SENIOR

Entrepreneurship HIGH
SCHOOL

Module

Developing Business Model 6

Quarter 2
Entrepreneurship
Quarter 2 – Module 6: Developing Business Model
First Edition, 2020

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Entrepreneurship
SENIOR
HIGH
SCHOOL

Self-Learning
Module

6
Quarter 2

Developing Business Model

Introductory Message

For the facilitator:

Welcome to the Entrepreneurship with Grade 12 Self-Learning Module on

Developing Business Model!
This Self-Learning Module was collaboratively designed, developed and
reviewed by educators from the Schools Division Office of Pasig City headed by its
Officer-in-Charge Schools Division Superintendent, Ma. Evalou Concepcion A.
Agustin, in partnership with the City Government of Pasig through its mayor,
Honorable Victor Ma. Regis N. Sotto. The writers utilized the standards set by the K
to 12 Curriculum using the Most Essential Learning Competencies (MELC) in
developing this instructional resource.

This learning material hopes to engage the learners in guided and independent
learning activities at their own pace and time. Further, this also aims to help learners
acquire the needed 21st century skills especially the 5 Cs, namely: Communication,
Collaboration, Creativity, Critical Thinking, and Character while taking into
consideration their needs and circumstances.

In addition to the material in the main text, you will also see this box in the
body of the module:

Notes to the Teacher

This contains helpful tips or strategies that
will help you in guiding the learners.

As a facilitator you are expected to orient the learners on how to use this
module. You also need to keep track of the learners' progress while allowing them to
manage their own learning. Moreover, you are expected to encourage and assist the
learners as they do the tasks included in the module.
 For the learner:

Welcome to the Entrepreneurship Self-Learning Module on Developing

Business Model.
This module was designed to provide you with fun and meaningful
opportunities for guided and independent learning at your own pace and time. You
will be enabled to process the contents of the learning material while being an
active learner.

This module has the following parts and corresponding icons:

Expectations – These point to the set of knowledge and skills

that you will learn after completing the module.

Pretest - This measures your prior knowledge about the lesson

at hand.d

Recap - This part of the module provides a review of concepts

and skills that you already know about a previous lesson.

Lesson - This section discusses the topic in the module.

Activities - This is a set of activities that you need to perform.

Wrap-Up - This section summarizes the concepts and

application of the lesson.

Valuing - This part integrates a desirable moral value in the

lesson.

Posttest - This measures how much you have learned from the
entire module.
 EXPECTATIONS

LEARNING OBJECTIVES: After going through this module, you are expected to:

1. identify the different key components of the business model canvas;

2. recognize the importance of a business model that would help

in determining the success or failure of a business; and
3. create a business model canvas according to your selected
product/service.

PRETEST
DIRECTIONS: Read each item carefully. Select the letter of the best answer
from the choices given.

______1. What term refers to a conceptual structure that supports the viability of the
business?
A. Business Plan B. Business Model
C. Business Process Enterprise D. Feasibility
______2. Which of the following terms is not a part of a business model?
A. Everything related to designing and manufacturing the product
B. Everything related to selling the product
C. Everything related to keeping business records
D. Everything related to how the business will make money.
______3. Which question statement does not apply to the business model?
A. Who your customer is?
B. How to recruit people
C. What value can you create for your customer?
D. How will you manage your costing?
______4. What term refers to dividing a customer based into groups of individuals?
A. Key Partners B. Value Proposition
C. Key Resources D. Customer Segments
______5. Why does an entrepreneur need to use a business model canvas?
A. It allows everyone to get a clear idea of what the business will likely be.
B. A mission statement for a product roadmap.
C. To quickly draw a picture of what the business demands.
D. All of the above.
 RECAP

Review of our previous lesson about recruiting qualified people for one’s business
enterprise. Enumerate the stages of the recruitment process and give a brief
explanation in each stage.

LESSON
Answer the following questions:

1. What does a teacher need in order for him/her to teach?

2. What does an architect need for him/her to propose a plan?

3. What does an entrepreneur need for him/her to propose a business plan

strategy?

Business Model - is a conceptual framework that encourages the

sustainability of a company and describes how it works, makes money, and how it
aims to achieve its objectives. Many of the business procedures and practices that
an organization adopts and implements are part of the business model.

According to management expert Peter Drucker (Das 2020, 1) “A business

model is supposed to answer who your customer is, what value you can create/add
for the customer and how you can do that at reasonable costs.”

Every business model has three parts:

1. All about product design and how to manufacture a product.

2. Selling the product and finding the right customer to allocate a product.
3. How the business earns money.
But there is a clearer view to present a Business Model through a Business Model
Canvas.

Business Model Canvas - strategic management and a startup template for

the development of new business models or for documentation. IMD Professor of
Innovation Management, Bill Fischer and Alex Osterwalder created and started the
Business Model Canvas.
 The business model canvas is the “Most prominent popular tool that makes it
simple for practitioners to design business models in a creative session." (De Reuver
2013, 17)

There are nine different components to a business model.

The following nine elements make up the boxes of The Business Model
Canvas, and each element comes with instructions and questions to consider before
filling in that box.

1. Key Partners
2. Key Activities
3. Key Resources
4. Value Propositions
5. Customer Relationships
6. Customer Segments
7. Channels
8. Cost Structure
9. Revenue Stream

Business Model Canvas

KEY PARTNERS KEY VALUE CUSTOMER CUSTOMER
ACTIVITIES PROPOSITION RELATIONSHIPS SEGMENTS
Your business creates
strategic relationships The type of
with other companies Activities or The essential need connections your A different groups
or with other people. tasks that are that your business business has with of people your
essential to is trying to fulfill for its customers and business interacts
1. Who are our key operating your its customers. the level of support with.
partners and
business. it gives.
suppliers?
2. Which key activities 1. What do you 1. Who are your
do partners perform? What key provide to your 1. What type of customers?
3. Which key activities do our customers? relationship does 2. From whom are
resources need to value 2. What problem each customer you creating value?
acquire from proposition, are you going to segment want?
partners? channels, solve? 2. How costly the
customer 3. What products relationship?
relationships, or services are you 3. How are you
and revenue offering to each going to integrate
streams require? customer segment? with the rest of
4. Which your business
customer’s needs model?
are you satisfying? 1.
KEY CHANNELS
RESOURCES
Assets that are Ways your
required to business uses to
operate and deliver the product
deliver your and value
business value proposition to
proposition. customers.

What key 1. How will you

resources do our reach your
value customer
proposition, segments?
channels, 2. Which channels
customer are most effective?
 relationships, 3. Which one is
and revenue most cost-efficient?
streams require? 4. How channels
integrated?
COST STRUCTURE REVENUE STREAMS
How the business spends money on its operations. The Business source of cash flow.
key cost and the level of cost-focus for your business.
1. What customers are willing to pay?
1. What are the most important cost in your business 2. What and how do they currently pay?
model? 3. How much does each revenue stream contribute to
2. Which key activities and key resources are the most overall revenue?
expensive?

SAMPLE BUSINESS MODEL CANVAS FOR APPLE

Customer segments: Apple’s main consumer segment is the mass market, and Apple
sells globally to customers all over the world. These customers tend to have similar
needs and problems that can be addressed through globally standardized offerings
such as the iPhone and iPad (hardware) as well as iTunes (software).

Value proposition: In a competitive marketplace, Apple must offer a bundle of

products and services that cater to the customer segment. As one illustration, Apple
iTunes offers a seamless music experience where customers can easily find,
purchase, and download music all in one place.

Channels: Customers are able to interact with Apple in person through retail stores
and Apple stores as well as online through the iTunes store and Apple’s company
website.

Customer relationships: Apple’s customers are dedicated to the brand and often have
many Apple products, such as iPhones, iPads, and MacBooks. The Apple love mark
has become a status symbol.

Revenue streams: Apple earns most of its revenues from selling products such as
iPods, and the iTunes store protects them from the competition with similar features.

Key resources: Apple’s key resources include its name brand, hardware and software,
and content.

Key activities: Apple products have outstanding marketing and hardware design.

Key partnerships: Through negotiations and contracts, Apple’s iTunes store is one of
the world’s largest online music libraries.

Cost structure: Most of Apple’s costs come through manufacturing and marketing,
including employee salaries.

KEY KEY VALUE CUSTOMER CUSTOMER

PARTNERS ACTIVITIES PROPOSITION RELATIONSHIPS SEGMENTS

• Marketing • Seamless • Love mark • Mass

• Record • Hardware music • Switching market
companies design experience costs
• OEMs
 • People KEY CHANNELS
• Content & RESOURCES
agreements
• Apple brand • Retail stores
• iPad • Apple stores
hardware • Apple.com
• iTunes • iTunes store
software
• Content &
agreements

COST STRUCTURE REVENUE STREAMS

• People • iTunes store

• Manufacturing • Large hardware revenues
• Marketing/sales • Some music revenues

(Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)

SAMPLE BUSINESS MODEL FOR AUTOMOBILE COMPANY

It focusses on safety, reliability, style, and mass appeal. A company like Honda or
Toyota would fit the description of this business model.
Model by CFI
KEY PARTNERS KEY ACTIVITIES VALUE CUSTOMER CUSTOMER
PROPOSITIONS RELATIONSHIPS SEGMENTS
- the automotive firms -extensive safety
that we can partner testing to ensure the -to provide affordable -excellent customer --customer looking for
with and share reputation and safety of and stylish cars with and maintenance an affordable vehicle
engineering technology drivers great efficiency and services with great fuel
and can help lower safety to everyday efficiency
R&D costs -automation and people who need to -dealerships that are
streamlining to lower travel or commute customer-focused to -customer looking for
-key raw materials and cost and prices for often. help with vehicle stylish with good
manufacturing customers inquiries and performance
equipment suppliers purchases
that help us utilize -R&D to increase drive - customer concerned
economies of scale and quality and improve -customer service call with automobile safety
automation gas mileage center for quick
inquiries and -primarily middle-class
- automotive dealership maintenance families who need a
that stock our cars and appointment four-door sedan for
act as a primary KEY RESOURCES CHANNELS everyday use.
channel with -human capital in -global distribution with
customers. engineers for R&D our key partners -mass market
-capital resources in -paid advertisement on
manufacturing multiple media
equipment channels as well as the
media influencer
-raw materials (steel,
rubber, plastic, -car shows
aluminum, etc.)
-dealership for
automotive sales
 -trade/car show
timeslots and panels to
market vehicles
COST STRUCTURE REVENUE STREAMS

-primary costs are relating to R&D innovative in fuel efficiency - primary revenue streams come from the sale of a vehicle
metrics, car specifications, and features as well as manufacturing
costs from raw materials. - secondary revenue of streams includes maintenance and
specialized vehicle modifications and parts.
-secondary costs arise from marketing on multiple platforms as
well as continuous automation of manufacturing processes. -customers can pay up-front through financing.

-sourcing through key partners allows us to save on raw materials

costs and our large scale of production and mass-market
customer segment allows us to utilize economies of scale.

IMPORTANCE OF BUSINESS MODEL

The business model serves as the business's blueprint and a guide for its
success (or failure) as it describes how the business generates and retains value
through its decisions and processes.
In the past, when there were not many competitors on the market,
entrepreneurs used to start a business and over time, their business model was
changing.

With the growing number of competitors in the market, however, the creation
of a business model has become almost a requirement to determine how the company
can work, interact with customers and distinguish itself in the market. The
marketing model offers consumers a justification to prefer the product over others in
the market.

Before we end our discussion, let me share with you a quotation from Yogi
Berra, “Without a plan, even the most brilliant business can get lost. You need to have
a goal, create milestones, and have a strategy in place to set yourself up for success.”
 ACTIVITIES
ACTIVITY 1. Identification. Identify the answer to the following
questions. Write the letter of the correct answer before the number from
the box below.
______1. It creates strategic relationships with other companies or with other people.
______2. A different groups of people your business interacts with.
______3. It is an asset that is required to operate and deliver your business value
proposition.
______4. Tasks that is essential in operating your business.
______5. Business sources of cash flow.
______6. It is how the business spends money on its operation.
______7. Ways your business uses to deliver the product and value propositions to
customers.
______8. The type of connections your business has with its customers and the level
of support it gives.
______9. The essential need that your business is trying to fulfill for its customers.
_____10. It is strategic management and a startup template for the development of
new business models or for documentation.

A. Key Partners F. Customer Segments

B. Key Activities G. Channels
C. Key Resources H. Cost Structure
D. Value Propositions I. Revenue Stream
E. Customer Relationships J. Business Model Canvas

ACTIVITY 2: Let’s Perform:

DIRECTIONS: In your previous lesson, you have already come up with your
business proposal about your product/service. Out of your business proposal,
create a Business Model using the nine components.
KEY KEY VALUE CUSTOMER CUSTOMER
ACTIVITIES PROPOSITION RELATIONSHIPS SEGMENTS
PARTNERS
•
• •
•
•

KEY CHANNELS
RESOURCES

• •
 COST STRUCTURE REVENUE STREAMS

RUBRICS FOR BUSINESS PLAN MODEL

https://www.rcampus.com/rubricshowc.cfm?code=VX87653&sp=yes&

ACTIVITY 3: Reflect Upon.

DIRECTIONS: In your own understanding, discuss the importance of business
model in 3-5 sentences. Criteria: Explanation 3 points, Organization 2 points.

____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
 WRAP - UP

S T O P Summary! DIRECTIONS: Summarize the lesson by completing the

following sentences.

We Studied the lesson about____________________________________________________

the Topic has taught me things about ___________________________________________

Our Opportunities for practice were ______________________________________________

the Purpose of the lesson was ___________________________________________________

VALUING
PERSONAL CANVAS! Directions: To deepen what you have learned,
create your own personal canvas for you to achieve your goals/aspirations in life.
Think of four components as your guidelines to achieve your goals/aspirations and
give a brief description. Plot your answer below.

POST TEST
Write TRUE if the statement is correct. Write FALSE if the
statement is incorrect.
________1. According to Yogi Berra, a business model is supposed to answer who your
customer is, what value you can create/add for the customer, and how you
can do that at reasonable costs.
________2. Business model canvas is the most prominent popular tool that makes it
simple for practitioners to design business models in a creative session.
________3. The business sources of cash flow determines the revenue stream of
business.
________4. The executive summary serves as a business blueprint and guide for
success.
________5. Customer Segments refer to the group of people that the business interacts
with.
 KEY TO CORRECTION
5. True
4. False
3. False
10. J 9. D 8. E 6. H 7. G 2. True
5. I 4.B 3. C 1. A 2. F 1. False
ACTIVITY 1 POSTTEST

Screening and shortlisting 4.

7. Introduction of the new employee Talent search 3.
6. Evaluation and offer of Employment Preparing for Job Description 2.
5. Interviewing Recruitment Planning 1.

RECAP

1.B 2. C 3. B 4. D 5. D
PRETEST

References
Barquet, Ana Paula B. Et al. 2011. "Business Model Elements for product-servcie
system. "Functional Thinking for Value Creation." In Business Model
Elements for product-service system, by Ana Paula B. Et al. Barquet, 332-
337. Berlin: Springer Berlin Heidelberg.
Business Model Foundry AG. n.d. Strategyzer. Accessed August 16, 2020.
https://cdn.productplan.com/wp-
content/uploads/2018/07/Business_Model_Canvas.png.
Das, Sourobh. 2020. "Business Model." www.feedough.com. July 8. Accessed
August 16, 2020. https://www.feedough.com/what-is-a-business-model/.
De Reuver, Mark, Harry Bouwman, and Timber Haaker. 2013. "Business model
roadmapping: A practical approach to come from an existing to a desired
business model." International Journal of Innovation Management ." In
Business model roadmapping: A practical approach to come from an existing
to a desired business model." International Journal of Innovation Management
, by Mark, Harry Bouwman, and Timber Haaker. e Reuver, 17.
Juncal, Shaun. n.d. "How to Build a Product Roadmap Based on a Business Model
Canvas." Product Plan. Accessed August 16, 2020.
https://www.productplan.com/business-model-canvas/.
Stewart Black, Donald G. Gardner, Jon L. Pierce, and Richard Steers. 2019.
"Organizational Behavior ." BC Campus. July 4. Accessed August 16, 2020.
https://opentextbc.ca/organizationalbehavioropenstax/chapter/business-
modelcanvas/#:~:text=A%20tool%20to%20describe%20and,key%20partners
hips%2C%20and%20cost%20structure.
Tim Vipond. 2015. CFI Education Inc. Accessed August 16, 2020.
https://corporatefinanceinstitute.com/resources/knowledge/strategy/busin
ess-model-canvas-examples/.
https://www.rcampus.com/rubricshowc.cfm?code=VX87653&sp=yes&