 P 990 000 P 1 138 500 P 1 366 200
bottle
Less: Cost of Sales
at P54.92 per (P 549 200) (P 604 120) (P 694 738) (P833 686)
bottle
Gross Profit P 350 800 P 385 880 P 443 762 P 532 514
Less: Marketing
(P 167 704) (P170 000) (P 170 000) (P170 000)
Expenses
Less: Other
Operating (P 23 333) (P 23 333) ( 23 333) (P 23 333)
Expenses
Net Income Before
P 159 763 P 192 547 P 250 429 P 339 181
Tax
Less: Income Tax (P 31 953) (P 38 509) (P 50 086) (P 67 836)
Net Income P 127 810 P 154 038 P 200 343 P 271 345
Mang Bagoong
Balance Sheet
As of 31 Decenber 2017
Assets
Current Assets
Cash P 2 000 000
Accounts Receivable 100 000
Mang Bagoong Inventory 50 000
Short-term Investments 200 000
Prepaid Expenses 200 000
Total Current Assets P 2 550 000
Non-current Assets
Delivery Truck P 500 000
Accumulated Depreciation- Delivery Truck (100 000)
Other Long-term Investments 400 000
Total Noncurrent Assets P 800 000
Total Assets P 3 350 000
Liabilities
Accounts Payable to Suppliers P 700 000

Notes Payable 300 000
Business Loan 800 000
Total Liabilities P 1 800 000
Owner's Equity
Mang Bagoong, Capital P 1 550 000
Total Owner's Equity P 1 550 000
Total Liabilities and Owner's Equity P 3 350 000

Prepare a financial plan for the product or service business you have chosen in the first
What I Have Learned So Far? in this module. Use a separate sheet of paper tor this activity.
Consolidating the Components of the Business Plan
After plotting all the necessary components of the business plan one by one, consolidating
these pieces of information now becomes easy. Below is a simplified format of business plan.
A. Executive Summary
B. The Competitive Environment

1. Industry Analysis (Porter 's Five Forces Model of Competition)
2. Competitive Analysis (Competitive Profile Matrix)
C. Competitive Strategies
D. The Product or Service Offering
E. The Value Proposition and Unique Selling Proposition
F. The 7Ps of Marketing (Marketing Mix)
1. Product
2. Place
3. Price
4. Promotion
5. Packaging
6. People
7. Process
G. Sales Forecast
H. Methods
1. Manufacturing/Sourcing of Goods or Service Delivery Process
2. Distribution Method
3. Payment Process
I. Manpower
1. Job Description
2. Employee Qualification
3. Selection of Job Applicants
4. Job Offer
5. Employee Development
J. Machines
1. Equipment and Other Physical Facilities
2. Telecommunications and Information Technology
K. Materials
1. Suppliers
2. Logistics
L. Projected Income Statement (three to five years)
M. Projected Balance Sheet (three to five years)
N. Projected Cash Flow Statement (three to five years)
O. Conclusion and Recommendations
During the grueling weeks of preparing the business plan, it will be very helpful to have an
entrepreneur-mentor or a professor guide your group for alignment and for strategic direction as
well.

Read the article "Profitable Business Ideas in the Philippines" on
http://www.moneymakerphilippines.com/2015/05/profitable-business-ideas-in-philippines.html.
After reading, answer the following:
1. Among the businesses mentioned, what do you think will be the most profitable based on
your own financial projections for the next three to five years
______________________________________________________________________
______________________________________________________________________
2. Do you think the cost of franchising business in the Philippines is profitably reasonable or
not? Why?
______________________________________________________________________
______________________________________________________________________
Extend Your Knowledge

To further extend your knowledge on how to create a business plan, you can visit
www.entrepreneur.com.ph/startup-tips/now-to-create-a-business-plan/page/17.
ESSENTIAL LEARNING
This module gave real-world insights in the preparation of a business plan from the
standpoints of different entrepreneurs in the given cases. It also narrated insightful
encounters with mentors/entrepreneurs/professors. The business plan as discussed serve
as the blueprint in implementing a business; thus, it is crucial that each entrepreneur must
prepare a well-researched and well-written business plan. Without a well-researched and
well-written business plan, it will be cumbersome for an entrepreneur to implement the
business since there is no guide or direction to follow.
A strategy plan was made upon close scrutiny of the competitive environment and the
industry where the business operates. The applications of appropriate competitive
strategies were also presented through the various cases discussed.
The marketing plan was taught so that you will be able to bear in mind that only appropriate
marketing strategies must be implemented based on the market needs. The product or
service offering must satisfy specific questions as well. The Value Proposition and Unique
Selling Proposition were also discussed as necessary for the longevity of the business
and to keep it competitive. The 7Ps in Marketing were also taught to aid you in ne
promotion of products or services, whether domestically or internationally. You were also
familiarized with the steps in making a sales forecast which will serve as the objective of
a business in the next three to five years.
The 4Ms of Operations the methods or processes of the business and how to make them
efficient and effective, the manpower that runs the business, the machines that make
business processes simpler, and the materials needed for production were also taught in
this unit. Additionally, this module introduced you to the financial plan, a document that
presents numerical values to the marketing and sales efforts to be implemented and the
costs to be incurred. A carefully made financial plan can tell whether a business is worth
pursuing or not. The elements you learned in this module strategy plan, marketing plan,
operations plan, and financial plan-make up a simplified business plan that covers all
facets of a prospective business.
Culminating Output
Finding a Business Opportunity and Preparing the Business Plan
1. Form a team with five members. Each of you must scan his or her environment and find
the most compelling business opportunities derived either from external sources or
internal sources. Therefore, each one of you must prepare an individual Opportunity
Attractiveness Matrix (OAM).
2. Each of you must present your individual OAM, highlighting the top business opportunity
in your locality. You and your team must convene and prepare the final OAM, choosing
only one of the business opportunities presented the one with the highest score in the final
OAM.
3. Once the most compelling opportunity has already been identified, your team should
strategically decide whether you will implement the business in your school with an ABM
professor as a mentor (Model A, a school-based business to be discussed in detail in the
next unit) or implement the business in your community with an existing
entrepreneur/industry partner venturing in the same business that you and your team have
identified (Model B, actual community-based business also to be discussed in detail in the
next unit). After finalizing which model to follow. Your team can know start preparing a
comprehensive business plan for your chosen business opportunity.
4. Make sure that your team cites the source of each piece of information included in your
business plan to avoid plagiarism. Additionally, the tasks should be distributed equally to
all members, with each one having specific tasks according to his or her capabilities. The
business plan should be professional-looking, free of grammatical and spelling errors, and
full of relevant content.
5. The final business plan must be submitted to your ABM professor or industry partner on
the set deadline. The ABM professor or industry partner will then review the business plan
thoroughly before he or she gives a recommendation for implementation. Additionally, he
or she will advise the students if there is a need to revise any portion of the business plan.
6. You and your team will be graded by your ABM professor or industry partner using the
Rubric for Making a Business Plan found on the next page.
RUBRIC FOR MAKING A BUSINESS PLAN
Criteria Excellent Good Poor Score

Competitive The content of the The content of the The content of the
Strategy Plan business plan clearlybusiness plan business plan not
(15%) followed the dynamicssomehow followed the clearly follow the
of devising a strategy
dynamics of devising a dynamics of devising
plan for competitive strategy plan for a strategy plan for
advantage. (15) competitive competitive
advantage. (10) advantage. (5)
Marketing and The content of The content of the The content of the
Sales Plan (30%) business plan clearly business plan business plan not
followed the marketing somehow followed the clearly follow the
and sales plan marketing and sales marketing and sales
components and was plan components and plan components and
able to improvise was somehow able to was not able to
strategic marketing and improvise strategic improvise strategic
sales tactics (30) marketing and sales marketing and sales
tactics. (20) tactics. (10)
Operations Plan The content of the The content of the The content of the
(30%) business plan clearly business plan business plan did not
followed the operations somehow followed the clearly follow the
plan components, operations plan operations plan
including improvising components, including components.(10)
strategic operational improvising strategic
efficiencies. (30) operational
efficiencies. (20)
Financial Plan The content of the The content of the The content of the
(15%) financial plan clearly financial plan financial plan did not
followed the correct somehow followed the clearly follow the
preparation and correct preparation correct preparation
presentation of and presentation of and presentation of
financial statements financial statements financial statements
based on reasonable based on reasonable based on reasonable
estimates. (15) estimates. (10) estimates. (5)
Peer Rating The group member The group member The group member
(10%) was consistent and somehow consistent was inconsistent and
instrumental in crafting and instrumental in contributed little
the business plan. (10) crafting the business crafting the business
plan. (7) plan. (4)
Adopted from: Diwa Senior High School Series: Business Enterprise Simulation

Module 2 - Business Enterprise Simulation-1

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Module 2 - Business Enterprise Simulation-1

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Republic of the Philippines

MARINDUQUE STATE COLLEGE

WHAT I NEED TO KNOW

MOST ESSENTIAL LEARNING COMPETENCIES

PREPARING THE BUSINESS PLAN

A business plan is like an

Preparing a Strategy Plan for Competitive Advantage

The Competitive Environment

 the dynamic external system in which a business competes and functions.

Street vendors selling the same goods

Below is the format of a Strategy Plan for Competitive Advantage (SPCA):

Assessment: Medium Pressure

Assessment: Low Pressure

3. The Bargaining Power of Buyers (Online Businesses)

4. The Bargaining Power of Suppliers (Online Freelancers)

Assessment: Low to Medium Pressure

5. Rivalry among Existing Firms

Assessment: Low Pressure

 A CPM is an essential strategic management tool that compares the entrepreneur s

Competitive Profile Matrix

Weighted Score = (Weight x Rating)

 According to http://www.businessdictionary.com/definition/cost-leadership.html, cost

Differentiation strategy - a strategy that highlights the uniqueness or difference of a

BEYOND WALLS 2.1 Read and Answer

What Have I Learned So Far?

Chosen product or service: _______________________________________________________

Preparing a Marketing Plan

 a business document outlining your marketing strategy and tactics.

Below is a sample simple format of a marketing and sales plan.

A. The Product or Service Offering

B. The Value Proposition and Unique Selling Proposition

C. The 7Ps of Marketing (Marketing Mix)

Product or Service Offering

 Will you offer a product, a service, o a hybrid (product and service)?

Service: Smartphone repair service

Hybrid: smartphone distribution and repair service

Examples: Smartphone products, air-conditioning units, televisions, refrigerators, \

 Will you offer a product, a service, or a hybrid (product and service)?

The Value Proposition and Unique Selling Proposition

The 7Ps of Marketing

Product: Fish paste (bagoong isda)

Variable Cost Fixed Cost

(Manila to Myanmar) P 2 000

Below is a detailed computation for the price of Mang Bagoong.

1. Add Variable Cost and Fixed Cost to get Total Cost.

P14 150 + P18 800 = P32 950

600 bottles = P54.92 for 9 oz. or 265 ml per bottle

Selling Price P90.00

Cost Per Unit P54.92

Gross Profit per Unit P35.08

Promotion: Promoting a product abroad is way different than promoting it in the

Below are examples of two of the direct competitors in Thailand

Nasi Goreng Ikas Bilis Crostini with crushed eggs and

Crispy Chicken covered Pad Cha with Mang Bagoong

 Food Expo (ThaiFex - World of Food Asia)

P16 283.93 per m

Transportation and Lodging Expense - P50 000.00

 Article placement in Food and Beverages Magazine by Tuttle Publishing

P5 000.00 x 4 months/year = P20 000.00

2. Do you think it is mandatory nowadays to promote a product or service on social media?

Sample box partition

Each product placed in an

Products placed in a box.