Katherine Ann P.

Paleracio SPSTRAMA S17

Company: Maynilad Water Services, Inc.

Five Forces of Competition

Threat of New Entrants:

Low

Bargaining Power of Buyer: Low

Rivalry among existing competitors:

Bargaining Power of Supplier:

Moderate

Moderate

Threat of substitute products or services:

Low

Threat of New Entrants: Low Maynilad has an exclusive rights to west concession area. Even if a new competitor emerges, it entails a lot of capital and very costly. Bargaining Power of Buyers: Low As the biggest provider of potable water in west concession area, no other water utility could supply such number of consumer for a lower price. In fact, there are water utilities that get their water itself to Maynilad and supply the same to their customers. There may emerge companies that would supply a certain area, but still they could not cater such number of consumer (1 million households).

Bargaining Power of Suppliers: Moderate Maynilad gets the needed services/products to its qualified/credited suppliers. Before a supplier would have a chance selling products and services they have to get accreditation from the company. Maynilad has a number of suppliers but they are only limited to those credited ones. Therefore, bargaining power of suppliers is moderate Threat of Substitute Products or Services: Low Deepwell is another alternative for water but constructing a well is very costly. Plus, construction of this is not encouraged as they may destroy ground water. Water rationing is not a smart alternative as it is much expensive compare to Maynilads. Mineral water is another alternative for consumers, this is much more costly. Many customers may prefer mineral water for drinking but it is only a small percentage of what a household consumes. I may say this not affect the company that much. Rivalry Among Existing Competitors: Moderate Although Maynilads service area differs from Manila Waters, I consider Manila Water as Maynilads competitor when there are bids for projects and acquiring other companies. During the bidding in a water utility in Vietnam, both Manila Water and Maynilad bid. But it was Manila Water who won the bid. There are other projects that are still open for bidding that Manila Water and Maynilad engaged in.

Competitive Profile Matrix (CPM)

CRITICAL SUCCESS FACTORS 1 2 3 4 5 6 7 Product Quality Price Competitiveness Customer Service Employee Relations Production Capacity Knowledge Sharing Inventory System TOTAL

Wt. 0.30 0.25 0.20 0.10 0.05 0.05 0.05 1.00

Maynilad Manila Water Rating Score Rating Score 3 0.90 4 1.20 3 0.75 4 1.00 2 0.40 3 0.60 4 0.40 3 0.30 4 0.20 3 0.15 3 0.15 3 0.15 3 0.15 4 0.20 2.95 3.60

Product Quality The quality of pipe network and establishment of Manila water compare to Maynilad is better to date. Manila water has fixed and oprimized its network long before Maynilad did the same. Therefore, Maynila Water has a more quality product compare to Maynilad as pipe network is crucial to give better pressure and more reliable water.

Price Competitiveness Maynilad inherited a debt during the acquisition of the project, which is higher than the debt of Manila Water. Currently, Manila Water offers a lower price compare to Maynilad.

Customer Service In back office, I could say that Manila Water and Maynilad are equal. But, in constructing its pipe network/establishment, Manila Water is more organized. Manila Water has a stricter compliance to safety. They have more staff and programs when it comes to safety and organizing the construction sites.

Employee Relations Maynilad has more programs compare to Manila Water for employee relations and activities. Maynilad truly believes that it is through employees to achieve success and growth of the business. Maynilad currently has values formation program, yearly sportsfest, cadetship program, leadership program. Manila Water only has cadetship program.

Production Capacity Maynilad serves 60% of Metro Manila while Manila water serves only 40%.

Inventory Management The product of the company is water and therefore optimizing the network is important to a profitable company. To date, the wastage (leakages, theft, pilferage) of Manila Water is only 14% while Maynilad has 40%.