2. R E C D I T I S R O S G N I V A S C E S M C
G N P O M E D S E G A T R O H S S H S E I I
S T N A N K M A C R O E C I N I M H C S X M
K A P L E S C O M M A N D N I M P O R T S O
E D A M C A U I T A L T R T D E O U F L D N
L A B O R M S M A R C I T E V I R S S E R O
G M I C R O E C E N T A X R S C O E I D O C
P I H S R I E N E R P E R E N E C H G S I E
P O S I L I V E E C O N O S I C S O D E V O
N O R P A T I V E E C O N T M I C L P O A I
G D S P E N D I N G E V I T A L E D O O H C
A U S O L U T E S S R O T S E V N I N E E O
S P S U P P L I E R S C O S T R A H I N B S
3. Entrepreneurs turn up
It is classic entrepreneurial stuff – see a problem and
figure out how to solve it, whether or not you have the
resources to do it. Linda Rottenberg, the founder of the
non-profit Endeavor, has a great line that describes the
situation neatly: “When economies turn down,
entrepreneurs turn up.”
Mind you, these entrepreneurs have all been walloped as
hard as the rest. As I write, most are going through
unprecedented declines in their business and are
scrambling to conserve cash, reduce expenses and pivot
the business to be ready for the inevitable recovery from
this pandemic.
4. But in the middle of this chaos, they have also been
moved to do something concrete to help the country.
Entrepreneurs are defined by how they respond to a crisis,
which as the Chinese word for crisis suggests is the co-
existence of danger and opportunity. The great ones are
those who find opportunity in the face of danger. The
great ones do right by all the stakeholders they serve:
employees, customers, shareholders, suppliers and the
communities they operate in. The great ones rise to the
occasion when the moment demands it of them.
In the words of the Count of Monte Cristo – a man who lost
everything then gained it back: “Life is a storm, my young
friend. You will bask in the sunlight one moment, be
shattered on the rocks the next. What makes you a man is
what you do when that storm comes.”
5. Below is a list of some of the noteworthy initiatives I have
seen in the little Endeavor community in the Philippines.
In the middle of a storm, this is how entrepreneurs rise to
the occasion.
Abetina Valenzuela (Equilife Medical)
Abetina is the founder of Equilife Medical, a company that
provides medical services and equipment to ICUs in
hospitals in the Philippines. When COVID-19 started to
escalate, Abet and her team scrambled to get all the
critical care equipment at their disposal - such as
ventilators - to the hospitals that needed them most. As
with all hospitals they have stepped up their efforts to
send their nurses, respiratory therapists and engineers
into the frontline, at ng theigreat personal risk to
themselves.
6. Paul Rivera (Kalibrr)
Paul is the co-founder and CEO of Kalibrr, a technology
company that aims to transform how candidates find
jobs and how companies hire talent. Currently, his team
is partnering with bld.ai, a technology company founded
by Danny Castonguay. The COVID Sentinel mission is to
detect, manage, and defeat pandemics. The sentinel
surveillance system not only aggregates high quality
data from public sources, but also collects targeted
data from sources such as sewage testing and patient
symptoms tracker apps. This intelligence is put in the
hands of doctors for tactical solutions and researchers
for systemic interventions.
(by Manny Ayala published by Rappler on April 4, 2020)
7. After reading the article, you now have an initial
idea about the lesson. But before we begin the
lesson, answer the following:
■ 1. What type of products/services was
created during the pandemic?
■ 2. In your opinion, what are the social and
economic factors that the business owners
considered in creating their business?
8. Socio Economic Impact of Business-
Consumers, Suppliers, and
Households
Effect of Business on Consumers
A successful business influences the behavior of
consumers to encourage them to buy its products.
The business does this by studying consumer needs
and adopting strategies to persuade as many
consumers as possible that the products have
value. You can use several methods to influence
consumers, and you have to know your markets
well to get the results you want.
9. 1. Influence Consumers Emotionally
To affect consumers’ behavior, you have to
communicate a message or present
consumers with information. Consumers’ are
more likely to respond to material that
connects on an emotional level, and surprise
combined with repeated episodes of joy or
humor is effective.
10. 2. Encourage Customers to Look for
Value
If you solve a common problem for
consumers more effectively than your
competitors, or solve it at substantially lower
cost, you can influence consumers to switch
to your brand. Your message emphasizes the
higher value consumers get when they solve
their problem using your products. The key is
to make sure your products meet the
expectations of consumers.
11. 3. Offer Social Responsibility
To have a more general effect on consumer
behavior is to offer ways of acting in a
socially responsible manner. You can promote
your brand as environmentally green and
socially responsible, carrying out
corresponding initiatives and informing your
target markets of your action. Consumers
who want to buy from socially active and
environmentally responsible companies
respond positively.
12. 4. Change Behavior with Excellent
Service
The level of service customers experience when
dealing with your company can have a profound
effect on customer behavior. Customers who
experience bad service will not buy from your
company again, and are more likely to share their
negative experiences with friends and online. Your
customer service goal must be to deliver flawless
service every time a customer interacts with your
business. The effects on customer behavior result
in a positive reputation for your company and
increased sales over the long term.
13. Factors that Impact Business and
Consumer Confidence
1. Changes in interest rates and/ or exchange rates,
particularly if they are rapid, large and unexpected;
2. Swings in the business cycle and associated movements
in employment/ unemployment levels and business investment
intentions;
3. Shifts in the relative prices of nondiscretionary goods
and services, notably petrol, healthcare, education and
utilities prices;
4. Announced policy shifts in the stance of government
fiscal policy including large structural spending cuts or
increases/ decreases in taxation rates.
14. Selecting the Right Suppliers
1. Supplier History and Reputation
2. Quality of the Product/Service provided by the
Supplier
3. Price Charged by the Supplier and how does this
impact on the quality of the product/service provided
by the supplier
4. Financial Strength.
Example: Does it have good cash flow and strong
balance sheet?
15. 5. Size of the Supplier and its other Customers.
Example: Does it normally deal with businesses of your size?
6. Capacity of the Supplier
Example: How much can the supplier comfortably provide and what is
its maximum?
7. Reliability of the Service
8. Flexibility of the Service
9. Turnaround Times
10. Payment Terms
Example: How quickly does the supplier expect payment and method of
payment?
11. Problem Resolution Process
16. Supplier Management
After agreeing a contract with a supplier it is
important to monitor the supplier’s performance
to ensure that they are providing the service that
was agreed with them. Some firms will agree
targets known as Key Performance Indicators (KPIs)
that suppliers will need to meet.
17. Supplier Management
Businesses are reliant on suppliers; suppliers
provide the tools a business needs to operate. If a
firm manages to negotiate a favorable contract
with the right supplier they are likely to benefit.
However, the wrong supplier or unfavorable
supplier contract is likely to have a detrimental
effect. If things go wrong with a supplier it may
take time to switch suppliers and even if you do
manage to switch suppliers quickly it could take
time to recover from the effects of a poor supplier.
18. Factors Affecting Household
Spending
Household spending is the most important
part of aggregate demand. It can be broken
down into a number of categories, covering
major spending items such as transport,
food, fuel, holidays and clothing.
19. The pattern of spending changes over time as a result of changes in:
1. Household income – some goods are normal goods while
others are inferior, so increases in income encourage
households to shift spending from goods with a low
income elasticity of demand, like food, to those with
high income elasticity of demand, like holidays.
2. Tastes and Fashions – over time spending on certain
items that are ‘in fashion’ increase relative to those
that go out of fashion.
20. The pattern of spending changes over time as
a result of changes in:
3. Taxes and Subsidies – as indirect taxes
and subsidies rise and fall, households will be
encouraged or discouraged from spending.
4. Relative Prices – as the prices of certain
goods and services rise in relation to others,
household spending will adjust.
21. Determinants of Spending
1. The current level of National Income
Some extra spending is induced by changes in the current
level of national income. As income rise, customers tend
to increase their spending on higher income elastic goods
and services, such as luxuries, holidays and leisure goods.
When income falls households may postpone spending on
these luxuries until income rise again.
22. Determinants of Spending
2. The Level of Savings
Spending and saving are mutually exclusive, which
means that if income is fixed, any change in
household’s savings will inversely affect spending.
Many of determinants of consumption have an
inverse effect on saving.
23. Determinants of Spending
3. Expectations
If households are confident, and have
positive expectations about the future,
current spending can rise. This can lead to
economic growth, and re – enforce the
positive expectations.
24. Determinants of Spending
4. Unemployment
Unemployment has two potential effects on
household spending. Firstly, the unemployed spend
less because of their lower personal income, and
secondly, unemployment causes negative
expectations, even for those employed, and this
can act as a curb on spending and a stimulus to
saving.
25. Determinants of Spending
5. Rates of Income Tax
Changes in tax can clearly affect disposable,
post – tax income, and hence affect
household spending.
26. Determinants of Spending
6. Interest Rates
By altering the level of saving – a rise in
interest rates will stimulate more saving, and
less spending.
