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A STRATEGIC MANAGEMENT CASE STUDY ANALYSISA Case Study Presented toCynthia R. Villanueva, DSMSubmitted by:PLOTEÑA, GracePIPON, Tresia RubyROTARLA, Ana JaneTOLEDO, John AndreiROSUELO, Carla AnneI. EXECUTIVE SUMMARYUniversal Robina Corporation (URC) is one of the largest branded consumer food and beve...

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A STRATEGIC MANAGEMENT CASE STUDY ANALYSIS

A Case Study Presented to Cynthia R. Villanueva, DSM

Submitted by: PLOTEÑA, Grace PIPON, Tresia Ruby ROTARLA, Ana Jane TOLEDO, John Andrei ROSUELO, Carla Anne

I.

EXECUTIVE SUMMARY

Universal Robina Corporation (URC) is one of the largest branded consumer food and beverage product companies in the Philippines. The company has a significant, and growing presence in the ASEAN and Oceania markets. It is among the Philippines' pioneers in the industry. It has been operating for over 50 years since Mr. John Gokongwei, Jr. established Universal Corn Products Inc. in 1954, a cornstarch manufacturing plant in Pasig City. URC is engaged in an array of food-related businesses, including the production and distribution of branded consumer snack foods and beverages; commodities such as sugar and flour; and agro-industrial businesses mainly hogs, animal feed, and other related products. URC has built three strong regional brands over the years— Jack 'n Jill for snack foods, C2 Cool and Clean for ready-to-drink tea, and Great Taste for coffee. These brands are becoming popular across the ASEAN region. We also have premium brands from SBA through their snack foods segment such as Thins, Cheezels, CC’s, Kettle and Natural Chip, Co., and Griffin’s through their high quality sweet biscuits and wide range of healthy wrapped snacks called Nice and Natural. URC's key to success has been attributed to building strong brands, robust product innovation pipeline, and world-class manufacturing and supply chain capabilities. URC will continue to transform and delight consumers in line with the changing competitive dynamics, and growth opportunities in Asia.

II.

MISSION

The mission statement of Universal Robina Corporation is stated below: "Universal Robina Corporation (URC) is one of the largest branded food product companies in the Philippines and has a growing presence in other ASEAN markets." Universal Robina Corporation's mission statement lacks the following components, namely:

Customers Considering that they are a manufacturing company of some unhealthy food products, they do not value the health and well–being of their customers, especially nowadays, where most people are more health–conscious.

Technology They lack transparency concerning their manufacturing and production process.

Concern for public image As a manufacturing company of "junk foods," the common notion of the public with regards to their image is a negative one, when in fact they are much more than capable of cleansing their appearance through community development and corporate social responsibility programs.

Concern for employees The statement lacks the recognition of all their employees' hard work and effort that has become a huge factor in the success of their business. Therefore, we propose an improvement of the current mission statement of URC to with:

"Universal Robina Corporation is one of the largest branded food products serving a huge market throughout the ASEAN region. It is loved by all ages, carries a wide portfolio of delightful brands of excellent quality and value, and is equipped with efficient technological systems and motivated people.

URC exemplifies its passion for winning, innovating, and encouraging people in ensuring its competitive advantage. It uses its influence to aid its consumers through its humanitarian programs, doing its responsibility as expected of its Filipino background."

III.

VISION

Current vision statement of URC: “URC's vision is to be the best Philippine food and beverage company, with a powerful presence throughout the ASEAN region, carrying a wide portfolio of delightful brands of exceptional quality and value, equipped with efficient systems and motivated people. We are committed to making lives a truly fun experience.” While impressively inspiring, Universal Robina Corporation’s vision statement proved to be better suited as a mission statement rather than a vision statement. It doesn’t appear to look into the future in a matter of years and vaguely described itself “to be the best Philippine food and beverage company,” which lacks the motivation for their employees to work and strive

harder to achieve their vision. The vision statement emphasizes the well–being of its employees but fails to mention its social responsibilities outside the company. In terms of the environmental aspect of the company, they lack the initiative to promote a more environmentally and eco–friendly way of producing their products. The mission and vision statements emphasized the company’s desire to be the best “Philippines food and beverage company in its ASEAN markets.” As stated earlier, the vision failed to set a deadline for when it decides to fulfill its goal “to be the best,” but making such a vague remark allowed for the vision statement to endure the changing times as it remained to its root values. Thus, we propose this revision for the company’s new vision statement:

“URC’s vision is to be the best Philippine food and beverage company throughout the ASEAN region, through the use of its excellent line of products, empowered employees, eco–friendly processes, and loyal customers.

It aims to sustain its competitive advantage as a premier multinational company in Asia and Oceania by embedding a sustainability program that ensures continued growth that is deeply rooted in the Filipino values.”

IV

V T p

VI.

STATEMENT OF THE PROBLEM The company is very competitive in competing with other leading companies. This paper shows the recommended strategies gathered through research by identifying the possible hindrance the company is currently facing in the market. Ultimately, this paper is aimed at identifying the areas of concern that need improvement. This paper will also be tackling what these strategies best do for the said company and what will be the most appropriate strategy for the company to achieve its strategic objective to be a strong market leader. There is also a scorecard for URC which states how the firm is improving in the industry and how it is continually creating values through measures, it also states how it improved upon its core competencies and competitive advantages and how satisfied the firm’s customers are.

VII.

STATEMENT OF OBJECTIVES

SHORT-TERM ·

To be able to incorporate its value to win and the virtue of dynamism, integrity, and courage 

By building healthy employer-employee relationship

·

URC continues to provide meaningful support to all its stakeholders 

Ensure a fair and good communication with its stakeholders. Proving excellent and quality service

·

URC is an organization that bring essentials to the Philippines, so Filipinos can have different

choices of foods and beverages 

Knowing what is the most needed essential for a Filipino citizen and focus on providing a healthy food and beverages

LONG-TERM ·

To invest on healthier food products for health - conscious consumers, in line with the

increasing trend in healthy living effective within 3 years  ·

Create international partnerships with successful healthy food manufacturers.

To adopt a more efficient way of production and other operations while considering its effects

on the environment within 2 years. 

Develop a research team to make a study about an efficient way of production and other operations while considering its effects on the environment

VIII.

SWOT ANALYSIS

STRENGTHS S1. URC generated sales growth by 14% S2. Branded consumer foods segment (BCFG) increased in international sales S3. URC has Audit and Nomination Committees S4. Strong financial position in the market S5. The company has funded non-contributory defined benefit retirement plan S6. The company’s operation in the Philippines, millions of pesos were spent on R&D activities. OPPORTUNITIES O1. Downsizing of the consumer prices in emerging and developing countries O2. Families spending more on food O3. Growth of Filipino shoppers’ spending on grocery food items

O4. Philippines’ Real GDP growth O5. Economic growth of the Philippines O6. Modern grocery retailers remain the key distribution channel for packaged food WEAKNESSES W1. The Company invested in wastewater treatment in its facilities in the Philippines W2. Majority of the Company’s debt is denominated in foreign currencies W3. Small capitalization in its developments THREATS T1. Consistent government intervention and dominance T2. Filipino attitudes toward spending T3. Technology as the greatest driver of future growth

IX.

SWOT MATRIX

Weaknesses

Strengths S1. URC generated sales growth by

W1. The Company invested in

14%

wastewater treatment in its facilities

S2. Branded consumer foods

in the Philippines

segment (BCFG) increased in

W2. Majority of the Company’s

international sales

debt is denominated in foreign

S3. URC has Audit and Nomination

currencies

Committees

W3. Small capitalization in its

S4. Strong financial position in the

developments

market S5. The company has funded a noncontributory defined benefit retirement plan S6. The company’s operation in the Philippines, millions of pesos were spent on R&D activities

Opportunities

SO STRATEGIES

WO STRATEGIES

SO1= S1 + O2 + O4 Utilize the presence of adequate financial resources to take an aggressive position in expanding through vertical integration – Integration Strategy

WO1= W2 + O5 Maintain position in the market industry and try to be a key player in the industry – Market Development

O1. Downsizing of the consumer prices in emerging and developing countries O2. Families spending more on food O3. Growth of Filipino shoppers’ spending on grocery food items O4. Philippines’ Real GDP growth O5. Economic growth of the Philippines O6. Modern grocery retailers remain the key distribution channel for packaged food

SO2= S2 + O5 Expansion to US industries or joint ventures to take advantage in introducing products into new geographic areas – Market Developments SO3= S3 + O3 + O6 Gain monopoly in the market with increased economies of scale and provide major competitive advantage. – Horizontal Integration

Threats T1. Consistent government intervention and dominance T2. Filipino attitudes toward spending T3. Technology as the greatest driver of future growth

ST STRATEGIES

WT STRATEGIES

ST1= S5 + T1 Increase employee population to gain tax exemptions and incentives from the government – Market Penetration

WT1= W2 + T2 Closing obsolete factories, pruning product line, and instituting expense control systems and profits – Retrenchment

ST2= S4 + T3 Invest on technological breakthroughs to further increase market advantage – Product development

WT2= W3 + T2 + T3 Diverse unrelated products that would not conform with buyer preferences - Diversification

X.

PORTER'S FIVE FORCES ANALYSIS

The threat of New Entrants – LOW Considering that Universal Robina Corporation and its competitors have already been established in the food and beverage industry, it will be very difficult for newcomers to enter the industry and compete with these companies, as the cost of capital would be very high.

Bargaining Power of Buyers – LOW to MODERATE (Consumers) / HIGH (Retailers) For consumers, their bargaining power is low to moderate because they cannot ask for a discount and lower prices as URC products are offered at their distribution channels at a fixed price. However, due to brand loyalty and preference, some consumers may still avail their products. In terms of retailers, they have high bargaining power because they can ask for discounts by buying bulk.

Bargaining Power of Suppliers – HIGH In their industry, since they have similar products as their competitors, the materials they use would also be similar, thus making the bargaining power of the suppliers high.

The threat of Substitutes – HIGH Buyers are the main source of the company profits, and if they were not satisfied with URC's products due to their high price, they would tend to buy from competitors that offer similar products Intense Rivalry – HIGH One of the things to consider knowing the intensity of competitive rivalry is the number of competitors. Universal Robina Corporation's main competitors are Oishi and Nissin - Monde, as they produce and sell similar products. Since these companies sell identical products, the product differentiation is low, thus making the intensity of competitive rivalry high.

XI.

STEEPLE (PESTLE) FRAMEWORK

PESTEL/PEST of Universal Robina Corporation Political -

-

Strong and powerful political person, the point of view on business policies and their effect on the organization. Strength of property rights and law rules. Changes in situation and its effect. Change in legislation and taxation effects on the company.

Economical -

Exchange rates fluctuations and its relation with company. Change in level of customer’s disposable income and effect. Fluctuation in unemployment rate and its effect on hiring of skilled employees. Effect of globalization on economic environment

Social-cultural -

Change in population growth rate and age factors and its impact on organization Effect on organization due to change in attitudes and generational shifts. Standards of health, education and social mobility levels. Religious believers and life styles and its effects on organization

Technological -

Any new technology in market that could affect the work, organization or industry Access of competitors to the new technologies and its impact on their product or better services. Existing technology that can facilitate the company

XII.

COMPETITIVE PROFILE MATRIX

URC

NISSIN

OISHI

Weight

Rating

Score

Rating

Score

Rating

Score

Global Expansion

0.15

4

0.60

4

0.60

2

0.30

Product innovation and quality

0.25

3

0.75

4

1.0

3

0.75

Distribution, sales and marketing

0.05

3

0.15

4

0.20

3

0.15

Price competitiveness

0.10

3

0.30

3

0.30

2

0.10

Financial position

0.10

2

0.20

4

0.40

3

0.30

Customer loyalty

0.20

3

0.60

3

0.60

4

0.80

Market share

0.15

2

0.30

4

0.60

2

0.30

TOTAL

1.00

XIII.

2.9

3.7

2.7

EXTERNAL FACTOR EVALUATION (EFE) MATRIX

Weight

Opportunities

Rating

Weighted Score

Downsizing of the consumer prices

20%

3

0.60

Families spending more on food

10%

3

0.30

. Growth of Filipino shoppers’ spending on grocery food items

15%

4

0.60

10%

3

0.30

Economic growth of the Philippines

10%

3

0.30

Modern grocery retailers remain the key distribution channel for packaged food

15%

4

0.60

Philippines’ Real GDP growth

Threats

Consistent government intervention and dominance

5%

2

0.10

Filipino attitudes toward spending

10%

2

0.20

Technology as the greatest driver of future growth

5%

3

0.10

TOTAL

XIV.

100%

3.1

INTERNAL FACTOR EVALUATION (IFE) MATRIX Weight

Rating

Weighted Score

URC generated sales growth by 14%

50%

3

1.5

Branded consumer foods segment (BCFG) increased international sales

5%

3

0.15

URC has Audit and Nomination Committees

10%

4

0.40

Strong financial position in the market

6%

3

0.18

The company has funded a non-contributory defined benefit retirement plan

5%

4

0.20

The company’s operation in the Philippines, millions

6%

4

0.24

Strength

of pesos were spent on R&D activities Weaknesses The company invested in wastewater treatment facilities in the Philippines

4%

2

0.08

Majority of the Company’s debt is denominated in foreign currencies

8%

1

0.08

Small capitalization in its developments

6%

1

0.06

TOTAL

XV.

100%

2.89

QUANTITATIVE STRATEGIC PLANNING (QSPM) MATRIX Market Penetration

Market Development

Product Development

Weight

AS

TAS

AS

TAS

AS

TAS

Downsizing of the consumer prices

0.20

4

0.80

3

0.60

1

0.20

Families spending more on food

0.10

4

0.40

4

0.40

4

0.40

Growth of Filipino shoppers’ spending on grocery food items

0.15

3

0.45

4

0.60

4

0.60

Philippines’ Real GDP growth

0.10

4

0.40

4

0.40

3

0.30

Economic Growth of the Philippines

0.10

1

0.10

3

0.30

2

0.20

Modern grocery retailers remain the key distribution channel for packaged food

0.15

4

0.60

4

0.60

4

0.60

External Opportunities

Threats

Consistent government intervention and dominance

0.05

2

0.10

2

0.20

3

0.15

Filipino attitudes toward spending

0.10

4

0.40

3

0.30

4

0.40

Technology as the greatest driver for...