SENIOR HIGH SCHOOL

APPLIED
ECONOMICS
QUARTER 4 – MODULE 1
LESSON 1-8

i
DO_Q4_APPLIED ECONOMICS_GRADE 12_MODULE1
RESOURCE TITLE: Applied Economics
Alternative Delivery Mode
Quarter 4 – Lessons 1-8
Revised Edition, 2023

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 SENIOR HIGH SCHOOL

Applied Ecnomics
Quarter 4 – Module 1
Lesson1: Different Principles, Tools,
and Techniques:
SWOT and TOWS Analysis

3
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.

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 Expected Learning Outcome/s:
MELCS: In this lesson the students are expected to gain competence
in preparing a SWOT and TOWS Analysis. ABM_AE12-IIa-d-9

FACT OR BLUFF: Write FACT if the statement is correct and BLUFF if not.
1. SWOT and TOWS Analysis don’t share the same focus because
it is a different tool.
2. There are lots of available options of principles, tools, and
techniques that can apply to your business.
3. Strengths and Opportunities are the internal factors of SWOT
Analysis.
4. Analyzing the external and internal environment can be used to
strategized for the whole organization.
5. TOWS Analysis matches up the internal factors and external factors.
6. Environmental scanning is vital for the success of a business.
7. Maxi-mini strategy aims to minimize both weaknesses and threats.
8. SWOT Analysis is use to assess organization’s current position.
9. SWOT Analysis is a technique or assessing the four aspects of
business-Strengths, Weaknesses, Opportunities, and Threats.
10. The SWOT emphasizes the external environment while the
TOWS emphasize the internal environment.

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Lesson Different Principles, Tools, and
1 Techniques: SWOT and
TOWS Analysis
In this module you will learn to analyze how to prepare a SWOT and
TOWS Analysis.

There are several challenges which the entrepreneurs are facing

especially in the changes in the economic environment. The Filipino
entrepreneurs should not neglect the contemporary issues which are
threatened in the survival and prosperity of the business activities such as
investment, rate and borrowings, taxes, labor, minimum wage, and rentals.
Confronting these contemporary issues faced by Filipino entrepreneurs
should provide clear recommendations and suggestions to solve these issues.

In the next lesson, we will discuss the different principles, tools, and
techniques particularly SWOT and TOWS Analysis that can be used and that
could be very helpful to solve the different contemporary issues facing Filipino
entrepreneurs.

Directions: Mark it S if it is under Strengths, W if Weaknesses, O if Opportunities,

and T for Threats.

1. Affordable prices
2. Tough competition
3. Not enough brand recognition
4. Expand social media presence
5. Product quality is very high

In the business world, there are lots of factors affecting the

performance of a business. Scanning the environment such as the internal
and external environment is vital for the success of a business. It is a must
to perform environmental scanning aligned with the mission and vision of
the company. Therefore, applying different principles, tools, and techniques
to analyze the present state of a business environment is very relevant to the
company’s strategic analysis and for planning for the future. Remember what
Patrick Dixon said, “Business strategy is the battle plan for a better future”.
There are lots of available options of principles, tools, and techniques
that can apply to your business. The challenging part is to select the best
option to formulate the most effective strategy. In this part, we will define
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 some of the tools, and techniques for business opportunities like the:
SWOT Analysis. A standard analysis tool that helps to assess the factors
(internal and external) that affect the business. SWOT stands for Strengths,
Weaknesses, Opportunities, and Threats. The SWOT Analysis is an extremely useful
tool to assess the organization’s current position and its primary objective is to
help an organization understand all the factors involved in making a business
decision. SWOT Analysis requires an honest assessment since this is a
compilation of your company’s Strengths, Weaknesses, Opportunities, and
Threats.
Strengths are the internal factors of the SWOT Analysis. These are the
things that your organization does particularly well, or in a way that
distinguishes you from competitors.
Weaknesses are also internal factors of SWOT Analysis. These
weaknesses are company characteristics that place a company at a
disadvantage relative to others.
Opportunities are the external factors of the SWOT Analysis that may affect
a company’s performance positively.
Threats on the other hand are the external factors that could cause trouble
for the company in the future.
1. TOWS Analysis. It is derived and an extension of the SWOT Analysis
model which stands for Threats, Opportunities, Weaknesses, and Strengths.
It is commonly used in a strategic planning tool that matches up the internal
factors (strengths and weaknesses) and external factors (opportunities and
threats). These techniques of analyzing these factors will help the company
to see how it can take advantage of opportunities, reduce threats, overcome
weaknesses, and exploit any strengths.
SO situation: Maxi-Maxi strategy: It is maximizing both strengths and
opportunities. How can the company use its strengths to take advantage of
the opportunities?

WO situation: Mini-Maxi strategy: It attempts to minimize the

weaknesses and maximize the opportunities. How can the company use their
opportunities to overcome the weaknesses that they are experiencing?
ST situation: Maxi-Mini strategy: It aims to maximize the strengths of a
company while minimizing the threats through strengths. How can the
company take advantage of its strengths to avoid real and potential threats?
WT situation: Mini-Mini strategy: It aims to minimize both weaknesses
and threats. How can the company minimize its weaknesses and avoid
threats.

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 SWOT and TOWS Analysis share the same focus areas of Strengths,
Weaknesses, Opportunities, and Threats, but it’s a different tool. The SWOT
emphasizes the internal environment while the TOWS emphasize the external
environment. This analysis helps the company get a better understanding of
the strategic choices that the company face. (Remember that “strategy” is the
art of determining how you’ll “win” in business and lie.)
(https://www.mindtools.com/pages/article/newSTR_89.htm)

Let us take a look at the SWOT and TOWS Analysis Matrix above. After
the company listed its Strengths, Weaknesses, Opportunities, and Threats,
they can now assess the results and decide if how they can use their
strengths to take advantage of the opportunities and decide to address the
company’s weaknesses and threats. The next step of the analysis, usually
associated with the externally- focused TOWS Matrix, helps the company
think about the options that they could pursue. To do this you match external
opportunities and threats with their internal strengths and weaknesses.

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Matching type: Write your answer in the space provided.

In this topic I have learned that

It is important to use different principles, tools, and techniques in the

identification of business opportunities because _

I believe my knowledge in this lesson will be useful in my daily life

on/when

9
Instructions: A. Complete the SWOT Analysis Matrix by identifying the
following characteristics if its strengths, weaknesses,

-Lots of competitors - High rental costs -Good customer service

-Customer Loyalty -Advertisement thru the use of socialmedia

-Product pricing -Changes in Customer favor

Strengths (S) Weaknesses (W)

• Brand Recognition

Opportunities (O) Threats (T)

• New Products & Services

B. Complete TOWS Analysis Matrix by matching the external threats and

opportunities with the internal weaknesses, and strengths (answers for
SWOT based on A.).

Strengths Weaknesses
Company 1. Brand Recognition 1.
2. 2.
3.
Opportunities SO WO
1. New Products & SO1. Use its brand to W1O1.
Services sell new products
2. S2O2.

Threats ST WT
1. S2T1. W2.T2.
2.

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Multiple Choices: Write the letter of your choice on the separate sheet of paper.
1. aims to minimize both weaknesses and threats.
A. Mini-mini C. Maxi-maxi
B. Maxi-mini D. Mini-maxi

2. Which of the following statements regarding SWOT Analysis is correct?

A. Strengths and weaknesses are the external factors of the SWOT
Analysis.
B. Opportunities and threats are the internal factors of the SWOT Analysis.
C. Both A and B are correct
D. Both A and B are incorrect

3. Which of the following are the internal factors of SWOT Analysis?

A. Strengths and Threats C. Strengths and Weaknesses
B. Weaknesses and Opportunities D. Opportunities and Threats

4. strategy aims to maximize the strengths of a company while

minimizing the threats througth strengths.
A. Mini-mini C. Maxi-maxi
B. Maxi-mini D. Mini-maxi

5. Which external factors that could cause trouble for the company in the
future?
A. Strengths C. Weaknesses
B. Opportunities D. Threats

6. The uniqueness of the product and excellent customer service are

examples of what factors in SWOT Analysis?
A. Strengths C. Weaknesses
B. Opportunities D. Threats

7. Which of the following statements is/are true?

A. The SWOT emphasizes the internal environment.
B. TOWS Analysis emphasize the external environment.
C. Both A and B are true
D. Both A and B is not true

8. Which of the following are the external factors of SWOT Analysis?

A. Strengths and Threats C. Strengths and Weaknesses
B. Weaknesses and Opportunities D. Opportunities and Threats

9. TOWS Analysis is derived from model that identifies the

company’s Strengths, Weaknesses, Opportunities and Threats.
A. SWOT Analysis C. TOWS Analysis
B. Porter’s Five Forces D. None of the above

10. Increase of competition and increase of raw materials costs are

examples of what factors in SWOT Analysis?
A. Strengths C. Weaknesses
B. Opportunities D. Threats
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Instructions:

1. Choose an online business, it could be an online business of your

family member, relative, or friend.

2. Identify and list the business’s Strengths, Weaknesses, Opportunities,

and Threats (SWOT Analysis) and then matches the external threats
and opportunities with the internal weaknesses, and strengths (TOWS
Analysis).

3. Give your conclusion and recommendations.

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 13
Assessment What’s More What I know What’s New
1. 1.A 1. 1.c 1. 1. BLUFF 1. 1. S
2. 2.D 2. 2.b 2. 2. FACT 2. 2. T
3. 3. C 3. 3.d 3. 3. BLUFF 3. 3. W
4. 4. B 4. 4.f 4. 4. FACT 4. 4. O
5. 5. D 5. 5.j 5. 5. FACT 5. 5. S
6. 6. A 6. 6.g 6. 6. TRUE
7. 7. C 7. 7.i 7. 7.BLUFF
8. 8. D 8. 8.b 8. 8. FACT
9. 9. C 9. 9.h 9. 9. FACT
10. A 10.e 10. BLUFF
References:
BU2 Business-to-you: SWOT Analysis, Bringing Internal and External
Factors Business News Daily: Marci Martin (2019) How Porter’s Five Forces
Can Help Small
Businesses Analyze the Competition Retrieved from:
https://www.business newsdaily.com/5446-porters-five-forces.html
Mind tools Essential skills for an excellent career, SWOT Analysis
Retrieved from: https://www.mindtools.com/pages/article/newTMC_05.htm

Together (2017) Retrieved from: https://www.business-to-you.com/swot-

analysis/

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 SENIOR HIGH SCHOOL

Applied Ecnomics
Quarter 4 – Module 1
Lesson2: Different Principles, Tools,
and Techniques: Porter’s Five
Forces

15
 Expected Learning Outcome/s:

MELCS: At the end of this module, learners are expected to gain

preparing a Porter’s Five Forces Analysis. ABM_AE12-IIa-d-9

FACT OR BLUFF: Write FACT if the statement is correct and BLUFF if not.
1. Porter’s Five Forces is especially useful when starting a new
business or when entering a new industry sector.

2. Porter’s Five Forces analyze the competitive environment within

an industry.

3. Prices' sensitivity, order size, and switching costs are examples

of power suppliers.

4. Five Forces analysis can help companies assess industry

attractiveness, and how companies can position themselves for
success.

5. Porter’s Five Forces is useful when the industry understands the

forces in the environment.

Lesson Different Principles, Tools, and

2 Techniques: Porter’s Five
Forces
In this lesson you will learn to identify the different principles, tools,
and techniques prepare a Porter’s Five Forces Analysis.

There are several challenges which the entrepreneurs are facing especially
in the changes in the economic environment. The Filipino entrepreneurs should
not neglect the contemporary issues which are threatened in the survival and
prosperity of the business activities such as investment, rate and borrowings,
taxes, labor, minimum wage, and rentals. Confronting these contemporary
issues faced by Filipino entrepreneurs should provide clear recommendations
and suggestions to solve these issues.

16
 In the next lesson, we will discuss the different principles, tools, and
techniques that can be used and that could be very helpful to solve the
different contemporary issues facing Filipino entrepreneurs.

Matching type: Write your answer in the space provided.

_____1. Power of buyers a. Number of suppliers

b. Number of substitute products or services
_____2. Threats of new entrants c. Number of competitors
d. Brand loyalty
_____3. Existing industry rivalry e. Number of customers

_____4. Power of suppliers

_____5. Threat of substitute

products or services

We mentioned in Lesson 1 that it is a must to perform environmental

scanning aligned with the mission and vision of the company by applying
different principles, tools, and techniques to analyze the present state of a
business environment.
Remember, that there are lots of available options of principles, tools,
and techniques that can apply to your business and the challenging part is
to select the best option to formulate the most effective strategy. We are
already done discussing the SWOT and TOWS Analysis, now we will proceed
to understand the Five Porter’s Five Forces by Prof. Michael E. Porter.
1. PORTER’s Five Forces. It is used to analyze the competitive environment
within an industry. It is a model that identifies and analyzes five competitive
forces of an industry that helps determine an industry’s weaknesses and
strengths. It is a comparative analysis strategy that was devised by Prof.
Michael E. Porter (Harvard Business School) applied to understand the level
of competition within the industry’s weaknesses and strengths. By using
Porter’s model, companies can set expectations of profitability. Porter’s Five
Forces is especially useful when starting a new business or when entering a
new industry sector.
Threats of new entrants. Profitable markets attract new entrants that
risk the profitability of a company. When companies can easily enter the
market, it means that there is a higher degree of competition. This force
considers how easy or difficult it is for the competitors to join the
marketplace.
Power of suppliers. Fewer suppliers mean higher costs for the
companies, fewer suppliers mean the more power the suppliers have. This
force is an assessment of how easy it is for suppliers to drive up prices and
analyzes how much power a business’s supplier has.

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 Power of buyers. When there are fewer customers and they have many
alternatives to buy from indicating that customers have a lot of power. This
force analyzes the power of the customer and how easy it is for them to drive
prices down. Businesses with a few powerful customers can dictate terms.
Threat of substitute products or services. New products and services
can erode businesses that are already established. The existence of
substitute products or services in the market will lead the customers to
switch to alternatives in response to price increases. This force examines
how easy it is for customers to switch from a business’s product or service
to that of a competitor.

Existing industry rivalry. The more established rivals mean a high

level of competition in the market. The larger the number of competitors,
along with the number of equivalent products and services they offer, the
lesser the power of a company. This last force examines how intense the
current competition is in the marketplace.

Let’s proceed on Porter’s Five Forces, the five forces look at five specific
factors that determine the profitability status of a company in about other
businesses in the industry. While SWOT Analysis look deeply to analyze the
company’s internal potential. Using Porter’s Five Forces model in conjoining
with SWOT Analysis will help the company to better understand where the
company fits in the industry.
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Matching type: Write your answer in the space provided.

1. Power of buyers
2. Threats of new
entrants
3. Existing industry
rivalry
4. Power of suppliers
5. Threat of substitute
products or services
A. This force considers how easy or difficult it
is for the competitors to join the marketplace.
B. A force that examines how intense the
current competition is in the marketplace.
C. Analyzes the power of the customer
D. Examines how easy it is for customers to
switch from a business’s product or service to
that of a competitor
E. Analyzes how much power a business’s
supplier has

In this topic I have learned that

It is important to use different principles, tools, and techniques in the

identification of business opportunities because _

I believe my knowledge in this lesson will be useful in my daily life

on/when

Instructions: Complete the Porter’s Five Forces Analysis Table by giving

recommendation/s on each force.

Risk
Forces Reason/s Recommendation/s
Level
Power of Low Prices are
buyers fixed
Power of The cost of the
suppliers Low raw materials are
fixed

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Threat of new Hard to open a
entrants Low new business
right away
Threat of Many similar
substitutes High products offer
in the market
Existing Many stores in
industry High the area
rivalry

Multiple Choices: Write the letter of your answer on a separate sheet of paper.

1. Which tool is used to analyze the five competitive forces of an industry

that helps determine an industry's weaknesses and strengths?
A. SWOT Analysis C. TOWS Analysis
B. Porter’s Five Forces D. None of the above
2. Which of the following statements regarding Porter’s Five Forces is correct?
A. Porter’s Five Forces is especially useful when starting a new
business or when entering a new industry sector.
B. Porter’s Five Forces is a comparative analysis strategy that was
devised by Prof. Michael E. Porter.
C. Both A and B are correct
D. Both A and B are incorrect
3. Which force in Porter’s five forces examines how intense the current
competition is in the marketplace?
A. Power of suppliers C. Power of buyers
B. Threats of new entrants D. Existing industry rivalry
4. This force determined by how easy it is for your suppliers to increase
their prices.
A. Power of suppliers C. Power of buyers
B. Threats of new entrants D. Existing industry rivalry
5. Complete the sentence: Fewer suppliers mean costs for the
companies, fewer suppliers mean the power the suppliers
have.
A. higher, more C. higher, less
B. lower, more D. None of the above
6. This is the strength of the customers to drive down the
prices.
A. Power of suppliers C. Power of buyers
B. Threats of new entrants D. Existing industry rivalry
7. Number of suppliers, size of suppliers, and supplier’s ability to
substitute is what Porter’s force?
A. Power of suppliers C. Power of buyers
B. Threats of new entrants D. Existing industry rivalry

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8. When the companies can easily enter the market, it means that there is
degree of competition.
A. higher C. lower
B. decrease D. None of the above
9. The strength of competition in the industry.
A. Power of suppliers C. Threat of substitute products or services
B. Threats of new entrants D. Existing industry rivalry
10. This refers to the likelihood of your customers finding a different way of
doing what you do.
A. Power of suppliers C. Threat of substitute products or services
B. Threats of new entrants D. Existing industry rivalry

Instruction:
Prepare a Porter’s Five Forces Analysis based from your answers in
the “What I can Do” in lesson 1. Take note of the three risk levels: Low,
Medium, and High risk, and don’t forget to give the reasons and
recommendations for each force.

21
22
References:
BU2 Business-to-you (2016) Porter’s Five Forces
Retrieved from: https://www.business-to-you.com/porters-five-forces/

CGMA (2020) Porter’s Five Forces of Competitive Position Analysis

Retrieved from: https://www.cgma.org/resources/tools/essential-
tools/porters-five-forces.html

Investopedia, Jim Chappelow, Reviewed by Gordon Scott (2020), Porter’s Five Force
Retrieved from: https://www.investopedia.com/terms/p/porter.asp

23
 SENIOR HIGH SCHOOL

Applied Ecnomics
Quarter 4 – Module 1
Lesson 3: Types of Industries

24
 Expected Learning Outcome/s:

MELCS: In this lesson the learners will gain competency in preparing

a flowchart that shows how businesses in each sector are interdependent.
ABM_AE12-IIa-d-9

Instructions: Read and analyze the statement below. Write PI if the

statement states about primary industry, SI for secondary
industry, TI for tertiary industry, and QI for quaternary industry.
1. Referred to as the Service Industry that provides services or
intangible products rather than producing goods.
2. Takes in raw materials form the natural environment.
3. Provides services to final consumers, for example in the school and
restaurant industries.
4. Responsible for acquiring and combining raw materials to produce
or manufacture new products for greater value.
5. Related to the processing of ideas rather than products.
6. Divided into two parts: heavy industry, and secondary industry.
7. The first stage wherein the focus of the jobs relies directly upon the
natural resources.
8. Focus on the creation, and interpretation of available information
and discover new ideas to evaluate and formulate new technologies.
9. Also known as the manufacturing industry and often described as
the second step.
10. Provide services to other businesses, these may involve in
transportation, and distribution of goods.

Lesson
Types of Industries
3
In this module you will learn to prepare a flowchart that shows how
businesses in each sector are interdependent.

25
 Scanning the environment is vital for the success of a business, in the
previous week we enumerated and discussed the different principles, tools,
and techniques in creating a business such as SWOT Analysis which assess
the factors that affect the business, the TOWS Analysis derived and extension
of SWOT Analysis model that is commonly used in a strategic planning tool
that matches up the internal factors and external factors, and lastly, Porter's
Five Forces that analyze the competitive environment within an industry. In
the next lesson, we will elaborate on the importance of industry analysis for
business opportunities as we will discuss the types of industry.

Instruction: Analyze the graph below describing the flow of product distribution. Write
your short explanation. (5-7 sentences)

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

Industry defined in many ways, Collins dictionary defines industry as

the work and process involved in collecting raw materials and making them
into products in factories. In Merriam Webster define the industry as
systematic labor especially for some useful purpose or the creation of
something of value. Another definition of the industry is the companies and
activities involved in the production of goods for sale especially in a factory -
Cambridge dictionary.
“You need to know the industry if you want to start a business in, and the
kind of business you want to start before you can start it” - Tim Berry of BPlans. It
is a fact that small businesses always conduct industry analysis before
starting up their businesses. But before conducting an industry analysis
(Porter’s Five Forces) we must first understand the significance of identifying
the different types of industries or economic activities that happen in every
economy. The industry is classified into four classifications or divided into
four types:
1. Primary industry. Known as primary because extraction or removal of
natural resources must happen before anything else can be made. Everything
comes from

26
 the earth. This industry takes in raw materials form the natural environment.
This is considering the first stage wherein the focus of the jobs relies directly
upon the natural resources. It directly interacts with nature and environment
and it's concerned is to extract natural resources on the earth and convert
into consumable products. These are the fishermen, hunters, coal miners,
and farmers. They are located close to the natural resources that they will be
using because they collecting resources and depended on it. The most vital
job in this stage is agriculture because it provides us food which includes
harvesting crops and managing animals.
2. Secondary industry. Also known as the manufacturing industry and often
described as the second step, it takes the raw materials supplied by primary
industries and processes them into consumer goods, or further processes
goods that other secondary industries have transformed into products. The
secondary industry is responsible for acquiring and combining raw materials
to produce or manufacture new products for greater value. This industry
involved in the production of a finished, and usable product and involved in
construction which requires factories, manufacturing plants, machinery,
energy, and the use of technology to successfully convert and develop the raw
materials into consumer goods. The decision making for the location for this
industry may depend upon the cost of shipping, you may locate it near the
raw materials or close to the market.
The secondary industry helped in the growth and prosperity of
countries. This industry generates more employment opportunities and of
course the higher the employment the higher the taxes that the government
can use for the welfare of its citizens. It also provides opportunities for
countries to develop trade agreements (occur when two or more nations agree
on the terms of trade between them). The secondary industry sector is divided
into two parts:
1. Light industry. It is defined as the manufacturing activity that takes a small
amount of product, it tends to be targeted toward end consumers rather than
other businesses. It doesn't require either a large area or a large quantity of
raw material. Some examples of light industry are manufacturers of food
items like cereal, ice cream and frozen food and manufacturer of bottled,
water soft drinks, and breweries, and many more.
2. Heavy industry. This refers to the manufacturing and production process
that require a huge capital investment compared to the light industry, in large
facilities, equipment, and machinery. Heavy industries use big machines to
produce either large objects or raw materials, such as steel, or large goods
such as ships or trains.
3. Tertiary industry. Sometimes referred to as the Service industry, an industry
that provides services or intangible products rather than producing goods. It
aims to operate highly within the service industry environment. The tertiary
industry involved in activities that provide services to other business, these
may involve in transportation, and distribution of goods (focus on moving
goods) from the producer to end consumer that may happen in wholesaling
and retailing. This industry also provides services to final consumers, these
happened for example in the school and restaurant industries which focus
on interacting and serving the customers. In this industry, the location is
depending on where it is needed in society.

27
4. Quaternary Industry. This sector of the industry includes industries related
to the processing of ideas rather than products. It involves intellectual
services and uses modern technology in research, development, and
information. This industry is similar to the tertiary industry that focuses
on providing services and intangible aspects of the economy. But the
Quaternary industry is associate with specialized knowledge, research
projects, scientific planning, and continuous development of information
technological advancements. These activities are about acquiring,
processing, and sharing of information and distributed with the help of
advance technology. People who work for these companies are often expert or
highly qualified within their field of work. Examples are the researchers,
scientists, and developers that dig in and develop new inventions for the
improvement of peoples' lifestyle.

Can you imagine a life without farmers and fishers? Well, we need
them for us to be able to survive because without food we will surely slowly
die. One of the examples of activities under the primary sector is farming and
fishing. The farmers’ main goal is to produce a good crop to make a living and
to feed the population. They are responsible for growing and harvesting of the
crops, as well as transporting the products to the market. Fishing in the
meantime includes the following activities: selling, marketing, transporting,
storing, and preserving fish products.

The secondary industry plays a key part in allowing us to have food on

the table without undertaking our fishing in the morning -Geography
Revision. The fresh fishes from the sea turned into sardines or tuna flakes,
the wheat, and rice harvested by the farmers are made into your favorite
bread, the milk that freshly squeezed from the cattle is turned into butter or
cheese. These are some examples of activities under the secondary industry
that turned the food grown and harvested from the primary industry into a
final good. Other examples are the processing of raw materials such as trees
that undergo a process to be wood pieces for building houses, buildings and
for furniture, factories that convert raw metal into pipes and wool into woolen
clothes, and other natural resources extracted such as oil that needs
refinement before it can be used as energy.
Now, the tertiary industry portrays a different role compared to the
Primary industry which extracts raw materials from the natural resources,
and to the Secondary industry which converts raw materials to produce
usable products. The tertiary industry provides services to the organization
involved in the shipping and transportation industry wherein its main focus
is the process of moving goods. It also provides personal services such as
hotels, restaurants, parlor shops, and entertainment, this time it focuses on
serving the people. The hospitals, banking, education, and professional
services, repair, and maintenance services are all includes in this also known
as the service sector.

28
The Quaternary industry plays a significant role to develop a country’s
knowledge and scientific base. It is sometimes referring to as the knowledge
sector. The services in this sector focus on the creation, and interpretation of
available information and discover new ideas to evaluate and formulate new
technologies. The activities under the quaternary industry are research and
development that undertake to innovate and introduce new products and
services, data processing, and information technologies. For examples, are
the development of new medicines, health treatments, improved methods to
communicate, and the development of new computer components.

Types of Examples
Industry
PRIMARY Agriculture, energy extraction, farming, forestry, fishing,
horticulture, mining
SECONDARY Manufacturing, food processing, component assembly,
raw
material processing
TERTIARY Administrative, banking, education, hospitals, personal
services (beauticians, hotels, restaurants, and
entertainment) professional (consulting and legal) real
estate services, repair
and maintenance services, wholesale and retail
QUATERNARY Research development, data processing, and software
development
Table 1: Examples of Types of Industries

The picture below shows the independence of different industries. The

Secondary industry depends on the Primary industry for the sources of the
raw materials which are extracted from the environment. Then the Secondary
will perform the manufacturing or production using the raw materials from
the Primary industry. And then the Tertiary industry will provide services to
the secondary industry to move the products from the manufacturer to the
end consumer.

How about the Quaternary industry? Does this industry connect to

other industries? If your answer is yes, then you are right. For example, if
you are the farmer (primary industry) and you wanted to improve agricultural
productivity. The researcher from the quaternary industry can help with the
improvement of the yield. How about in secondary and tertiary industries?
We mentioned that the quaternary industry is an economic activity based on
the intellectual or knowledge- based economy. This industry involved in
organizing, interpreting, and transmits data or information which helps the
secondary and tertiary industries to improve their products or services.

29
Instructions: Complete the crossword puzzle using the given hints.

Across
2. They convert raw materials into the final product.
5. An agreement that occurs when two or more nations agree on the terms
of trade between them.
8. The most vital job in the primary industry because it provides us food
which includes harvesting crops and managing animals.
9. The sector of the secondary industry that uses big machines to produce
either large objects or raw materials.
10. Define as systematic labor especially for some useful purpose or the
creation of something of value.

Down
1. The industry is responsible for acquiring and combining raw materials to
produce or manufacture new products.
3. An industry that provides services or intangible products rather than
producing goods.
4. This sector of the secondary industry doesn't require either a large area
or a large quantity of raw material.
6. In this industry, the extraction, or removal of natural resources must
happen before anything else can be made.
7. This sector of the industry includes industries related to the processing
of ideas rather than products.

30
 In this topic I have learned that

Knowing the importance of the different types of industries will help

me in the identification of business opportunities because

I believe my knowledge in this lesson will be useful in my daily life on/when

Instructions: For each activity below decide if they belong to the Primary
Industry (PI), Secondary Industry (SI), Tertiary Industry (TI), or
Quaternary Industry (QI).

1. Bus driving 6. Hairdressing

2. House building 7. Car manufacturing
3. Dairy farming 8. Information sharing experts
4. Coal Mining 9. Oil wells
5. Information and 10.
Banking Communication Technology
31
Multiple Choices: Write the letter of your choice on the separate sheet of paper

1. Which type of industry that takes in raw materials form the natural
environment?
A. Primary Industry C. Secondary Industry
B. Tertiary Industry D. Quaternary Industry
2. What type of industry is related to the processing of ideas rather than
products?
A. Primary Industry C. Secondary Industry
B. Tertiary Industry D. Quaternary Industry
3. Which of the following is an example of the Tertiary Industry?
A. Agriculture C. Personal services
B. Research development D. Manufacturing
4. also known as manufacturing industry, that uses the raw materials
from the Primary Industry and process them into usable products.
A. Primary Industry C. Secondary Industry
B. Tertiary Industry D. Quaternary Industry
5. Which of the following statements is/are true about the Light industry?
A. The light industry requires a huge capital investment.
B. The light industry uses big machines to produce either large
objects or raw materials.
C. The light industry takes a small amount of product; it tends to
be targeted toward end consumers rather than other
businesses.
D. All of the above.
6. It refers to economic activities concerned with the production of goods
and provide services?
A. Industry C. Manufacturing
B. Agriculture D. None of the above
7. It is referred to as the Service industry, an industry that provides
services or intangible products rather than producing goods?
A. Primary Industry C. Secondary Industry
B. Tertiary Industry D. Quaternary Industry
8. Which of the following are characteristics of heavy industry?
A. A small number of raw materials C. Heavy products
B. Small factories D. Small products
9. Which of the following statement is not true?
A. The tertiary industry provides services that support primary and
secondary industries.
B. The secondary industry doesn’t depend on the Primary industry
for the sources of the raw materials which are extracted from the
environment.
C. The primary industry directly interacts with nature and
environment and extract natural resources on the earth convert
into consumable products.
D. None of the above
10. Secondary industry is divided into two parts; the and _ .
A. Light and medium industry C. Primary and secondary industry
B. Light and heavy industry D. None of the above
32
Instruction:

1. Choose a businesses, if possible within your barangay or your city.

Identify which of the businesses belong to Primary, Secondary, Tertiary
Industry, and Quaternary Industry (optional).

2. Prepare a flow chart that shows the interdependent of the businesses

to each other and describes and explains how these businesses are
interdependent with each other.

33
 34
Assessment What I know
1. 1. A 1. 1. TI
2. 2. D 2. 2. PI
3. 3. B 3. 3. TI
4. 4. C 4. 4. SI
5. 5. C 5. 5. QI
6. 6. A 6. 6. SI
7. 7. B 7. 7. PI
8. 8. C 8. 8. QI
9. 9. B 9. 9. SI10. TI
10. B
References:
BPlans, Tim Berry, Industry Analysis: Know Your Industry Before You Start
Your Business Retrieved from: https://articles.bplans.com/know-your-
industry- before-you-start-your-business/
Encyclopedia Britannica, Types of Industry
Retrieved from: https://www.britannica.com/explore/savingearth/industry
Geography Revision, February 29, 2020, Secondary Industry/Tertiary
Industry/Quaternary Industry Retrieved from: https://geography-
revision.co.uk/gcse/industry/secondary-industry/
https://geography-revision.co.uk/gcse/industry/tertiary-industry/
https://geography-revision.co.uk/gcse/industry/quaternary-industry/
Marketing91, Hitesh Bhasin (2019), Primary Industry: Meaning, Types, and
Example of Primary Industry Explained/ Secondary Industry:
Meaning, Types, Characteristics, and
examples Retrieved from:
https://www.marketing91.com/ primary-industry/
https://www.marketing91.com/secondary-industry/
School Work Helper, William Anderson (2019), Types of Industry
Retrieved from: https://schoolworkhelper.net/types-of-
industry/

35
 SENIOR HIGH SCHOOL

Applied Ecnomics
Quarter 4 – Module 1
Lesson 4: Micro and Macro
Environment

36
 Expected Learning Outcome/s:
MECLS: In this lesson the learners are expected to gain competence
explaining the difference the micro environment and macro environment.
ABM_AE12-IIa-d-9

TRUE OR FALSE: Write True if the statement is valid and False if otherwise.

1. Organization can survive without customers.

2. Political factors and legal factors are the same factors under the
PESTEL Analysis.
3. Business organizations are part of the business environment it
cannot function in isolation.
4. The micro environment has an indirect impact on the
business organization.
5. A company must be aware of its competitors, strengths, and weaknesses.
6. The macro environment is a set of external and controllable factors
that greatly influenced the success of a business.
7. Conducting self-analysis of the organization is not important.
8. PEST Analysis is a framework that examines opportunities and
threats or external factors of the business environment.
9. Conducting a micro environment and macro environment analysis
before the decision-making process is vital for business success.
10. A business environment is defined as the sum or collection of all the
internal factors only.

Lesson
Micro and Macro
4 Environment

In this lesson you will learn to explain the difference the micro
environment and macro environment.

37
 According to Jhon Barth “The business environment remains challenging,
but if you have a good strategy there is gold in all of this”. Always remember
that business organizations are part of the business environment it cannot
function in isolation. These environments that have a direct and indirect
impact on the business operations which means in order the business
firms to survive and grow is to formulate strategic planning (some
examples of strategic planning was mentioned in lesson 9 and 10 (SWOT,
TOWS Analysis and Forter’s Five Forces).

Many factors affect and surround the business, this is called the
business environment. The business environment is defined as the sum or
collection of all the internal and external factors such as employees,
customers’ needs and expectations, supply and demand, management
clients, suppliers, owners, activities by government, innovation in
technology, social needs, market trends, economic changes, etc. The
business environment helps in identifying business opportunities, tapping
useful resources, assists in planning, and improves the overall performance,
growth, and profitability of the business. There are various types of business
environment like:

1. Micro environment. It refers to the environment which has a direct

impact on the business organization. These are the factors within the
company that affect the business strategy, decision making, and performance
of the organization such as the ability to serve its customers and the routine
activities of the business. COSMIC, or Competitors, Organization itself, Suppliers,
Market, Intermediaries, and Customers are the elements/factors under the
micro environment.

2. Macro environment. These are set of external and uncontrollable

factors that greatly influenced the success, business strategies, and decision
making of the business. The macro environment consists of six different
elements known as PESTEL that stands for Political, Economic, Socio-cultural,
Technological, Environmental, and Legal.
The micro environment and macro environment are two different
viewpoints of the business environment. It both affects the business strategy,
and decision making of business but the micro environment has a direct and
regular impact while the macro environment has an indirect impact on a
business's marketing decisions. Based on the sets of elements of micro and
macro environment, you will see that micro environment are the internal
factors applied to operational or

38
internal issues that are controllable and the macro environment are the
external environment and external issue that are uncontrollable factors. It is
vital for business success to conduct micro environment and macro
environment analysis before the decision-making process.
Basis for MICRO ENVIRONMENT MACRO ENVIRONMENT
Comparison
Meaning The factors or elements in a The factors or elements
firm’s immediate in a firm’s general
environment environment
Elements COSMIC, i.e. Competitors, PESTEL, i.e. Political,
Organization, itself, Economic, Socio-
Suppliers, Market, cultural, Technological,
Intermediaries, and Environmental, and
Customers Legal
Influence Direct and regular impact Indirect impact on
on on marketing decisions marketing decisions
organizaton
Business Applied to operational or Environment and
Application internal issues external issues
Are these factors Yes No
controllable?

Table 1. Comparison Chart

Micro or Macro: Below are the list of elements. Write Micro if the elements
belongs to Micro Environment and Macro if it is Macro
environment. Write your answer on the space provided.

______1. Market
______2. Political
______3. Economic
______4. Customers
______5. Competitors

Elements of Micro Environment

Competitors. Every business has competition, competitors are the
rivals or other organizations which compete with each other for both markets
and resources. A company must be aware of its competitors, strengths, and
weaknesses.

39
 Organization itself. It is also important that a company conduct a self-
analysis of the organization itself. Just like understanding the competitors'
strengths and weaknesses the organization itself must understand its
strengths and weaknesses as well as the objective and goals of the business.
These elements of the micro environment composed of owners which are
the people who have a major shareholding, board of directors, and employees
who are the people who work for the organization which is the major
contributor for the success of the business.
Suppliers. One of the important components of the micro environment.
Suppliers are the ones who provide raw materials, equipment, and other
resources needed by the company. Remember that the suppliers with their
bargaining power can influence the cost structure of a company.
Market. The organization must study the market, it includes price
sensitivity, market maturity, and cost structure.
Intermediaries. Those who act as a bridge between the manufacturer
and the marketer, include wholesalers, distributors, and retailers that link
the firm and the customers.
Customers. They are the ones who purchase the organization’s
products/services, it makes sense that an organization cannot survive without
customers. Consumers/customers are considered as the king of business.

Elements of Macro Environment

PESTEL Analysis is a management tool used to identify, analyze,
organize, and monitor macro-environmental factors that can have an impact
on an organization's performance. It is a framework that examines
opportunities and threats or external factors of the business environment.
This tool is often used in collaboration with other business tools such as the
SWOT analysis and Porter’s Five Forces. PESTLE Analysis is a useful tool
when starting a new business. PESTLE is a mnemonic which in its expanded
form denotes P for Political, E for Economics, S for Social, T for Technological,
E for Environmental, and L for Legal.
Political Factors. These are the factors that determine the extent to
which a government intervenes in the economy or a certain industry.
Economic Factors. These are the factors that determinants of an
economy’s performance that have significant impacts on a company.
Social Factors. Factors that represent the demographic
characteristics, norms, customs, and values of the population within which
the organization operates.
Technological Factors. These are the factors pertain to innovation in
technology, the technology that can affect the way the company's make,
distribute, and communicate their products and services.
Environmental Factors. These environmental forces that influenced
by the surrounding environment that have an impact on the businesses.
Legal Factors. These are the factors of legal and regulatory
requirements on the business that have both external and internal sides.

40
 P E S T E L
Government Economic Population Technology Weather and Discrimination
Policy growth growth rate incentives climate law
Political Exchange Age Level of Environmental Employment
Stability rates distribution innovation policies laws
Foreign Interest rates Career and Automation Climate Consumer
trade policy Lifestyle change protection
attitudes laws
Tax policy Inflation rates Safety Technological Pressures Copyright
emphasis change from NGO’s & patent
laws
Labor law Disposable Health Technological Natural Health &
income consciousness awareness disaster safety laws
Trade Unemployment Cultural Internet Air & water Education
restrictions rates barriers infrastructure pollution laws

Table 2 List of PESTEL Factors

Instructions: Identify the word being described by the following statements.

Choose your answer inside the box.

Micro Environment Competitors Environment Factors

1. The rivals or other organizations which compete with each other

for both markets and resources.
2. The environment which have direct impact in the business organization.
3. The factors that pertain to innovation in technology that can
affect the company.
4. The one who provides raw materials, equipment, and other
resources needed by the company.
5. The external and uncontrollable factors that greatly
influenced the success, business strategies, and decision
making of the business.
6. The ones who purchase the organization’s products/services.
7. The forces that are influenced by the surrounding environment that
have an impact on the businesses.
8. The factors that determinants of an economy’s performance
that have significant impacts on a company.
9. The factors of legal and regulatory requirements on the business
that have both external and internal sides.
41
 10. The one who acts as a bridge between the manufacturer and the
marketer.

In this topic I have learned that

It is important to understand the micro and macro environment for

business opportunities because

I believe my knowledge in this lesson will be useful in my daily life on/when

Instruction: A. List the elements of the micro environment and describe how each element
affects businesses. Write your answer in the table below.

Elements of Micro Environment Description

42
B. Matching type: Write your answer in a separate sheet of paper.

___1. Political Factors a. Advertising laws

___2. Economic Factors b. Government type
___3. Social Factors c. Nutrition awareness
___4. Technological Factors d. Animal Rights groups
___5. Environment Factors e. ICT Development
___6. Legal Factors f. Corrupt government
g. Lifestyle changes
h. Digital Revolution
i. Waste disposal
j. Food safety regulations
k. High inflation rates
l. Impact of globalization

Multiple Choices: Write the letter of your choice on a separate sheet of paper.

1. Which of the following is not the element of the micro environment?

A. Political B. Suppliers C. Customers D. Organization itself

2. Complete the sentence: Micro environment has a impact while

macro environment has a on marketing
decisions.
A. direct, indirect C. indirect, direct
B. indirect, general D. general, direct
3. Which of the following statement is not true?
A. The micro environment has a direct and regular impact on
marketing decisions.
B. The macro environment is the external issue of the environment.
C. The micro environment is a controllable factor.
D. None of the above.
4. They are the one who provides raw materials, equipment, and other
resources needed by the company.
A. Customers B. Intermediaries C. Suppliers D. Market

5. Which of the following is an element of the macro environment?

A. Intermediaries C. Technological Factors
B. Market D. Competitors
6. / are considered as the king of business.
A. Consumers/customers C. Consumers/suppliers
B. Customers/intermediaries D. Customers/suppliers
7. Complete the sentence: are the factors that determine the
extent which a government intervenes in the economy while are the
legal and regulatory requirement on the business.
A. Legal factors, political factors C. Political factors, legal factors
B. Political factors, social factors D. Legal factors, economic factors

43
 8. It is defined as the sum or collection of all the internal and external factors?
A. Micro environment C. Macro environment
B. Business environment D. PEST Analysis
9. What do you call the factors that pertain to innovation in technology?
A. Political Factors C. Social Factors
B. Technological Factors D. Economic Factors
10. These are the rivals or other organizations which compete with each other
for both markets and resources.
A. Intermediaries C. Customers
B. Competitors D. Market

Compare the micro environment and macro environment by using the Venn
diagram below. Summarize the differences and similarities in the lines below.

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

44
 45
What’s New
1. Micro
2. Macro
3. Macro
4. Micro
5. Micro
What I Know What's More Assessment
1. 1.False 1. 1. Competitors 1. 1.A
2. 2.False 2. 2.Micro environment 2. 2.A
3. 3.True 3. 3. Technological Factors 3. 3.D
4. 4.False 4. 4. Suppliers 4. 4.C
5. 5.True 5. 5.Macro environment 5. 5.C
6. 6.False 6. 6. Customers 6. 6.A
7. 7.False 7. 7.Environmental Factors 7. 7.C
8. 8.True 8. 8. Economic Factors 8. 8.B
9. 9.True 9. 9.Legal Factors 9. 9.B
10. False 10.Intermediaries 10.B
References:
Key Differences: Surbhi S. (September 21, 2015) Difference between Micro
and Macro Environment Retrieved from:
https://keydifferences.com/difference- between-micro-internal-and-
macro-external-environment.html#

Toppr: Business Environment Retrieved from:

https://www.toppr.com/guides/ business-environment/

Marketing Tutor.Net: Umar Faroog (December 12, 2017) Micro environment

Definition, Factors & Example Retrieved from:
https://www.marketingtutor.net/ micro-environment-definition-
factors- example/

Business-to-you: September 18, 2016, scanning the Environment:

PESTEL Analysis Retrieved from: https://www.business-to-
you.com/scanning-the- environment-pestel-analysis/

46
 SENIOR HIGH SCHOOL

Applied Ecnomics
Quarter 4 – Module 1
Lesson 5: Socioeconomic Factors
Affecting Business and Industry

47
 Expected Learning Outcome/s:

MELCS: Explain the effect of various socio-economic factors

affecting business and industry.

AGREE OR DISAGREE: Write the word AGREE if the statement is true; otherwise,
write the word DISAGREE.

1. Income determines the purchasing power of an individual.

2. The education level of an individual influences his taste and preferences

towards goods and services

3. An entrepreneur should consider the availability of labor within the area

in assessing a business opportunity.

4. Customs and traditions are one of the socioeconomic factors.

5. Socioeconomic factors serve as measurements of both financial viability

and social standing.

Socioeconomic Factors
Lesson
Affecting Business and
5 Industry

In this lesson, the students will understand how the socioeconomic factors of
consumers affect business and industry in the society.

Leaῆo Jr. R. (2016) defines socioeconomic factors as characteristics that define

the quality of life in a society. Socioeconomic factors include income, education and
occupation of an individual. These factors influence the behaviors, attitudes, trends,
tastes and lifestyles of individuals.

48
 Socioeconomic factors serve as measurements of both financial viability
and social standing (upper class, middle class and lower class) of a person.
Different socioeconomic classes will generally have different priorities, and this
will affect how they spend their money.

Create a mind map that shows the connection of income, education and occupation to
the buying capacity of consumers.

Socioeconomic factors affecting Business and Industry

1. Income

Income is the monetary payment received for goods or services or from other
sources, as rents or investment. According to Leaῆo Jr. R. (2016) the availability of
disposable income influences spending. Disposable income refers to an income a
person has available for spending, saving, or investing after all taxes and other
mandatory obligations have been paid.

The possibility for an individual to buy luxurious or expensive good and

services is high whenever they receive an increase in their disposable income. On
the other hand, if the disposable income of an individual is not enough, they tend
to limit their spending on their essential needs.

2. Education
Education is the act or process of acquiring particular knowledge or skills as
for the profession. Through education, people in our society become equip with
necessary knowledge and skills for them to be employed in different jobs and
profession. For business and industry, this determines the availability of skilled
workforce when seeking for employees. Leaῆo Jr. R. (2016) pointed out that a
society that has a well-educated population flourished because individuals are
employable in well-paying jobs.

Education also refers to a degree, level or kind of schooling attained by an

individual. For business and industry, the level of education of target market
determines the degree of business interactions with customer. For example, it
would be easier to conduct market research or a product presentation with
educated costumers than less educated one.

49
 3. Occupation

Occupation is a person’s principal work or business as means of earning a

living. People’s income varies depending on their occupation. Leaῆo Jr. R.(2016)
stated that “high paying jobs are normally associated with skilled occupations such
as engineers, doctors, lawyers and accountants; while unskilled occupations such
as menial labor do not pay much. Therefore, the ability of customer to afford the
different products a business offers depends on the type of their occupation”

Understanding and analyzing the effect of socioeconomic factors affecting

business and industry will help owners to make better decisions about its future
and direction.

LaMarco, N (2018) shared in his article that “as a business owner, it is your
responsibility to raise the socioeconomic status of your employees and those in
your community, even as you seek to raise your own”. By doing so, business
owners may pave the way for themselves and others to recruit better employees in
the future. This can be done by improving workplace conditions, offering better
work benefits to employees so they can take care of their families’ health and
education, and take part in corporate social responsibility projects to improve the
community at l

Direction: Identify the socioeconomic factor that is considered on the given

situations. Write the letter of your answer on the separate sheet of paper.

A. Income B. Education C. Occupation

1. Mariel bought a new car for her service as company’s Branch Manager.

2. Cherry spends less time in explaining the content of the insurance’s terms
and condition since her client is a graduate of business course.

3. Employees receiving P25,000 below are now tax free. This made an
increase to their take home pay. Thus, an opportunity to increase their
consumption for goods and services.

4. Marife was laid-off. Consequently, their family’s total disposable income

declines. Thus, they restrict their expenditure on their basic needs.

5. The number of graduate increases as education became accessible to all.

The ABC Manpower Agency is now having difficulty in looking for
applicants on household services like house helper, baby-sitter and
gardener.

50
 Socioeconomic factors are characteristics that define 1. .
Socioeconomic factors are 2. _____ , 3. , 4. of an
individual. These factors influence the 5. , 6. , 7.
, 8. and 9. of individuals. Different
socioeconomic classes will generally have different 10. , and this
will affect how they spend their money.

Direction: Consider that you are on the following situations, which good or
service will you avail? Encircle your answer. In column 3 state
your reason of choice and in column 4, identify the socioeconomic
factor you consider in making a choice.

Situation Options Reason of Socioeconomic

Choice Factor
1. A Senior High a. cheap and
student buys a brandless
newbag. bag
b. cheap but
branded bag
c. expensive and
branded bag
2. A construction a. fastfood
worker takes his b. restaurant
lunch. c. karinderia
3. A professional a. single tub
busy working machine
parent buys a b. twin tub machine
washing machine. c. fully
automatic
machine
4. Your family a. lake/river
will spend a nearby or at
summer get- your province
away b. Man-made Resort
c. Beach Resort
5. A company a. motor bike
manager buys a b. car
vehicle for a c. truck
service.

51
True or False: Write the word true if the statement is correct;
otherwise, write False.

1. The availability of disposable income influences spending habits.

2. Unskilled occupations receive a higher pay.
3. A society that has a less educated population flourishes.
4. The ability of customers to buy a product that a business offers depends
on
their income.
5. If disposable income increases, customers are likely to purchase
expensive items.
6. The scope of interactions with customer is influenced by their education
level.
7. Skilled occupations receive a high-salary.
8. The types of occupation dictate the education level of individuals in the
society.
9. Income determines the availability of skilled workers when looking for
employees.
10.When income is sufficient, customers tend to limit their spending to
essential items.

Instruction: Create an infographic showing how the socioeconomic

status of an individual affects their consumption.

52
 53
What I Know
What's More
What I Have Learned
Assessment
9.
References:

LaMarco, Nicky. The Socioeconomic Factors Affecting Small Businesses

Retrieved from https://smallbusiness.chron.com/socioeconomic-
factors- affecting-small-businesses-73234.html Accessed
September 15, 2020

Leaῇo Roman D. Applied Economics for Senior High School. Mindshapers Co.
Inc.,
Intramuros Manila, 2016

https://www.yourdictionary.com/disposbl

e-income

https://www.dictionary.com/browse/edu
cation
s

54
 SENIOR HIGH SCHOOL

Applied Ecnomics
Quarter 4 – Module 1
Lesson 6: Socioeconomic Impact
of Business to Stakeholders

55
Expected Learning Outcome/s:

Evaluate the viability and impact of business on the community.

TRUE OR FALSE. Write T if the statement is true. F if the statement is false.

1. The first step to understanding what socioeconomic factors are is to

understand socio economics.
2. Social norms and different social philosophies have impact oh how
consumers behave in an economy.
3. Socioeconomics factors are, therefore, the social and economic factors
that shape and determine the dynamics a society will experience.
4. To have an intimate understanding socioeconomics factors affecting
business you will have to understand both external and environmental
factors as well as their interplay affects your business.
5. Economic factors are essential part of all business analysis.

Lesson Socioeconomic Impact of Business to

6 Stakeholders

The impact of business to stakeholders is discussed in this section.

The discussion also looks at the possible contribution of the communities.
Thus, an underlying premise of socioeconomic impact is a
community-based approach.

What are examples of business stakeholders?

Typical stakeholders are investors, employees, customers, suppliers,
communities, governments, or trade associations. An entity's stakeholders
can be both internal and external to the organization.

56
 The business that a consumer chooses to work with is directly
impacted by corporate responsibility.

While working in the community you will meet your neighbors, who
will then become familiar with the business. The strong bonds built with
public will have incredible benefits to the organization.

A business’s societal involvement affects positive change and

investment by bringing members has a direct impact on the health of a
business.

Approaches that will make a positive difference and fulfill a societal

need involves raiding money for park improvements or sponsoring a school
program that the company can get behind and remain passionate about.

Group Activity: Give at least one socioeconomic impact of your business to

the following.

1. Customer
2. Supplier
3. Government
4. Household
5. Community

Think like an entrepreneur. If you will be given opportunity to become an

entrepreneur, what business do you want to have? Provide an answer to the
following:

1. Name of business ______________________________

2. Nature of business______________________________
3. Location ____________________________________
4. Capital______________________________________
5. Mission/Vision _________________________________

57
 Why does the economy need to consider the importance of
socioeconomic impacts?

Discussion:

What is the impact of business activity on stakeholders?

Discussion:
_____________________________________________________________________________
_____________________________________________________________________________
__________________________________________________________________
__________________________________________________________________

Performance task

Conduct an interview with agencies / industries directly related to employment.

Ask them what factors affect the present problem of unemployment.

______________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

58
Answer Varies: Discussion

59
References:

https://www.sciencedirect.com/topics/earth-and-planetary-
sciences/socioeconomic-impact
https://www.consultecon.com/services/impact_evaluations/socio-
economic_impact/default.cfm
Dennis J. Saluba Applied Economics for Senior HIgh School , C&E Publishing, Inc.

60
 SENIOR HIGH SCHOOL

Applied Ecnomics
Quarter 4 – Module 1
Lesson 7: Socioeconomic Impact
of Stakeholders to Business

61
 Expected Learning Outcome/s:

Evaluate the viability and impact of business on the community.

TRUE OR FALSE. Write T if the statement is true. F if the statement is false.

1. Stakeholders are the small investors of the company and they can
anytime bring in or take out money from the company.
2. Stakeholder is a person who has an interest in the company.
3. Stakeholders can be an investor in the company and their actions
determine the outcome of the company.
4. Stakeholders plays an important role in in defining the future of the company.
5. Internal Stakeholders are part of the management of the company
and have voting power.

Lesson
Socioeconomic Impact of
7 Stakeholders to Business

A business cannot function without its stakeholders. Each stakeholder group has a role
to play, and indifferent levels of influence on business operations. In order to understand the
impacts that different stakeholders have on a business, an organization requires access to
leading of any potential change in the attitudes those stakeholders have. This lesson is a
comprehensive, broad reaching and contained sufficient information to understand the
attitudes of the stakeholders towards an organization.

62
 Discussion:
How do stakeholders affect business?

_____________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________

How do stakeholders impact business activity?

Understanding the impact on the stakeholders means you must know

who they are and how they relate to your business. What is their relation?
Along with customers, owners, employees, communities, suppliers, and
business partners are the key groups. It is an interconnected chain to know
how stakeholders impact business activity.

Customers want the stakeholders to operate a business honestly, and

they should be capable of providing a value-oriented solution. Suppliers and
business partners expect the stakeholders to manage business relationships
with responsibility and high integrity. Communities want companies to
involve and give back in return. Employees desire a fair working environment.

Instruction: Discuss the importance of community, company and

government by using the Venn diagram below. Summarize the differences
and similarities of impacts to include stakeholders’ effort to manage business
relationships with responsibility.

Economy Government

Government

63
Identify at least three successful businesses in the Philippines and research on the
following:

1. History of the business

2. Nature of the business
3.The strengths and weakness of the business
4.Future plans of the business

Discussion: How do stakeholders influence business activities?

_____________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

What is the impact of stakeholders to business?

Discussion:
_____________________________________________________________________________________
____________________________________________________________________________________________
____________________________________________________________________________________________
____________________________________________________________________________________________

Performance Task

Planning a Business. If you will be asked to start your own business, what type of
business organization will you start and why? Elaborate on your answer.

____________________________________________________________________________________________
____________________________________________________________________________________________
____________________________________________________________________________________________
____________________________________________________________________________________________

64
Answer Varies: Discussion

65
 References:

https://onlinelibrary.wiley.com/doi/full/10.1111/lre.12275 Received: 10 July

2019 / Revised: 20 September 2019 / Accepted: 23 September 2019 / Published: 26
September 2019
www.goldfields.com>sustainability. Dennis J. Saluba Applied Economics for Senior HIgh
School , C&E Publishing, Inc.

66
 SENIOR HIGH SCHOOL

Applied Ecnomics
Quarter 4 – Module 1
Lesson 8: Managing
Socioeconomic Impact

67
 Expected Learning Outcome/s:

Evaluate the viability and impact of business on the community

A. TRUE OR FALSE. Write T if the statement is true. F if the

statement is false.

1. The creation of and changes in new technologies such as mobile phones

and gadgets can shift the way the society does business.
2. Socioeconomic impacts can be seen through challenges in levels of
income, quality of life and access to services.
3. Assessing economic impact means there is poor examination of proposed
development activities.
4. A country is even defined by its socioeconomic development and standing.
5. The goal of studying effects and impacts is to bring about socioeconomic
development.

Lesson

8
Managing Socioeconomic Impact

Large and medium-scale manufacturing industries undoubtedly bring an

unprecedented human and environmental crisis. The goal of this lesson is to look at the scope
and levels of corporate social responsibility for local community development from the
perspective of social and economic responsibility.

68
Direction: Choose your answer from the box and write the letter of your
choice on the space provided.

A. Agriculture Skills
B. Industrial Skills

C. Customer Service Skills

1. Providing Customers of what they want.

2. Information and communication
3. Repair of motor vehicles and motorcycles
4. Real estate activities
5. More vocational contexts in preparation
6. Hunting and fishing operation
7. Livestock operation
8. Monocropping
9. Assessment management and facility management
10. Urban farming

Impacts are potential changes caused-directly and indirectly in whole

or in part. For example, impacts on cultural maintenance, equitable business
and employment and adequate sustainable income and lifestyle.

Impacts of development activities on water, air, land flora and fauna.

In recent years, the impacts of industrial development on society, culture and
different forms of economics activity have gained equal importance.

Businesses have a huge impact not only on the national economy, but
on the economy of their communities as well.

There are three broad sectors of the economy; primary sector

involves extracting and harvesting natural products from the earth (example,
agriculture, fishing and mining, the secondary sector consists of processing
(for example, the processing of food stuffs produced by agriculture),
manufacturing and construction. That is to say, the secondary sector takes

1
the products from the primary sector and does something more with them,
the tertiary sector provides services, such as retail services, entertainment
or financial service

Directions: Choose your answer from the box and write the letter of your
choice on the space provided?

A. Health and Well Being

B. Equitable Business and employment

Opportunities

C. Sustainable wildlife harvesting land access and

use

1. Hunting, trapping and gathering

2. Wellness
3. Access to land
4. Cultural maintenance
5. Community and cultural group cohesion
6. Recreational and traditional economy
7. Insurance
8. Personal Care and cosmetics
9. Training and career development
10. Local, regional and territorial business competitiveness.

This activity demonstrates that business must abide by the law and take
voluntary steps to promote the well-being of their employees and their families, as
well as the local community and society at large.

Economists often distinguish three broad sectors of the economy:

Identify of what kind of processes related in terms of their main activity.

Discuss your answer:

____________________________________________________________________
__________________________________________________________________________
_______________________________________________________________
2
 Provide a thorough discussion of your answer to the question below.

How does socioeconomic status affect our society?

Discussion:

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Give one example of socioeconomic issue in the Philippines.

Discussion:

_______________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________

Performance Task

Form pairs or groups of three (3). Research on possible products you can sell or business
you can embark on as students. Make a business plan outlining your proposal, applying the
process discussed in the lesson.

3
 4
What’s New What’s More What I have Learned What I can Do
Assessment
1.C 1.C Answer Varies -
2.C 2.A
3.B 3.C
4.B 4.C
5.B 5.C
6.A 6.C
7.A 7.A
8.A 8.A
9C 9.B
10.A 10.B
 John P. Conere SEAM, Inc
https://www.researchgate.net/publication/263652975_Socio
Economic_Approach_to_Management

https://www.atlantis-press.com/proceedings/ispcbc-19/125914456
Dennis J. Saluba Applied Economics for Senior HIgh School , C&E Publishing, Inc.

5
For inquiries or feedback, please write or call:

Department of Education - Bureau of Learning Resources (DepEd-BLR)

Ground Floor, Bonifacio Bldg., DepEd Complex

Meralco Avenue, Pasig City, Philippines 1600

Telefax: (632) 8634-1072; 8634-1054; 8631-4985

Email Address: blr.lrqad@deped.gov.ph * blr.lrpd@deped.gov.ph

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