Republic of the Philippines

NORTHWEST SAMAR STATE UNIVERSITY

Calbayog City

COLLEGE OF ENGINEERING AND ARCHITECTURE

SUMMARY REPORT
in
TECHNOPRENEURSHIP
(BES 5)

Submitted by:
Katrin Joyce F. Donceras
Gardo Abarico
BSECE

Submitted to:
Eng. Marianne Lou Palomar
Instructor

Business Model
 Republic of the Philippines
NORTHWEST SAMAR STATE UNIVERSITY
Calbayog City

COLLEGE OF ENGINEERING AND ARCHITECTURE

 The term business model refers to a company's plan for making a profit.
 It identifies the products or services the business plans to sell, its identified target
market, and any -anticipated expenses.
 Business models are important for both new and established businesses. They help
new, developing companies attract investment, recruit talent, and motivate
management and staff.
 A business model is a high-level plan for profitably operating a business in a specific
marketplace. A primary component of the business model is the value proposition.
 BM help investors evaluate companies that interest them and employees
understand the future of a company they may aspire to join.

Types of Business Models

1. Retailer (Example: Grocery Stores, Clothing Stores, Department Stores)

2. Manufacturer (Example: San Miguel Corporation, Petron, Shell)

3. Fee-for-Service (Example: DLA Piper LLP)

4. Subscription (Example: Spotify)

5. Freemium (Example: LinkedIn/LinkedIn Premium, Spotify, Skype)

6. Bundling (Example: AT&T)

7. Marketplace (Example: Shopee, Lazada)

8. Affiliate (Example: social media influencers such as Lele Pons, Zach King, or Chiara
Ferragni.

9. Razor Blade (Example: HP (printers and ink))

10. Reverse Razor Blade (Example: Apple (iPhones + applications))

11. Franchise (Example: Jollibee, Seven Eleven)

12. Pay-As-You-Go (Example: Utility companies, Telecommunications)

13. Brokerage (Example: Oanda, Admirals(Admiral Markets)

How to Create a Business Model

a. Identify your audience - understand who you are trying to target so you can craft
your product, messaging, and approach to connecting with that audience.
b. Define the problem - know what problem you are trying to solve.
c. Understand your offerings - With your audience and problem in mind, consider
what you are able to offer.
d. Document your needs - This includes product-specific challenges as well as
operational difficulties.
e. Find key partners. - consider who will provide your materials and how critical your
relationship with that provider will be.

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 Republic of the Philippines
NORTHWEST SAMAR STATE UNIVERSITY
Calbayog City

COLLEGE OF ENGINEERING AND ARCHITECTURE

f. Set monetization solutions - This includes selecting the strategy or strategies above
in determining your business model type.
g. Test your model - Perform test surveys or soft launches.

A. Time value of money

 The time value of money (TVM) is the concept that a sum of money is worth more
now than the same sum will be at a future date due to its earnings potential in the
interim.
 The time value of money is a core principle of finance.
 The concept of the time value of money can help guide investment decisions.
 The principle of the time value of money means that it can grow only through
investing so a delayed investment is a lost opportunity.
 Inflation has a negative impact on the time value of money because your purchasing
power decreases as prices rise.

Time Value of Money Formula

Based on these variables, the formula for TVM is:

B. Revenue Generation
 Revenue generation is the overarching process whereby businesses find ways to
drive income and increase profitability.
 The implementation of a revenue generation process enables the sales team to
know how best to go about increasing the business’ profit and income.
 It also offers the business a clear view of all revenue streams.

Revenue Generation Process:

 There are three departments or teams that are responsible for revenue
generation: sales, marketing, and customer success.

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 Republic of the Philippines
NORTHWEST SAMAR STATE UNIVERSITY
Calbayog City

COLLEGE OF ENGINEERING AND ARCHITECTURE

Revenue Models

When considering what type of revenue model to use for your business, it’s
important to keep the following in mind:

1) Value of your Product - the value that your product delivers to a customer should be
reflected in your chosen revenue model.
2) Your Customers - understanding of the customers that consume your product is
fundamental when mapping out your model.
3) Your Competition - Getting a solid understanding of your key competitors, how they
position themselves in the market and what their goals are is also important to
consider in this process.

Pricing Stategies

A pricing strategy should account for various business factors; including revenue
goals, marketing rollout plans, and product attributes. Getting a solid understanding of all
the factors that impact your pricing is fundamental for knowing what to charge your
customers.

How to Increase Revenue

 Set Goals
 Effective Marketing
 Customer Retention
 Product Marketing
 Refine Pricing
 Upsell and Cross-Sell
 Automation
 Discounts
 Optimize Sales Process

C. Price structure, Price elasticity

 Price Structure
 Is a construct which organises a business’ product prices across multiple brands
and categories.
 It’s the backbone or structure of a firms price-category hierarchy.

 Price Elasticity
 Refers to the degree to which individuals, consumers, or producers change their
demand or the amount supplied in response to price or income changes.
 It is predominantly used to assess the change in consumer demand as a result of
a change in a good or service's price.

D. Channels of Distribution
 Is the network of businesses or intermediaries through which a good or service
passes until it reaches the final buyer or the end consumer.

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 Republic of the Philippines
NORTHWEST SAMAR STATE UNIVERSITY
Calbayog City

COLLEGE OF ENGINEERING AND ARCHITECTURE

 A distribution channel represents a chain of businesses or intermediaries through which

the final buyer purchases a good or service.
 Distribution channels include wholesalers, retailers, distributors, and the Internet.

Components of a Distribution Channel

 Producer – combine labor and capital to create goods and services
 Agent – act on behalf of the goods and services as it moves through distribution
 Wholesaler – person or company that sells large quantities of good to retailers
 Retailer – sells goods to public in small quantities for immediate use or consumption
 End Consumer – person who buys a product or service

Types of Distribution Channels

 Direct – allows the consumer to make purchases from manufacturer;
 Indirect – allows consumer to buy the goods from a wholesaler or retailer;
 Hybrid – use both direct and indirect channels.
The channel should align with the firm's overall mission and strategic vision including
its sales goals.

E. Strategic Partners
 A strategic partnership is an arrangement between two or more companies that
agree to support each other in an effort to help both parties succeed.
 Normally formed between non-competing businesses, sharing resources and
leveraging key assets with the mission to grow and increase efficiencies.
 Are not one-sided; they’re interdependent and mutually beneficial.
 The goal of the strategic collaboration is to create joint value by offering non-
financial resources (e.g., information) that the other company would otherwise be
unable to access.

3 Things that make a good strategic partnership

 Complementary Audiences
 Not a Competitor
 Mutually Beneficial

How to Create Strategic Partnership

 Do your research
 Consider the big picture
 Get it in writing

5 Benefits of Strategic Partnerships

 Access to shared resources
 Opportunity to reach new markets
 Gain a competitive advantage
 Greater brand awareness
 Financial stability

F. Business Model Canvas

 delve into our book, “How to Create Innovation.“
 is an excellent tool to create a business model and present your ideas. It gives a clear
picture of how you will make money and sustain your business.

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 Republic of the Philippines
NORTHWEST SAMAR STATE UNIVERSITY
Calbayog City

COLLEGE OF ENGINEERING AND ARCHITECTURE

 consists of nine essential parts: Customer Segments, Value Proposition, Revenue

Streams, Channels, Customer Relationships, Key Activities, Key Resources, Key
Partners, and Cost Structure.

Let’s take a look at each section of the Business Model Canvas.

1. Customer Segments – Who is your customer?
2. Value Propositions – What makes you better than others?
3. Channels – How will you communicate your value proposition?
4. Revenue Streams – How will you make money?
5. Customer Relationships - How will you interact with your customers?
6. Key Activities – What are the activities that would enable you to deliver your value
proposition?
7. Key Resources – Who/what are your key resources?
8. Key Partners
9. Cost Structure

G. Business Model Canvass Example

Apple Business Model Canvas

 Apple is dedicated to selling its products – computers, iPhones, etc. – and its
services. Most of their revenue comes from phone sales.
 But most tech-savvy people understand that Apple’s brand placement is vital to
the company’s success. They’ve positioned their products as desirable,
fashionable, and cutting-edge. Keeping their products connected to “cool” is
important to their overall business model.

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 Republic of the Philippines
NORTHWEST SAMAR STATE UNIVERSITY
Calbayog City

COLLEGE OF ENGINEERING AND ARCHITECTURE

Netflix Business Model Canvas

 Netflix has always used a subscription-based business model, starting with physical
DVDs and then transitioning to the streaming platform with which most of us are
familiar. Recently, Netflix has begun to leverage its success as an entertainment
distributor to try its hand at becoming an entertainment creator.
 An important element of their business model is the customer experience. As such,
improving and developing that experience attracts a lot of the company’s attention
and resources.

References:

https://www.investopedia.com/terms/b/businessmodel.asp#:~:text=The%20term%20business
%20model%20refers,both%20new%20and%20established%20businesses.

https://www.investopedia.com/terms/t/timevalueofmoney.asp#:~:text=The%20time%20value%20of
%20money%20(TVM)%20is%20the%20concept%20that,a%20core%20principle%20of%20finance.

https://dealhub.io/glossary/revenue-generation/#:~:text=Revenue%20generation%20is%20the
%20overarching,the%20business'%20profit%20and%20income.

https://taylorwells.com.au/pricing-structure/

https://www.investopedia.com/terms/d/distribution-channel.asp

https://www.marketinggeneral.com/blog/what-is-a-strategic-partner

https://www.sbdc.duq.edu/Blog-Item-What-is-Business-Model-Canvas#:~:text=The%20Business
%20Model%20Canvas%20consists,Key%20Partners%2C%20and%20Cost%20Structure.

https://digitalleadership.com/blog/business-model-canvas-examples/