Senior High School

Entrepreneurship
Module 11:
Business Models

AIRs - LM
LU_ Entrepreneurship_Module 11
ENTREPRENEURSHIP
Module 11: Business Models
Second Edition, 2021

Copyright © 2021
La Union Schools Division
Region I

All rights reserved. No part of this module may be reproduced in any form without written
permission from the copyright owners.

Development Team of the Module

Author: Encarnacion R. Basallo

Editor: SDO La Union, Learning Resource Quality Assurance Team
Content Reviewer: Jimena Veronica T. Nieva
Language Reviewer: Kay Owen L. Boado
Illustrator: Ernesto F. Ramos, Jr.
Design and Layout: Angela Pauline C. Ganuelas & Hasmin R. Omaoeng

Management Team:

Atty. Donato D. Balderas, Jr.

Schools Division Superintendent
Vivian Luz S. Pagatpatan, Ph.D
Assistant Schools Division Superintendent
German E. Flora, Ph.D, CID Chief
Virgilio C. Boado, Ph.D, EPS in Charge of LRMS
Lorna O. Gaspar, EPS in Charge of Entrepreneurship
Michael Jason D. Morales, PDO II
Claire P. Toluyen, Librarian II

Printed in the Philippines by: _________________________

Department of Education – SDO La Union

Office Address: Flores St. Catbangen, San Fernando City, La Union
Telefax: 072 – 205 – 0046
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LU_ Entrepreneurship_Module 11
 Senior High School

Entrepreneurship
Module 11:
Business Models

Module 11:
Business Model

LU_ Entrepreneurship_Module 11
Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear
learners, can continue your studies and learn while at home. Activities,
questions, directions, exercises, and discussions are carefully stated for you
to understand each lesson.

Each SLM is composed of different parts. Each part shall guide you
step-by-step as you discover and understand the lesson prepared for you.

Pre-tests are provided to measure your prior knowledge on lessons in

each SLM. This will tell you if you need to proceed on completing this module
or if you need to ask your facilitator or your teacher’s assistance for better
understanding of the lesson. At the end of each module, you need to answer
the post-test to self-check your learning. Answer keys are provided for each
activity and test. We trust that you will be honest in using these.

In addition to the material in the main text, Notes to the Teacher are
also provided to our facilitators and parents for strategies and reminders on
how they can best help you on your home-based learning.

Please use this module with care. Do not put unnecessary marks on
any part of this SLM. Use a separate sheet of paper in answering the exercises
and tests. And read the instructions carefully before performing each task.

If you have any questions in using this SLM or any difficulty in

answering the tasks in this module, do not hesitate to consult your teacher
or facilitator.

Thank you.

LU_ Entrepreneurship_Module 11
 Target

The biggest challenge to face when starting a business is to understand the

problem that needs solution for your customers.

One part of starting a successful business is to ensure that your product fits
the needs of the market and the other is to figure out how the business is going to
be profitable. This is where the business model comes into play.

Where will your business idea start, how should it progress, and when will
you know you have been successful? How will you create value for customers? These
are some fundamental questions that need to be answered as you go through with
this module.

In this module, the learner’s will be able to develop a business model.

(TLE_ICTAN11/12EM-Ia-2).

At the end of this module, you are expected to:

 Understand the components of the business model;

 Identify and discuss the importance of the business model; and
 Develop a business model

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LU_ Entrepreneurship_Module 11
 Jumpstart

Activity 1.

Direction: Using the concept map, write the components in developing a business
model. Use another sheet of paper for your answer.

Activity 2.

Direction: Read carefully. Identify which component of a business model is used

to answer the given question. Use another sheet of paper for your answer.

______________1. What benefits of your products and services can you provide to
your customers?
______________2. What do you need to manage your business?
______________3. Who are your suppliers/key partners?
______________4. How will your product and service reached and sell to your
customers?
______________5. What will you do to attain your value proposition?

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LU_ Entrepreneurship_Module 11
 Discover

After finalizing your business and presenting your prototype, it is time to

develop your business model. Creating an effective business model is essential in
determining fundamental expectations and decisions on the opportunity of the
business, and setting the right track for it to be a success.

Some most successful businesses today used design thinking, powerful

approach, regular and confident transition as their business models to be able to
upgrade and adapt in a changing world.

What is a Business Model and Its Importance?

Starting up a business is a lot like building a house. Imagine a house

constructed without initial plans. Making a business model means planning. It is
the foundation for every enterprise and its products. It also describes the basis of
how your business will generate revenue and provide the best value to your
customers. Business model represents the whole procedure of creation, delivery,
and capturing of structural values in both financial and community aspects.

With a business model, entrepreneurs will have a clear idea of how to best
raise the business, and it will be much easier to produce a stable and sustainable
concern. An appropriate business model helps to identify elements in your business
concept such as: solving problems for whom; how to create customer value; how to
deliver product or service to customers; how to retain competitiveness of the
business; and foresee all revenue and costs.

The business model allows entrepreneurs to analyze, evaluate, and figure out
various methods to design revenue streams and costs. Estimating costs to the initial
launch of a product is insufficient. A business has to keep working until
its revenues surpass its expenses.

Business models are also important for both recent and stable businesses. It
helps new company to attract investors, recruit right talents, inspire the organization
and guide the entire management strategy to ensure your business idea is working
successfully. For stable businesses, it serves as the foundation for developing
financial predictions, setting achievements, and guideline for reviewing and updating
your business plans in preparation for future challenges and trends.

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LU_ Entrepreneurship_Module 11
Components of a Business Model

The key components of an effective business model are interconnected with

each other and are supported with good features. There are numerous methods to
consider, but these components have been adapted to have simpler approach to help
you develop your own business model. The following are six major components of a
business model:

n Channels
Distributio
Partners

BUSINESS
Key

MODEL

Figure 1. Components of a Business Model

1. CUSTOMER-SEGMENTS

Who are your customers? The main reason why you are
creating your products and services are simply for your
customers. It is an essential key of a business model to ensure
that the products and services are associated with the customer’s
needs and wants. Examples of customer-segments are mass
market, niche market, segmented, diversified and multi-sided
markets. To have an effective customer segmentation, an
https://cdn1.iconfinder.com/data/i
cons/business-management-and-
growth-18/64/911-512.png
organization must first identify their customers and determine
both their current and future needs.

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LU_ Entrepreneurship_Module 11
2. VALUE PROPOSITION

What benefits can your products and services provide to

your customers? Determine what makes your product unique
and better from your competitors. This is the reason why
customers purchase your product because of the tangible and
intangible benefits gained over the others. Once you have
defined the value proposition, connect each one to a service or
product to determine how will you stay marketable to
https://static.thenounprojec
customers in a long run. t.com/png/1814412-
200.png

3. DISTRIBUTION CHANNELS

How will your product and service reach your customers?

It is the process of bringing the product and services to the
customer. It may be a physical, online or direct store. To do so,
a manufacturer should acquire the most convenient passage to
send the products through different chain process called the
distribution channel so you can achieve higher sales.

https://cdn2.iconfinder.com/data/ico
ns/logistics-delivery-1-3/66/7-512.png

4. KEY RESOURCES

What do you need to manage your business? Resources

are needed to create value for customers. They are considered
the main asset to ensure your business model is sufficiently
prepared to sustain and support the needs of your business.
These can be characterized into four main categories:
1. Physical resources - Tangible resources use to create its
value proposition such as raw material, buildings, machines and https://cdn4.vectorstock.com
factory, distribution systems and etc. /i/thumb-large/29/98/hands-
hold-gear-icon-outline-
vector-28972998.jpg

2. Human resources – The employees are the most valuable

key resources that help develop the business through creative innovations and have
the needed skills and knowledge that bring out the uniqueness of your business from
that of the others.

3. Intellectual resources – These are significant intangible resource that can

be used when promoting new products such as brand, copyrights, partnerships, or
even a food recipe.

4. Financial resources - Money or capital is the most essential resource needed

to start out buying things for your business.

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LU_ Entrepreneurship_Module 11
5. KEY ACTIVITIES

What will you do to attain your value proposition? The

customers are expecting extra ordinary things from your
business. These are important strategy that the company will
implement to operate successfully and to achieve a
competitive edge in the business industry. Below are some
examples of key activities based on your business:
https://cdn.iconscout.com/icon/premi

 Ask for referrals um/png-256-thumb/key-activity-

1792233-1522532.png

 Gift giving to those who send referrals

 Communication with clients
 Improving the onboarding procedure
 Continuing on highest of marketing trends to improve the service
 Enhancing the sales process, and etc.

6. KEY PARTNERS

Who are your suppliers/key partners? Businesses

cannot function properly without key partners that provide
ability to serve customers. Key partners are the
relationship of a business with another business to ensure
that your business model will work. This can be a
relationship with the suppliers, strategic alliances, or
advertising partners. The partnership that you
https://www.secureco.co/wp-
content/uploads/2018/12/partner will create will bring impact to help your business in the
-icon.png
field that would be inadequate or lacking for your business
to do on its own.

A good business model is simple and understandable. It answers the key

questions about what you are trying to reach and for whom.

And strong business model strengthens thorough analysis and it eliminates

anxiety by providing a scheme for improvement, these are the ultimate benefit of a
business model.

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LU_ Entrepreneurship_Module 11
 Explore

Activity 3: Direction: Read each item carefully. Choose the letter of the correct
answer in the box and write it in a separate sheet of paper.

A. Business Model E. Intellectual Resources I. Physical Resources

B. Customer-Segment F. Key Activities J. Value Proposition
C. Distribution Channel G. Key Partners
D. Human Resources H. Money/Capital

___1. It is an essential key of a business model to ensure that the product and
services are associated with the customer’s needs and wants.
___2. These are significant intangible resource that can be used when promoting
new products such as brand, copyrights, partnerships, or even a food recipe.
___3. It represents the whole procedure of creation, delivery, and capturing
of structural values in both financial and community aspects.
___4. A passage to send the products through different chain process.
___5. The relationship of a business with the other business to ensure that your
business model will work.
___6. Tangible resources use to create its value proposition.
___7. These are important strategy that the company will implement to operate
successfully and to achieve a competitive edge in the business industry.
___8. It is the most essential resource needed to start out buying things for your
business.
___9. It is the reason why customers purchase your product because of the tangible
and intangiblebenefits gained over the others.
___10. It helps develop the business through creative innovations and handle the
skills and knowledge that brings uniqueness to the business from another.

Activity 4. Enumeration:

A. Give three importance of a business model.

1. ________________________________________________________________________
2. ________________________________________________________________________
3. ________________________________________________________________________

B. List the four main categories of key resources.

1. ________________________________________________________________________
2. ________________________________________________________________________
3. ________________________________________________________________________
4. ________________________________________________________________________

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LU_ Entrepreneurship_Module 11
 Deepen

Activity 5. Direction: Choose any trending/popular business operated during this

pandemic. Develop an applicable Business Model for the business owner. Use the
guide questions in the table to provide the necessary information needed to create a
Business Model. Use separate sheet/s for your answer.

Business Name:

Product/Service

Who are your customers?

Customer:

What benefits of your products and services can you

Value provide to your customers?
Proposition

How will your product and service reached and sell to

Distribution your customers?
Channel

What do you need to manage your business?

Key Resources

What will you do to attain your value proposition?

Key Activities

Who are your suppliers/key partners?

Key Partners

Scoring Rubric
Indicator Moderate Strong Strong Evidence (3-4 Very Strong Evidence
Evidence (1-2 points) (5 points)
points)
Quality of Learners did some of Some details may not Most details are
Work/ the information, but be reflected accurately correctly reflected in
Understanding it has missing in in the table. It may the table. It includes
significant details. be missing and hard to all necessary
understand. information that is
easy to understand

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LU_ Entrepreneurship_Module 11
 Gauge

Direction: Read each item carefully. Choose the letter of the correct answer and
write it in a separate sheet of paper.

1. Which of the following is NOT included as a component of a business model?

A. Customer-Segment B. Executive Summary
C. Key Activities D. Key resources

2. Which of the following best describes a business model?

A. A plan for growth.
B. An experimental of the business.
C. A series of theories that the business suggests to perform.
D. A framework on how a company produce, delivers, and extracts value.

3. Mass market, niche market, segmented, diversified and multi-sided markets

are all examples of what components of a business model?
A. Customer segments B. Key Resources
C. Key Partners D. Value proposition

4. Which of the following reason why customers purchase your product?

A. Provide excellent service B. Benefits gained over the other
C. Unique value of the product D. All of the above

5. Which component of the business model describe the network of suppliers

and partners who complement each other to ensure that your business model
will work?
A. Customer segments B. Key Resources
C. Key Partners D. Value proposition

6. Which of the following pertains to the asset that allows an enterprise to create
value for the customer?
A. Customer segments B. Key Resources
C. Key Partners D. Value proposition

7. The online marketplace website falls under which of the following components
in the business model?
A. Customer segments B. Distribution Channel
C. Key Activities D. Value proposition

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LU_ Entrepreneurship_Module 11
8. When to have an effective customer segmentation?
A. First identify their customer and determine both their current and
future needs.
B. First need to plot a new profit plan and develop new resources and
procedure.
C. The manufacturer should acquire first the most passage to send
products.
D. Select your partners properly that provide ability to serve customers.

9. Which of the following question is interrelated to the value proposition in a

business model?
A. How much is the product value in the market?
B. What problem are you trying to help our customers to solve?
C. Is there anyone in the business doing the same job at a lower cost?
D. How much is a customer willing to pay for the service or product we
offer?

10. Which business concept could not be identified using the business model?
A. Solving problems for whom?
B. How to create customer value?
C. How to deliver product or service to customers?
D. How much is the product value in the market?

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LU_ Entrepreneurship_Module 11
LU_ Entrepreneurship_Module 11
11
JUMPSTART
Activity 2.
1. Value Proportions
2. Key Resources
3. Key Partners
4. Distribution Channel
5. Key Activities
EXPLORE GAUGE
Activity 3 1. B
2. D
1. B 3. A
2. E 4. D
3. A 5. C
4. C 6. B
5. G 7. B
6. I 8. A
7. F 9. B
8. H 10. D
9. J
10. D
Answer Key
References

Alton, Larry. (2015, April 22). The 7 Elements of a Strong Business Model.
https://www.entrepreneur.com/article/243753

Contributor, Chron. (2021, July 19). Components of a Business Model.

https://smallbusiness.chron.com/components-business-model-3861.html

Department of Education. (2020). Entrepreneurship Learner’s Material. First

Edition 2018.

Kopp Carol M. (2020, July 03). What Is a Business Model?

https://www.investopedia.com/terms/b/businessmodel.asp

Haaff, Brian de. (2017, August 1)The 10 Main Components of a Business

https://www.entrepreneur.com/article/243753

https://www.mbaknol.com/general-business-articles/business-model/

Mishra, Sonal. (2021, October 4). 6 Components of a Strong Business Model

https://upmetrics.co/blog/6-components-strong-business-model

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 For inquiries or feedback, please write or call:

Department of Education – SDO La Union

Curriculum Implementation Division
Learning Resource Management Section
Flores St. Catbangen, San Fernando City La Union 2500
Telephone: (072) 607 - 8127
Telefax: (072) 205 - 0046
Email Address:
launion@deped.gov.ph
lrm.launion@deped.gov.ph

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