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Ateneo de Manila University

John Gokongwei School of Management


Project Information Cataloging System (PICS)
Class Project Information and Cover Sheet

Name of Student/s: School Year: 2016-2017 Sem: 2nd


(Surname, First name, MI)
Cheung, Seanne Cathleen Subject Code: L&S 127
De Jesus, Ryan Curt
Course Name: Strategy Implementation
Manaois, Jerome
Ortega, Charlon Teacher: Sabug, Fructuoso T., JR
Salvatierra, Shereen
Tan, Neil Brian (Information below this line and in this column for
use by Faculty &/or PICS staff only.)

Grade: Call Number:

Project Title: Peek A Tee Functional Area:

Client: Male and Female, Comments:


16-30 years old, class B & C

Industry Category: Apparel

Abstract (150 words or less)

Our pocket tees aim is to give its consumers creative novelty designs for them to have
an avenue of their personal expression. Due to financial limitations, we would only have an
initial set of 5 designs, the theme will be pop culture phenomena or trending fads that will
invoke humor to the public. It aims to be a statement for the consumers that they are in the
know with regards to pop culture while at the same time have a quality pocket tee that is
fashionable. The production of this product does not require a considerably high capital,
hence can be shouldered by the six group members. The revenue of the company would come
from both retail/enterprise product sales and bulk sales.

Author(s) Recommended Key Words


Pocket, T-shirts, Shirts, Tees
Executive Summary

The value proposition of the companys quality novelty shirts comes as a form of self-

expression. This product aims to target class B and C in Metro Manila, particularly students

and the young adults, from ages 16 to 30. The companys revenue will come from both

retail/enterprise product sales and bulk sales. In addition, competitors are comprised of local

shirt producers and designers, as well as small scale shirt manufacturing businesses. The

companys vision is to be a well-known fashion brand that helps spread positivity and

happiness in every wear. While Peek A Tees competitive edge is variety through adding

designs every season, and affordability through the reduction of overall cost while retaining

high quality.

Peek A Tee has encountered some challenges and has made certain deviations and

revisions from the original business plan to contain these problems. Firstly, revamping the

design concept of the shirts pushed back the start of manufacturing process by a week. As

part of Peek A Tees contingency plan, the company agreed on outsourcing the shirts instead.

The company also decided to increase the selling price of the shirts to have a faster return on

investment. From PHP 300 per shirt, the selling price is increased to PHP 349. In December,

the company finished revamping the design concept and the production of the shirts. Due to

the delay in the production of shirts, the group was only able to start selling in the first few

weeks of January.

Costs of the goods such as for raw materials as well as labor was higher than the

estimated cost of Peek A Tee. Some deadlines were not made during the first month of

operations. In the first month of implementation, reaching the targeted sales per month was

also a challenge. Peek A Tee once ran out of stock for two of the designs namely the finger

corgi and the muscle corgi. Peek A Tee then asked its manufacturer to produce the

minimum quantity for the same price.


Throughout the implementation of the business plan, there was no change with

regards to the internal strategic position of Peek-A-Tee. The company stuck with its unique

value proposition of creating unique yet humorous designs and this remains to be its key

strength. In addition, there was no change in the external environment as well. For

opportunities, market access is still a top priority due to the following of the unique product.

While the threats of established brands are unavoidable, the company can be more

aggressive with its marketing campaign. The people behind Peek-A-Tee realized that creating

a plan for promotions is a lot easier than implementing it. Furthermore, they also saw that

being present in social media is not enough to acquire a decent following. The owners also

saw how difficult it is to compete in the apparel industry given that competition is heavy.

The plan for expansion will include exposures to bazaars and the like, though the

company would largely be in digital and online. In terms for the groups competitive strategy,

focusing on differentiation will be the most effective way to attain competitive advantage

among different competitors. Given that the company is a newcomer, it may opt to use

advertising to attract customers, but only as much as resources are able to.

The sources of the paid-up capital (PHP 240,000) by the various incorporators of the

company would either be coming from minimal loans, from either parents or friends or both,

or from the incorporators own savings. Each incorporator would be responsible in acquiring

their share of the total initial investment required for by the company.

In Year 2017, 2018, and 2019, the companys vision and mission statement, as well as

objectives, will not change. In terms of its competitive strategies, the company plans to

maximize social media through aggressive promotional efforts. The financial and non-

objectives for these years is to increase its share in the market. Lastly, the company aims to

have recovered a minimum of 80% of its total initial investments. If the profit allows,

physical retailing would be one of the biggest factors for the companys success.
Table of Contents
Executive Summary .............................................................................................................. 2
I. Business Plan .................................................................................................................... 5
A. Highlights of the Business Plan ..................................................................................... 5
B. Deviations / Plan Revisions ........................................................................................... 7
C. Key Milestones/ Timetable ............................................................................................ 9
D. Key Result Areas ........................................................................................................ 10
2. Business Implementation ................................................................................................ 10
A. Actual vs. Projected Key Results/ Accomplishments ................................................... 10
B. Variance Analysis........................................................................................................ 10
C. Major Challenges / Problems Encountered and Management Response .................... 11
D. Actual Financial Statements ........................................................................................ 15
3. Strategy Evaluation ......................................................................................................... 15
A. Fred Davids Strategy Evaluation Framework with Recommended Corrective Actions 15
B. Rumelt's Criteria .......................................................................................................... 16
C. Lessons Learned ........................................................................................................ 18
4. Prospects ........................................................................................................................ 20
A. Growing the Business ................................................................................................. 20
B. Funding Plan ............................................................................................................... 22
C. Improved Business Plan ............................................................................................. 23
D. Projected Financial Statements................................................................................... 26
Appendices..26
I. Business Plan

A. Highlights of the Business Plan

Business Concept

The value proposition of the companys quality novelty shirts comes as a form of self-

expression. This product aims to target class B and C in Metro Manila, particularly students

and the young adults, from ages 16 to 30. The companys revenue will come from both

retail/enterprise product sales and bulk sales. In addition, competitors are comprised of local

shirt producers and designers, as well as small scale shirt manufacturing businesses, in the

Philippines.

Vision-Mission Statement

Our vision is to be a well-known fashion brand that helps spread positivity and

happiness in every wear. It is the companys mission to strive to be one of the leading apparel

companies by providing quality novelty shirts with designs reflective of current trends and

pop culture to youth in the Philippines.

Financial and Non-Financial Objectives

The company aims to increase its overall market share, put up physical

stores/infrastructures, and venture into new opportunities. Within three years of operations,

the company aims to have recovered a minimum of 80% of its total initial investments.

Industry Study and Marketing Plan with Competitive Strategies

The total value of the Apparel and Footwear Industry in the Philippines was PHP

597.4 million in 2015. Current value sales are increasing by 7% because of increased

awareness of young consumers with regards to fashion. Moreover, the companys main

competitors are namely Bench, Penshoppe, Team Manila, and Tee Culture. The company

plans to utilize social media such as Facebook, Twitter, and Instagram for online retailing

while renting bazaar booths for physical retailing. Peek A Tees competitive edge is variety
through adding designs every season, and affordability through the reduction of overall cost

while retaining high quality. As for the personnel requirements, aside from the six group

members of the company, additional help would not be hired unless the need arises. As the

production of the company would be mainly outsourced, the tasks required would mostly be

in logistics and general work.

The role of Chief Executive Officer will be filled by Shereen Salvatierra, and Chief

Operating Officer will be filled by Jerome Manaois. In addition to these, the role of VP for

Production will be filled by Ryan de Jesus, VP for Finance and Accounting by Charlon

Ortega, VP for Marketing and Sales by Seanne Cheung, and VP for HR and PR by Neil Tan.

Financial Plan & Projections

Thirty percent (30%) from the total capital of PHP 220,000 will be used for the

acquisition of supplies, twenty percent (20%) for the outsourcing of sewing facility, twenty

percent (20%) will be used for printing, and thirty percent (30%) will be used for the other

operating expenses such as transportation, advertising, rent, utilities, and supplies costing

PHP 40,000 annually. To kick start the company's processes, resources from the six group

members, and if need be, a reasonable loan, would be required. Since the apparel industry has

a low barrier to entry, it does not require a huge sum to enter.

Sales projection for the first year was computed by determining the number of BC

males and Females aged 16-30 in NCR, those willing to try a new clothing brand, and those

willing to purchase at computed SRP; at 2.67% apparel industrys annual growth rate. At

sales volume of 1000, 1232, and 1,581 for the first 3 years of operations, sold at 300 with

COGS at 180/unit, and annual operating expenses of 40,000, the net incomes are 44,000;

63,491,36; and 87,505,50 respectively. Cash flows are 256,500.00; 319,991.36; and

407,496.86 for the 3 years. Both assets, and liabilities and equity, equals 264,000;
327,491.36; and 414,996.86. Finally, the breakeven point remains 334 in units or PHP

100,200 in sales throughout the three years.

B. Deviations / Plan Revisions

During the course of the business operations, Peek A Tee has encountered some

challenges and has made certain deviations and revisions from the original business plan in

order to contain these problems and to continue fulfilling Peek A Tees vision of being a

brand that promotes positivity and happiness in every wear. These deviations were derived

from the contingency plans that the company has put together before the start or operations.

Change in design concept

The initial design concept of Peek A Tee is by having four original designs and two

limited edition designs, for Christmas and Valentines Day. However, the problem that was

raised by the panelists is that it would ruin the element of surprise, one of the unique selling

propositions of the product, if customers would see the same design on other people and

would already know what is inside the pocket. Upon the suggestion of the panelists, instead

of having four designs with the same designs inside the pocket, tt would create a better

element of surprise, if there were different designs inside the pocket with the same design

outside the pocket. Peek A Tee was able to make revisions by reducing the outside designs

into two designs instead. In addition, more designs for the inside pockets were created per

outside design, meaning each outside design had three different inside designs.

Taking out the limited edition designs

In addition to the four original designs, Peek A Tee included two limited designs in

the original business plan. However, a few problems were faced during the manufacturing

process. Firstly, revamping the design concept of the shirts pushed back the start of

manufacturing process by a week. By then, Christmas was already one week away, therefore

the company decided not to push through with the Christmas design anymore. Secondly, the
company encountered problems with the shirt manufacturers. Initially, the company planned

to manufacture the shirts instead of outsourcing ready-made shirts. However, by the third

week of December, the company that the company chose to produce the shirts and print the

designs backed out because they had received a big order from SM, their contract company

and therefore not being able to accommodate Peek A Tee anymore. This, then, cause a big

delay to the manufacturing process, since the company could not find a company to produce

the shirts. The company decided after doing a cost-benefit analysis that it would not be ideal

to have limited edition designs too early in the operation since the manufacturing process is

still not stable.

Change in manufacturing process and pricing

As mentioned previously, the company experienced some problems with the

manufacturer, which resulted to a delay in the production of the shirts. As part of Peek A

Tees contingency plan, the company agreed on that if manufacturing the shirts does not

work out, the company will decide to outsource the shirts instead. The company, then, looked

for suppliers of shirts that offers the best quality. Since as mentioned in the companys core

value, Peek A Tee aims to offer shirts that are of the best quality, and the company does not

want to compromise the quality of the shirt because of this setback. Moreover, the group also

decided that it will be less costly to buy regular shirts, have the design printed on, and then

buy cloth for the pockets and have it sewn on; instead of buying pocket shirts, have the stitch

of the pocket taken out, then have the design printed and have the pocket sewn back on. The

company partnered up with Sun Joy shirts for the supply of ready-made shirts, because only

Sun Joy was able to provide with top notch quality out of all the shirt suppliers, however it

also the brand with the higher prices compared to other shirt brands. Moreover, since Sun

Joys shirts are relatively bigger in size compared to other shirts, the company decided to

acquire small, medium and large size only.


Another change in the manufacturing process was the printing process. Originally, the

group intended to have silkscreen printing, the same printing that was used in the prototype.

However, upon further research, silkscreen printing will be costlier for our changing designs

and the print cracks after a few washes. The company decided to switch to heat press printing

because it is more cost effective and has better quality.

Despite having a major change in the manufacturing process, the actual cost of

producing a shirt sums up to be PHP 5 cheaper than the projected cost of PHP 180 per shirt.

This is because the labor costs of having the shirts sewn was taken out. The company also

decided to increase the selling price of the shirts to have a faster return on investment. From

PHP 300 per shirt, the selling price is increased to PHP 349.

C. Key Milestones/ Timetable

(Refer to Figure 1) In December, the company finished revamping the design concept

and the production of the shirts. Due to the delay in the production of shirts, the group was

only able to start selling in the first few weeks of January. Due to the lack promotional

materials, the company only started selling to family and friends. In the second week of

January, the company started to work on promotional materials. In the same week, the

company opened its first pop-up stall for a duration of three days in Sto. Domingo St, Quezon

City. After finalizing the promotional materials, Peek A Tee was able to launch its Facebook

page in the last week of January. In February, Peek A Tee decided to expand its reach online

and launches its Instagram account. In the same month, Peek A Tee started selling in Ateneo

Trade and University Trade, offering options of meetups and shipping for non-Ateneans. As

part of the companys expansion stage, Peek A Tee aims to join bazaars in order to increase

sales and boost its reputation; hence in March, Peek A Tee joined two bazaars: AMA Piazza

bazaar, which happened last March 13 to 17, and MECO SOSS bazaar, which happened last

March 27 to 31.
D. Key Result Areas

Peek A Tee has identified four key results areas in order to fulfill its company goals

that are found in Peek A Tees vision, mission and value statements. These key result areas

are recognized by their respective performance indicators. (Refer to Figure 2)

2. Business Implementation

A. Actual vs. Projected Key Results/ Accomplishments

(Refer to Figure 3)

B. Variance Analysis

Sales Price Variance - 8,624.00 Favorable

The sales price variance (refer to Figure 4) resulted to a positive favorable amount

mainly because of high demand due to product differentiation and uniqueness. Moreover, it is

agreed upon by the company to increase the markup of the price in order to speed up the

breakeven process by decreasing the required units to breakeven. Although increasing

markup could potentially decrease demand and sales, the company decided that the main

demand (Ateneo Community) of the product will not be severely affected.

Variable Overhead Total Variance - 2,813.60 Favorable

In terms of procuring the direct materials, which constitutes to the Cost of Goods

Sold, the variance depicts a favorable result which arises from efficient cost control, planning

error, and untimely use of contingency plan. The cost per production and packaging of shirt

ended up significantly lower, from 180/shirt to 161/shirt, mainly because of a more efficient

procurement method, wherein members buy and haggle each material to reduce its overall

costs in shirt production.

Fixed Overhead Total Variance - 7,088.67 Favorable


This favorable variance has been amounted due to the decreased in transportation,

advertising, and rent expense, mainly due to planning error and making use of more cost-

efficient avenues to conduct sales (i.e. free bazaars, garage sales, online order forms)

Sales Volume Variance - (13,027.43) Unfavorable

This amounted to an unfavorable amount mainly due to the lack of actual units

produced and sold in comparison with initial plans. The huge deviation was mainly caused by

unable to sell at the planned month of December due to the last minute shift towards

contingency plans regarding production, resulting to lesser time period to conduct sales.

C. Major Challenges / Problems Encountered and Management Response

Supply Chain

The first challenge encountered by Peek A Tee during the implementation of the

business plan was with regards to the supply chain. During the first production planning, the

initial supplier, who was supposed to provide the final products based on the designs backed

out on the last minute due to previous obligations. Therefore, the whole supply chain needed

to be reconsidered. Renewing the supply chain, canvassing and accruing all the supplies at a

low-price posed as a major challenge in terms of time coordination. This also caused delay in

the whole production process which was carried over to the selling process.

In light with this, the task was distributed to specific people to accomplish within a

time period instead of the system that was set before where all should be present. Certain

people were instead asked to acquire the supplies from another supplier while others looked

for a printing place that would provide the best value. After the extensive process of

contacting all suppliers and corresponding with each supplier, the product was produced.

Also, instead of finding another supplier for the packaging, it was made by people of the

company. This was also more cost-efficient than that of asking for suppliers to complete the

last process.
Costing

Another challenge that Peek A Tee encountered in the implementation was with

regards with the costing. Costs of the goods such as for raw materials as well as labor was

higher than the estimated cost of Peek A Tee. Aside from this, the printing of the logos and

designs on the shirts costed twice than what was previously estimated. This prompted Peek A

Tee to bargain with the suppliers to the minimum that they would be able to give. In the

process of this, there was also emphasis given that Peek A Tee is managed by student who

have limited resources especially with respect to financial resources. Costs for packaging

were lessened due to the initiative of members of Peek A Tee to create a more cost effective

and more efficient method for packaging without asking suppliers to produce for Peek A Tee.

Taking all this into account, Peek A Tee was able to produce the pocket tees at a cost less

than the estimated cost.

Administrative

With respect to administrative affairs, Peek A Tee encountered some conflicts within

themselves. Some deadlines were not made during the first month of operations which was

last December. Some of the members of Peek A Tee were assigned to canvas for the best

value cloth were not able to find it in the specific time that was settled. Due to this, some

conflicts arose. Compromises were made in order to finish the production of the pocket tees

on the deadline set by Peek A Tee.

The decision for the designs of the pocket tee also caused a conflict. A unanimous

decision could not be made for the designs of the pocket tees. In the end, Peek A Tee came

up with entirely new designs that compromised the disagreeing parties and complied with the

suggestion of the panelist.

Reaching Targeted Sales


In the first month of implementation, reaching the targeted sales per month was also a

challenge. This was also an effect of the delay in the production process. Due to this, Peek A

Tee added some promotional avenues to boost its sales. Firstly, Peek A Tee ask the help of

some well-known models within the Ateneo community to model for the product at the same

time promote the product.

Aside from traditional promotional avenue such as participating in two bazaars

namely, AMA Piazza Bazaar (in the month of March) and MECO SOSS Bazaar (in the

month of March), the company used a more non-traditional promotional avenue like setting

up its first pop-up stall or a modified garage sale in the month of February outside the

house of one member of the company in Sto. Domingo, Quezon City near Sienna College to

boost the sales of the month. This broadened the market reached of Peek A Tee to not only

the online community within Ateneo at the same time increasing the awareness of the brand.

Peek A Tee reached out through its Facebook and Instagram page two contests where

customers can actively participate in. One was a design contest where contestants can design

a product of their own using the concept of Peek A Tee. The best design chosen has a chance

to have their design printed by Peek A Tee. Another was Choose your Peek where a GIF of

a model opening to pocket to show a full uncovered design was spread online through its

Facebook and Instagram pages. The contestant that was able to pause the GIF at the time

where the full uncovered design was shown has a chance to win a Peek A Tee shirt by

posting the screenshot photo and tagging Peek A Tee in either Facebook or Instagram.

Push marketing was also implemented to increase sales. While participating in both

bazaars within Ateneo, designated people within the group would each take turn to promote

the product in more crowded areas within the Ateneo such as Gonzaga Hall, SEC Walk,

MVP Lobby, and JSEC. This method increased the brand awareness and the sales followed

through.
Lastly, some changes in the pricing strategy were implemented to further promote the

product as well as its sales. Peek A Tee capitalized on the cliquish nature of some customers.

For those who want to buy five or more Peek A Tee products for themselves or for their

family members or wanted to collaborate with their friends can purchase the product at 50

pesos less. Instead of purchasing the product at 349 pesos, they can acquire it at 299 pesos as

long as five or more bought it at the same time.

These additional promotional avenues increased the sales of Peek A Tee from January

to February and finally reaching the projected sales per month of 83 pocket tees with 85

pocket tees sold for the Month of March.

Stocks

Peek A Tee once ran out of stock for two of the designs namely the finger corgi and

the muscle corgi during the third week of February. To contain this, Peek A Tee asked its

manufacturer on the least amount of shirts that can be produced with the same price given

before. Twelve units of shirts were needed to be given the same price. Peek A Tee decided

that if there were eight customers that preordered the pocket tees of the specific designs, Peek

A Tee would reproduce the pocket tees. Finally, additional 12 units per design were produced

to keep up with the demand of the customers.

Aside from this, forecasted demand for each size was slightly off. Peek A Tee

forecasted that the demand for medium sized pocket tees would be the highest. The size of

extra large was also taken out due to the fact that the sizes of the pocket tees was larger than

normal shirts. However, more people ordered the size of large than what was produced while

there were also some that ordered extra-large. In the process of reproducing the pocket tees,

Peek A Tee took that into consideration and reproduced the preordered sizes along with

extras for the large and extra-large size to meet the demands of customers.
D. Actual Financial Statements

(Refer to Figures 5,6,7, and 8)

3. Strategy Evaluation

A. Fred Davids Strategy Evaluation Framework with Recommended Corrective Actions

Internal Factor Evaluation (refer to Figure 9)

Throughout the implementation of the business plan, there was no change with

regards to the internal strategic position of Peek-A-Tee. The company sticked with its unique

value proposition of creating unique yet humorous designs and this remains to be its key

strength. Since its just a starting company, it is able to address specific needs of customers

whether this be a sudden influx in demand or new designs. The company is able to acquire its

raw product at a relatively cheap price which allows it to be competitive in its pricing. Aside

from this, the company also streamlines its value chain in order for them to offer quality

novelty pocket shirts that does not break the bank. However, a weakness of the company is in

the area of technology development. Since Peek-A-Tee is just a startup, it doesnt have access

to cheap financial products which can be used for capital expenditures. Buying equipment

may be expensive, but its long-term effect can make the company have a lower cost in

producing the pocket shirts. In line with limited capitalization, the company is not able to

reach all of its target consumer which limits its potential sales. Also, given that the company

is just a startup, the roles of business partners arent clearly established and it results to

people having the same task.

External Factor Evaluation (Refer to Figure 10)

Throughout the implementation of the business plan, there was no change in the

external environment. For opportunities, market access remains to be a top priority since its

unique product has a following. Being able to raise awareness to a bigger crowd can make

Peek-A-Tee have scalable growth in the years to come. Online commerce remains to be a
convenient avenue for customers to place orders. This allows the company to have better

information on what shirt designs and sizes are ordered more frequently. Creating a website

that is comprehensive and have more information about Peek-A-Tee may ignite brand interest

and loyalty. Given the growth of the BPO Industry in the Philippines and increased

remittances from abroad, the Philippines GDP is expected to grow for the following years. In

line with this, higher income allows for people to have an increase in buying power.

Partnerships with other companies are also avenues of potential growth. However, Peek-A-

Tee is threatened by the presence of established retail stores. They can offer a similar design

concept to that of Peek-A-Tee which may severely affect its growth and sales. Furthermore,

the apparel industry remains to be very aggressive with the entry of international brands

which spends a lot in their marketing campaign. Also, certain designs may only be a fad

which can make unsold stock hard to turnover.

The goal of Peek-A-Tee has satisfactorily achieved its objective of acquiring market

share. Through participating in different bazaars, Peek-A-Tee was able to expand its

customer segment. The owner's initial investment which shows that the product sells well.

Also by streamlining its value chain, Peek-A-Tee was able to accomplish the goal of having

an efficient production system.

B. Rumelt's Criteria

Consistency

Peek-A-Tee has the mission of providing quality novelty shirts with designs that

reflect current trends and pop culture. Its long term goal is to increase total market share. The

company has been consistent in achieving these goals which can be seen in the

implementation of their business plan. Participating in bazaars, creating timely designs, and

having an online order form helped the company to be recognized in the market. They also

try to maximize exposure in social media, specifically through Facebook, in order for the
consumers to be aware of their product. The company didnt incur any loss in the bazaars

they joined which shows that they are able to fulfill its mission of humorous trendy designs,

increased market share, while at the same time remaining to be profitable.

Consonance

The company continuously monitors the trend in pop culture in the Philippines to

produce new designs. This allows them to be adaptive to the external environment and see

new opportunities that may suddenly arise. This is evident in Peek-A-Tees decision to create

new designs instead of going with the initial designs they thought of in the strategy formation

phase. The company was able to determine that the design was already outdated and it

wouldnt be well received in the market. It can be seen that the company not only look at

trends at a whole, but also at individual trends, such as specific designs, and this allows it to

remain innovative and profitable.

Feasibility

The company is able to acquire its inventory of shirts at a low cost while at the same

time looking for the most cost-efficient way to produce the final product. Peek-A-Tee is

closely involved with its value chain. The company buys shirts in bulk in order to get it a

cheap price. Afterwards, they select the most cost effective company which prints designs to

bulk shirts. To finalize the product, Peek-A-Tee also looks for a bargain in the cloth for their

shirts pockets as well as the sewing facility. The operations of the company is sustainable

and this will allow the company to remain profitable.

Advantage

Peek-A-Tee focuses on designs that are humorous yet fashionable. Their competitive

advantage is being a niche novelty product. It positions itself not only as mere novelty, but

that which offers the benefit of being fashionable. This advantage of the company in line with

the its cost effective approach in handling its resources allows it to be distinct from the
competition, while maintaining a relatively low price. The company is also adept at creating

designs that capture its target market. This allows for Peek-A-Tee to stand on its own against

other competitors.

Corrective Actions

For corrective actions, the company can consider issuance of debt. This can allow the

company to address its lacking in technological development as well as their limited

marketing ability. This in turn may result to increased sales. The company can also consider

organizational structuring in order for people to have defined roles which can make processes

more efficient. The company can also consider creating its own website in order to capitalize

on the opportunity of Online Commerce. Given that more people are having access and using

the internet for their convenience, the company might be able to reach to more people and

increase its sales. The company can also decide to partner up with other companies in order

to reach a wider audience. While the threats of established brands are unavoidable, the

company can be more aggressive with its marketing campaign. This can make people have

brand awareness with Peek-A-Tee. Given that Peek-A-Tee designs may be cyclical in nature,

the company is encouraged to bring out more designs so that people will always have the

option to buy a shirt with timely design. This may include conducting more marketing

research, focused group discussions, which can allow the company to address the various

needs of its customers.

C. Lessons Learned

The people behind Peek-A-Tee realized that creating a plan for promotions is a lot

easier than implementing it. Furthermore, they also saw that being present in social media is

not enough to acquire a decent following. It is not enough to have a good product, what

matters just as much is the ability to bring the said product in front of the customer and

acquire enough interest for them to buy it.


The owners also saw how difficult it is to compete in the apparel industry given that

competition is very heavy. This is a challenge for products to be truly differentiated in order

to have a value that cannot be easily acquired in other products. The owners also realized

how difficult it can get to have a fully functional online platform for orders. Customers may

suddenly cancel on their orders and that there is no certainty that they will buy even if they

have filled up the form. This was a challenge for the company to be more flexible in meeting

the demands of the customers. Furthermore, we also saw that forecasting shirt sizes for

various designs is very difficult since theres no particular pattern to it. This in turns may lead

to stock which may be hard to turnover.

Peek-A-Tee also saw the significance of having various contingency plans because

not having one may greatly delay the operations of the company. Since the inventory was

only received at the latter part of December, it resulted to the company having no sales

which could have been an opportunity to have profit. The company also learned that having a

logistics and production plan is just as important as having a marketing and sales plan. Peek-

A-Tee had difficulties at the beginning in transferring raw materials, and in making it to the

final product ready for sale. Having a production plan can be very tedious and it may lead to

companies looking for a second and third option in order to make sure that there will always

be inventory ready for sale.

Peek-A-Tee learned that the actual costs of production can be very different from that

of the forecasted price. There are different factors that are hard to account for in a theoretical

level which only gets its specific figure once negotiations are being made with different

suppliers. It is better to overestimate when it comes to forecasting because underestimating

costs results to unfeasible business plans which may need some serious revisions.

Lastly, Peek-A-Tee learned that money was just a reward for the job well done and

for one to gain money, one must first spend and lose money in the first place. Owners having
to invest their own money created an incentive for them to be better in handling money and

bargaining well with suppliers. The company also realized that even if a person can have

higher profit by working alone, working as a team allows for the group to contribute their

expertise in an organized manner which allows for scalable growth since they are able to

operate better than a person who does the job alone.

4. Prospects

A. Growing the Business

The plan for expansion will include exposures to bazaars and the like. Though the

company would largely be in digital and online, the primary goal of its physical presence at

bazaars is to boost sales and expose the product to a larger public. The group will retain this

type of strategy for the short-term because of the limited initial investment. Moreover,

attaining a strong product position in an online environment may be the most cost-effective

for the group as a startup, but at the same time very difficult due to the ease of entry of

different groups that could potentially create an external risk of increasing competitor

presence.

Furthermore, constant consideration of the customers feedback and criticism by

making necessary changes based on their suggestions can positively affect and maintain the

companys overall performance. In addition, choosing cost-benefit solutions is one way of

sustaining the business. Customer trust depicts an important role for ensuring sustainability

especially for startup businesses.

In terms for the groups competitive strategy, focusing on differentiation will be the

most effective way to attain competitive advantage among different competitors. In order to

maintain at a suitable level of competitive advantage, constant innovation and evaluation of

product is key. However, in order to keep the styles up to date, trend research and customer

feedback will ultimately be the guide. For instance, since the companys designs are largely
based on pop culture and current trends, the company plans to create new designs every

season, about every three months, to accommodate the changing consumer preferences. In

addition, the company would also increase the range of sizes of shirts it offers because during

the initial stage of operations, the company had only produced small, medium, and large. The

demand for extra small and extra-large sized was unfortunately not accounted for. Hence, the

company would be producing extra-large and extra small sizes for the upcoming designs.

Moreover, the company would also conduct a next stage for market research in order to

gauge whether the expansion to polo shirts and long sleeves from merely t-shirts is a viable

option. As of the moment, the manufacturing process is still relatively unstable due to the

startup nature of the company, therefore limited edition designs are still not being

implemented due to the negative results derived from the cost-benefit analysis. However,

once the companys production processes has stabilized, then the way for the production of

limited edition designs shall be paved.

Every month, top management shall hold meetings amongst themselves in order to formulate

additional strategies to be able meet the companys overall objectives and in order to evaluate

the companys overall performance.

Given that the company is a newcomer in the industry, and is likely unheard of yet,

the company may opt to use advertising in order to attract customers, but only as much as

resources are able to. The form of media in which the company would advertise in would

highly likely be conventional ones such as newspapers, flyers/posters, magazines, and if

financially possible, radio. Given that social media sites, such as Facebook, Twitter, and

others are virtually free, it would be wise for the company to utilize these sites, as much as

possible. The company also plans to participate in a couple of local fashion/apparel events

and apply for participation in the aforementioned events and represent the company in

promoting its product, the Peek A tee.


Meanwhile, the company shall produce and distribute flyers, small posters, stickers

more frequently than large tarpaulins and banners. However, the distribution of such

promotional items will be highly subjected to the limited funds of the startup company.

Hence, online platforms such as Facebook, Twitter, and Instagram shall be the main

promotional tools the company will utilize. Not only are they cost-efficient, but also highly

effective and more convenient to manage.

If sales and revenue allows it, the company may also opt to establish physical stores in order

to attract more consumers. This, however, will be not a major priority of the company as it is

highly costly and in this digital age, online stores as a distribution platform have proven to be

highly effective.

B. Funding Plan

The production process of the companys products is all outsourced, therefore there

are virtually neither machines nor employees required to operate. But the company is in

charge of acquiring all the raw materials to ensure optimum quality for all outputs. As

aforementioned, the company has plans to build physical infrastructures, if and only if, the

sales and net income proves it to be a viable option as it is not a main concern as of the

moment.

Moreover, promotions and advertising will encompass all promotional materials such

as flyers small posters, stickers, tarpaulins and banners as well as paid advertising in online

platforms such as Facebook. Also, another distribution avenue the company will utilize is

bazaars which will incur rent expenses. Lastly, the company would need funding for

transportation expenses in order to be able to transport its products from raw materials

suppliers to manufacturing to storage and eventually, to bazaars and the consumers.

*Figures are based on actual monthly expenses incurred during the initial run of the

company.
Uses of Funds (Refer to Figure 11)
The sources of the paid-up capital by the various incorporators of the company would either

be coming from minimal loans, from either parents or friends or both, or from the

incorporators own savings. Each incorporator would be responsible in acquiring their share

of the total initial investment required for by the company. If for instance an incorporator has

acquired a loan, he/she will be solely accountable for said amount. Since the company has a

relatively low barrier to entry, the amount required to kickstart, or in this case, continue

and/or expand the production process, is relatively small. Therefore, issues regarding the

acquisition of amounts would be virtually manageable.

The computation of the paid-up capital required for each incorporator would be on a one-year

basis. This basis positively assumes that the net profit for the first year would be able to

sustain the production processes of the company for the next year, then the profit for the

second year would sustain the third, and so on for the years to come.

Statement of Sources (refer to Figure 12)

C. Improved Business Plan

Year 1

Vision-Mission Statement

In Year 2017, the companys vision and mission statement will not change as not to

make the consumers confuse about what the company is especially that it is relatively new in

the market.

Financial and Non-Financial Objectives

The objectives of the financial and non-financial objectives of the company would be

the same. The company will still aim to increase its overall share in market in the end of Year

2017 by having more physical stores and venturing into new operations.

Marketing Plan with Competitive Strategies


In terms of its competitive strategies, the company plans to maximize social media

such as Facebook, Twitter and Instagram through aggressive promotional efforts. This will

not only increase the awareness of the consumers but also an avenue for online retailing. The

company will still continue to join bazaars to introduce its product physically to potential

customers.

Financial Plan and Sales Projections

Sales projection for the Year 2017 will be determined by the apparel industrys annual

growth rate of 2.67% and the forecast of the people who are willing to try a new clothing

brand and willing to purchase at computed SRP. It will also be based on the past actual

demands during the first year. At sales volume of 584 units for the first year of operations,

sold at Php 349 with COGS at 180 per unit, and annual operating expenses of Php 30,500, the

net income for the company is Php 79,357.39. Cash flows for this year will be Php 79,357.39.

Finally, both assets, and liabilities and equity equal Php 112,997.39.

Year 2

Vision-Mission Statement

In Year 2018, the company will still retain its vision and mission statement. The main

reason for doing this is to maintain the companys values, culture and goals that have been

established already.

Financial and Non-Financial Objectives

The financial and non-objectives for this year is to increase its share in the market by

having permanent stores either in malls or in other establishments. By this year also, the

company aims to have recovered a minimum of 80% of its total initial investments.

Marketing Plan with Competitive Strategies

If the profit allows, physical retailing such as permanent store inside a mall would be
one of the biggest factors for the companys success. Continuous benchmarking with the

competitors in order to penetrate the market is also necessary and crucial during the year.

Financial Plan and Sales Projections

Sales projection for the Year 2018 will be determined by the apparel industrys annual

growth rate of 2.67% and the forecast of the people who are willing to try a new clothing

brand and willing to purchase at computed SRP. It will also be based on the past actual

demands during the first year. At sales volume of 720 units for the second year of operations,

each unit sold at Php 349 with COGS at 180 per unit, and annual operating expenses of Php

30,500, the net income for the company for this year is Php 104,848.70. Cash flows for this

year will be Php 184,206.09. Finally, both assets, and liabilities and equity equal Php

217,846.09.

Year 3

Vision-Mission Statement

Lastly, for the Year 2019, the vision statement of the company would slightly change.

The vision statement would not just be a well-known company but rather to be an established

fashion brand. The statement fashion brand that helps spread positivity and happiness in

every wear will be retained. For the mission statement, it will not change because the

company still aims to be one of the leading apparels in the country.

Financial and Non-Financial Objectives

For its financial and non-financial objectives, its market share should increase

significantly due to physical stores built last year.

Marketing Plan with Competitive Strategies

If physical stores inside malls will be successful, the company will add more branches

in different malls in different places in Metro Manila. Online retailing will be push further to

be more aggressive in the market.


Financial Plan and Sales Projections

Sales projection for the Year 2019 will still be determined by the apparel industrys

annual growth rate of 2.67% and the forecast of the people who are willing to try a new

clothing brand and willing to purchase at computed SRP. It will also be based on the past

actual demands during the first year. At sales volume of 887 units for third year of operations,

each unit sold at Php 349 with COGS at 180 per unit, and annual operating expenses of Php

30,500, the net income for the company for this year is Php 136,255.01. Cash flows for this

year will be Php 320,461.10. Finally, both assets, and liabilities and equity equal Php

354,101.01.

D. Projected Financial Statements

(Refer to Figures 13, 14, and 15)

Appendices

Figure 1

Month
Key Milestones
December January February March

Revamping of design concept

Production of shirts

Start of selling

Promotional preparations

Pop up Stall in Sto Domingo

Launch of Facebook page

Launch of Instagram account

Ateneo Trade and University Trade

AMA Piazza bazaar

MECO SOSS bazaar


Figure 2

Key Result Area Performance Indicators

Sales Develop sales promotions

Develop good relationships with suppliers and customers

Achieve gross profit target

Update strategies depending on the current sales


performance

Product delivery

Marketing Open to social media to increase brand awareness

Launch new designs

Increase market/customer reach

Increase of distribution channels

Production Find and coordinate with suppliers

Find less costly alternatives

Tracking of inventory

Quality control

Finance Generate financial statements to track expenses and


returns

Generate sales projections and compare with actual sales

Generate capital

Figure 3

Key Result Performance Projected Actual


Area Indicators
Sales Develop sales Facebook page Facebook page (+
promotions Ateneo Trade Design contest and
Instagram Choose your Peek)
Bazaars Ateneo Trade
Instagram
Bazaar
Pop-up stall
Push marketing

Develop good Continuous work Supplier backed out due to


relationships relationship with suppliers; previous commitments but
with suppliers Constant involvement in was able to work
and customers customers feedbacks and harmoniously with other
criticisms suppliers; Involved in the
feedbacks and criticisms of
customers and kept up with
the demand

Achieve gross Gross Profit of 30,000.00 Gross Profit of 32,507.60


profit target pesos pesos

Update Strategies include Facebook Updated and added


strategies page/Ateneo Trade, strategies such as contests,
depending on Instagram, and bazaars pop-up stalls, push
the current sales marketing, and promotions
performance in bulk buying

Product delivery Meet-ups for online selling Meet-ups for online selling
and bazaar selling and bazaar selling

Marketing Open to social Facebook Facebook


media to page/Ateneo Trade page/Ateneo Trade
increase brand Instagram (+ Design Contest
awareness and Choose your
Peek)
Instagram

Launch new Six different designs Two different outside


designs designs with three different
inside designs for each
outside design

Increase Web presence; Bazaars Web presence; Push


market/customer marketing; Bazaars; Pop-up
reach stall

Increase of Order link through Order link through


distribution Facebook page/Ateneo Facebook page/Ateneo
channels Trade; Bazaars Trade and Instagram;
Bazaars; Pop-up Stall
Production Find and Continuous work Supplier backed out due to
coordinate with relationship with suppliers previous commitments but
suppliers was able to work
harmoniously with other
suppliers

Find less costly Supplier of cloth - have it Supplier of shirt - print


alternatives sewn to shirt - print designs designs; buy cloth sew
- sew pocket - supplier of pockets - self-packaged
packaging; or Buy pocket
tees - remove pockets - print
designs - sew pockets -
supplier of packaging

Cost: 180 pesos


Cost: 150.8 pesos (white)
and 171.2 pesos (black)

Tracking of 625 pesos per month 33,640 pesos (December)


inventory

Quality control Silk screen printing Heat press printing (less


prone to cracks and does not
fade with multiple washes

Finance Generate Income statement, statement Updated income statement,


financial of cash flow, balance sheet statement of cash flow,
statements to and break-even analysis to balance sheet and break-
track expenses track expenses and returns even analysis to track
and returns expenses and returns for
each month

Generate sales Sales per Month: Sales per Month:


projections and 83 units December: 0
compare with January: 37
actual sales February: 54
March: 85

Generate capital Capital of 1,750 pesos per Capital of 2803.33 pesos per
month month

Figure 4

Peek A Tee Corporation


Projected Income Statement
For the Period Ending March 31, 2017

Budget Original Budget Flexed Actual Variance


Output 383 176 176
Sales 115,000.00 52,800.00 61,424.00 8,624.00
Variable
Overhead (69,000.00) (31,680.00) (28,866.40) 2,813.60
Fixed Overhead (10,166.67) (4,667.83) (3,078.00) 7,088.67
Total 35,833.33 16,452.17 29,479.60 13,027.43
*a multiple of 0.46 (actual/original) is multiplied with original to get flexed
Figure 5

Peek A Tee Corporation


Income Statement
For the Period Ending March 31, 2017

December January February March


Product Mix White Black White Black White Black White Black
Sales Volume 0 0 14 23 21 33 27 58
4,886.0 8,027.0 7,329.0 11,517. 9,423.0 20,242.
Gross Revenue 0.00 0.00
0 0 0 00 0 00
Sales Discount 0.00 0.00 0.00 0.00 0.00 0.00 50.00 0.00
2,111.2 3,937.6 3,166.8 5,649.6 4,071.6 9,929.6
Cost of Goods Sold 0.00 0.00
0 0 0 0 0 0
Gross Margin 0.00 6,864.20 10,029.60 15,613.80
Operating Expenses
Advertising Expense 0.00 0.00 322.00 256.00
Rent Expenses 0.00 0.00 0.00 2,500.00
Total Operating
0.00 0.00 322.00 2,756.00
Expenses
Net Income 0.00 6,864.20 9,707.60 12,857.80

Figure 6

Peek A Tee Corporation


Statement of Cash Flows
For the Period Ending March 31, 2017

December January February March


Cash Flow from Operating Activities
Net Income 0.00 6,864.20 9,707.60 12,857.80
Change in Inventories (33,640.00) 6,048.80 5,029.60 14,001.20
Net Cash Provided by Operating Activities (33,640.00) 12,913.00 14,737.20 26,859.00
Cash Flow from Investing Activities
Net Cash Provided by Investing Activities 0.00 0.00 0.00 0.00
Cash Flow for Financing Activities
Equity Investment 33,640.00 0.00 0.00 0.00
Net Cash Provided by Financing Activities 33,640.00 0.00 0.00 0.00
Net Increase (Decrease) in Cash 0.00 12,913.00 14,737.20 26,859.00
Cash Balance, Beginning 0 0.00 12,913.00 27,650.20
Cash Balance, End 0.00 12,913.00 27,650.20 54,509.20

Figure 7

Peek A Tee Corporation


Balance Sheet
For the Period Ending March 31, 2017

December January February March


ASSETS
Cash 0.00 12,950.00 27,741.20 54,735.20
Inventory 33,640.00 27,591.20 22,561.60 8,560.40
Total Assets 33,640.00 40,541.20 50,302.80 63,295.60
LIABILITIES
Total Liabilities 0.00 0.00 0.00 0.00
EQUITY
Capital 33,640.00 33,640.00 33,640.00 33,640.00
Retained Earnings 6,901.20 16,662.80 29,655.60
Total Liabilities and Equity 33,640.00 40,541.20 50,302.80 63,295.60

Figure 8

BreakEven Analysis
Variance CF CM CP KT KR KD
Units Produced 46 45 33 34 33 33
Product Mix Percentage 20.5% 20.1% 14.7% 15.2% 14.7% 14.7%
Net Unit Selling Price 349 349 349 349 349 349
Net Unit Variable Cost 171.2 171.2 171.2 150.8 150.8 150.8
Contribution Margin 177.8 177.8 177.8 198.2 198.2 198.2
Weighted Ave CM/unit 36.5 35.7 26.2 30.1 29.2 29.2
Total Fixed Cost w/ Investment 21,199.26
Total Break Even Units 113
BreakEven units per Variance 23 23 17 17 17 17
BreakEven in pesos 8,128.87 7,952.15 5,831.58 6,008.29 5,831.58 5,831.58

Figure 9

Key Internal Factors Weight Rating Weighted


Score

Strengths

Unique Designs 0.2 4 0.80

Flexibility to Demands 0.15 4 0.60

Procurement 0.15 3 0.45

Logistics 0.15 3 0.45

Operations 0.05 3 0.15

Weaknesses

Technology Development 0.15 1 0.15

Marketing and Sales 0.1 2 0.2

Firm Structure 0.05 1 0.05

TOTAL 1 - 2.85

Figure 10

Key External Factors Weight Rating Weighted


Score

Opportunities

Market Access 0.2 3 0.6


Online Commerce 0.1 4 0.4

Higher Income 0.15 3 0.45

Partnership with other companies 0.1 3 0.3

Threats

Presence of established retail stores 0.15 2 0.30

Increasing competition 0.2 1 0.2

Cyclical trends 0.1 1 0.1

TOTAL 1 - 2.35

Figure 11

Expense Value (Php)


Transportation Expenses (1 year) 15,000
Promotions and Advertising (1 year) 5,500
Raw Materials and Outsourcing Expense (1 207,000
year)
Rent Expense (1 year) 10,000
Miscellaneous (1 year) 2,500
Total 240,000

Figure 12

Incorporator Number of Shares Par Value (in Php) Total Paid-up


Subscribed Capital (in Php)

Cheung, Seanne 4,000 10 40,000

De Jesus, Ryan 4,000 10 40,000

Manaois, Jerome 4,000 10 40,000

Ortega, Charlon 4,000 10 40,000

Salvatierra, Shereen 4,000 10 40,000


Tan, Neil 4,000 10 40,000

Total 24,000 10 240,000

Figure 13

Peek A Tee Corporation


Projected Income Statement
For the Years 2017-2029

2017 2018 2019

Sales Volume 584 720 887

Gross Revenue 203,937.39 251,259.02 309,561.17

Cost of Goods Sold 94,080.00 115,910.32 142,806.15

Gross Margin 109,857.39 135,348.70 166,755.01

Operating Expenses
Transportation
Expenses 15,000.00 15,000.00 15,000.00

Advertising Expense 5,500.00 5,500.00 5,500.00

Rent Expenses 10,000.00 10,000.00 10,000.00


Total Operating
Expenses 30,500.00 30,500.00 30,500.00

Net Income 79,357.39 104,848.70 136,255.01

Figure 14

Peek A Tee Corporation


Projected Statement of Cash Flows
For the Years 2017-2019

2017 2018 2019

Cash Flow from Operating Activities


Net Income 79,357.39 104,848.70 136,255.01

Change in Inventories (33,640.00) 0.00 0.00

Net Cash Provided by Operating


Activities 45,717.39 104,848.70 136,255.01

Cash Flow from Investing Activities

Purchase of Delivery Vehicle

Purchase of Equipment for Production

Purchase of Furniture and Fixtures

Net Cash Provided by Investing


Activities 0.00 0.00 0.00

Cash Flow for Financing Activities

Equity Investment 33,640.00 0.00 0.00

Net Cash Provided by Financing


Activities 33,640.00 0.00 0.00

Net Increase (Decrease) in Cash 79,357.39 104,848.70 136,255.01

Cash Balance, Beginning 0 79,357.39 184,206.09

Cash Balance, End 79,357.39 184,206.09 320,461.10

Figure 15

Peek A Tee Corporation


Projected Balance Sheet
For the Years 2018-2020

2017 2018 2019

ASSETS

Cash 79,357.39 184,206.09 320,461.10

Inventory 33,640.00 33,640.00 33,640.00


Total Assets 112,997.39 217,846.09 354,101.10

LIABILITIES

Total Liabilities 0.00 0.00 0.00

EQUITY

Capital 33,640.00 33,640.00 33,640.00

Retained Earnings 79,357.39 184,206.09 320,461.10

Total Liabilities and Equity 112,997.39 217,846.09 354,101.10