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Entrepreneurship
Quarter 2 – Module 6
4 M’s of
Production and
Business Model
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D e p a rtm e n t o f E d u c a tio n ● R e p u b lic o f th e P h ilip p in e s

 What I Need to Know

In developing a business plan, we also have to consider the importance of the 4M’s of operations in
all business opportunities. Because it helps you to identify the problems of the business in the future
and in actual situation especially in the production process and marketing.
In application of your 4M’s of production, it is best to consider the customer’s point of view in
terms of their influences as to why they will buy a particular product, does your product aim to answer
each consumer’s wants or needs and meet up with their expectations over the product, and how do
suppliers, value chain and supply chain affects the business and production.
This module will guide you to demonstrate understanding of the 4M’s of operations and for you to
be able to:

• Describe the 4M’s (Manpower, Method, Machine, Materials) of operations in

relation to the business opportunity;
• Develop a product description;
• Create a prototype of the product;
• Test the product prototype;

W hat I Know

Before we start with this module, answer the following questions below.

D ire ctio n s: Write T ru e if the statement is correct, otherwise write F alse if the statement is incorrect
on the space provided below.
______1. Output represents the final products from the production process and distributed to the
customers.
______2. The 4M’s in the production operation are the materials, manpower, machine and money.
______3. Manpower in production operation refers to the workers involved in the production of goods.
______4. Product description is the marketing copy that explains what a product is and its benefits.
______5. Prototype is a replica of a product.
______6. Product to produce is one of the factors to be considered in the production method.
______7. Educational qualifications and experience is one of the criteria in considering manpower.
______8. Skills and expertise is not important in considering manpower.
______9. Benefits are the reasons why customers will decide to buy the products.
______10. Machine refers to the manufacturing equipment.
______11. Supplier is an entity that supplies goods and services to another organization.
______12. Supply chain is a system of organizations, people, activities, data and properties involved
in moving a product or service from supplier or customer.
______13. Business model describes the rationale of how an organization makes, transports, and
captures value in economic, social, cultural or other contexts.
______14. In selecting the type of equipment to purchase, the entrepreneur may consider cost and
capacity of the equipment.
______15. Value chain is the process or activities by which a company adds cost to an article, that
includes production, promotion, and providing of after-sales service.

Lesson 4 M’s of Operations in Relation to the

Business Opportunity and
1 Developing Business Model

What’s In

In your previous lesson, you learned about the 7P’s of Marketing Mix; Product, Place, Price,
Promotion, People, Packaging and Positioning in relation to business opportunity, wherein marketing
is about creating and accumulating customers. Marketing plans are intended to capture a market
portion and to setback competitors.
B rand nam e was also introduced, where it is a name, symbol, or other feature that
distinguishes a seller’s goods or services in the marketplace. Your brand is one of the greatest assets
because your brand is your customers’ over-all experience of your business.
Experts believed that a good brand can result in better loyalty for its customers, a better
corporate image and a more relevant identity.

What’s New

G U E S S T H E P IC T U R E
D ire ctio n : Given with the following pictures, fill in the following blanks below to form a
meaningful word. Two (2) points for each correct word.

M __ __ P __ W __ R M __ __ H __ N __ S
 M __ T __ __ I __ __ S M __ __ H __ __ S

W h a t is It

The most serious issues in the whole production system are the inputs and
the transformation process. Their quality determines the quality of the output.
The factors involved in the input and the production process are usually referred to
as the Four M’s of production, namely M an pow e r, M etho d, M achine , and M aterials.

Four M’s

• Manpower
• Method OUTPUT
• Machine
• Materials

M an p o w er

- Talks about human labor force involved in the manufacture of products.

- It is measured as the most serious and main factor of production. The entrepreneur must
determine, attain and match the most competent and skilled employees with the jobs at the
most appropriate time period.

- Educational qualifications and experience, status of employment, numbers of workers

required, skills and expertise required for the job are some of the manpower criteria that must
be highly considered by the entrepreneur. M aterial

- Talks about raw materials necessary in the production of a product. Materials mainly form
part of the finished product. Just in case the resources are below standard, the finished
product will be of unsatisfactory as well.

- The entrepreneur may consider cost, quality, availability, credibility of suppliers and waste
that the raw material may produce. M ach in e

- Discusses about manufacturing equipment used in the production of goods or delivery of

services.
 - In the process of selecting the type of equipment to purchase, the entrepreneur may consider
types of products to be produced, production system to be adopted, cost of the equipment,
capacity of the equipment, availability of spare parts in the local market, efficiency of the
equipment and the skills required in running the equipment. M eth o d

- Production method discusses the process or way of transforming raw materials to finished
products. The resources undergo some stages before it is finalized and becomes set for
delivery to the target buyers.

- The selection of the method of production is dependent on product to produce,

mode of production, manufacturing equipment to use and required skills to do
the work.
P ro d u ct D escrip tio n

- Is the promotion that explains what a product is and why it’s worth buying?
The purpose of a produ ct description is to provide customers with details
around the features and benefits of the produ ct so they’re obliged to buy.

- Know who your target market is, focus on the product benefits, tell the full
story, use natural language and tone, use power words that sell, and use
good images. These are guidelines for you to have a good product
description; since some customers are very particular with it since they
consider the welfare of their family, if it is safe to use.
P ro to typ in g
A duplication of a product as it will be produced, which may contain such details as
color, graphics, packaging and directions. One of the important early steps in the
inventing process is making a prototype . Benefits are the reasons why customers will
decide to buy the products such as affordability, efficiency or ease of use. The
features of the product or service merely provide a descriptive fact about the product
or service.
It is better to test your product prototype to meet customers’ needs and expectations;
and for your product to be known and saleable. Pretesting of the product or service is
similar to a sample of the product or service given to the consumer free of cost in
order that he/she may try the product before committing to a purchase.
S u p p lier
An entity that offers goods and services to another business. This entity is
among of supply chain of a business, which may offer the main part of the value
contained within its products. Certain suppliers may even involve in drop
shipping, where they ship goods directly to the customers of the buyer.
S u p p liers are your business partners, without them your business will not live.
You need them as much as you need your customers to be satisfied. But as an
entrepreneur you have to choose a potential supplier that has loyalty and value your
partnership; a supplier that would lead you to the fulfillment of your business
objectives, mission and vision.
V alu e ch ain is a method or activities by which a company adds value to an
item, with production, marketing, and the provision of after-sales service. The main
goal and benefit of a value chain, and therefore value chain analysis, is to make or
support a competitive benefit.
A su p p ly ch ain is a structure of organizations, people, activities, data, and
resources involved in moving a product or service from supplier to customer.
The main objective of supply chain management includes management of a
varied range of components and procedures, for instance, storing of raw materials,
handling the inventory, warehousing, and movement of finished product from the point
of processing to the point of consumption.

B u sin ess m o d el describes the reasons of how an organization creates, delivers,

and captures value in economic, social, cultural or other contexts. The development
of business model construction and variation is also called busin ess m od el inn ovation
and forms a part of business plan.
It is a company's plan for how it will make revenues and make a profit. It
describes what products or services the business plans to manufacture and market,
and how it plans to do so, as well as what expenses it will incur.
There are important phases in developing your business model, namely;
Identifying the specific audience; establishing business process; recording a business
resources; developing strong value proposition; determining key business partners;
and creating a demand for today’s generation strategy and be open for innovations.
After developing a business model, we will proceed in developing a business
plan. To be able to successfully complete this module, you need to prepare a
business plan and operate your plan and finally keep records of your business
transactions.
B u sin es s p lan is an important tool for you to have an idea about the future of
your business. Your business plan will be your guide in the moment you will be
implementing and operating your business proposal.
 You can also make use of the business plan in securing investment capital
from financial institutions or lenders. It can also be used to influence people to work
for your enterprise, to secure credit from suppliers, and to fascinate potential
customers.
Read the stories of Jessie, Mercy and Monna below to fully understand the
importance of having a business plan:

“Je ssie is th e e ld est o f five childre n o f M r. & M rs. N a tivid ad . T h e fa m ily is h a ving
d ifficu lty to sup p o rt fo r th e ir e veryd ay n e e ds. B e ca u se o f th is, Je ssie trie d to e n ter sellin g
b a na n a cu e a n d w ith h is d re a m to m a ke h is b u sin e ss g ro w , h e p u t u p m a n y sta lls in th e
com m u n ity w ith ou t co nside ring th e a d vises o f h is frie nd s to m a ke a b u sin e ss p la n b e fo re
im p lem e n tin g h is d e cisio n . A fte r a fe w m o n th s h is stalls sh utd o w n .”
“M e rcy is th e yo un g e st in th e fa m ily. S h e fo u nd o u t th a t she lo ve s to cu t h a ir a n d a p ply m a ke
u p to h e r frie nd s. U n til su ch tim e th a t h e r frie nd s in trod u ce d h e r to th e ir frie nd s to o fo r h a ircu t
a n d m a ke u p w h e n th e re a re o cca sio ns. F e w m o n th s a fte r, M e rcy w a s to ld b y h e r frie nd s to p u t
u p a b e au ty p a rlo r in th e ir p la ce . S o sh e a sks h e r m o th e r w h o is a lso a b u sin e ssw om a n to
te a ch h e r h o w to m a ke a b u sin ess p la n a n d e ven tu ally e n de d w ith a su ccessfu l b u sine ss.”
“M o n n a is a d ilig en t stu de n t. B e cau se o f h e r kn ow le d ge g a in e d fro m sch o o l a b o ut
b u sin ess p la n she w a s a b le to e n ha n ce h e r skills in b u sin ess a n d fin ally fo u nd h e rse lf in to h is
la un d ry sh op b u sin ess.”

Each scenario taught us that business is not just about how much income or
profit you can get but it’s about the life of your business. And in having a business,
you also have to consider technological forces, Social forces, Political forces, Cultural
forces, Economic forces and Legal forces.

The following are the components found in a Business Plan.

• In tro d u ctio n - this part discusses what is the business plan all about.
• E xe cu tive S u m m ary - is part of the business plan which is the first to be
presented but the last to be made.
• M a n ag e m en t S ec tio n - shows how you will manage your business and the
people you need to help you in your operations.
• M a rk etin g S ectio n - shows the design of your product/service; pricing, where
you will sell and how you will introduce your product/service to your market.
• F in an cial S ec tio n - shows the money needed for the business, how much
you will take in and how much you will pay out.
• P ro d u ctio n S ec tio n - shows the area, equipment and materials needed for
the business.
• C o m p etitive A n alys is - is the strategy where you identify major competitors
and research their products, sales and marketing strategies.
• M a rk et- The persons who will buy the product or services
 • O rg an izatio n al ch art- is the diagram showing graphically the relation of one
official to another, or others of a company.

What’s More

General Directions: Answer the following questions based on your learnings about
4M’s of production and Value Chain or Supply Chain. Write your answer on the space
provided. Five (5) points in each correct answer for Problem No.1 and 2 points for
each correct answer in Problem No.2.
Problem No. 1. “In your hom e, w hen you w ant to eat egg sandw ich befo re going to school, your
m oth er w ould surely prepare it for you. Y ou r egg sandw ich w ould not be produ ced w ith out a process.”

1. Who would be your manpower? _______________________________

2. What would be
your materials? ________________________________

3. What machines or tools would you use? _________________________

4. What methods are needed to produce the egg sandwich? (Cooking
procedures- enumerate them).
___________________________________________________________
___________________________________________________________
___________________________________________________________
Problem No. 2: With the pictures shown below, identify each picture whether it is Value Chain or
Supply Chain.
1. _____________

2. _______________

3. _______________
 What I Have Learned

Complete the statements below and write your answers on the space provided.

1. _____________ talks about human labor force involved in the manufacture of

products. It is measured as the most serious and main factor of production.
2. _____________ is about raw materials necessary in the production of a
product.
3. _____________ discusses the process or way of transforming raw materials
to finished products.
4. The purpose of a ___ ___ ___ ___ ___ ___ ___ is to provide customers with
details around the features and benefits of the product so they’re obliged to
buy.
5. A duplication of a product as it will be produced, which may contain such
details as color, graphics, packaging and directions. One of the necessary
early steps in the inventing method is creating a _______________.
6. ____________ are your business partners, without them your business will
not live.
7. ______________________ describes the reasons of how an organization
creates, delivers, and captures value in economic, social, cultural or other
contexts.
8. ____________________ is an important tool for you to have an idea about
the future of your business.
9. ____________________ is part of the business plan which is the first to be
presented but the last to be made.
10. ____________________ shows the design of your product/service; pricing,
where you will sell and how you will introduce your product/service to your
market.
 What I can Do

Direction: Answer the following questions base on the picture shown below. Write
your answers on the space provided. Two (2) points in each correct answer.

1. Are you familiar with the picture above? Give one example of a food business
establishment that you think is famous among teenagers today.
______________________________________________________________
_____________________________________________________________.
2. What do you think is the reason why this particular food business establishment
becomes famous amongst teens nowadays?
______________________________________________________________
_____________________________________________________________.
3. Do you know some other ways to enjoy their product other than coming in
personally into their store and buying their product for yourself?
______________________________________________________________
_____________________________________________________________.
4. Do you think such strategies are effective to make the business more productive?
Why or why not?
______________________________________________________________
____________________________________________________________

Assessment

D ire ctio n : Encircle the letter of your choice.

1. Which of the following refers to the human workforce involved in the manufacture of products?
A. Materials B. Method C. Machine D. Manpower

2. The 4M’s of production are as follows except ONE.

A. Management B. Manpower C. Method D. Machine
3. Which of the following refers to the marketing copy that explains what a product is and why it is
worth purchasing?
A. Prototype B. product description C. Business Model D. Suppliers
4. It represents the final products from the production process and distributed to the customers.
A. Input B. Supplies C. Output D.
Materials
5. It is a replica of a product.
A. Prototype C. Business Model
B. Product description D. Suppliers
6. Which of the following refers to the system of organizations, people, activities, information, and
resources involved in moving a product or service from supplier to customer?
A. Supply chain B. Value chain C. Business model D. Prototype
7. Which of the following is the process or activities by which a company adds value to an article,
including production, marketing, and the provision of aftersales service?
A. Supply chain B. Value chain C. Business model D. Prototype
8. It describes the rationale of how an organization creates, delivers, and captures value in
economic, social, cultural or other contexts.
A. Prototype B. Product description C. Business Model D. Suppliers
9. It is an entity that supplies goods and services to another organization.
A. Prototype B. Product description C. Business model D. Suppliers
10. Which of the following refers to the manufacturing equipment used in the production of goods or
delivery of services?
A. Machine B. Manpower C. Method D.
Materials
11. It refers to the process or technique of converting raw materials to finished products.
A. Machine B. Manpower C. Method D. Materials
12. It simply refers to the raw materials needed in the production of a product.
A. Machine B. Manpower C. Method D. Materials
13. Statement I- Skills and expertise is not important in considering manpower. Statement II- Benefits
are the reasons why customers will decide to buy the products.
A. Only Statement I is true. C. Both Statements are true.
B. Only Statement II is true. D. Both Statements are false.

14. Statement I- Educational qualifications and experience is one of the criteria in

considering manpower.
Statement II- Product to produce is one of the factors to be considered in method or
production method.
A. Only Statement I is true. C. Both Statements are true.
 B. Only Statement II is true. D. Both Statements are false.
15. Statement I- In selecting the type of equipment to purchase, the entrepreneur may consider cost
and capacity of the equipment.
Statement II- The purpose of a product description is to supply customers
through details around the features and benefits of the product.
A. Only Statement I is true. C. Both Statements are true.
B. Only Statement II is true. D. Both Statements are false.

Additional Activities
B u sin es s P la n M akin g

Below is a template for business plan. You need to fill this out using the business you
want to pursue.

This section will show how you will manage your business and the people you need
to help you in your operations

MANAGEMENT a. b. Manager: ______________________________

SECTION
c. Workers: ______________________________

This section shows the design of your product/service; pricing, where you will sell and
how you will introduce your product/service to your market.

MARKETING a. Product Description:

SECTION
b. Price:
c. Selling location:
d.Promotional Activity:
This section shows the money needed for the business, how much you will
take in and how much you will pay out

FINANCE SECTION a. b. Capital Amount:

c. Expected Daily Sales:
d. Expected Daily Expenses:
e. Income per Day:

This section shows the area, equipment and materials needs for the
business.
PRODUCTION a. b. Draw a lay out of your production area:
SECTION c. Enumerate the equipment needed:

c. Enumerate the materials needed:

R U B R IC F O R B U S IN E S S P L A N M A K IN G

The content was wellthought ,guide

questions were thoroughly answered
Content 15

The paper was wellwritten with ideas

Organization easily conveyed to readers. 10

Points are thoroughly developed

Development 5
TOTAL 30