Balai Strategic Paper

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Submitted as Partial Fulfilment of the

Requirements in Strategic Management
Prof. Roberto Manaois
Jericko Malaya
Exceed Expectations
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Address: 8 Civic Street Village East Cainta Rizal, Philippines

Phone: +63 9166285963, E-mail: jmalaya20@gmail.com
Exceed expectations Jericko Malaya
Contents
Chapter 1 - Introduction ........................................................................................................................ 4
Chapter 2 - Research and Design Methodology ................................................................................... 5
Chapter 3 - External Analysis ............................................................................................................. 20
3.1
Political / Legal ........................................................................................................................... 21
3.2
Economic .................................................................................................................................... 23
3.3
Socio-Cultural ............................................................................................................................. 29
3.4
Technological .............................................................................................................................. 31
Chapter 4 - Industry and Competition Analysis .................................................................................. 34

4.1
Industry Analysis ........................................................................................................................ 35
4.2
CPM Matrix ................................................................................................................................ 43
4.3
External Factor Evaluation Matrix (EFE) ................................................................................... 46
Chapter 5 - Internal Analysis .............................................................................................................. 49

5.1
The Vision / Mission Analysis .................................................................................................... 49
5.2
The 7 S Model of Mckenzie ........................................................................................................ 51
5.3
The VCA ..................................................................................................................................... 60
5.4
Financial Analysis ....................................................................................................................... 63
5.5
The Internal Factor Evaluation Matrix (IFE) .............................................................................. 71
Chapter 6 - Strategy Formulation........................................................................................................ 72

6.1
TOWS Matrix ............................................................................................................................. 73
6.2
The Space Matrix ........................................................................................................................ 74
6.3
I-E Matrix.................................................................................................................................... 76
6.4
The Summary of Matrices........................................................................................................... 77
6.5
The Quantitative Strategy Planning Matrix ................................................................................ 78
Chapter 7 - Strategy Implementation .................................................................................................. 80
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9
10
7.1
Recommended Mission/Vision ................................................................................................... 80
7.2
Recommended Strategies for Communication............................................................................ 80
7.3
Recommended Strategic and Financial Objectives ..................................................................... 82
7.4
Recommended Business Strategies ............................................................................................. 84
7.5
Three-year Financial Projection .................................................................................................. 86
7.6
The Departmental Programs ....................................................................................................... 91
7.6.1
Marketing Department ........................................................................................................ 91
7.6.2
Finance Department ............................................................................................................ 93
7.6.3
Human Resources ............................................................................................................... 94
Chapter 8 - Strategy Evaluation, Monitoring and Control .................................................................. 95

8.1
Strategy Map of the Firm ............................................................................................................ 96
8.2
The Balance Scorecard................................................................................................................ 97
8.3
Contingency Planning ................................................................................................................. 98
Chapter 9 - Conclusion ....................................................................................................................... 99

Footnotes and References ............................................................................................................. 100
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Chapter 1 - Introduction
The main purpose for this paper is to help Balai Resort in achieving its goals by proposing
different strategies. The frameworks help the management understand the external and internal
factors that affect the formation of business strategies, the basis of strategies, where it should be
derived from and finally the implementation of the strategies.
The strategist has chosen Balai Resort because this is their family business. They have been
running the resort for 15 years. Because this is so, He wanted to learn how to think strategically
and how to form strategies that may contribute to the company.
There are numerous challenges a resort has to face. Most resorts does not have differentiation.
They cannot afford to invest in the capabilities required to compete with larger resorts.
With the help of this strategic paper, the best strategy for the resort to undertake is Product Development.
They would need to enhance their services to draw in more clients and be more competitive. The
projected results is very promising, with an increase in revenues of 15% yearly and garnering a net
income of atleast Php 6 Million
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Chapter 2 - Research and Design Methodology
The researcher used different methodology in gathering the data needed. This is to ensure a more
comprehensive approach in finding out the best strategy for the resort. It is divided in to two
parts, external and internal analysis.
The external environment is the context in which a business operates. This takes in various
factors including those outside its control, for example, laws or standards. The external
environment is the context in which a business operates. Each factor can have an effect on the
business positive or negative and so companies make plans and strategies to try to anticipate
these effects. If a company does not plan for external environment changes or ignores them, then
it may miss opportunities to grow or suffer setbacks, for example, losing business to a
competitor.
First strategy used is PESTEL Analysis. PESTLE analysis, which is sometimes referred as PEST
analysis, is a concept in marketing principles. Moreover, this concept is used as a tool by
companies to track the environment theyre operating in or are planning to launch a new
project/product/service etc.
PESTLE is a mnemonic which in its expanded form denotes P for Political, E for Economic, S
for Social, T for Technological, L for Legal and E for Environmental. It gives a birds eye view
of the whole environment from many different angles that one wants to check and keep a track of
while contemplating on a certain idea/plan.
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The framework has undergone certain alterations, as gurus of Marketing have added certain
things like an E for Ethics to instill the element of demographics while utilizing the framework
while researching the market.
There are certain questions that one needs to ask while conducting this analysis, which give them
an idea of what things to keep in mind. They are:
What is the political situation of the country and how can it affect the industry?
What are the prevalent economic factors?
How much importance does culture has in the market and what are its determinants?
What technological innovations are likely to pop up and affect the market structure?
Are there any current legislations that regulate the industry or can there be any change in
the legislations for the industry?
What are the environmental concerns for the industry?
All the aspects of this technique are crucial for any industry a business might be in. More than
just understanding the market, this framework represents one of the vertebras of the backbone of
strategic management that not only defines what a company should do, but also accounts for an
organizations goals and the strategies stringed to them.
It may be so, that the importance of each of the factors may be different to different kinds of
industries, but it is imperative to any strategy a company wants to develop that they conduct the
PESTLE analysis as it forms a much more comprehensive version of the SWOT analysis.
It is very critical for one to understand the complete depth of each of the letters of the PESTLE.
It is as below:
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1. Political: These factors determine the extent to which a government may influence the
economy or a certain industry. [For example] a government may impose a new tax or duty
due to which entire revenue generating structures of organizations might change. Political
factors include tax policies, Fiscal policy, trade tariffs etc. that a government may levy
around the fiscal year and it may affect the business environment (economic environment) to
a great extent.
2. Economic: These factors are determinants of an economys performance that directly
impacts a company and have resonating long term effects. [For example] a rise in the
inflation rate of any economy would affect the way companies price their products and
services. Adding to that, it would affect the purchasing power of a consumer and change
demand/supply models for that economy. Economic factors include inflation rate, interest
rates, foreign exchange rates, economic growth patterns etc. It also accounts for the FDI
(foreign direct investment) depending on certain specific industries whore undergoing this
analysis.
3. Social: These factors scrutinize the social environment of the market, and gauge
determinants like cultural trends, demographics, population analytics etc. An example for
this can be buying trends for Western countries like the US where there is high demand
during the Holiday season.
4. Technological: These factors pertain to innovations in technology that may affect the
operations of the industry and the market favorably or unfavorably. This refers to
automation, research and development and the amount of technological awareness that a
market possesses.
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5. Legal: These factors have both external and internal sides. There are certain laws that affect
the business environment in a certain country while there are certain policies that companies
maintain for themselves. Legal analysis takes into account both of these angles and then
charts out the strategies in light of these legislations. For example, consumer laws, safety
standards, labor laws etc.
6. Environmental: These factors include all those that influence or are determined by the
surrounding environment. This aspect of the PESTLE is crucial for certain industries
particularly for example tourism, farming, agriculture etc. Factors of a business
environmental analysis include but are not limited to climate, weather, geographical location,
global changes in climate, environmental offsets etc.
The second external analysis method used is Industry Analysis. Industry analysisalso known
as Porters Five Forces Analysisis a very useful tool for business strategists. It is based on the
observation that profit margins vary between industries, which can be explained by the structure
of an industry.
The Five Forces primary purpose is to determine the attractiveness of an industry. However, the
analysis also provides a starting point for formulating strategy and understanding the competitive
landscape in which a company operates.
Industry analysis enables a company to develop a competitive strategy that best defends against
the competitive forces or influences them in its favour. The key to developing a competitive
strategy is to understand the sources of the competitive forces. By developing an understanding
of these competitive forces, the company can:
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Highlight the companys critical strengths and weaknesses (SWOT analysis)
Animate its position in the industry
Clarify areas where strategic changes will result in the greatest payoffs
Emphasize areas where industry trends indicate the greatest significance as either
opportunities or threats
The third research methodology for external analysis is CPM Matrix. CPM, or the CPM Matrix,
stands for Competitive Profile Matrix and is a powerful strategic analysis tool. CPM allows
business owners, stockholders and other interested parties to see the strengths and weaknesses of
all major competitors in an industry on a single page. This helps visualize and communicate the
competitive landscape. In most industries, competitors tend to have distinct strengths and
weaknesses. While one particular player might have the lowest manufacturing costs, another
could have the most recognized brand name. Yet another competitor could have the tastiest or
most durable product, for example. CPM not only helps the company place all of these on a
single page, but also distil a vast amount of data into a single numeric score. As a result, the
company can rank companies in terms of the "total package" they bring to the table. This allows
a manager or business owner to identify the strongest competitors as well as the areas where she
most needs to improve.
Concluding the external analysis is the EFE Matrix. The EFE matrix is very similar to the IFE
matrix. The major difference between the EFE matrix and the IFE matrix is the type of factors
that are included in the model. While the IFE matrix deals with internal factors, the EFE matrix
is concerned solely with external factors.
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External factors assessed in the EFE matrix are the ones that are subjected to the will of social,
economic, political, legal, and other external forces.
In order for the strategic management process to begin, managers are required to conduct an
internal analysis. This involves identifying the business' strengths and weaknesses, by analysing
its competencies. It also involves managers highlighting the business' competitive advantage. For
strategies to be effective, the organisation must exploit and expand on its strengths, as well as
reduce or eliminate its weaknesses; thus furthering its competitive advantage, in order to achieve
profitability.
A business' competencies are its resources and capabilities that allow the business to differentiate
itself and its products and services, or reduce its costs, when compared with competitors. A
business' resources are its assets, which may be tangible assets, such as equipment or technology,
or intangible assets such as brands, knowledge and expertise.
First method use to analyse the internal factors is analysing the Vision / Mission statement.
Vision and mission statements (VMS) are tools used by organizations to set priorities, build
unity and give directions to its members. While the two separate terms vision and mission
statement are often lumped together and used interchangeably, they are in fact very different.
An organizations vision is often called its future state. It describes what the organization
hopes to be in the future. It is a long-term, lofty goal that sets the tone for higher achievement
within the organization.
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A mission statement is short-term, usually 3-5 years, and describes the organizations current
state. The mission is more detailed than the vision because it outlines how the organization will
go about achieving its vision.
VMS help an organization:
Guide strategic planning and implementation
Define performance standards and expectations
Establish a more productive, goal-oriented corporate culture
Communicate its purpose and goals to outside stakeholders1
The second method used is the McKinsey 7s model. The McKinsey 7S model involves seven
interdependent factors which are categorized as either "hard" or "soft" elements:
Hard Elements
Soft Elements
Shared Values
Strategy
Skills
Structure
Style
Systems
Staff
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"Hard" elements are easier to define or identify and management can directly influence them:
These are strategy statements; organization charts and reporting lines; and formal processes and
IT systems.
"Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and
more influenced by culture. However, these soft elements are as important as the hard elements
if the organization is going to be successful.
The way the model is presented in Figure 1 below depicts the interdependency of the elements
and indicates how a change in one affects all the others.
Let's look at each of the elements specifically:
Strategy: the plan devised to maintain and build competitive advantage over the
competition.
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Structure: the way the organization is structured and who reports to whom.
Systems: the daily activities and procedures that staff members engage in to get the job
done.
Shared Values: called "superordinate goals" when the model was first developed,
these are the core values of the company that are evidenced in the corporate culture and
the general work ethic.
Style: the style of leadership adopted.
Staff: the employees and their general capabilities.
Skills: the actual skills and competencies of the employees working for the company.
The third method used for internal analysis is the VCA. VCA is a strategy tool used to analyze
internal firm activities. Its goal is to recognize, which activities are the most valuable (i.e. are the
source of cost or differentiation advantage) to the firm and which ones could be improved to
provide competitive advantage. In other words, by looking into internal activities, the analysis
reveals where a firms competitive advantages or disadvantages are. The firm that competes
through differentiation advantage will try to perform its activities better than competitors would
do. If it competes through cost advantage, it will try to perform internal activities at lower costs
than competitors would do. When a company is capable of producing goods at lower costs than
the market price or to provide superior products, it earns profits.
M. Porter introduced the generic value chain model in 1985. Value chain represents all the
internal activities a firm engages in to produce goods and services. VC is formed of primary
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activities that add value to the final product directly and support activities that add value
indirectly. Below you can see the Porters VC model.
Primary Activities
Support Activities
Although, primary activities add value directly to the production process, they are not necessarily
more important than support activities. Nowadays, competitive advantage mainly derives from
technological improvements or innovations in business models or processes. Therefore, such
support activities as information systems, R&D or general management are usually the most
important source of differentiation advantage. On the other hand, primary activities are usually
the source of cost advantage, where costs can be easily identified for each activity and properly
managed.
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The fourth method used is financial analysis. Strategic management consists of setting end goals,
then analyzing ways to reach those goals. Department heads and their staff members might be
responsible for creating specific tactics to reach these goals but perform their work using the bigpicture objectives set by the strategic management team. Using different financial reports and
projections can help managers determine which strategies have the best chances for success.
Budgeting
The most basic form of financial analysis for strategic management is budgeting. In addition to
creating budgets for the coming year, management conducts budget variance analyses to
determine where previous budgets were not accurate and why. Using this information, the
strategic management team makes changes to the areas that caused negative budget results and
looks to take advantage of practices that caused better-than-budgeted results.
Pricing Analysis
Not all products will generate high sales volumes at high prices, and strategic management tries
to determine the elasticity of demand for products at different prices. Projecting the effects of
price increases and decreases can help managers create strategic pricing strategies, such as
selling at a low price to create higher volumes or selling at higher prices, which might result in
lower volumes. Once this analysis is finished, managers can determine how these strategies will
affect gross profits.
Evaluating Costs
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One technique for analyzing the finances of a business is to calculate overhead and production
costs. Overhead costs are expenses related to running a business regardless of what your sales
levels are. These include such costs as rent, insurance, marketing and office staff. Production
costs are those expenses directly related to making your products, such as supplies, labor,
machinery and packaging. Once management knows overhead and production costs, it can
determine those costs per unit at different levels of production. This helps with setting prices and
can tell the management team if it needs to undertake cost-containment as one strategy to
achieve or improve profitability. The analysis might determine that the company cannot reduce
production costs further and must reduce overhead expenses, or vice versa.
Cash Flow Management
Profitable businesses can have trouble paying their bills if they dont coordinate receipt of their
receivables with due dates of payables. Strategic management includes managing cash flow,
ensuring the company has enough cash or credit to pay its bills. Part of this strategy includes
setting procedures for issuing credit to customers, negotiating credit terms with suppliers and
maintaining cash reserves. This strategic management of cash helps prevent losing access to
supplies and materials, which can lead to production stoppages and loss of customers.
Performance Analysis
If a business is considering buying another company or shutting down a division, management
reviews the performance of the business or division to determine not only its profitability
performance, but also its financial effects on the rest of the company. Acquiring a profitable
business might put too much stress on the acquiring companys administrative staff or debt-
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service abilities. Shutting down a division that is not profitable might free up resources the
company could use to generate larger profits in other divisions.
To cap the internal analysis the researcher used IFE Matrix. IFE matrix also provides a basis for
identifying and evaluating relationships among those areas. The Internal Factor Evaluation
matrix or short IFE matrix is used in strategy formulation.
The IFE Matrix together with the EFE matrix is a strategy-formulation tool that can be utilized to
evaluate how a company is performing in regards to identified internal strengths and weaknesses
of a company. The IFE matrix method conceptually relates to the Balanced Scorecard method in
some aspects.
To properly come up with the right strategy, the researcher used TOWS Matrix, Space Matrix
and I-E Matrix.
TOWS analysis is a method of strategic analysis used to study the environment of the
organization and its interior. TOWS concept is synonymous with the term SWOT acronym. By
according to H.Weihrich english words Threats (in the environment), Opportunities (in the
environment), Weaknesses (of the organization), Strenghts (of the organization) should be placed
in this order to make the emphasis on problem-solving sequence in the process of strategy
formulation.
TOWS analysis is an algorithm of the strategic analysis process, involving systematic and
comprehensive assessment of external and internal factors that determine current condition and
growth potential of the company.
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It is based on a simple classification scheme: all of the factors influencing the current and future
position of the organization is divided into:
External and internal to the organization,
Having negative and positive impact on the organization.
The intersection of above distinctions gives four categories of factors:
External and positive (opportunities)
External and negative (threats)
Internal and positive (strengths)
Internal and negative (weaknesses)
Comparing opportunities and threats with strengths and weaknesses of the company allows to
define its strategic position, and can also be a source of interesting ideas of strategies.
Strenghts Weeknesses
Opportunities S / O
S/T
Threats
W/T
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W/O
The SPACE matrix is just a little bit more complex than the SWOT analysis. The SPACE matrix
evaluates different variables and assigns them a score considering how important they are for the
situation of the company. It analyzes four different areas (two internal to the company and two
external) that will represent four quadrants in a graphic. The purpose of this matrix is to situate
the company in one of these four quadrants and give a suggestion according to which quadrant
results- about what type of strategies a company should follow: conservative, aggressive,
defensive or competitive. But, how do we come up with the quadrant where our company is
located? The first step is to address each of the four areas of question: the internal strategic
dimensions represented by the financial strength (FS) and the competitive advantage (CA); and
the external strategic dimensions represented by the environmental stability (ES) and the industry
strength (IS)
IE stands for Internal external as the name suggest that its based upon internal and external
factors of the organization. The IE is an important strategic tool which comes under the portfolio
management considered much similar to BCG Matrix. The IE matrix used to plot the
organization divisions in nine cell diagram, each cell have some meaning associated which
suggest strategies.
In summarize way it can be defined as the strategic management tool which is used to analyze
the current position of the divisions and suggest the strategies for the future for the better results.
Quantitative Strategic Planning Matrix (QSPM) is a high-level strategic management

approach for evaluating possible strategies. Quantitative Strategic Planning Matrix or a QSPM
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provides an analytical method for comparing feasible alternative actions. The QSPM method
falls within so-called stage 3 of the strategy formulation analytical framework.
When company executives think about what to do, and which way to go, they usually have a
prioritized list of strategies. If they like one strategy over another one, they move it up on the list.
This process is very much intuitive and subjective. The QSPM method introduces some numbers
into this approach making it a little more "expert" technique.
Chapter 3 - External Analysis
The External Analysis examines opportunities and threats that exist in the environment. Both
opportunities and threats exist independently of the firm. The way to differentiate between a
strength or weakness from an opportunity or threat is to ask: Would this issue exist if the
company did not exist? If the answer is yes, it should be considered external to the firm.
Opportunities refer to favorable conditions in the environment that could produce rewards for the
organization if acted upon properly. That is, opportunities are situations that exist but must be
acted on if the firm is to benefit from them. Threats refer to conditions or barriers that may
prevent the firms from reaching its objectives.
The following area analyses are used to look at all external factors effecting a company:
Customer analysis: Segments, motivations, unmet needs
Competitive analysis: Identify completely, put in strategic groups, evaluate performance,

image, their objectives, strategies, culture, cost structure, strengths, weakness
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Market analysis: Overall size, projected growth, profitability, entry barriers, cost structure,
distribution system, trends, key success factors
Environmental analysis: Technological, governmental, economic, cultural, demographic,

scenarios, information-need areas Goal: To identify external opportunities, threats, trends,
and strategic uncertainties
3.1
Political / Legal
Malacanag hopes to boost the number of tourist arrivals in the country with the signing of a law
rationalizing the taxes being paid by international carriers. Republic Act No. 10378, otherwise
known as the Common Carriers Tax (CCT) Act, exempts foreign carriers both air and sea
from paying the three percent CCT.
Carriers will also be exempted from VAT (value added tax) for the transport of passengers.
Deputy presidential spokesperson Abigail Valte said the signing of the law was in addition to the
travel and tourism competitiveness report of the World Economic Forum putting the Philippines
at rank 82, up from 94.
The International Civil Aviation Organizations (ICAO) also lifted significant safety concerns in
the Philippine commercial aviation industry. Valte said the CCT collected from international
carriers comprised less than one percent of the budget, which would be insignificant compared to
multiplier effect of a vibrant tourism industry. She explained that by foregoing some revenues,
international carriers would be encouraged to fly to the country and bring in more tourists.
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The administration sees tourism as one sector that can provide livelihood and jobs to people as it
does in other countries. The Philippine Travel Agencies Association welcomed the signing of the
law, according to reports, as it will be good for their industry. Valte said the Civil Aviation
Authority of the Philippines was continuously working with the US Federal Aviation Authority
and the European Union so local airlines could fly to more destinations in the United States and
Europe.
She noted that the infrastructure needed to help tourism is also a priority of the administration.
She said the Department of Transportation and Communication (DOTC) continues to rehabilitate
old airports as well as construct new airports. The Aquino administration targets 10 million
foreign tourist arrivals by 2016. Last year, the Department of Tourism launched the Its More
Fun in the Philippines campaign to attract more tourists to come to the country.
The State declares tourism as an indispensable element of the national economy and an industry
of national interest and importance, which must be harnessed as an engine of socioeconomic
growth and cultural affirmation to generate investment, foreign exchange and employment, and
to continue to mold an enhanced sense of national pride for all Filipinos. To this end, the
Tourism Act of 2009 was passed on 12 May 2009, granting fiscal and non-fiscal incentives to
tourism business, including income tax holiday of up to six years, and employment of foreign
nationals, among others
One of the salient features of this law is also the establishment of "Tourism Enterprise Zones" or
TEZs, which are geographical areas, sufficient in size and capable of being defined into one
contiguous territory, and are identified as viable tourism destinations in view of their historical
and cultural significance, environmental beauty, existing or potential integrated leisure facilities,
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reasonable distances, accessibility to transportation infrastructures and strategic location, such as

to catalyze the socioeconomic development of their neighboring communities.
Tourism enterprises within the TEZ shall register with the Tourism Infrastructure and Enterprise
Zone Authority (TIEZA) for purposes of availment of the incentives provided under the law.
3.2
Economic
The Philippines has been among the emerging markets in the region given its sound economic
fundamentals and highly-skilled workforce. Growth in the Philippines has been averaging at
about 5 percent since 2012, significantly higher than the rate achieved in the previous two
decades. Amid global uncertainties, the economy posted a 6.6 percent GDP growth in 2012,
driven by higher government spending and exports.
In recent years, the Philippines has restored stability and proved resilient to food and fuel price
hikes, the global financial crisis and recession, and the impact of typhoons and El Nio. The
countrys robust economic growth as well as the governments sound fiscal management also
saw the Philippines attain investment grade status from the Japan Credit Rating Agency,
following similar upgrades from major credit raters in 2012.
Stable remittances have provided a strong basis for currency stability and a healthy build up of
international reserves. The country currently enjoys a savings rate that exceeds investment, while
its human resources continue to be in high demand around the world.
Contribution of tourism can be measured by the share of tourism direct gross value added
(TDGVA) to total gross domestic product (GDP), the contribution of tourism industry to the
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economy was 5.9 percent in 2012. It averaged 5.8 percent during the years 2012-2013. TDGVA,
an indicator which measures the value added of different industries in response to activities of
both domestic and inbound visitors, amounted to PhP 571.3 billion in 2011, higher by 10.2
percent than in the previous year.
Among the tourism-characteristic industries, shopping had the biggest share to TDGVA at 22.9
percent, followed by accommodation at 11.2 percent, and entertainment and recreation at 6.8
percent.
These are based on the latest results of the Philippine Tourism Satellite Account (PTSA) which
also provides information on tourism expenditure and employment. Other key results from PTSA
include the following:
Inbound tourism expenditure, which refers to the expenditure of non-resident visitors (foreign
visitors and Philippine passport holders permanently residing abroad) within the Philippines,
continued to increase as it posted double-digit growth of 13.9 percent in 2011, amounting to PhP
124.5 billion from PhP 109.2 billion in 2010.
Shopping, food and beverage, and accommodation topped the list of consumption products
among inbound tourists, with 28.5 percent, 25.6 percent and 24.5 percent shares to the total
expenditure, respectively.
Domestic tourism expenditure, which includes expenditure of resident visitors within the country
either as domestic trip or part of international trip, grew largely by 27.1 percent, from PhP 783.4
billion to PhP 995.7 billion.
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Share of tourism employment to total employment in the country slightly increased at 10.3
percent from the previous years 10.2 percent. Employment in tourism industries was estimated
at 3.8 million in 2011, higher by 3.5 percent from last years 3.7 million.
ASEAN Integration will also have an impact on tourism. Ever since it burst on the world stage
with the historic 1992 Visit ASEAN Year, commemorating the 25th year of the founding of the
Association, the ASEAN travel & tourism industry has been through some rough patches,
including both internal and external shocks.
Now in its 42nd year, the wider ASEAN community is beginning to get its act together with a
broad range of political, economic and socio-cultural agreements, and numerous initiatives with
external partners such as China, India, Japan, Korea, the Gulf Countries and Mercosur.
These will have a profound influence on the ASEAN as a whole, and the ASEAN travel &
tourism industry in particular, for decades ahead.
As the ASEAN travel & tourism industry prepares the draft of the ASEAN Tourism Strategic
Plan (2011-15), it will have to factor in a whole new set of parameters, including a) changes in
the global world order; b) future directions of ASEAN; and c) expected changes in the ASEAN
travel & tourism industry itself.
While the first phase of tourism growth over the last three decades was driven by the need to
create infrastructure and eliminate impediments and bottlenecks, the new era will require the
ASEAN travel & tourism industry to build the super-structure without compromising its
environmental, cultural and social fabric.
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The mandate for doing this has been set in the ASEAN Socio-Cultural Community Blueprint, the
first of its kind approved by the ASEAN leaders at the 14th ASEAN summit in Thailand in
February 2009. The Blueprint includes a detailed and exhaustive wish-list of what the ASEAN
leaders would like to see done in the years ahead to forge a common identity and build a caring
and sharing society which is inclusive and harmonious where the well-being, livelihood, and
welfare of the people are enhanced.
But recent developments have also indicated that it may not all be smooth sailing. Natural
disasters and health warnings will continue to pose standing risks. The impact of climate change
is only just beginning to make itself felt. And the regions cultural, social and ethnic diversity,
certainly its major tourism asset, could also be a significant future liability.
At their meeting on 8 January 2009, Ha Noi, Viet Nam, ASEAN tourism ministers reaffirmed
their commitment to accelerate the integration process and, endorsed the initiative of the
ASEAN NTOs to formulate the ASEAN Tourism Strategic Plan 2011-2015 as the successor to
the Roadmap for Integration of Tourism Sector (RITS) 2004-2010 to further integrate tourism in
the ASEAN Economic Community in 2015 and to encourage joint tourism integration and
promotion as well as travel facilitation and connectivity within ASEAN.
ASEAN NTOs and the senior transport sector officials are working to facilitate air, land and sea
travel in the region, primarily with a view to boost intra-ASEAN travel. There is a desire to
accelerate land links through initiatives such as facilitation of cross border land travel by tourist
buses and the development of common tourism road signage. Regular consultations are taking
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place between the officials of cruise tourism and maritime transport working groups, and the
Asia Cruise Association is involved in the development of cruise industry in ASEAN.
In May 2009, the ASEAN Multilateral Agreement on the Full Liberalisation of Air Freight
Services and the ASEAN Multilateral Agreement on Air Services were signed by ASEAN
Transport Ministers. These will create the competitive space for greater expansion and
opportunities for air travel within the ASEAN region, in terms of more destinations, increased
capacities and lower fares. Expected to come into force by December 2010, it provides for
designated airlines of the ASEAN countries to operate unlimited frequencies to the capital cities
of each others countries.
This entire package of measures and agreements across all economic sectors of the ASEAN
community will give a significant boost to all forms of travel and tourism. Effectively, they have
paved the way for the next generation of growth by reducing or eliminating restrictions on the
movements of people, goods and services within the ASEAN region.
The boom in free trade will mean more travel for business, meetings, conventions and
exhibitions, both within the ASEAN region and to/from its Dialogue Partner countries. Aviation
liberalisation will mean greater airline linkages, right across the region.
The secondary cities of ASEAN will be primary beneficiaries. This will be especially important
both for economic growth but also ensuring a fairer distribution of income within the region and
within countries themselves.
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A significant proportion of the growth will be more focussed on border crossings, spurring
significant investments around the dozens of international checkpoints, especially in the Greater
Mekong Subregion.
The changing profile of visitors will require fundamental changes in the supply and design of
products and services. For example, catering to the Chinese, Middle Eastern traffic and Indians,
including millions of first-timers, will become as important as catering to the more seasoned
travellers from Europe and North America.
The growth will allow a more even spread of tourism flows and address the issue of seasonalitydriven peaks and troughs in the demand cycles.
The Mutual Recognition Agreement for professional and educational standards will mean greater
mobility of qualified manpower across the region. This will become necessary, almost vital, in
order to cater to the changing customer-profiles.
It will create significant new business opportunities both within the travel & tourism industry as
well as amongst suppliers of products and services to the industry, ranging from training to food
& beverage and Information Technology.
But there will also be side-effects and negative consequences Small & medium sized businesses
will be affected by the increased competition. There will be increased environmental concerns,
further pressure on infrastructure and natural resources, social issues like the spread of organized
crime, even increased nationalistic sentiments and a greater trend towards deglobalisation.
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3.3
Socio-Cultural
Staycation is gaining popularity here in the Philippines. A staycation is defined as travel to a

nearby enclave, without the hassles of flights and long-distance journeys. For the working
professional who often has to plan last minute for vacations they find themselves paying for last
minute pricing. Not only that, but the hassle of airport lines, delayed flights, traffic, and the
hustle and bustle that goes along with traveling to be too burdensome. A staycation is just that, a
vacation where you stay put. As the old saying goes home is where the heart is, and many
people find that its easier to recharge their batteries after a relaxing week at home than it is to
travel miles away to a beach city. Not only that, but its also quite a bit cheaper. The point of a
vacation is to relax and enjoy yourself, and for some it can be hard to relax after spending a large
chunk of money just to get away from it all.
Changing demographics will have a dramatic impact upon tourism in coming decades, impacting
the types of tourists that will travel, where they originate from, where they travel to, the types of
accommodation they require and the activities they engage in while away. Between now and
2030, world population is forecast to grow over the period from 6.9 billion to 8.3 billion people.
This growth will not be evenly spread across the globe, rather different regions will expand at
different rates and some will actively decline as a percentage of the total. Population growth will
generate substantial expansion in overseas travel. In 2000, the rate of international journeys was
11.5 per 100 people. If this rate was to remain unchanged, world population growth alone would
create a 20% rise in international travel, which does not account for increased travel growth rates
of 20 per 100 people that is forecasted in the developing economies.
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Asia displays considerable intra-continental differences between developed and developing

nations with regards to many demographic factors. Fertility is set to decline steadily from 3.47
children per woman in 1990 to 2.1 in 2030. While this is a steep decline it is notable that Asian
fertility will not drop below replacement level during the time-period under review. male and
female expectancy has become increasingly divergent. By 2030, the difference is set to reach a
still relatively minor 4 years; with male expectancy standing at 71.6 and female at 75.7, the
average will be 73.6. Asias shift from rural to urban has been one of the most dramatic trends of
the last few decades. Between 1990 and 2030, the pattern of urban vs. rural habitation is set to
shift from just 30% urban to almost 60%. Within this demographic shift the change in the profile
of India and China are hugely significant. Both of these nations show a double-digit increase in
their urban population, Indias rising from 25% to just over 45% and Chinas moving from just
under 30% to just fewer than 60%. Impacts of such trends to tourism demand and travel behavior
includes:
Tourists from developing countries are likely to be younger with very distinctive needs than
older tourists from more traditional source markets. This could force a stark choice for tourism
destinations in their marketing, communications and product development.
For transport and accommodation, the tension between designing products and services for older
and younger tourists may not be so stark. Design that takes into account the needs of older
tourists might simply come to be seen as examples of good design for all.
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Overall, as households and families become more diverse - more multi-generational, more
singles, more "second" families and so on - the whole of tourism sector will have to respond to
this diversity
3.4
Technological
Low-cost carriers (LCCs) in the Philippines contributed to approximately 96 percent of total

domestic air travel growth from 2006 to 2011.
This was revealed during the Brunei Darussalam-Indonesia-Malaysia Philippines East Asean
Growth Area (BIMP-Eaga) Summit held in Davao last week.
Candice Iyog, Cebu Pacific (CEB) vice president for Marketing and Distribution said,
Philippine LCCs contributed about 96 percent of total domestic air travel market growth from
2006 to 2011. Full-service carriers on the other hand contributed four percent growth in that sixyear period.
This is mainly driven by the low fares offered by LCCs such as CEB. By unbundling services
such as baggage and meals, customers are given the choice to buy only the services they want to
pay for. Full service or legacy carriers continue to bundle all their services into the fare,
something new air travelers have rejected. Cebu Pacific continues to remain focused on
stimulating travel demand in the Philippines. Weve seen this in every market we operate and
call this the Cebu Pacific effect, Iyog added.
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Despite the rising cost of fuel, average fares are now 30 percent less than 10 years ago because
of LCCs, allowing people who never flew before to travel three to four times a year. Promo fares
and seat sales allow even minimum wage earners to fly.
In 2006, one out of every two domestic passengers flew on LCCs. In 2011, LCCs dominated the
domestic market with 76 percent market share, or three out of every four domestic passengers,
indicating how many have benefit from the entry of LCCs in the market.
The Cebu Pacific Effect can also be seen in international destinations, especially those with a
dense population of global Filipinos.
CEB first flew to Hong Kong in 2005 when the Philippines-Hong Kong passenger count was at
1.99 million. Six years later, 2.75 million passengers were recorded for all airlines, indicating a
growth rate of 38 percent.
The same is true for Singapore, where passenger traffic jumped by 175 percent after CEBs entry
into the market. Similar patterns can be seen in Jakarta, Kuala Lumpur and Kota Kinabalu routes
that CEB currently operates to via Manila.
In Kuala Lumpur, Filipino tourist arrivals to Malaysia more than doubled within five years of
Cebu Pacifics entry.
CEB continues to work closely with private stakeholders and key government offices to ensure
continued airline growth for the benefit of its passengers and the economy. Despite this
phenomenal contribution of LCCs to inbound and domestic tourism, the industry continues to
face hurdles such as safety concerns and infrastructure limitations, among others, Iyog said.
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As an example, she cited that many of the 81 airports in the Philippines remain unequipped for
night landing or and even those night-rated airports do not extend operating hours. Airlines
currently operate most domestic flights during the day, leading to air traffic congestion or
cancelled flights due to daylight limitations.
CEB is already planning for an even wider route network in 2013 with long haul flights, and an
estimated passenger growth outlook at 10-15 percent per year. We expect delivery of 56 brandnew Airbus A320 A321neo and A330 aircraft until 2021, so we can offer more route, flight and
destination choices to our passengers, she said.
The Philippines has it all for sports enthusiasts who want a splashing good time. Water sports
offer thrills and exercise while being close to nature, a major boon in a country with picturesque
islands and a great variety of sea creatures. The love for water sports have been increasing
yearly, so much so that the resort's can't be competitive without them. There are plenty of
exciting activities to engage in on the Philippines many lakes, rivers, and waterfalls as well as its
coastal waters.
What better way is there to explore the wealth of marine life in Philippine waters than to go
scuba diving or snorkeling? Snorkeling is easier to learn, involving mainly swimming just below
the surface of the water with a simple mouth-breathing apparatus and mask, allowing the
snorkeler to get a good view of the underwater world. But for longer, more intensive exploration
of the depths of the sea, you have to learn scuba diving, which allows for longer underwater
expeditions with a portable supply of oxygen.
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Some of the first people to populate the country came on boats. With over 7,000 islands to
explore, sailing is a natural sport to try, whether on the sea or on vast lakes. Sailing is a great
way to enjoy the tropical sunshine, strong sea breezes, and beautiful scenery of the Philippines.
For those who prefer calm waters, jet skiing might be a better sport. It involves riding a speedy
motorized craft on the surface of the sea or a lake. It is a great way to take in the scenery and is
very easy to learn.
Another enjoyable way to sightsee on the water while getting a bit of exercise is kayaking. It
involves paddling a light craft on the sea or a lake. Paddling quietly is not only relaxing, it allows
one to observe the natural environment with very little disturbance of the wildlife.
The popular beach and lake resorts of the Philippines have long offered facilities for waterskiing,
a sport which involves being towed on skis by a motorboat or a cable.
Similar to waterskiing, wakeboarding involves riding on a board to which both feet are bound
while being towed across the water by a boat or cable. By riding on the wake, the wakeboarder
may fly up and perform stunts in the air. Wakeskating is similar except the feet are not bound to
the board. The Camsur Watersports Complex is the favorite place for engaging in these sports in
the Philippines. Other destinations for wakeboarders and wakeskaters in the Philippines include
Lago de Oro and Taal Lake in Batangas and Anchor Bay Water Sports in Romblon.
Chapter 4 - Industry and Competition Analysis
Industry and competitive analysis (ICA) is a part of any strategy development in firms and other
organizations. It contains a very practical set of methods to quickly obtain a good grasp of an
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industry, be it pharmaceuticals, information and communication technology, aluminum, or even

the beer industry. The purpose of ICA is to understand factors that impact on the performance of
the industry, and as well the performance of firms within the industry. Firms in an industry can
be categorized in so called strategic groups based on the strategies they are pursuing. Each
strategic group is associated with a certain level of performance, and the firms' membership in
such groups can be used to predict their moves within the industry. Moreover, managers use ICA
to allocate resources, reach strategic goals such as market share or profitability, and help their
firms improve their position within the industry.
4.1
Industry Analysis
Intensity of Rivalry - Strong
(Figure 1)
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As can be seen in Figure 1, the growth for Accommodation Services for visitors have a 15.1%
increase from year 2012 and 2013. This latest data from the NSO clearly shows the fast industry
growth of the hotel and resort industry in the Philippines.
There is a very low differentiation with the different beach resorts in the Philippines.
Differentiation can only be done thru pricing and services. Most resorts introduce different water
sports activities in their area of business to draw crowds. Budget flights increase domestic
traveling increasing the competition ten folds. Previously unreachable destinations are just a few
minute of flight away to explore and experience. With young Filipinos tend to lean towards a
more adventurous vacation and to experience culture in the different provinces of the
Philippines, beach resorts in the Luzon area tends to suffer.
The rivalry among competitors in the hotel industry is fierce. When potential customers can learn
about a hotel on line, the internet reduces the differences among competitors. People tend to seek
the best price for the best experience and the tendency is to reduce price to be competitive. The
internet covers wide geographical areas so the market is widened increasing the number of
competitors. For example, someone who wants to spend the day in the historic town of Niagaraon-the-:Lake can easily choose a hotel in a near by town if the amenities or the price are better.
Variable and fixed costs can be different in areas that are more expensive to live and work
making it more difficult for a hotel in Niagara on the Lake to reduce their prices to the level of
one in nearby St. Catharines.
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Switching cost is low in the resort industry. Customers, in essence is paying for the experience
the resort provides. After their stay in a resort, they won't have any problem transferring to a
different resort for a different experience. They will not be inconvenienced when transferring to
a different resort so switching will not be a problem.
Bargaining Power of Buyers - Strong
Business persons choosing a hotel for business travel are savvy consumers and they are
comfortable with computer technology. It has become very simple for them to go online and
book a hotel. They no longer need travel agents, corporate travel consultants or middle men of
any kind to determine where they will stay. Porters model predicts this elimination of
intermediaries.
Tourists are more and more capable of using the internet in the same way but in another
fulfillment of Porters model, they are more often bonding together in a novel way. They are
finding internet businesses like cheaphotels.com which will negotiate or discover bargains for
them. Both of these processes shift the bargaining power to the end user as the Porter model
predicts and these same freedoms reduce the cost of switching so that loyalty is a thing of the
past unless a particular hotel uses its one time opportunity when a customer stays at the hotel to
deeply impress the customer with a unique and valuable differentiator.
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On the 41st anniversary of the Dapartment of Tourism (DOT),Secretary Ramon Jimenez Jr. has
one appeal to every Filipino:make tourism your business.
Jimenezs enthusiasm in spreading the gospel of tourism to his countrymen is understandable.

The industry has become one of the biggest moneymakers for the Philippines.
In 2013, the total revenue from inbound visitors increased by 15.1 percent, to a hefty $4.40
billion (P186.15 billion). The increase surprised tourism officials, who were expecting fewer
visitors after a series of calamities struck the country.
According to Jimenez, 4,681,307 foreigners visited the country last year, a 9.56 percent jump
from 2012 figure of 4,272,811. The figure was below the Philippine target of five million arrivals
for the year, but Jimenez still considers 2013 to be a milestone for the tourism industry, since
visitor arrivals increased despite the devastating earthquake in Cebu and Bohol and Super
Typhoon Yolanda in November. Jimenez said the key source markets generally performed well
during the month of December, proof of the tourism sectors resilience. South Korea is the
Philippines biggest source of tourists, with 1.17 million visitors from that country. The United
States ranks second with 674,564 arrivals. Other visitors came from Japan (433,705); China
(426,352); Australia (213,023); Singapore (175,034); Taiwan (139,099); Canada (131,381);
Hong Kong (126,088); United Kingdom (122,759); Malaysia (109,437); and Germany (70,949).
For 2014, Jimenez believes prospects are even brighter for the tourism industry. The DOT is so
upbeat it is targeting six million foreign tourist arrivals before the end of this year. In fact, 2014
has a promising start. Last January alone, 461,363 tourists arrived in the country, a 5.8 percent
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rise from January 2013s 436,079. Jimenez reported that receipts from these visitors amounted to
$469 million. As of February 2014, visitor arrivals amounted to 884,014 posting a growth of
3.49 percent from the same period last year.
Another positive development is the returning to Category 1 status of the local commercial
aviaton industry by the US Federal Aviation Administration (FAA). The status upgrade allows
Philippine carriers to schedule more flights to US destinations. Transportation and
Communications Secretary Joseph Emilio Abaya said the upgrade would be a boon to the
countrys tourism industry, help local airlines expand their operations, and improve trade and
business relations between the Philippines and the US.
DOT welcomes this positive development. Philippine carriers can now operate to other cities in
the United States and increase frequencies to existing routes.
Meanwhile Sec. Jimenez says, Medical tourism is one of our niche products. The Philippines is
fortunate to have a wealth of skilled medical professionals. The DOT is taking a closer look at
dentistry, orthodontics, orthopaedics, and cancer care among others. The Philippines has a full
range of services but at present, investment in equipment is concentrated in Manila and still
needs to spread to other areas.
Barriers to Entry - Moderate
The initial investment in the hotel industry creates quite a barrier to entry but certain barriers to
entering the hotel market are reduced by the internet. A presence on the internet reduces upstart
marketing costs somewhat, and gives the new competitor access to potential suppliers and
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resources. Even a bed and breakfast can use the websites of large chains to understand the key
marketing concepts and the lures for customers. Switching costs are usually nil for a consumer.
A vital barrier would be differentiation. A hotel that can differential itself by location, by service,
amenities or some other quality has the potential to attract and keep its clients. Another barrier to
entry would be expertise. Unfortunately, in a mobile society employees frequently leave one
hotel chain to work in another and they take that expertise in terms of training or of experience
with them. It is in the areas of expertise and of differentiation that a hotel can make the greatest
impact on its client and thereby on its bottom line. In fact many established companies have
synergies between their established business and online technology.
Closing a business, is most tedious in the country. The nod of state agencies such as the
Bureau of Internal Revenue (BIR), the Securities and Exchange Commission (SEC), the Social
Security System, the Philippine Health Insurance Corp., Home Development Mutual Fund, and
local governments are required. For firms with special registrations, the nod of specific
agencies, such as the Philippine Economic Zone Authority (PEZA), the Board of Investments
and the Bangko Sentral ng Pilipinas, is also required.
Each agency has distinct requirements and procedures. In the case of PEZA, the business must
submit a letter to the PEZA chief with supporting documents.
For the BIR, the procedures are outlined in Revenue Regulations 11-2008 issued on August 15,
2008. Under the rules, canceling a registration requires the filing of a Notice of Closure or
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Cessation of Business with the large taxpayers unit or the revenue district office where the
taxpayer is registered.
The supporting documents required are a board resolution authorizing a shortened corporate term
in the case of a domestic corporation, or the dissolution of the Philippine entity in the case of
branches or representative offices of foreign firms; an application for Information Registration
Update (BIR Form 1905); an inventory of goods, supplies, and capital goods; a list of unused
sales invoices or official receipts and all other accounting forms such as vouchers, debit/credit
memos, delivery receipts, purchase orders; the surrender of original copies of unused sales
invoices or official receipts and all other unused accounting forms; and the surrender of original
copies of all business notices and permits.
Taxpayers seeking the cancellation of their registration are automatically investigated by the BIR
for tax liabilities.
This audit is the same as regular audits and governed by the same rules on prescription. Hence,
the assessment should be issued within three years from the date of filing of the return and
payment of the tax due. It may be prudent for the taxpayer planning to cease operations to review
compliance with tax laws and regulations to estimate the tax exposure, and perhaps set aside that
amount.
When liabilities are settled, the BIR will cancel the firms Certificate of Registration and TIN,
and issue the Tax Clearance or Certificate of No Outstanding Tax Liability.
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An application for dissolution with the SEC cannot commence until all the requirements,
including the tax clearance, are complied with. This is the major cause of delay in most
dissolution procedures. In the meantime, the company technically remains a registered nonoperating entity. This, however, does not prevent the company from pursuing the liquidation of
its properties and inventories, subject to taxes.
The proof of cancellation of business registration and tax clearance are also required if a
company to be dissolved wants tax credit certificates (TCC) from the BIR for unutilized input
value-added tax. In a recent case, the Court of Tax Appeals ruled that the "registration" of the
company must be cancelled first before it can apply for TCCs.
The tax clearance is a mechanism to ensure that no corporation escapes taxes and liabilities
simply through dissolution.
Firms planning to close operations must be aware of the tax implications as well as the
requirements of government agencies to avoid shelling out money unnecessarily. In these
challenging times, every peso counts.
Bargaining Power of Suppliers - Weak

While this is not a substantial threat in the hotel industry it can have impact especially in the area
of labor. With an aging population, there are fewer people to fill service industry jobs and hotels
which can attract excellent staff have a greater chance of providing excellent and exceptional
experiences to their clientele. As part of their internet strategy all hotel chains should have a
section on recruitment for employment.
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The other supplies that are needed by hotels are also easier to attain through internet channels
whether originated by the supplier or by the hotel chain. With their products in greater demand
by greater numbers of hoteliers suppliers gain some measure of power by competition for their
offerings.
4.2
CPM Matrix
Competitive Profile Matrix of Balai Resorts Inc.
Balai Resort
Critical Success Factors
Weight
Rating
1. Advertising
0.05
2. Service Quality
0.1
3. Price Competitiveness
0.05
4. Management
0.05
5. Financial Position
0.05
6. Customer Loyalty
0.1
7. Market Share
0.05
9. Technological Advantage
0.1
10. Brand Image and Awareness
0.1
11. Location
0.15
12. Food
0.15
13. Persons to be accomodated
0.05
Total
1
1
3
3
2
1
3
1
1
1
2
4
3
Aquatico
Score
Rating
0.05
0.3
0.15
0.1
0.05
0.3
0.05
0.1
0.1
0.3
0.6
0.15
2.25
4
3
1
2
4
2
2
3
4
4
3
1
La Luz Beach Resort
Score Rating
0.2
0.3
0.05
0.1
0.2
0.2
0.1
0.3
0.4
0.6
0.45
0.05
2.95
Score
3
3
3
3
4
4
3
3
4
4
2
4
0.15
0.3
0.15
0.15
0.2
0.4
0.15
0.3
0.4
0.6
0.3
0.2
3.3
Analysis of the CPM Report

Based on the research and analysis of pertinent data result of the comparative profile
matrix shoes that Balai Resort is the lest competitive with having a score of 2.25. Balai Resort
needs to correct their weakness to improve its comparative position. There exists a stiff
competition in the Beach Resort industry in Batangas as shown by the results.
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Balai Resort relies heavily on advertising thru word of mouth. Word of mouth advertising
(WOM) is the unpaid spread of a positive marketing message from person to person. It can take
place directly using the human voice, or can be transmitted via any communicative means such
as through the internet or via text message. WOM is a powerful promotional tool and should be
considered as part of almost every business marketing strategy. Meanwhile Aquatico and La Luz
Beach Resort spends a good chunk of their funds to advertising attracting people faster and
creating more customers for them leaving Balai Resort behind.
Service quality is equal with the three resorts. The staffs of Balai Resort is trained well by
one of the owners who have experience in running a resort business. All guests should be greeted
with a smile and all request should accommodated accordingly in a timely manner.
Being the cheapest is not the goal of Balai Resort, they want the guest to have the best
value for their money. Pricing of the different resorts in batangas is not far away from each other,
except for Aquatico. Aquatico's pricing is for the upper class, commanding the image of luxury
and prestige. Meanwhile, Balai Resort's target market is the middle class looking for a relaxing
getaway from the busy schedule in Metro Manila.
Managing a resort should be done by a well experience group of people that is well
versed in the different aspects of the operation. The management of Balai Resort have key
experience in two fronts, one in the operation of the resort and the second one is in the finances.
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Unfortunately they don't have experience in handling advertising and marketing which is crucial
in attracting guest for the resort.
Although the resort does have experience finance manager in position, they lack capital
for the business. All the money used for the construction of the resort up to the daily operations
are from creditors. The resort is highly leveraged, the good thing about it is that there is no
capital outlay from the beginning, the bad part is that interest expense is high. With a primitive
advertising efforts thru word of mouth, it is a slow grind to pay of the huge debt. Another
drawback of this set up is that they would need to loan more if they want to add attraction for the
resort which it is severely lacking.
Customer loyalty is one of the strength of Balai Resort. It is one of the perks when word
of mouth is spreading. The one who talked about the resort is usually a repeat customer and
therefore loyal to the resort. The resort's concept is to keep things to the most minimal, no
televisions, no cable and no movies. This will force the guests to mingle with each other the old
way and have fun at doing so. This culture is not for the yuppies, those generations are looking
for excitement and party atmosphere. It caters more to the taste of the more mature professionals.
Technological advantage leans towards Aquatico and La Luz, both resorts have more
attractions that could attract guest to stay and relax at their resort. They also have a more
automated booking procedure that is faster and easier to use that the manual booking procedures
of Balai Resort. Other resorts have different water sports that is one of their main attraction,
which Balai Resort does not have.
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Batangas, specifically San Juan Laiya, is a well known tourist attraction because of it's
white sand beach. This is where Aquatico and La Luz is situated, a few miles before that strip of
sand is Balai resort. Balai Resort occupies a 7 hectare land, with gray sand. Not having a white
sand is a big drawback for the resort, but there is a huge potential in developing the massive land
area and it's fish pond that is unique only to Balai Resort. Another unique attraction of the resort
is it's small chapel surrounded by fishponds. It is made of stone built by the natives in the 70's, it
creates a great atmosphere for weddings and pictorials.
The main attraction for the resort is it's mouth watering food. Most resorts cater buffet
style food, although the term buffet is misleading. A guest would line up for the food but a server
is the one who would transfer the food to the plate which defeats the purpose of being buffet.
The guest are strip off of the right of larger portions and constricted with what the server thinks
is the right portion. Some resort does provide authentic buffet but the taste of the food is usually
bland and unappetizing. Balai Resort prides itself of having an open buffet with delicious food.
The resort will also change some menus upon request or give an extra variant or two for those
with special food requests.
4.3
External Factor Evaluation Matrix (EFE)
External Factor Evaluation (EFE) matrix method is a strategic-management tool often used for
assessment of current business conditions. The EFE matrix is a good tool to visualize and prioritize the
opportunities and threats that a business is facing.
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The EFE matrix is very similar to the IFE matrix. The major difference between the EFE matrix and the
IFE matrix is the type of factors that are included in the model. While the IFE matrix deals with internal
factors, the EFE matrix is concerned solely with external factors.
External factors assessed in the EFE matrix are the ones that are subjected to the will of social, economic,
political, legal, and other external forces.
EFE Matrix
Step-C
Opportunities
Growth in the Philippines has been averaging at about 5
percent since 2012.
Economic
The economy posted a 6.6 percent GDP growth in 2012,

Economic
driven by higher government spending and exports
TDGVA, an indicator which measures the value added of
different industries in response to activities of both
domestic and inbound visitors, amounted to PhP 571.3
billion in 2011, higher by 10.2 percent than in the previous
Economic
year
Domestic tourism expenditure, which includes expenditure
of resident visitors within the country either as domestic
trip or part of international trip, grew largely by 27.1
Economic
percent, from PhP 783.4 billion to PhP 995.7 billion.
Share of tourism employment to total employment in the
country slightly increased at 10.3 percent from the
previous years 10.2 percent. Employment in tourism
industries was estimated at 3.8 million in 2011, higher by
Economic
3.5 percent from last years 3.7 million.
The Aquino administration targets 10 million foreign
Political / Legal
tourist arrivals by 2016
Weight Rating Weighted Score

0.05
0.15
0.03
0.09
0.02
0.06
0.05
0.15
0.05
0.15
0.05
0.15
Low-cost carriers (LCCs) in the Philippines contributed to

approximately 96 percent of total domestic air travel
Technological
growth from 2006 to 2011
Overall, as households and families become more diverse more multi-generational, more singles, more "second"
families and so on - the whole of tourism sector will have to
Socio-Cultural
respond to this diversity
0.1
0.3
0.05
0.15
The love for water sports have been increasing yearly, so

much so that the resort's can't be competitive without
Technological
them.
0.1
0.3
0.1
0.3
Medical tourism is one of our niche products
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Bargaining Power
of Buyers
Threats
Natural disasters and health warnings is continuing to pose
standing risks, also the impact of climate change is only
just beginning to make itself felt
The regions cultural, social and ethnic diversity, certainly
its major tourism asset, could also be a significant future
liability.
Small & medium sized businesses will be affected by the
increased competition by the ASEAN Integration
There will be increased environmental concerns, further
pressure on infrastructure and natural resources, social
issues like the spread of organized crime, even increased
nationalistic sentiments and a greater trend towards
deglobalisation.
Changing demographics will have a dramatic impact upon
tourism in the coming decades.
Staycation is gaining popularity here in the Philippines.
Growth for Accommodation Services for visitors have a
15.1% increase from year 2012 and 2013
Economic
0.01
0.02
Economic
0.01
0.01
Economic
0.05
0.05
Economic
0.01
0.02
Socio-Cultural
Socio-Cultural
0.05
0.1
0.05
0.05
Intensity of Rivalry
0.01
0.01
0.01
0.01
0.1
0.1
0.1
1
0.1
2.27
When potential customers can learn about a hotel on line,

the internet reduces the differences among competitors. Intensity of Rivalry
Technological advantage leans towards Aquatico and La
Luz, both resorts have more attractions that could attract
Technological
guest to stay and relax at their resort
There is a very low differentiation with the different beach
Intensity of Rivalry
resorts in the Philippines
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Chapter 5 - Internal Analysis
In order for the strategic management process to begin, managers are required to conduct an internal
analysis. This involves identifying the business' strengths and weaknesses, by analysing its competencies.
It also involves managers highlighting the business' competitive advantage. For strategies to be effective,
the organisation must exploit and expand on its strengths, as well as reduce or eliminate its weaknesses;
thus furthering its competitive advantage, in order to achieve profitability.
A business' competencies are its resources and capabilities that allow the business to differentiate itself
and its products and services, or reduce its costs, when compared with competitors. A business' resources
are its assets, which may be tangible assets, such as equipment or technology, or intangible assets such as
brands, knowledge and expertise.
5.1
The Vision / Mission Analysis
Mission The mission of Balai Resort is to provide an exceptional hospitality experience to the
hardworking middle class, in spectacular surroundings, by delivering quality service and great
food in an atmosphere of comfort, openness and friendship above par from other recreational
resort. The company shall adhere to the principles of sustainability and environmental
responsibility in the Philippines.
In support of this (mission statement) we are committed to:
Satisfying and exceeding the expectations of our guests by actively responding to their
needs now and in the future.
Providing a safe working environment for our staff.
Providing a framework of employee involvement, teamwork and open communication.
Being an environmentally responsible company.
Making a significant contribution to our industry partners.
Making a significant contribution to the community.
Providing an equitable return on investment to the owners of Balai Resort.
Vision To be the leading recreational resort in the Philippines
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Vision Statement Analysis

Parameter
Does it clearly
answer the
question: What do
we want to
become?
Yes/No
Yes
Is it concise enough
yet inspirational?
Yes
Does it give
indication as to
when it should be
attained?
No
Why?
The company clearly states that they want to be the best in the
recreational resort industry
Aiming to be the leading company in the industry is a great inspiration
to the staffs
The managers know that being the best does not have any timeline. It is
a continous process of improvement to be on top, and to stay on top
Mission Statement Analysis

Parameter
Customers
Yes/No
Yes
Products or Services Yes

Markets
Yes
Technology
Yes
Concern for survival,
growth and
profitability
Yes
Philosophy
Yes
Self-Concept
Yes
Concern for public

image
Concern for
employees
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Yes
Yes
Why?
The Firm specificaly identified middle class earners as their target
market
Providing quality service and great food is the firm's way to be different
from it's competitors
It is stated that the area of operation will be in the Philippines
Having up to date recreational activities is one of the key service of the
resort
Aiming to have the highest quality of service and great food equates to
the drive of the company to survive, grow and be profitable
The company wants to be the best in the aspect of service and food. In
the hotel business this are key factors into achieving great market share
The resort want to be known to have the best service and food in
relation to other recreational resorts
Being in the beach resort business, the owners know the importance of
preserving the natural resources. It is one of the key factors in
attracting guest to the resort
In support to the Mission Statement stated, the company will provide
safe working environment for it's employees
5.2
The 7 S Model of Mckenzie
Strategy
Strategy refers to what the organization does that provides unique value or competitive
advantage. For example, some organizations seek to offer low-cost, no frills solutions; others
emphasize service and convenience. Strategy addresses the question, what is your niche?
What is the Balai Resort strategy? Or, in the terms of the 7-S framework, what is the unique
contribution of Balai? According to its vision statement, Balai Resort seeks to to provide an
exceptional hospitality experience to the hardworking middle class, in spectacular surroundings,
by delivering quality service and great food in an atmosphere of comfort, openness and
friendship above par from other recreational resort. The company shall adhere to the principles
of sustainability and environmental responsibility in the Philippines While there are many
organizations that seek the same kind of goal, Balai Resort has several unique characteristics.
Most importantly, Balai Resort is unusual in its ability to source funds, facilitate the resort
personally, and engage it's loyal clients into coming back and spreading the word about the
resort. The Balai Resort leadership also can provide inputs concerning government and
environmental policies in many of these areas due to strong professional relationships. The Balai
Resort seeks to leverage its extended social network to identify, evaluate, and communicate new,
low-cost, readily available suppliers to increase the profitability of the resort and pay of its debts
as soon as possible.
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Second, Balai Resort focuses on a wide range of clients: domestic and foreign, middle to upper
class, with or without transportation. Its scope extends beyond the limits of any single resort and
most private organizations. Because of its broad focus, Balai Resort works actively across
agency and organizational boundaries.
Finally, Balai Resort addresses problems across six broad functional areas:
Capabilities. Gathering, sharing and evaluating information about low-cost suppliers and
related activities.
Social Networks. Building open and active coalitions among expertsfrom any
organization or part of the worldwho have background and knowledge in key areas,
and among the business, government, and civil society stakeholders who will have to live
with and sustain the solutions on the ground.
Policy, doctrine and operational procedures. Converting high-level guidance into

effective operational procedures.
Legal and regulatory issues. Complying with all laws and regulations, while identifying
and working to change those that impede cooperation and unity of effort.
Resources. Identifying needs for both the short and long terms.
Training, exercises, and education. Maintaining readiness, capturing lessons learned, and
preparing future leaders.
Through all of these activities, the unique strategy niche of Balai Resort lies in its holistic
approach, addressing a broad range of scenarios while considering both technologies and humansocial factors; and its openness, with all agencies, groups, and individuals welcome to contribute,
and with nothing secret or proprietary.
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Structure
Structure is about how the organization is arranged or configured. Many organizations take a
functional structure, in which different branches of the organization specialize in particular
functions, such as manufacturing, sales, and service. Another common form is a divisional
structure, in which divisions are arrayed according to geographical regions, products, or some
other factor, and each division contains a full complement of functional elements (e.g., sales,
service, R&D).
In 7-S terms, Balai Resort have a functional structure since it was first established. Figure 1
shows the initial functional team approach. At that early stage it focused mostly on low-cost,
tangible infrastructure components that could be built within the budget and in a reasonable
timeline. As originally conceived, separate cells or divisions would be formed to serve each of
the key functional activities of the organization. This functional structure was never
implemented, largely because of limitations of funds and people. However, the major functional
elements illustrated in figure 1 still provide a useful picture of the principal activities and goals
of the organization.
Finance
EXCOM
IDEAS
Construction
Operations
Marketing
Academics
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The box at the center of figure 1 represents Balai's Executive Committee (EXCOM), whose
membership was envisioned in 2000 as consisting of 4 people, each with a crosscutting
understanding of the project. The EXCOM was intended to be the core decision making body for
the organization.
In this model, people with ideas/innovation at the edge, as well as ideas from academia,
would be linked to the organization directly, they would require atleast 3 EXCOM members to
beprsent in each presentation, which is when they would screen ideas and decide the best ones to
be implemented. The EXCOM will look at integrated, whole-systems approaches, and oversee
demonstrations and testing activities. The EXCOM also was intended to work with academic
partners in developing and refining a research agenda.
Each EXCOM members have their own responsibility in the overall operations of the resort
which make decision make fast and responsive to different challenges. VP for Infrastructure will
handle the preliminary design of the resort, and the plans needed to secure proper government
documentations. He will also spearhead the building of the resort up until completion. Once the
resort is done and fully functional, he will handle the maintenance aspect of it and future
improvements if needed. VP for Marketing will be responsible for providing executive
leadership and management of the Companys marketing organization and in-bound and outbound marketing activities worldwide. The VP Marketing will drive the Companys efforts to
position itself as a visionary leader. Since the VP for Marketing will be primarily responsible in
sourcing the customers, he will also be part of the one deliberating the needed attractions to
attract the target market together with the VP for Operations. The VP for Operation will be in
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charge of overall performance of the resort in the front line. He will handle all the trainings
needed for all the staffs, and also the proper system that will be implemented to have a smooth
flowing operations up front. The VP for Finance will handle all the sourcing of funds and
budgeting. He will also handle all the government requirements and also the bookkeeping office.
Systems
Systems refers to the rules and regulations, standards, and processes for getting things done and
managing the activity of the organization, both formal and informal. They include personnel
evaluation and practices, pay and rewards, performance assessments, supervisory and chain-ofcommand relationships, and policies for planning, monitoring, and executing projects.
In the first year of its existence as an organization, the principal process was a series of Balai
Resort demonstrations and displays intended to educate and communicate to a broad audience
what Balai Resort is about. Displays are static events, such as trade shows and conferences.
Demonstrations are working events, including examples from as many food as possible. These
have been complemented by field observations to begin gathering experience with the feel of the
resort in operational environments.
Staffing
Staffing refers to people in the organization and how they are recruited, selected, and trained to
perform their jobs. Leadership is included in this category, whether leaders are selected from the
outside or developed from within. Staffing addresses the question of how the organization
assures it has the right people to do the work.
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The more difficult aspect of staffing for an organization like Balai Resort is how to effectively
access the diverse, local network of capable participants with expertise in relevant areas. There is
no real opportunity to select or screen these people, and the nature of the resort business is that
during lean season employees enter and leave the organization at will. A challenge for the
organization and its leaders is to attract and retain quality staff. Another leadership challenge is
to support and foster open, creative exchanges, while reducing opportunities for
misunderstandings among members. It may be possible to develop some specialized systems that
could be applied in functional network organizations (e.g., email standards and courtesies) to
reduce misunderstandings and related problems. How does the organization manage extreme
positions or views within the network? How does it host exchanges and activities that involve
private partners with commercial interests and potential conflicts of interest? A related issue is
the need to balance privacy concerns with the general goal of keeping all information and
dialogue open and public.
Security is also a concern as regards the potential involvement of individuals or groups who may
wish to do harm to the network. Here, too, specialized systems and procedures may be needed to
manage these risks in a way that maximizes the participation of volunteer experts, while
minimizing or excluding those with nefarious intent.
Skills
Skills are the special, distinctive competencies of the organization, both in the people and the
organization itself. What is the organization good at, and what special skills and competencies
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are found its people? What are the special skills of Balai Resort, not so much in individuals, but
as an organization? The skills domain relates closely to the strategy of the organization, that is,
what is the special niche of the organization, and what are we good at doing? Balai Resort and
the people in it are especially skilled at:
building social networks, making contacts, and developing relationships that span
organizational boundaries,
providing reach-back support to forward responders who need expert assistance and
information, making results and useful information publicly available, and
suggesting government policy refinements to support cross-agency cooperation.
In addressing what are the special skills of an organization, it is also useful to consider what the
organization is not expert at. It is clear that Balai Resort, for example, is not an organization
great at marketing. Also, by and large, the organization is not conducting operations, low and
upper class. Rather, marketing is provided indirectly by building and communicating with
previous clients.
Style
Style deals mainly with the leadership approach of the top managers in the organization. How do
the leaders interface with subordinates and others in the organization, and how do members
interact with each other? Style also incorporates the climate or culture of the organization, which
can be expressed in terms of job titles, space allocation, workplace architecture, artifacts, and
policies. It includes both the climate of the organization and the dominant leadership style.
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Currently, the Balai Resort does this primarily by actively engaging the extended, open network
via emails, phone calls, blogs, and face-to-face meetings to confront compelling problems. The
climate is one of discovery and excitement in applying new ideas and technologies to addressing
real-world challenges. Leadership is mainly focused externallyon raising the funds needed to
sustain the operation, on the big problems the organization is trying to solve, and on the
extended, open network of experts and agencies whose help and cooperation is needed to solve
problems.
Leaders must manage internal staff functions and activities. In the case of Balai Resort, a small
staff performs the essential, day-to-day tasks of the organization. Leaders must be flexible in
balancing between accommodation and patience on the one hand and providing direction and
setting clear tasks and deadlines on the other. They also may have to adjust their style quickly to
match context and circumstances. Further, a style that works in one part of the organization may
be ineffective in other parts. It is also critically important in any organization that members are
recognized for their contributions. People will stop participating or withdraw from the
organization if they perceive that their contributions are not noticed and valued. There are many
ways to recognize and reward contributions, ranging from simple email acknowledgments to
more formal and public notes and awards.
Shared Values
Shared values are the core beliefs in the organization about what is important and why the
organization exists. They are incorporated in formal statements, such as a vision statement, and
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in informal expressions and practices around the organization. Shared values are the underlying
principles or ideas that provide meaning and purpose in an organization. They are the basic
values that, ideally, everyone agrees on, though the values are often unwritten, and agreement is
tacit. In an open network organization, shared values may be more difficult to identify across a
large, diverse membership, but may be even more important to cohesion and unity of effort.
What are the shared values in Balai Resort? Perhaps the primary expressed shared value in Balai
Resort is found in the organizations vision statement: to provide an exceptional hospitality
experience to the hardworking middle class, in spectacular surroundings, by delivering quality
service and great food in an atmosphere of comfort, openness and friendship above par from
other recreational resort Implied in this vision statement are other values that bind people
together in the organization. The first is a commitment to provide exceptional hospitality
experience, in spectacular surroundings, quality service and great food.
A second shared value is a deep appreciation for environment safety. The Balai Resort seeks to
be constantly alert to new technological developments, procedural improvements, and innovative
ideas that can be applied to saving and improving the eco system. Another basic shared value is
open sharing of information gained through the project. While there is certainly an appreciation
for the importance of information security and individual privacy, in general the Balai Resort
strives to be completely open with any information gained, and with the results of tests and
evaluations. This value does at times have to be balanced against legitimate proprietary concerns
of commercial participants, and with security concerns regarding information that could be used
for nefarious purposes.
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Also highly valued across the organization are social relationships. There is a generalized belief
within the Balai Resort network that human social relationships are essential to accomplishing
important goals. Related to this value is a shared value regarding the importance of
communication. While face-to-face communication is important, very often it is impossible.
Good communication tools and strategies are necessary not only in responding to emergencies
and crises, but also beforehand, in prevention phases.
5.3
The VCA
PRIMARY ACTIVITIES
Inbound Logistics
The inbound logistics for Balai Resort are people. People who want to have an exciting,
or even relaxing vacation go to the different resorts in the country. Also, business people go to
Balai Resort for out of town meetings and conferences. Booking a reservation, checking into the
resort or walking in is part of the inbound logistics process. Consumers can do this in a number
of ways, for instance booking a reservation with Balai Resort directly, on the web, or by phone.
Consumers can also use an online travel discount service such as Expedia, Obritz, etc. to book
reservations. In order for consumers to physically get to a resort they need to drive going to
batangas.
The Booking procedure is done manually. There is one booking officer that answers
general queries, available dates for bookings, sending of quotations, confirming bank deposits,
special arrangements with different clients and giving map details to confirmed customers.
During peak seasons, there are a lot of problem with the workload since the volume of queries is
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too much to handle. The booking officer is handling 2 cellphones, 1 landline and he also needs to
answer the emails of all the interested guests.
Balai Resort have partnered with Agoda, one of the fastest-growing online hotel
platforms worldwide. Agoda Company Pte. Ltd., the company behind Agoda.com, was
established in 2005 by two veterans of the online travel business and in 2007 was acquired by
Priceline Group, the largest seller of rooms online. Priceline Group is publicly traded on
NASDAQ (Nasdaq: PCLN) and is a part of the S&P 500.
Operations
Creating an environment that is appealing is done by the architectural design of resort.
The architect for Balai Resort is Erik Pambid who is also part owner of the resort. Of course the
architecture and design is only a small element of operations used to attract customers. Besides
the relaxing at the resort, it is also packed with different activities for all it's clients.
Balai Resort also caters buffet style food. Most resorts cater buffet style food, although
the term buffet is misleading. A guest would line up for the food but a server is the one who
would transfer the food to the plate which defeats the purpose of being buffet. The guest are strip
off of the right of larger portions and constricted with what the server thinks is the right portion.
Some resort does provide authentic buffet but the taste of the food is usually bland and
unappetizing. Balai Resort prides itself of having an open buffet with delicious food. The resort
will also change some menus upon request or give an extra variant or two for those with special
food requests.
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Maintenance of the fish ponds is also part of the operations. This includes cleaning the
water utilizing the different tides during the day. This is important for the longevity of the fish
residing in the fish ponds. Also, the different fishes are fed using left over food to save cost due
to the large amount of fishes involved. There is also a drawback in maintaining the fish pond,
there are a lot of flies in the resort due to the stagnant water
Marketing/Sales
The marketing and sales activities for Balai Resort's include offering customers
promotions such as special hotel rates and packages. Balai Resort relies heavily on advertising
thru word of mouth. Word of mouth advertising is the unpaid spread of a positive marketing
message from person to person. It can take place directly using the human voice, or can be
transmitted via any communicative means such as through the internet or via text message.
WOM is a powerful promotional tool and should be considered as part of almost every business
marketing strategy.
The resort also post in the company's social media page of different challenges to entice
the market to go to the resort. A good example of it is the Barkadahan Competition, where guests
who went to the resort, are encouraged to post their picture and leave a testimonial to win free
accommodation.
Service
Another important aspect of the Marketing/Sales element for Balai Resort that I think
falls under the service category of the value chain is customer experience and satisfaction. If the
customer has a positive experience and is satisfied with the service that Balai Resort provides
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then they are more likely to return and give Balai Resort repeat business. There are a lot of
testimonials regarding this.
The employees always make sure to be courteous around guest, always wearing their
warm smiles to promote a feeling of familiarity in Balai. They always stay close the different
groups of guest, to make sure that if anything is needed, they are always ready to offer their
services.
5.4
Financial Analysis
Many well-known tools and techniques of financial analysis are used by investors, stockbrokers,
and corporate managers to assess corporate performance. Their use is particularly prevalent in
mergers and acquisitions and in the analysis of capital expenditure. But how often do we say:
Lets do some financial analysis to see if this strategy is any good. Lets take a view on the
corporate portfolio and the extent to which value is added by the corporate center and use
financial tools to do it. In my experience, this doesnt happen much.
When companies undertake an acquisition, extensive financial analysis accompanies the

investigation by managers, the proposals put to the board, and, if necessary, the story that is told
to investors and the financial community. Comparisons are made with valuations of similar
businesses and with transactions of a similar nature. Discounted cash flow techniques are used to
assess the impact of different outcomes and the extent to which the investment is likely to
recover the cost of capital employed in it. So the use of financial analysis for decision-making in
the corporate environment is well known and widespread.
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Statement of Financial Position

Balai RESORT
BALANCE SHEET
DEC 11
DEC 12
DEC 13
A S S E T S
Current Assets
Cash on Hand
Cash in BanK
C/a Under liquidation
Cash in Bank
Cash in bank - Time Deposit
Cash in Bank - UCPB
Accounts Receivable
Accounts Receivable
Accounts Receivable - Credit Card - Equitable
Cleaning Materials on Hand
Giftshop on Hand
Wine & Liquor on Hand
Beverages on Hand
Advances to Officers
Advances under liquidation - Resort
(130,000.00)
4,000.00
0.00
51,824.70
0.00
57,040.95
32,406.35
310,424.90
0.00
0.00
0.00
0.00
0.00
(243,939.85)
(11,238.72)
0.00
(186,529.71)
0.00
12,049.42
205,423.62
296,473.40
0.00
0.00
0.00
0.00
0.00
12,014.42
179,288.27
0.00
116,772.59
67,705.05
55,510.24
316,223.66
0.00
0.00
0.00
0.00
0.00
0.00
841.00
841.00
325,696.90
73,079.16
748,355.23
Fixed Assets
Restaurant Furnitures & Fixtures
Less:Accumulated Depreciation
1,794,646.01
(185,641.88)
2,547,913.99
(840,151.45)
2,617,823.79
(1,555,294.14)
1,609,004.13
1,707,762.55
1,062,529.65
6,300,000.00
66,973.01
0.00
127.54
6,994,552.00
(348,101.86)
16,150,293.97
(828,032.08)
8,644.82
0.00
3,242.55
0.00
0.00
10,300,000.00
33,509.87
0.00
10,677.95
7,196,512.00
(1,079,333.70)
16,433,548.18
(2,490,528.55)
(0.00)
0.00
3,241.93
0.00
0.00
16,116,400.00
82,168.05
0.00
20,968.13
7,525,265.71
(1,834,710.30)
16,852,006.89
(4,187,216.55)
(0.00)
28,347,699.95
30,407,627.68
34,589,541.13
30,282,400.98
32,188,469.38
36,400,426.01
Other Assets
Land
Misc Asset
Office Rent Deposit
Withholding Tax - Credit Card
Leasehold Improvement - Labor
Less: Amortization
Leasehold Improvement - Materials
Less: Amortization
Pre-operating expense
Investment - Air Center
Input Tax
Provision for Input Tax
Advanced Corp Tax
TOTAL ASSETS
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0.00
0.00
14,659.21
LIABILITIES & STOCKHOLDER'S EQUITY

LIABILITIES
Accounts Payable
Accounts Payable
Accounts Payable
Advances from Guests
Advances from Officers
Accounts Payable
Service charge
SSS Payable
SSS Loan Payable
Pag-ibig Payable
Withholding Tax - Expanded
Withholding Tax - Compensation
Excess Cash
5,200,000.00
12,000,000.00
14,952,098.53
30,468.00
750,000.00
2,843,334.39
306.00
1,937.30
0.00
0.00
0.00
0.00
0.00
6,000,000.00
12,000,000.00
19,394,341.30
51,736.25
750,000.00
4,683,965.21
6,246.08
16,564.90
0.00
0.00
0.00
0.00
148.64
6,000,000.00
10,000,000.00
6,698,775.38
207,662.50
377,357.34
4,003,611.91
328.00
2,528.90
90.13
0.00
0.00
0.00
(1,094.75)
35,778,144.22
42,903,002.38
27,289,259.41
250,000.00
250,000.00
26,000,000.00
STOCKHOLDER'S EQUITY
Authorized Capital stock of 40,000 shares
Subscribed and fully paid 10,000 common shares
Retained Earnings
Add:
Dividend Income
Air Center Dividends
Less: Dividends Issued
Net Income for the period
TOTAL LIABILITIES & STOCKHOLDER'S EQUITY
(218,713.26)
0.00
0.00
0.00
(5,527,030.59)
(5,752,743.85)
0.00
0.00
0.00
(5,211,789.17)
(5,495,743.85)
(10,714,533.02)
30,282,400.36
32,188,469.36
(12,101,380.21)
(4,787,453.27)
9,111,166.53
36,400,425.93
Statement of Comprehensive Income

Balai Resort
INCOME STATEMENT
FOR THE PERIOD ENDED
DEC 11
Food
Food Alacarte
Accomodation
Liquor and Beverage
Rental
Giftshop
Package Income
Air Center Dividend
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DEC 12
DEC 13
1,243,015.00
3,820,647.29
1,352,800.00
48,325.00
38,630.00
1,829.00
(42,750.20)
0.00
3,747,251.60
155,274.50
120,670.00
11,854.00
(63,307.00)
0.00
3,838,685.75
354,607.00
3,344,632.66
126,336.00
89,015.00
2,450.00
21,880.00
15,000.00
2,641,848.80
7,792,390.39
7,792,606.41
Less:
Operating Expenses
Food Purchases
Food Purchases - ala carte
Groceries
Liquor/Beverages
Giftshop
Fuel - Generator
Laundry
Electricity - Batelec
Water (Including land rental)
Kitchen Supplies
Resort Supplies
Toll Fees
Gas and Oil
Security Services
Tanod Fee
Ecological Fee
Pool Supplies
Part- time
667,813.15
1,765,242.98
208,788.10
54,467.25
175.50
15,347.00
43,372.00
145,634.15
0.00
14,878.44
164,845.14
14,638.00
64,539.42
106,290.00
2,280.00
2,280.00
36,600.00
37,749.00
77,118.85
107,420.00
8,211.30
200,244.50
102,064.00
240,577.81
0.00
3,876.00
174,956.24
5,405.00
41,730.82
139,211.00
2,000.00
14,265.00
58,341.00
94,250.00
1,448,680.75
91,418.00
415,371.80
136,485.00
0.00
149,071.00
124,540.40
232,487.93
0.00
37,000.00
206,518.54
2,170.00
1,039.00
208,800.00
0.00
41,195.00
111,243.81
129,500.00
Total Operating Expenses
1,579,697.15
3,034,914.50
3,335,521.23
NET INCOME BEFORE ADMIN EXPENSES
1,062,151.65
4,757,475.89
4,457,085.18
53,893.67
977,201.90
20,982.54
129,460.99
30,075.00
35,190.48
102,050.06
160,534.25
50,080.69
166,554.46
60,000.49
39,619.90
0.00
10,414.55
40,574.50
28,500.00
25,500.00
607.38
12,000.00
24,365.00
1,201,436.20
18,662.02
103,732.61
1,955.00
45,379.38
124,084.99
221,266.45
71,178.82
66,971.82
45,289.00
18,435.44
0.00
6,256.16
39,211.42
30,000.00
30,000.00
0.00
4,750.00
67,704.21
1,245,028.10
29,625.76
219,749.21
2,502.47
84,818.43
168,888.57
306,549.85
71,493.26
110,258.71
44,415.00
810.00
3,543.55
21,261.00
30,000.00
30,000.00
0.00
1,800.00
0.00
1,943,240.86
2,052,974.31
2,438,448.12
2,704,501.58
2,018,637.06
2,141.08
(8,735.00)
0.00
388.49
(3,635,386.60)
(712,433.69)
(2,452,064.60)
(4,787,453.27)
Less:
Administrative Expenses
Food Allowance
Salaries & Wages
Office supplies expense
Taxes and Licenses
Misc Expense
SSS Contribution
13th Month Pay/mid year bonus
Repairs & Maintenance
Telephone
Transportation Expense - Manila
Transportation Expense - Resort
Meal Expense
Professional Fee
Representation
Advertising Expense
Office Rent Expense
Light and Water - office
Bank Charges - Credit Card
DONATION
Net Income before other income

Add(Less): Interest on Deposits
Bank Charges
(881,089.21)
Excess Management Fee

Interest Expense
Depreciation Expense
Amortization Expense
0.00
(3,269,443.81)
(185,641.88)
(1,193,423.55)
1,281.30
(228.00)
0.00
0.00
(4,860,461.35)
(654,509.57)
(2,402,373.13)
NET INCOME
(5,529,310.59)
(5,211,789.17)
66 |
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987.85
(700.00)
Financial Analysis
Liquidity Ratio
Current Ratio
2011
0.09
2012
0.01
2013
0.16
0.18
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0
2011
2012
2013
2011
2012
2013
The ratio is mainly used to give an idea of the company's ability to pay back its short-term
liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher
the current ratio, the more capable the company is of paying its obligations. A ratio under 1
suggests that the company would be unable to pay off its obligations if they came due at that
point. While this shows the company is not in good financial health, it does not necessarily mean
that it will go bankrupt - as there are many ways to access financing - but it is definitely not a
good sign.
The current ratio can give a sense of the efficiency of a company's operating cycle or its ability to
turn its product into cash. Companies that have trouble getting paid on their receivables or have
long inventory turnover can run into liquidity problems because they are unable to alleviate their
obligations. Because business operations differ in each industry, it is always more useful to
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compare companies within the same industry.
This ratio is similar to the acid-test ratio except that the acid-test ratio does not include inventory
and prepaids as assets that can be liquidated. The components of current ratio (current assets and
current liabilities) can be used to derive working capital (difference between current assets and
current liabilities). Working capital is frequently used to derive the working capital ratio, which
is working capital as a ratio of sales.
Having an average of .087 in three years span is not ideal to say the least. Balai Resort is highly
leveraged, having all of it's start up money coming from lenders. Although this is not entirely a
good thing, the historical analysis of the data presents that by 2013, the current ratio increase but
still with a dismal ratio of .16. The resort owners knew this will be the case entering into the
business, and relied on its operation to pay for the liabilities upon due.
Leverage Ratios
2011
Debt-to-Total-Assets1.18
Ratio
2012
1.33
2013
0.75
Debt-to-Total-Assets Ratio
1.5
1
0.5
0
2011
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2012
2013
Debt-to-Total-Assets
Ratio
Total debt to total assets is a leverage ratio that defines the total amount of debt relative to assets.
This enables comparisons of leverage to be made across different companies. The higher the
ratio, the higher the degree of leverage, and consequently, financial risk. This is a broad ratio that
includes long-term and short-term debt (borrowings maturing within one year), as well as all
assets tangible and intangible.
From the above data, Balai Resort is heavily under debt in year 2011 and 2012 with debt
covering all the assets recorded in the books of the resort. But by year 2013, it has lowered to
75% only, meaning it has paid almost 50% of its debts from previous year since there is no
capital infusion made. Nevertheless Balai Resort still have a lower degree of financial flexibility.
This is because debt servicing payments have to be made under all circumstances, otherwise the
company would breach debt covenants and run the risk of being forced into bankruptcy by
creditors. While other liabilities such as accounts payable and long-term leases can be negotiated
to some extent, there is very little wiggle room with debt covenants. Therefore, a company
with a high degree of leverage may find it more difficult during a recession than one with low
leverage. It should be noted that total debt measure does not include short-term liabilities like
accounts payable and long-term liabilities such as capital lease and pension plan obligations.
Like all other ratios, the trend of the total debt to total assets should also be evaluated over time.
This will help assess whether the companys financial risk profile is improving or deteriorating.
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2011
Debt-to-Equity Ratio
(6.51)
2012
(4.00)
2013
3.00
6
4
2
0
-2
2011
2012
2013
-4
-6
-8
A high debt/equity ratio generally means that a company has been aggressive in financing its
growth with debt. This can result in volatile earnings as a result of the additional interest
expense.
If a lot of debt is used to finance increased operations (high debt to equity), the company could
potentially generate more earnings than it would have without this outside financing. If this were
to increase earnings by a greater amount than the debt cost (interest), then the shareholders
benefit as more earnings are being spread among the same amount of shareholders. However, the
cost of this debt financing may outweigh the return that the company generates on the debt
through investment and business activities and become too much for the company to handle.
This can lead to bankruptcy, which would leave shareholders with nothing.
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5.5
The Internal Factor Evaluation Matrix (IFE)
IFE Matrix
Step-C
Opportunities
Balai Resort prides itself of having an open buffet with
delicious food. The resort will also change some menus
upon request or give an extra variant or two for those with
special food requests.
Customer loyalty is one of the strength of Balai Resort
Balai Resort occupies a 7 hectare land, with gray sand
Fishpond that is unique only to Balai resort
CPM Matrix
0.1
0.4
CPM Matrix
0.01
0.03
CPM Matrix
0.05
0.2
CPM Matrix
0.05
0.2
0.05
0.2
0.05
0.15
7s Framework
0.01
0.03
Value Chain
Analysis
0.05
0.15
Value Chain
Analysis
0.01
0.03
Value Chain
Analysis
0.05
0.2
0.2
0.2
0.01
0.01
0.05
0.05
0.04
0.08
Value Chain
Analysis
0.05
0.05
Value Chain
Analysis
0.05
0.1
0.1
0.1
0.05
0.1
0.01
0.01
0.01
1
0.01
2.3
Old chapel that is aged by time, only found in Balai resort CPM Matrix
Balai Resort focuses on a wide range of clients: domestic
and foreign, middle to upper class, with or without
7s Framework
transportation
Each EXCOM members have their own responsibility in
the overall operations of the resort which make decision
make fast and responsive to different challenges
Business people go to Balai Resort for out of town
meetings and conferences
Balai Resort have partnered with Agoda, one of the

fastest-growing online hotel platforms worldwide
The employees always make sure to be courteous around
guest, always wearing their warm smiles to promote a
feeling of familiarity in Balai
Threats
Resorts should have attractions that could attract guest to
stay and relax at their resort
CPM Matrix
Resorts should have a more automated booking
procedure that is faster and easier to use
CPM Matrix
Severe lack of financial flexibility
Primitive advertising done thru Word of Mouth
During peak seasons, there are a lot of problem with the
workload in Bookkeeping
There is also a drawback in maintaining the fish pond,
there are a lot of flies in the resort due to the stagnant
water
Financial Analysis
CPM Matrix
Financial Analysis
Great Profit Margin
There is no real opportunity to select or screen these
people, and the nature of the resort business is that during
lean season employees enter and leave the organization at
7s Framework
will
A challenge for the organization and its leaders is to
7s Framework
attract and retain quality staff
Having an average of .087 in three years span is not ideal Financial Analysis
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Weight Rating Weighted Score
Chapter 6 - Strategy Formulation
A strategy is a broad plan developed by an organization to take it from where it is to where it

wants to be. A well-designed strategy will help an organization reach its maximum level of
effectiveness in reaching its goals while constantly allowing it to monitor its environment to
adapt the strategy as necessary. Strategy formulation is the process of developing the strategy.
Strategy formulation requires a series of steps performed in sequential order. The steps must be
taken in order because they build upon one another. However, there are two processes that are
continually performed throughout strategy formulation: environmental scanning and continuous
implementation. Environmental scanning is simply the process of paying attention to the external
environment for factors that may affect your organization's performance, which will need to be
addressed in the strategy formulation process. For example, you will pay attention to what your
competition is doing and make adjustments to your strategic plan as necessary throughout the
process. Continuous implementation is simply implementing parts of the strategy that must be
implemented in order for the next step of the strategy formulation process to be undertaken.
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6.1
TOWS Matrix
Balai Resort
Company Analysis: TOWS Matrix
Weaknesses (W)
Strengths (S)
INTERNAL
FACTORS
EXTERNAL
FACTORS
Opportunities (O)
1. Grow th in the Philippines has
2. The economy posted a 6.6
percent
3. TDGVA, an indicator w hich
4. Domestic tourism expenditure
5. Share of tourism employment to
6. The Aquino administration targets
7. Low -cost carriers (LCCs)
8. Overall, as households and
f amilies
9. The love f or w ater sports have
been
10. Medical tourism is one of the
Philippines' niche products
Threats (T)
1. Natural disasters and health
2. The regions cultural, social and
1. Balai Resort prides itself of having
1. Resorts should have attractions
2. Customer loyalty is one
2. Resorts should have a more
3. Balai Resort occupies
3. Severe lack of f inancial f lexibility
4. Fishpond that is unique only to Balai resort
4. Primitive advertising done
5. Old chapel that is aged by time
5. During peak seasons
6. Balai Resort f ocuses on
6. There is also a draw back
7. Each EXCOM members have
7. Great Prof it Margin
8. Business people go to Balai Resort
8. There is no real opportunity
9. Balai Resort have partnered w ith Agoda
9. A challenge f or the organization
10. The employees alw ays make sure
10. Having an average of .087
SO Strategies
S3010 - Create f acilities to accommodate the
medical tourism needs f rom f oreign countries
WO Strategies
W3O9 - Partner w ith dif f erent w ater
sports ow ners to place their products
to the resort, this is a good w ay to limit
investment
S9O3 - Create stronger partnership w ith Agoda

to capture the increasing inbound travelers
looking f or vacation
S3O9 - Partner w ith dif f erent w ater sports
ow ners to place their products to the resort, to W10O4 - Capture the grow ing market to
maximize the location (Product
increase the cash position of the
Devel opment )
company
S6O8 - Create a more f lexible packages and

rooms f or emerging client groups
ST Strategies
S7T1 - Assign an of f icer to handle the pending
natural disasters that could hit the Philippines
WT Strategies
W1T9 - Maintain the current setup of
Balai Resort
3. Small & medium sized businesses

4. There w ill be increased environment
5. Changing demographics w ill ha
S4S5T3 - Maximize the unique traitsof the resort W3T10 - Sell parts of the resort to have
to counter the threat f rom the ASEAN
f inancial f reedom to create more
integration
service to dif f erentiate to other resorts
6. Staycation is gaining popularity

7. Grow th f or Accommodation
8. When potential customers can
S4S5T10 - Promote the f ish pond and the

chapel to have a unique dif f erentiation w ith
other resorts
9. Technological advantage leans

10. There is a very low dif f erentia
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6.2
The Space Matrix
Balai Resort
SPACE Analysis
Strategic Position and ACtion Evaluation (SPACE) is used to determine the appropriate strategic posture for a
company. Financial Strength (FS) and Competitive Advantage (CA) are the two primary determinants of a firm's
strategic position. Industry Strength (IS) and Environmental Stability (ES) characterize the entire industry. You are to
assign scores (below) for each of the 4 dimensions. Each factor contains a comment to assist in scoring. Averages
(or average minus 6 as indicated) for each dimension are plotted on the chart. The result is a four-sided polygon
displaying the weight and direction (the "thrust") of the strategic assessment. By adding the results of the two X-axis
dimensions (CA & IS) and the two Y-axis dimensions (FS& ES), an (X,Y) coordinate is obtained and plotted on the chart
to determine the appropriate strategic posture. Keep in mind that the SPACE Chart is a summary device and each
dimension should be analyzed individually as well, especially if any dimension results in a high or low score.
Strategic Dimensions and Scoring
Factors Determining Financial Strength (FS)
Factors Determining Industry Strength (IS)
Indicate a score for each of the following criteria.
Return on Investment
Growth Potential
Leverage
Profit Potential
Liquidity
Technological Know-How
Capital Required Versus Capital Available
Resource Utilization
Cash Flow
Capital Intensity
Risk Involved in Business
Ease of Entry into Market
Inventory Turnover
Productivity, Capacity Utilization
Economies of Scale and Experience
Other:
Other:
4
Average
3.4
Factors Determining Environmental Stability (ES)

Average
3.6
Factors Determining Competitive Advantage (CA)

Technological Changes
-5
Market Share
-4
Rate of Inflation
-3
Product Quality
-3
Demand Variability
-4
Product Life Cycle
-3
Price Range of Competing Products
-3
Product Replacement Cycle
-4
Barriers to Entry into Market
-3
Customer Loyalty
-2
Competitive Pressure/Rivalry
-5
Competition's Capacity Utilization
-2
Price Elasticity of Demand
-3
Technological Know-How
-3
Pressure from Substitute Products
-5
Vertical Integration
-5
Differentiation, Uniqueness
-2
Other:
Other:
Average - 6
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-3.9
Average - 6
-3.1
Strategic Position and ACtion Evaluation (SPACE)

(High)
FS
6.0
Conservative Financially sound, but

market is very competitive
and is waning
Aggressive Strength on all dimensions
5.0
4.0
3.0
2.0
1.0
(Low)
CA
IS
Defensive -
Competitive -
Relative weakness
on most dimensions
ES
Comp. advantage in good

industry, b ut weak in financial
and environmental stability
(Low)
Competitive
This situation is typical in a company with a definite
competitive advantage in a very attractive industry with
some environmental uncertainty. Critical to this company is
financial strength. Common practices for companies in this
situation: acquire financial resources to increase marketing
effort, increase sales force, expand/improve product
offerings, productivity investments, cost reduction, or merge
with cash-rich company.
In a Competitive quadrant, the usual strategy to be applied are the ff:
Backward Integration
Forward Integration
Horizontal Integration
Market Penetration
Market Development
Product Development
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(High)
Based on the SPACE Analysis, this

company's strategic posture rests
in this quadrant. The (X,Y)
coordinates are (0.5 , -0.5).
6.3
I-E Matrix
I-E Matrix
The IFE Total Weighted Score
Strong
4.0 to 3.0
4.0
Average
2.99 to 2.0
II
Weak
1.99 to 1.0
III
High
3.0
The
EFE
Total
Grow
and
Build
IV
VI
Hold
and
Maintain
VII
VIII
IX
Harvest
or
Divest
Medium
Weighted
Scores
2.0
Low
1.0
In a Competitive quadrant, the usual strategy to be applied are the ff:
Market Penetration
Product Development
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6.4
The Summary of Matrices
Strategies
Forward Integration
Backward Integration
Horizontal Integration
Market Penetration
Market Development
Product Development
Related Diversification
Unrelated
Diversification
Retrenchment
Divestiture
Liquidation
SPACE
Matrix
x
x
x
x
x
x
IE
Matrix
TOWS
Matrix
x
x
Total
1
1
1
2
1
3
0
0
0
0
0
The Summary of Matrices produced the top 2 strategies that should be implemented for Balai
Resort to have a better position in the market. One is Market Penetration and the other one is
Product Development.
Market penetration is both a measure and a strategy. A business will utilize a market penetration
strategy to attempt to enter a new market. The goal is to get in quickly with you product or
service and capture a large share of the market. Market penetration is also a measure of the
percentage of the market that your product or service is able to capture.
Aggressive pricing is a very common tactic. The company can use penetrating pricing, which is
setting the price of the company's product or services lower than that of its competitors. This
strategy may work well in price-sensitive markets. The company may be able to maintain a
decent level of profits due to the volume of sales decreasing the company's costs per unit for
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the product. Additionally, once the company have obtained market share goal and have
achieved a sufficient level of brand loyalty, the company may be able to increase prices.
The company can also achieve market penetration through aggressive marketing campaigns
and distribution strategies. For example the company may saturate the market with an
aggressive advertising campaign consisting of TV, radio and direct mailing ads. The company
may also penetrate the market by saturating their product in the market. For example, in some
cities, it seems there's a Starbucks on every street corner.
Meanwhile, Product Development is employed when a company's existing market is saturated,
and revenues and profits are stagnant or falling. There is little or no opportunity for growth. A
product development diversification strategy takes a company outside its existing business and a
new product is developed for a new market. An example of this strategy is a company that has
sold insurance products and decides to develop a financial education program aimed at college
students. The new product is not revolutionary as there are other companies producing similar
products, but it is new to the company producing it.
6.5
The Quantitative Strategy Planning Matrix
Market
Product
Penetration Development
Weight
0.05
0.03
0.02
0.05
AS
2
2
2
3
TAS
0.10
0.06
0.04
0.15
AS
3
2
2
3
TAS
0.15
0.06
0.04
0.15
5. 5. Share of tourism employment to

6. 6. The Aquino administration targets
0.05
0.00
0.00
0.05
0.10
0.10
7.
8.
9.
10.
0.10
0.05
0.10
0.10
3
1
2
4
0.30
0.05
0.20
0.40
2
2
4
2
0.20
0.10
0.40
0.20
1.
2.
3.
4.
Opportunities
1. Growth in the Philippines has
2. The economy posted a 6.6 percent
3. TDGVA, an indicator which
4. Domestic tourism expenditure
7. Low-cost carriers (LCCs)

8. Overall, as households and families
9. The love for water sports have been
10. Medical tourism is one of the Philippines' niche products
78 |
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1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Threats
1. Natural disasters and health
2. The regions cultural, social and
3. Small & medium sized businesses
4. There will be increased environment
5. Changing demographics will ha
6. Staycation is gaining popularity
7. Growth for Accommodation
8. When potential customers can
9. Technological advantage leans
10. There is a very low differentia
Weight
0.01
0.01
0.05
0.01
0.05
0.05
0.01
0.01
0.10
0.10
AS
0
3
3
2
3
2
3
3
3
2
TAS
0.00
0.03
0.15
0.02
0.15
0.10
0.03
0.03
0.30
0.20
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Strengths
1. Balai Resort prides itself of having
2. Customer loyalty is one
3. Balai Resort occupies
4. Fishpond that is unique only to Balai resort
5. Old chapel that is aged by time
6. Balai Resort focuses on
7. Each EXCOM members have
8. Business people go to Balai Resort
9. Balai Resort have partnered with Agoda
10. The employees always make sure
Weight AS
0.10
3
0.01
2
0.05
2
0.05
2
0.05
4
0.05
3
0.01
0
0.05
3
0.01
3
0.05
0
TAS
0.30
0.02
0.10
0.10
0.20
0.15
0.00
0.15
0.03
0.00
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Weaknesses
1. Resorts should have attractions
2. Resorts should have a more
3. Severe lack of financial flexibility
4. Primitive advertising done
5. During peak seasons
6. There is also a drawback
7. Great Profit Margin
8. There is no real opportunity
9. A challenge for the organization
10. Having an average of .087
Weight
0.20
0.01
0.05
0.04
0.05
0.05
0.10
0.05
0.01
0.01
AS
1
2
2
3
2
2
2
2
2
2
TOTALS
TAS
0.20
0.02
0.10
0.12
0.10
0.10
0.20
0.10
0.02
0.02
4.44
AS
2
2
3
2
2
2
4
3
4
4
AS
TAS
0.02
0.02
0.15
0.02
0.10
0.10
0.04
0.03
0.40
0.40
3
2
3
3
4
3
0
2
2
0
TAS
0.30
0.02
0.15
0.15
0.20
0.15
0.00
0.10
0.02
0.00
AS
4
3
2
2
2
2
2
2
2
2
TAS
0.80
0.03
0.10
0.08
0.10
0.10
0.20
0.10
0.02
0.02
5.32
With a TAS of 5.32, the most applicable strategy that Balai Resort should apply is Product
Development. To be specific, as discussed in the TOWS Matrix, Balai Resort should expand it's services
and partner with different water sports providers to entice the market to choose Balai Resort over its
competitors.
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Chapter 7 - Strategy Implementation
The implementation of organization strategy involves the application of the management process
to obtain the desired results. Particularly, strategy implementation includes designing the
organization's structure, allocating resources, developing information and decision process, and
managing human resources, including such areas as the reward system, approaches to
leadership, and staffing.
7.1
Recommended Mission/Vision
In the analysis if the current Mission/Vision statement of the company, it can be clearly seen that
it is aligned with the strategy that they would need to implement. Both the Mission and Vision
statement answered the important questions needed to qualify them as complete and embodies
the ultimate goal of the business. There is no need to recommend a different version of both
statements.
7.2
Recommended Strategies for Communication
Technology is sometimes only as good as the principles that govern its application. Any one who
has ever had to suffer through excessive use of the reply all email function at their organization
immediately understands that deciding what to communicate to whom, at what level of detail and
at which point in the process can be a puzzle for the Management. It helps to have an
overarching communication strategy running with clear deliverables and focused messaging.
When it comes to breaking down the messaging for the relevant audiences, its often worthwhile
to look at some of the more traditional strategic management tools. As an example, the balanced
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scorecard was originally designed to look at performance management and strategy

implementation. The communication elements of these tools are as relevant for project delivery
as they are for generating buy-in to changes in strategy.
The balanced scorecard segments a strategy into what it means for key groups within the
business, traditionally from an investor, financial, process and people development perspective.
The company should broaden this out into a seven-step model (Figure 2) which breaks down
objectives into deliverablesfollowing this process, the company can also break down project
objectives into relevant, easily understood, and focused communications.
(Figure 2)
The language used is also important. Different audiences need the information expressed in
different ways. The seven-step process allows the company to define the message, the language
and the nuances for communicating the vision and reasons to the wider business.
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This ensures better buy-in from the outset because people understand why the project is
worthwhile; the company get to share the goals and values that your project will deliver. By
ensuring that everyone understands the rules of the game, the company gets the opportunity to
cheerlead the wider business into positively supporting and encouraging the project team to
deliver something recognized by the organization as valuable. .
Alongside the continual reinforcement of why the business is doing this, the company needs to
constantly inform the project community of any improvements, delivery successes and issues
which have been resolved. This is all about transparencybuilding trust and buy-in to the
project, as well as driving the continual improvement of project management processes.
To do this the company needs to have a very clear understanding of the status of all of the key
project deliverables. The company will need to demonstrate that they are utilizing the resources
allocated to the project effectively and that the impact on the business is within the tolerances
agreed at the outset. The company also need to show that the cash burn is in line with achieved
deliveries and that the overall quality of what has been delivered is as expected.
All of this builds to a compelling and positive communication strategy, tailored to the relevant
audiences and providing all with the clarity, comfort and visibility they need to stay engaged and
confident.
7.3
Recommended Strategic and Financial Objectives
Strategic objectives are objectives that set out what the business are trying to achieve. They can
set set at two levels:
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Corporate level: These objectives are ones that include the business as a whole.
Functional level: These objectives are set out to improve on an area of assigned responsibilities
of the chosen division of the business. Additionally the objectives are usually set after the
corporate objectives have been set.
For Balai Resort, the strategic objective from the corporate level is to increase profit yearly by
atleast 15% annually thru product development. With the current trend now in the Philippines,
water sports is becoming a lucrative business with few businesses catering to the market. With
it's strategic location in Batangas and 7 hectare land, Balai Resort is poised to become one of the
leading providers of water sports activities in the Philippines. Strategies on a functional level will
be discussed on a later chapter.
Financial objectives are the business' financial future plans and needs. To set these goals the
business will need to do corporate financial planning. This is when the business decides what the
company needs to do with their finance under economic circumstances. The main financial
objective of any company will be to make an income, but apart from this the objectives will set
out how much the company will need to earn and how much to spend.
Since Balai Resort is not strong financially, it's objective is to earn net income of atleast Php 6
Million starting 2015, with expenses steadily increasing by 3% annually, this is to anticipate the
inflation rate. Salary is projected to increase due to the increase in guest, which is estimated to
double by year 2015 and increase annually by 15% every succeeding year. The resort does not
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plan to make any additional purchase in the next 3 years, prioritizing all income to pay off its
debts to clear any expense associated with the interest. Gross margin will be pegged at 78% to
cover all the operating and interest expense incurred by the company. It can also be projected
that once the debt is already paid, selling price can be lowered to attract more guests, the lower
gross margin will not affect the bottom line figure because of the removal of the interest expense
being paid monthly.
7.4
Recommended Business Strategies
The first and foremost business strategy of Balai Resort is to reinvent itself from a laid back kind
of resort to a more adventurous type. This will be done thru the partnership with the different
suppliers of water sports equipment.
The Philippines has it all for sports enthusiasts who want a splashing good time. Water sports
offer thrills and exercise while being close to nature, a major boon in a country with picturesque
islands and a great variety of sea creatures. The love for water sports have been increasing
yearly, so much so that the resort's can't be competitive without them. There are plenty of
exciting activities to engage in on the Philippines many lakes, rivers, and waterfalls as well as its
coastal waters.
What better way is there to explore the wealth of marine life in Philippine waters than to go
scuba diving or snorkeling? Snorkeling is easier to learn, involving mainly swimming just below
the surface of the water with a simple mouth-breathing apparatus and mask, allowing the
snorkeler to get a good view of the underwater world. But for longer, more intensive exploration
of the depths of the sea, you have to learn scuba diving, which allows for longer underwater
expeditions with a portable supply of oxygen.
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Some of the first people to populate the country came on boats. With over 7,000 islands to
explore, sailing is a natural sport to try, whether on the sea or on vast lakes. Sailing is a great
way to enjoy the tropical sunshine, strong sea breezes, and beautiful scenery of the Philippines.
For those who prefer calm waters, jet skiing might be a better sport. It involves riding a speedy
motorized craft on the surface of the sea or a lake. It is a great way to take in the scenery and is
very easy to learn.
Another enjoyable way to sightsee on the water while getting a bit of exercise is kayaking. It
involves paddling a light craft on the sea or a lake. Paddling quietly is not only relaxing, it allows
one to observe the natural environment with very little disturbance of the wildlife.
The popular beach and lake resorts of the Philippines have long offered facilities for waterskiing,
a sport which involves being towed on skis by a motorboat or a cable.
Similar to waterskiing, wakeboarding involves riding on a board to which both feet are bound
while being towed across the water by a boat or cable. By riding on the wake, the wakeboarder
may fly up and perform stunts in the air. Wakeskating is similar except the feet are not bound to
the board. The Camsur Watersports Complex is the favorite place for engaging in these sports in
the Philippines. Other destinations for wakeboarders and wakeskaters in the Philippines include
Lago de Oro and Taal Lake in Batangas and Anchor Bay Water Sports in Romblon.
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7.5
Three-year Financial Projection
Balance Sheet
ASSET S
2015
2016
2017
Current Assets
Cash
4,612,465
9,738,427
16,267,157
Accounts Receivable
Inventory
Prepaid Expenses
Other Initial Costs
T otal Current Assets $
4,612,465
9,738,427
16,267,157
Fixed Assets
Real Estate -- Land
16,000,000
16,000,000
16,000,000
Real Estate -- Buildings
18,000,000
18,000,000
18,000,000
Leasehold Improvements
1,000,000
1,000,000
1,000,000
Equipment
Furniture and Fixtures
Vehicles
Other
T otal Fixed Assets $
35,000,000
35,000,000
35,000,000
(Less Accumulated Depreciation)
380,000
760,000
1,140,000
T otal Assets
39,232,465
43,978,427
50,127,157
LIABILIT IES & EQ U IT Y

Liabilities
Accounts Payable
23,476,988
20,155,945
16,733,889
Commercial Mortgage Balance
Credit Card Debt Balance
Vehicle Loans Balance
Other Bank Debt Balance
Line of Credit Balance
Commercial Loan Balance
T otal Liabilities $
23,476,988
20,155,945
16,733,889
Equity
Common Stock
9,000,000
9,000,000
9,000,000
Retained Earnings
6,755,477
14,822,483
24,393,269
Dividends Dispersed/Owners Draw
T otal Liabilities and Equity
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T otal Equity $
15,755,477
23,822,483
33,393,269
39,232,465
43,978,427
50,127,157
Income Statement
Revenue
2015
Rooms
2016
2017
3,960,000
4,554,000
5,237,100
11,700,000
13,455,000
15,473,250
Product 3
Product 4
Product 5
Product 6
18,009,000
100% $ 20,710,350
Meals
T otal Revenue
15,660,000
100%
100%
Cost of Goods Sold

Rooms
3,510,000
4,036,500
4,641,975
Product 3
Product 4
Product 5
Product 6
Meals
T otal Cost of Goods Sold
3,510,000
22%
4,036,500
22%
4,641,975
22%
Gross Margin
12,150,000
78%
13,972,500
78%
16,068,375
78%
Payroll
302,395
317,514
333,390
Advertising
300,000
309,000
318,270
Car and Truck Expenses
120,000
123,600
127,308
Commissions and Fees
Contract Labor (Not included in payroll)
Insurance (other than health)
Legal and Professional Services
100,000
103,000
106,090
O perating Expenses
Licenses
Office Expense
60,000
61,800
63,654
Rent or Lease -- Vehicles, Machinery, Equipment
Rent or Lease -- Other Business Property
Repairs and Maintenance
120,000
123,600
127,308
Supplies
240,000
247,200
254,616
Utilities
60,000
61,800
63,654
Miscellaneous
60,000
61,800
63,654
Travel, Meals and Entertainment
Other Expense 1
Other Expense 2
T otal O perating Expenses
1,060,000
Incom e (Before O ther Expenses)
10,787,605
7%
1,091,800
69%
12,563,186
6%
$ 1,124,554
5%
70%
$ 14,610,431
71%
O ther Expenses
Amortized Start-up Expenses
Depreciation
380,000
380,000
380,000
Interest
Commercial Loan
756,923
658,892
557,880
Commercial Mortgage
Credit Card Debt
Vehicle Loans
Other Bank Debt
Line of Credit
Bad Debt Expense

T otal O ther Expenses
1,136,923
N et Incom e Before Incom e T ax
Incom e T ax
N et Incom e/Loss
6,755,477
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7%
1,038,892
9,650,682
11,524,293
2,895,205
3,457,288
8,067,005
43%
6%
937,880
5%
$ 13,672,551
$
45%
4,101,765
$ 9,570,786
46%
Cash Flow Statement
Y ear 1 T ot als
Y ear 2 T ot als
Y ear 3 T ot als
Beginning Balance
Cash Inflows
Cash Sales
$ 15,660,000
$ 18,009,000
20,710,350
Accounts Receivable
$ 15,660,000
$ 18,009,000
20,710,350
New Fixed Asset Pur chases
Additional Inventor y
Cost of Goods Sold
3,510,000
4,036,500
4,641,975
Oper ating Expenses
1,060,000
1,091,800
1,124,554
Payr oll
302,395
317,514
333,390
Taxes
2,895,205
4,101,765
Loan Payments
3,979,936
3,979,936
3,979,936
Owner s Distr ibution
Line of Cr edit Inter est
Line of Cr edit Repayments
Dividends Paid
T ot al Cash O ut flows
$ 11,747,535
9,425,750
14,181,620
N et Cash Flows
3,912,465
8,583,250
6,528,730
T ot al Cash Inflows
Cash O ut flows
Investing Activities
Oper ating Activities
Financing Activities
O perat ing Cash Balance

Line of Credit D rawdown
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Breakeven Analysis and Financial Ratios

Gross Margin % of Sales
Gross Margin
12,150,000
Total Sales
15,660,000
Gross Margin/T otal Sales
77.6%
T otal Fixed Expenses

Payroll
Operating Expenses
O perating + Payroll
302,394.56
2,196,923.33
2,499,318
Breakeven Sales in D ollars (Annual)

77.6%
Gross Margin % of Sales

Total Fixed Expenses
Yearly Breakeven Am ount
Monthly Breakeven Am ount
Ratios
2,499,318
3,221,343
268,445
Year O ne
Year T wo
Year T hree
Liquidity
Current Ratio
0.2
0.5
1.0
Quick Ratio
0.2
0.5
1.0
Debt to Equity Ratio
1.5
0.8
0.5
Debt-Service Coverage Ratio - DSCR
0.3
0.4
0.6
Safety
Profitability
Sales Growth
0.0%
15.0%
15.0%
COGS to Sales
22.4%
22.4%
22.4%
Gross Profit Margin
77.6%
77.6%
77.6%
SG&A to Sales
8.7%
7.8%
7.0%
Net Profit Margin
43.1%
44.8%
46.2%
Return on Equity (ROE)
42.9%
33.9%
28.7%
Return on Assets
17.2%
18.3%
19.1%
1.5%
1.4%
1.3%
Days in Receivables
0.0
0.0
0.0
Accounts Receivable Turnover
0.0
0.0
0.0
Days in Inventory
0.0
0.0
0.0
Inventory Turnover
0.0
0.0
0.0
Sales to Total Assets
0.4
0.4
0.4
Owner's Compensation to Sales

Efficiency
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Analysis of Financial Projection

General Financing Assum ptions
Value
Owner's Cash Injection into the Business
25.2% Owner's injection is reasonable
Cash Request as percent of Total Required Funds

Loan Assum ptions
2.0% Cash request seems reasonable with respect to total request

Value
Commercial Loan Interest rate
90 Loan term seems within range for this type of loan
Commercial Mortgage Interest rate
9.0% Interest rate seems reasonable
Commercial Mortgage Term in Months
240 Loan term seems within range for this type of loan
Debt-Service Coverage
30.4% Calculated loan payments relative to operating profit seem reasonable

Value
Gross Margin as a Percent of Sales

Owner's Compensation Lower Limit Check
Findings
3.0% Interest rate may be too low for the type of loan requested
Commercial Loan Term in Months
Incom e Statem ent
Findings
Findings
77.6% Gross margin percentage seems reasonable
239,995 An owner's compensation amount has been established
Owner's Compensation Upper Limit Check
3.6% Owner's compensation seems reasonable
Advertising Expense Levels as a Percent of Sales
1.9% Advertising as a percent of sales may be too low
Profitability Levels
$ 6,755,477 The business is showing a profit
Profitability as a Percent of Sales

Cash Flow Statem ent
43.1% The projection may be too aggressive in stating profitability

Value
Findings
Desired Operating cash Flow Levels
- The financial projection provides the desired level of cash flow
Line of Credit Drawdowns
- The business doesn't seem to require a line of credit
Accounts Receivable Ratio to Sales

Balance Sheet
Does the Year 1 Balance Sheet Balance?
0.0% Accounts receivable amount as a percent of sales seems reasonable

Value
$
Debt to Equity Ratio

Breakeven Analysis
Do Sales Exceed the Breakeven Level?
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Findings
- The balance sheet does balance
149.0% Very comfortable
Value
Findings
$ 12,438,657 The sales projection exceeds the projected break-even sales level
7.6
The Departmental Programs
The primary focus of implementation will be the Marketing Department, Finance Department and the
Human Resource Department. There would be no need to include IT and R&D since the company does
not invest highly in does department.
7.6.1
Marketing Department
The marketing department has overall responsibility for growing revenue, increasing market
share and contributing to company growth and profitability. In a small business, the marketing
department may just be one person, or it may include a marketing director or manager plus
marketing executives responsible for functions such as advertising, publications or events.
The marketing department works with Internal or external product development teams to develop
new products or improve existing ones. The department analyzes sales of existing products and
identifies gaps in the product range where there may be opportunities for the company.
Marketing employees provide development teams with information on customer needs and
preferences to help them identify the features or improvements to incorporate in new products.
Later in the product development process, the marketing department sets prices and prepares
plans to launch the product.
Marketing will focus on STP or Segmentation, Targeting and Positioning. The STP process
demonstrates the links between an overall market and how a company chooses to compete in that
market. It is sometimes referred to as a process, with segmentation being conducted first, then
the selection of one or more target markets and then finally the implementation of positioning.
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The goal of the STP process is to guide the organization to the development and implementation
of an appropriate marketing mix.
Balai Resort made some surveys regarding the different segments that usually tries water sports.
The first segment is the yuppies or young professionals. They are adventurous and currently the
lifeblood of the BPO industry. They have a lot of spending capability and their generation always
look for excitement and new things to try.
The second segment is the family. Group of people usually comes with a adolescent who wants
to try a different vacation spot. They are not thrill junkies such as the yuppies.
The third segment is the hardcore water sports professionals. They live for the thrill of having
fun in the water. They are always looking for the best places to hone their talent and skills.
Balai targets the first segment as it's primary market. With the spending capability partnered with
the search for thrills the yuppies can instantly bring income to the company.
Balai Resort will position itself as the low cost but high quality water sports resort. Focusing on
higher number of guests rather than a few but high paying ones.
Another great advantage of the yuppie segment is that they are technically inclined. The current
marketing of Balai Resort of word of mouth will become digital with the help of this segment.
This will increase the flow of information faster and will multiply network to a wider range.
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7.6.2
Finance Department
The finance department is the backbone of a company's operations and processes. It records
operating transactions, analyzes them and prepares financial statements that inform top
management, regulators and investors about a company's economic health. Finance employees
also ensure that internal mechanisms and policies comply with regulatory standards, industry
practices and human resources policies.
The finance department's main task is to control it's expenses to the bare minimum just enough
not to hamper the operation of the whole resort. Because of the partnership with the different
supplier of the water sports activities, there would be no need for additional capital or loan.
The finance department will set a stringent budget that will be checked upon on a monthly basis.
This will ensure that all the spendings are within the budget and no expense are done due to
impulse.
Cost of Goods sold will be strictly watched and inventory checks will be done on a weekly basis
to properly account for all items. Since majority of the cost is from the food, the finance
department will conduct random audits and sampling so that the food will still be up to par with
the standard without sacrificing the cost.
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7.6.3
Human Resources
Human resource management (HRM, or simply HR) is a function in organizations designed to

maximize employee performance in service of their employers strategic objectives. HR is
primarily concerned with how people are managed within organizations, focusing on policies
and systems. HR departments and units in organizations are typically responsible for a number of
activities, including employee recruitment, training and development, performance appraisal, and
rewarding (e.g., managing pay and benefit systems). HR is also concerned with industrial
relations, that is, the balancing of organizational practices with regulations arising from
collective bargaining and governmental laws.
Since there is a problem with personnel, Balai Resort would invest in the morale and training of
its staff. The company would conduct annual outing where the staffs could bring their family for
them to enjoy. Training would be done thru partnership with the different top hotel business in
the Philippines. This will ensure a high standard of training that will be one of the key to success
of the resort.
Training is crucial for organizational development and success. It is fruitful to both employers
and employees of an organization. An employee will become more efficient and productive if he
is trained well.
The benefits of training can be summed up as:
1. Improves morale of employees- Training helps the employee to get job security and
job satisfaction. The more satisfied the employee is and the greater is his morale, the
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more he will contribute to organizational success and the lesser will be employee
absenteeism and turnover.
2. Less supervision- A well trained employee will be well acquainted with the job and
will need less of supervision. Thus, there will be less wastage of time and efforts.
3. Fewer accidents- Errors are likely to occur if the employees lack knowledge and skills
required for doing a particular job. The more trained an employee is, the less are the
chances of committing accidents in job and the more proficient the employee becomes.
4. Chances of promotion- Employees acquire skills and efficiency during training. They
become more eligible for promotion. They become an asset for the organization.
5. Increased productivity- Training improves efficiency and productivity of employees.
Well trained employees show both quantity and quality performance. There is less
wastage of time, money and resources if employees are properly trained.
Chapter 8 - Strategy Evaluation, Monitoring and Control
The final stage in strategic management is strategy evaluation and control. All strategies are
subject to future modification because internal and external factors are constantly changing. In
the strategy evaluation and control process managers determine whether the chosen strategy is
achieving the organization's objectives. The fundamental strategy evaluation and control
activities are: reviewing internal and external factors that are the bases for current strategies,
measuring performance, and taking corrective actions.
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8.1
Strategy Map of the Firm
Balai Resort
Strategic Objectives
Strategy Map
Financial
Adhere to strict
budgets to increase
profits
Lower selling price

after paying of debts
Set up proper
controls to limit
spoilages and
promote productivity
Issue dividends upon

turning to profit
Customer
Tap the yuppie

segment to increase
the market of the
company
Create special
promotion for the
targeted segment
Be courteous in
attending to
customers all the
time
Attend to all
customer needs
Operations
(Process)
Partner with different

water sports owners
to develop the
services of the
company
Offer unique water

sports available only
at Balai Resort
Learning & Growth
Send staffs to
training for continous
learning
Increase staff
visibilty to promote
sense of familiarity
Be uptodate with
different water sports
technology in the
world
Conduct CSRs
Build the Enterprise
Increase Customer
Value
Achieve Operational
Excellence
Be a Good
Corporate Citizen
Create contigency
Acquire own water
plans for smooth flow
sport technology
of the operations
when budget permits
Strategic Themes
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8.2
The Balance Scorecard
Financial Sorecard
Objectives
Measures
Targets
Initiatives
Profitable Growth
Revenue Growth
15% increase yearly
Increase water
attractions to the resort
and invest in marketing
Targets
Initiatives
Win-Win dealer relations Dealer Gross Profit

Growth
10% Increase in Gross

Profit of Dealers
Establish a dealer
committee and give more
discount
Delight the Customer
40% share of total

market
Increase staff to customer

ratio to have high
visibility of staff to cater
to the needs of the
customers
Customer Scorecard
Objectives
Measures
Share of Segment
Positive Feedback
Customer Surveys
Internal Business Process Scorecard

Objectives
Measures
Targets
Initiatives
Operational Excellence
Gross Margin
Maintain a gross
margin of 40%
Semi annual training for

the staff
Establish controls in the
operation process
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Check costings yearly to

update it if necessary
Develop innovative services Increase in Profit
15% Increase yearly
Continually conduct
partnership with
different water sports
provider
Learning and Growth Scorecard

Objectives
Measures
Targets
Initiatives
Loyal Personnel
Personnel Turnover
Low personnel turnover
Conduct company outings

to increase morale of staff
Give personnel trainings
to enhance their skills
8.3
Contingency Planning
A basic premise of good strategic management is that firms plan ways to deal with unfavorable
and favorable events before they occur. Too many organizations prepare contingency plans just
for unfavorable events; this is a mistake, because both minimizing threats and capitalizing on
opportunities ca n improve a firm's competitive position.
Regardless of how carefully strategies are formulated, implemented, and evaluated, unforeseen
events, such as strikes, boycotts, natural disasters, arrival of foreign competitors, and government
actions, can make a strategy obsolete. To minimize the impact of potential threats, organizations
should develop contingency plans as part of their strategy-evaluation process. Contingency plans
can be defined as alternative plans that can be put into effect of certain key events do not occur
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as expected. Only high priority areas require the insurance of contingency plans. Strategists
cannot and should not try to cover all bases by planning for all possible contingencies. But in any
case, contingency plans should be as simple as possible.
For Balai Resort, if the partnership with the different water sports owner does not increase it
sales. The second strategy will kick in, which is market development. Since the resort has it's
own stone chapel, management would tap the different wedding organizers so that they would be
the prime choice in any beach wedding activities. This will maximize the room available, and
also since most of the weddings are done year round and on weekends. It would be a great back
up plan to increase profit.
Chapter 9 - Conclusion
The partnership with the different water sports activities owner will allow Balai Resort's already
successful company to expand into new areas. It will give the company the capability to increase
its sales a hundred fold. More importantly, the company will be able to bring change its image
and be the top recreational resort in the country.
Such activities will allow the company to expand their already vibrant services and, ultimately,
bring about new and exciting products and programs for the current target segment. Best of all,
the company will have greater power to improve and transform peoples lives forever.
The company feels that this practical plan, along with Balai Resort's unique market position,
offers a lot of positives, including:
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Balai Resort's strategic alliances with topnotch infomercial firms, production companies
and leaders in the water sports industry lend credibility to this ambitious business plan.
Moving forward on this partnership will position all of our investors as active participants
in Batangas' community planning.
It will allow the rebuilding of the historic San Juan area. The citys growth and expansion
have already attracted major developers, all of whom are investing millions of pesos into
the citys planned renaissance.
Not to be forgotten, you will also help play an active role in addressing our communitys
need for education in health and fitness.
With the partnership, the company can broaden Balai Resort's market reach, create new jobs in
the community and, over the long term, shape the recreational resort industry.
10 Footnotes and References
David, F. (2005). Strategic management: Concepts and cases (10th ed.). Upper Saddle River, N.J.:
Pearson Prentice Hall.
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Chapter 1 - Introduction ........................................................................................................................ 4

Chapter 2 - Research and Design Methodology ................................................................................... 5

Chapter 3 - External Analysis ............................................................................................................. 20

Political / Legal ........................................................................................................................... 21

Chapter 4 - Industry and Competition Analysis .................................................................................. 34

Industry Analysis ........................................................................................................................ 35

CPM Matrix ................................................................................................................................ 43

External Factor Evaluation Matrix (EFE) ................................................................................... 46

Chapter 5 - Internal Analysis .............................................................................................................. 49

The Vision / Mission Analysis .................................................................................................... 49

The 7 S Model of Mckenzie ........................................................................................................ 51

The VCA ..................................................................................................................................... 60

Financial Analysis ....................................................................................................................... 63

The Internal Factor Evaluation Matrix (IFE) .............................................................................. 71

Chapter 6 - Strategy Formulation........................................................................................................ 72

TOWS Matrix ............................................................................................................................. 73

The Space Matrix ........................................................................................................................ 74

The Summary of Matrices........................................................................................................... 77

The Quantitative Strategy Planning Matrix ................................................................................ 78

Chapter 7 - Strategy Implementation .................................................................................................. 80

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Recommended Mission/Vision ................................................................................................... 80

Recommended Strategies for Communication............................................................................ 80

Recommended Strategic and Financial Objectives ..................................................................... 82

Recommended Business Strategies ............................................................................................. 84

Three-year Financial Projection .................................................................................................. 86

The Departmental Programs ....................................................................................................... 91

Marketing Department ........................................................................................................ 91

Finance Department ............................................................................................................ 93

Human Resources ............................................................................................................... 94

Chapter 8 - Strategy Evaluation, Monitoring and Control .................................................................. 95

Strategy Map of the Firm ............................................................................................................ 96

The Balance Scorecard................................................................................................................ 97

Contingency Planning ................................................................................................................. 98

Chapter 9 - Conclusion ....................................................................................................................... 99

Exceed expectations Jericko Malaya

Exceed expectations Jericko Malaya

Chapter 2 - Research and Design Methodology

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What are the prevalent economic factors?

What are the environmental concerns for the industry?

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Exceed expectations Jericko Malaya

Exceed expectations Jericko Malaya

Highlight the companys critical strengths and weaknesses (SWOT analysis)

Animate its position in the industry

Exceed expectations Jericko Malaya

Exceed expectations Jericko Malaya

VMS help an organization:

Guide strategic planning and implementation

Define performance standards and expectations

Establish a more productive, goal-oriented corporate culture

Communicate its purpose and goals to outside stakeholders1

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Let's look at each of the elements specifically:

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Style: the style of leadership adopted.

Staff: the employees and their general capabilities.

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