I.

INTRODUCTION

Filinvest Land, Inc. (FLI) is one of the leading real estate developers in the Philippines. It
is a subsidiary of Filinvest Development Corporation (FDC), which has more than 40 years of
experience in real estate development. FLI was incorporated on November 24, 1989 as Citation
Homes, Inc. and changed its name to FLI on July 12, 1993. It began commercial operations in
August 1993 after FDC spun off its real estate operations and transferred all related assets and
liabilities to FLI in exchange for shares in FLI. FLI was listed on the Philippine Stock Exchange
(PSE) on October 25, 1993.

FLI’s business has historically focused on the development and sale of affordable and
middle-market residential lots and housing units to lower and middle-income markets throughout
the Philippines. It has developed over 2,400 hectares of land, and provided home sites for over
150,000 families, which makes it one of the largest home providers in the Philippines today. In
recent years, FLI has expanded its residential business to include other income segments (high-
end) and themed residential projects with a leisure component, such as farm estates and
developments anchored by sports and resort clubs.

FLI has substantial experience in developing and introducing new formats to the residential
real estate market. The Company intends to be at the forefront of market changes by continually
innovating and introducing new project formats to anticipate and meet market demands. Recent
innovations includes:

(a) Homes situated on small lots designed to be expanded vertically through the addition
of a second storey without requiring the occupants to vacate the home while the second storey is
being added.

(b) The “Entrepreneurial Village” or “Asenso Village” concept which is the result of a
collaborative effort with the Government to allow entrepreneurs with small- and medium-size
businesses to live and work in a residential development with access to Government agencies that
assist small businesses.

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 FLI is also a pioneer in the development of very large master-planned township
developments which provide a convenient mix of commercial, industrial and residential uses.

FLI currently has over 150 projects located in 48 cities and municipalities nationwide. The
Company has an extensive network of sales offices, in-house sales agents and independent brokers
located throughout the Philippines, as well as accredited brokers in countries and regions with
large Overseas Filipino Workers (OFW) and expatriate Filipino populations (such as Japan, Italy,
the United Kingdom and the Middle East). Approximately half of FLI’s real estate sales are
directly or indirectly derived from Overseas Filipinos (OFs).

FLI has, over the years, accumulated an extensive, well-located, low-cost landbank. As of
the end of 2016, FLI’s landbank stood at 2,390 hectares, bulk of which is located just outside
Metro Manila in the nearby provinces of Rizal, Bulacan, Batangas, Cavite and Laguna, as well as
in growth areas such as Cebu, Davao and General Santos City in South Cotabato province.

FLI currently has significant investments in rental properties for office and retail tenants.
Among these investments are: (1) The Festival Supermall, in Filinvest City (FC) in Muntinlupa
(southern Metro Manila), (2) A 60% stake in Filinvest Asia Corporation which owns half of
PBCom Tower within the Makati Central Business District, and (3) A 60% stake in Cyberzone
Properties, Inc., developer of office buildings in Northgate Cyberzone, a 10-hectare Business
Process Outsourcing (BPO) office park with multinational tenants. Festival Supermall is the largest
shopping center in Southern Metro Manila with a gross area of 200,000 square meters. It has over
600 retail stores and outlets, ten cinemas and two themed amusement centers. It also has exhibit,
trade and music halls which are leased out to events like trade fairs. PBCom Tower is currently
the tallest building in the Philippines with 52 floors. It is located at the corner of Ayala Avenue
and Herrera Street in Makati City. Filinvest Asia Corporation owns 35,000 square meters of
leasable office space in PBCom Tower, which is leased out to about 30 tenants which include
multinational companies and BPO firms. Meanwhile, Northgate Cyberzone, the BPO campus
within Filinvest Corporate City, currently has eighteen (18) office buildings. This makes FLI the
leader in developing offices with infrastructure to support IT-related and BPO businesses in the
growing southern Metro Manila area.

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 FLI has a 20% stake in Filinvest Alabang, Inc. (FAI), the developer of the 244-hectare
Filinvest City (FC). Since the start of its development in 1995, FCC has grown to become a major
destination in southern Manila that services all segments of the population with a wide array of
retail, office and residential developments. The corporate city is home to key anchors such as the
Asian Hospital and a fast growing office base in the Northgate Cyberzone. The second busiest
transport terminal in Metro Manila is in the immediate vicinity, making FCC a major gateway for
commuters going into and out of Metro Manila from the south. The completion of the extension
of the Skyway elevated road to Alabang will significantly enhance the value of FCC and further
increase its attractiveness as the location of choice for offices and residential living in the South of
Metro Manila.

II. RESEARCH DESIGN AND METHODOLOGY

Data and Information

Methodology

III. COMPANY’S MISSION, OBJECTIVE, AND SHARED VALUES.

MISSION:

The primary responsibility of Filinvest Land is to the people that inhabit the cities,
communities, and homes it has created. Filinvest will continually contribute to the economic
development of society and will function as a good corporate citizen.

OBJECTIVE:

Filinvest shall provide its customers with universally competitive products that are valued
not only for quality but in terms of affordability for all income levels. Only through research and

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development, innovation, and the use of appropriate technology can high quality services be
provided.

Affordable housing shall always be a high priority in company endeavors. Coupled with
safeguarding and maximum utilization of company assets, this long-term view (one of holding
permanent the strategic health of Filinvest) should lead to better and sounder returns for
stockholders. The continuous pursuit of this mission can only result in industry leadership.

SHARED VALUES

In the delivery of service to these people, high quality will be the one and only standard. A
singularity of interest exists between the company and its employees, providing good working
conditions, compensation based on performance, opportunity for growth and employment security
are musts.

Innovation, professionalism, and teamwork are highly valued. The highest standards of
business and moral ethics shall be exercised.

The long-term strategic health of Filinvest will always be paramount over short-term
financial gains.

REVIEW OF THE EXISTING VISION AND MISSION

Parameter Y/N Why?

Does it clearly answer the Y It is to offer affordable

question: What do we want service which to the
to become? people to inhabit the
cities, communities and
homes it has created

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Is it concise enough yet N It is too short but the
inspirational? quality of inspiration is
high that it can
encourage its costumer
to patronize their
products

Does it give clear N Since the business is in

indication as to when it going concern principle,
should be attained? there mission and vision
should be continuous as
to its action

Parameter Y/N Why?

CUSTOMERS: Who are Those are in the low to

the firm’s customers? middle income earner
and overseas Filipino
Worker

PRODUCTS OR Residential lots, housing

SERVICES: What are the unit, other income
firm’s major products or segments (high-end) and
services? themed residential
projects with a leisure

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 component, such as farm
estates and
developments anchored
by sports and resort
clubs.

MARKETS: To those extensive but

Geographically, where low-cost land bank,
does the firm compete? located outside of metro
manila in the nearby
provinces of Rizal,
Bulacan, Batangas,
Cavite, and Laguna.

TECHNOLOGY: Is the
firm technologically
current?

CONCERN FOR
SURVIVAL, GROWTH
AND PROFITABILITY: Is
the firm committed to
growth and financial
soundness?

PHILOSOPHY: What are

the basic beliefs, values,

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 aspirations and ethical
priorities of the firm?

SELF-CONCEPT: What is
the firm’s distinctive
competence or major
competitive advantage?

CONCERN FOR PUBLIC

IMAGE: Is the firm
responsive to social,
community and
environmental concerns?

CONCERN FOR
EMPLOYEES: Are
employees a valuable asset
of the firm?

REVISED VISION AND MISSION

Revised Vision Statement

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 Parameters Y/N Why?

Does it clearly answer the

question: What do we want
to become?

Is it concise enough yet

inspirational?

Does it give clear

indication as to when it
should be attained?

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Revised Mission Statement

Parameter Y/N Why?

CUSTOMERS: Who are

the firm’s customers?

PRODUCTS OR
SERVICES: What are the
firm’s major products or
services?

MARKETS:
Geographically, where
does the firm compete?

TECHNOLOGY: Is the
firm technologically
current?

CONCERN FOR
SURVIVAL, GROWTH
AND PROFITABILITY: Is

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the firm committed to
growth and financial
soundness?

PHILOSOPHY: What are

the basic beliefs, values,
aspirations and ethical
priorities of the firm?

SELF-CONCEPT: What is
the firm’s distinctive
competence or major
competitive advantage?

CONCERN FOR PUBLIC

IMAGE: Is the firm
responsive to social,
community and
environmental concerns?

CONCERN FOR
EMPLOYEES: Are
employees a valuable asset
of the firm?

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IV. EXTERNAL ANALYSIS

4.1 General Environment

4.1.1 Political and Governmental Forces

- Change in Tax Law “Tax reform Acceleration and inclusion law”
- Size of the government fund/budget: According to the administration of Duterte
“the 2018 general appropriations act, which is 12% higher than last year’s
budget, will primarily support infrastructure development and free education in
state universities and colleges, universal health care, free irrigation” related to
this, in the 2018 national budget the Department of public works and highways
(DPWH) with allocation of 637.86 billion. This may have a huge impact to the
real estate industry, the time consume in the traffic in the Philippines may
reduce which leads to better transportation subsequently consumer may use to
go home rather to have condominiums.
4.1.2 Economic Forces
4.1.2.1 GDP and GNP
- According to the Philippine statistic Authority, the Philippines economy
grew an annual 6.9 percent in the September of 2017, further, an
upwardly revised of 6.7 percent expansion in the last quarter of the year
2017, furthermore, the market consensus of the Philippines grows up to
6.5 percent. The said growth was the strongest since the third quarter of
2016, it is happened because of the faster pace and the rose of the
government spending from 7.1 percent last June year 2017 to 8.3
percent last September it is because of the large infrastructure
construction program e.g Slex-Nlex skyway, also the decrease in private
consumption from 7.2 percent to 4.5 percent it is because of the
decelerate of the top contributor in the house hold expenditure, as the
food and non-alcoholic consumption from 8.4 recorded from the
previous year to 3.4 percent, aside from that, the housing, water,

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 electricity, gas and fuels slowed down by 2.6 percent from 8 percent of
the previous year 2016, investment and the increase in exports.
- Services are the biggest sector of the Filipino economy and account for
57 percent of total GDP. Within services the most important segments
are: trade, repair of motor vehicles and household goods (17 percent of
total GDP); real estate, renting and business activities (11 percent);
transport, storage and communication (8 percent); financial services (7
percent) and public administration, defense and social security (4
percent). Industry accounts for 31 percent of GDP. Within industry,
manufacturing (22 percent of total GDP) and construction (5 percent)
are the most important. Agriculture contributes the remaining 12 percent
of GDP.
4.1.2.2 Real Estate, Renting, and Other Business Activities (RERBA)
- RERBA posted a 7.7 percent growth in the third quarter of 2017, slower
than the 8.9 percent growth recorded in the previous year. The growth
was driven by Renting and Other Business Activities which grew by
11.0 percent as compared with the 13.1 percent growth in the same
period of the previous year. Meanwhile, Ownership of Dwelling sped
up by 2.9 percent from 2.8 percent growth in the third quarter of 2016.
Real Estate expanded by 7.7 percent, slower compared with the 9.7
percent growth recorded in 2016.
4.1.2.3 Tax impositions that increase the take home profits of the workers
4.1.2.4 Changes in market rental rates;
4.1.2.5 BPO’s
- In 2016, BPO in the Philippines continued to experience a positive
growth rate. Activity in the industry appears to be robust enough such
that the industry’s projected total income range would reach US$ 40 to
55 billion by 2020. The Industry, currently employing about 1 million
Filipinos, is also projected to increase employment by providing a total

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 of about 1.3 to 1.5 million new jobs in the next three years, both in terms
of employees directly and indirectly employed. The BPO industry is
regarded as a priority by the Philippines Development Plan as essential
to the country’s ten high priority development areas. To further entice
investors, existing government programs include incentives such as tax
holidays, tax exemptions, and simplified export and import procedures.
For local industry sectors, the leading subsector is Call Centers. The
Philippines BPO industry has overtaken India as the leading call center
country, and due to this, the subsector is projected to continue to
maintain the largest contribution to the industry’s growth in future
years. According to a UA&P (University of Asia and the Pacific)
industrial economist, the call center sector is projected to continue a
robust growth rate until 2020.
4.1.3 Social, Cultural and Demographic Forces
4.1.3.1 Population is increasing
- According to world meter in 2016 the Philippines population is
103,320,222 and it increase in the year 2017 to 104,918,090 with the
yearly percentage change of 1.55%
4.1.3.2 Number of employed, unemployed and underemployed
- According to Philippine Statistic Authority the preliminary results of the
Annual Labor and Employment Estimates for 2016 based on the average
of the four (4) LFS rounds (January, April, July and October) reported
an annual labor force participation rate of 63.4 percent out of the 68.1
million population 15 years old and over. Compared to the 2017 annual
labor force participation rate with the same basis it declines to 61.2
percent out of 69.9 million. This is equivalent to about 43.2 million to
42.8 million economically active population comprising either the
employed or unemployed persons.

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 - The annual employment rate in 2016 was reported at 94.5 percent or
approximately 40.8 million matched to the annual employment rate in
2017 was reported at 94.3 percent approximately 40.3 million, it was
decreased by .2 percent or approximately 500,000
- The 2016 annual unemployment rate was 5.5 percent it is about 2.4
million match up to 2017 annual unemployment with the rate of 5.7
percent it is about 2.4 million.
- The underemployed persons or those employed persons who express the
desire to have additional hours of work in their present job or to have
additional job, or to have a new job with longer working hours was
estimated at 7.5 million persons corresponding to an underemployment
rate of 18.3 percent. Judge against 2017 underemployed with the
estimate at 6.5 million persons corresponding to an underemployment
rate of 16.1 percent.
4.1.3.3 Lifestyle choice
- Institutional population constitutes that part of the total population
whose usual place of residence are collective or institutional living
quarters (ILQs) such as hotels, motels, lodging houses, and dormitories;
hospitals and nurses' homes; welfare institutions; corrective and penal
institutions; convents, nunneries, seminaries, and boarding schools;
military camps and stations; logging, mining, construction/public works
camps; oceangoing and interisland/coastal vessels; and refugee camps.
As of August 1, 2015, the institutional population of the country totaled
405,588 persons, or 0.4 percent of the country's total population of
100,981,437 persons. This figure is higher by 168,453 persons
compared with the 237,135-institutional population that was reported in
2010. 114,392 persons came from hotels, motels, lodging houses, and
dormitories.
4.1.3.4 Number of OFW and their remittance

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 - According to the survey done by the PSA, the number of Overseas
Filipino Workers (OFWs) who worked abroad at any time during the
period April to September 2015 was estimated at 2.4 million. In the
same period any time during the April to September 2016, the number
of the overseas Filipino workers decrease to 2.2 million.
- In the same survey, the total remittance sent by OFWs during the period
April to September 2015 was estimated at 180.3 billion pesos. These
remittances included cash sent home (135.6 billion pesos), cash brought
home (37.3 billion pesos) and remittances in kind (7.4 billion pesos).
However, even though the number of the OFW decrease the total
remittance sent by OFWs during the period April to September 2016
was estimated at 203.0 billion pesos higher than last survey period.
These remittances included cash sent home (146.0 billion pesos), cash
brought home (45.7 billion pesos) and remittances in kind (11.1 billion
pesos).
4.1.3.5 Staycation
- Accordingly, the term staycation has been rising every year in the
Philippines since 2011. In fact, the average increase has been
10%. This implies that more and more Filipinos are searching for
staycation options and would prefer to stay not only in the country but
also in close proximity to home. There are some factors that account
for this increasing staycation trend in the Philippines. Staycations
provide cheaper cost to a better alternative to inter-island or
international travel. It also provides them with that much-needed rest
and relaxation, much better than tiring themselves out again on a long
trip.
4.1.4 Natural Environment Forces
4.1.4.1 Climate change

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 - The Philippines has experienced a number of major natural catastrophes
over the years, including typhoons, droughts, volcanic eruptions and
earthquakes. There can be no assurance that the occurrence of such
natural catastrophes will not materially disrupt the Company’s
operations. These factors, which are not within the Company’s control,
could potentially have significant effects on the Company’s housing and
land development projects, many of which are large, complex estates
with infrastructure, such as buildings, roads and perimeter walls, which
are susceptible to damage. Damage to these structures resulting from
such natural catastrophes could also give rise to claims against the
Company from third parties or from customers, for example for physical
injuries or loss of property. As a result, the occurrence of natural or other
catastrophes or severe weather conditions may adversely affect the
Company’s business, financial condition and results of operations.
- Further, although the Company carries insurance for certain
catastrophic events, of types, in amounts and with deductibles that the
Company believes are in line with general real estate industry practice
in the Philippines, there are losses for which the Company cannot obtain
insurance at a reasonable cost or at all. Neither does the Company carry
any business interruption insurance. Should an uninsured loss or a loss
in excess of insured limits occur, the Company could lose all or a portion
of the capital invested in a property, as well as the anticipated future
turnover from such property, while remaining liable for any project
construction costs or other financial obligations related to the property.
Any material uninsured loss could materially and adversely affect the
Company’s business, financial condition and results of operations.
- To mitigate the impact of natural and other catastrophes on the
Company’s operations, the contractors are required to get Contractor’s
All Risk Insurance which covers all risks, including acts of God. Upon

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 the completion and turnover of the units to FLI, the Company gets
Commercial All Risk Insurance, which also includes acts of God, with
the amount insured equivalent to the construction cost. Even when the
unit is turned over to the buyer, and still under in-house financing, the
unit continues to be covered by Commercial All Risk Insurance. For the
properties FLI leases out, these are covered by Commercial All Risk
Insurance, which include acts of God, as well as Business Interruption
Insurance wherein lost revenues due to conditions covered by the
Commercial All Risk Insurance can be claimed.
4.1.4.2 Traffic in the Philippines,
- according to a study conducted by Boston Consulting Group, the
Philippines’ capital region placed at the 3rd spot of the most worst
traffic in Southeast Asia, and it shows Metro Manila Motorist and
Commuters get struck in the traffic for an average of 66 minutes daily.
On the top of 66 minutes traffic experience, driver also spend an average
of 24 minutes per day in searching of parking. Moreover, as expected,
according to the respondent from metro manila, the travel time doubles
during the rush hour in the morning and in the evening
4.1.5 Legal Forces
4.1.5.1 Government regulations that help in fair business competitions by securing
domestic company from foreign investors who would like to have business in
the Philippines
4.1.5.2 The Company is subject to Republic Act No. 6552 (the “Maceda Law”),
which applies to all transactions or contracts involving the sale or financing of
real estate through installment payments, including residential condominium
units (but excluding industrial and commercial lots). Under the Maceda Law,
buyers who have paid at least two years of installments are granted a grace
period of one month for every year of paid installments to cure any payment
default. If the contract is cancelled, the buyer is entitled to receive a refund of

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 at least 50% of the total payments made by the buyer, with an additional 5%
per annum in cases where at least five years of installments have been paid (but
with the total not to exceed 90% of the total payments). Buyers who have paid
less than two years of installments and who default on installment payments are
given a 60-day grace period to pay all unpaid installments before the sale can
be cancelled, but without right of refund. While the Company historically has
not experienced a material number of cancellations to which the Maceda Law
has applied, there can be no assurance that it will not experience a material
number of cancellations in the future, particularly during slowdowns or
downturns in the Philippine economy, periods when interest rates are high or
similar situations. In the event the Company does experience a material number
of cancellations, it may not have enough funds on hand to pay the necessary
cash refunds to buyers or it may have to incur indebtedness in order to pay such
cash refunds. In addition, particularly during an economic slowdown or
downturn, there can be no assurance that the Company would be able to re-sell
the same property or resell it at an acceptable price. Any of the foregoing events
would have a material adverse effect on the Company’s business, financial
condition and results of operations.
4.1.5.3 The Philippines’ property development industry is highly regulated. The
development of subdivision and other residential projects is subject to a wide
range of government regulations, which, while varying from one locality to
another, typically include zoning considerations as well as the requirement to
procure a variety of environmental and construction-related permits. In
addition, projects that are to be located on agricultural land must get clearance
from the Philippine Department of Agrarian Reform (“DAR”) so that the land
can be re-classified as non-agricultural land and, in certain cases, tenants
occupying agricultural land may have to be relocated at the Company’s
expense. Presidential Decree No. 957, as amended, (“PD 957”) and Batas
Pambansa Blg. 220 (“BP 220”) are the principal statutes which regulate the

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 development and sale of real property as part of a condominium project or
subdivision. PD 957 and BP 220 cover subdivision projects for residential,
commercial, industrial or recreational purposes and condominium projects for
residential or commercial purposes. The Housing and Land Use Regulatory
Board (“HLURB”) is the administrative agency of the Government which
enforces these statutes. Regulations applicable to the Company’s operations
include standards regarding: the suitability of the site; road access; necessary
community facilities; open spaces; water supply; sewage disposal systems;
electricity supply; lot sizes; the length of the housing blocks; and house
construction. All subdivision development plans are required to be filed with
and approved by the local government unit with jurisdiction over the area where
the project is located. Approval of development plans is conditioned on, among
other things, completion of the acquisition of the project site and the developer’s
financial, technical and administrative capabilities. Alterations of approved
plans that affect significant areas of the project, such as infrastructure and public
facilities, also require the prior approval of the relevant government unit. There
can be no assurance that the Company, its subsidiaries or associates or partners
will be able to obtain governmental approvals for its projects or that when
given, such approvals will not be revoked. In addition, owners of or dealers in
real estate projects are required to obtain licenses to sell before making sales or
other dispositions of subdivision lots and housing units. Project permits and any
license to sell may be suspended, cancelled or revoked by the HLURB based
on its own findings or upon complaint from an interested party and there can be
no assurance that the Company, its subsidiaries, associates or partners will in
all circumstances, receive the requisite approvals, permits or licenses or that
such permits, approvals or licenses will not be cancelled or suspended. Any of
the foregoing circumstances or events could affect the Company’s ability to
complete projects on time, within budget or at all, and could have a material
adverse effect on its financial condition and results of operations. To mitigate

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 the risk of development and application regulations in the Philippines having
an adverse effect on FLI’s projects, the Company’s Legal Department and
Engineering Department ensure that all projects are compliant with
Government regulations and specifications.
4.1.6 Technological
- Availability of technologies for efficient business transactions and operations
- Entry of the third-party internet provider
- Online reservation of rooms and payment in banks through the use of
cellphones.

4.2 Industry and Competitor Analysis

4.2.1 Five Porter’s Forces

FORCES

Rivalry among competing firms Strong force

Potential entry of new competitors Medium force

Bargaining power of consumers Strong force

Potential development of substitute products Medium force

Bargaining power of suppliers Medium force

4.2.1.1 Rivalry among competing firms

- Its direct competitors include Ayala Land Inc., Vista Land, Robinsons
Land, and DMCI.
4.2.1.2 Bargaining power of consumers
- There only few real estate developers who offers affordable and high
quality services. Therefore, the bargaining power of consumer is very
low

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 4.2.1.3 Potential development of substitute products
- According to Philippine Statistic Authority Final results of the 2014
Annual Survey of Philippine Business and Industry (ASPBI) showed
that a total of 4,862 establishments in the formal sector of the economy
were engaged in real estate activities. Majority (89.6%) or 4,358
establishments had a total employment (TE) of less than 20. The
remaining 504 establishments (10.4%) were with TE of 20 and over.
- Real estate activities with own or leased property had the highest
number of establishments with 4,240 establishments (87.2%) while the
rest of the firms were involved in real estate activities on a fee or
contract basis. The threat of hotels who offers contractual basis, and
check-in basis is a small threat compare to the competitors of the
business. Therefor the risk of substitution is low to average.
4.2.1.4 Bargaining power of suppliers
- The Parent Company’s cost of sales is affected by volatility in the price
of construction materials such as lumber, steel and cement. While the
Parent Company, as a matter of policy, attempts to fix the cost of
materials component in its construction contracts, in cases where
demand for steel, lumber and cement are high or when there are
shortages in supply, the contractors the Parent Company hires for
construction or development work may be compelled to raise their
contract prices. As a result, rising cost of any construction materials will
impact the Parent Company’s construction costs, and the price for its
products. Any increase in prices resulting from higher construction
costs could adversely affect demand for the Parent Company’s products
and the relative affordability of such products as compared to
competitors’ products. This could reduce the Parent Company’s real
estate sales.

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 - The major raw materials used by the Company for the development and
construction of its projects are cement and steel bars as well as the
finishing materials. These materials are sourced from local suppliers.
The Company has about 150 suppliers, the major ones of which include
the following:
Material supplied Company
- Cement - Apo Cement Corporation and
Holcim Phils., Inc.
- Steel Bars - Capitol Steel Corporation, Pag-
asa Steel Works, Inc., Universal
Steel Smelting Co., Inc.,Steel
Asia and Cebu Steel
Corporation
- Tiles - Lepanto Ceramics, Inc.,
Mariwasa Siam Ceramics, and
Cebu Oversea Hardware Co.,
Inc.
- PVC Pipes, Cast Iron - Philippine Valve
Materials Manufacturing Co.
- Plumbing Materials - Cebu Oversea Hardware Co.,
Inc. and Co Bian Kiat
Hardware, Amici Mercantile,
Inc.
- The Company uses over 100 contractors for land development and
construction works. These include the following contractors: Longridge
Construction, Inc., CE Construction, Megawide Builders,
RvabKonstruct Inc., RGL Construction, Primavera Construction and
Nippon Formworks & Construction Corp. Therefore, the supplier of
Filinvest Land cannot demand high price without any justification

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 because they are easily remove to the contract and find another as
replacement.
4.2.1.5 Threat of new entry
- In terms of potential entry of new competitors, the quality of filinvest
land is high-quality for it is maintained by professional staff of the
company, the pricing of the services that the company offers is
affordable for the main market of Filinvest land is focuses to the low
and medium earners, and the marketing and advertisement of Filinvest
land through Television and billboard endorse by famous artist may
have impact to the potential costumer and to the loyal costumer of
Filinvest. All this may overcome the barrier which the new competitor
may enter.

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4.3 Summary and Conclusion
4.3.1 External and Evaluation Matrix
External Factor Evaluation Matrix
Key External Factors Weight Rating Weighted Score
Opportunities
a. GDP and GNP .05 1 .05

b. New tread: Staycation .12 4 .48

c. Lifestyle choice .11 3 .33

d. Increase in remittance of the OFW .04 1 .04

e. Heavy traffic in the Philippines .16 4 .64
f. Online reservation .08 3 .24
Threats
a. Decrease in number of employed, .06 2 .12
underemployed and unemployed
b. Decrease in number of OFW .06 1 .06
c. Climate change .09 3 .27
d. Entry of hotels/motels .1 3 .3
e. Maceda Law .04 1 .04
f. Budget to DPWH increases .09 2 .18
TOTAL 1 2.75

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External Factor Evaluation (EFE) matrix

4.3.2 Competitive Profile Matrix

Competitive Profile Matrix

FILINVEST VISTA LAND SMDC
LAND INC.
Critical Success Factors Weight Rating Score Rating Score Rating Score
Advertisement .1 1 .1 1 .1 2 .2
Product/service quality .2 3 .6 2 .4 4 .8
Price competitiveness .15 3 .45 3 .45 1 .15
Target market .15 4 .6 2.5 .375 2 .3
Customer loyalty .05 2 .1 2 .1 4 .2
Management .10 3 .3 2 .2 4 .4
Location .25 4 1 2.5 .625 3 .75
Total 1 3.15 2.25 2.8

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V. COMPANY ANALYSIS

5.1 Management
5.1.1 Planning
- FLI’s objective is to strengthen its market position in its core residential house and
lot business by capitalizing on economic and social trends in the Philippines and
to develop its portfolio of commercial office and retail properties. FLI intends to
achieve this objective through the following strategies: Continue to grow its
residential housing and lot business, Develop and introduce new development
project formats, Widen Reach through Product Expansion and Extension of
Geographic Coverage, adhere to prudent financial management to ensure
sustainable growth and capital sufficiency, and Enhance the value of its
investment properties.
5.1.2 Organizing

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Name Position
Jonathan T. Gotianun Chairman of the Board
Lourdes Josephine G. Yap President and Chief Executive Officer
Mercedes T. Gotianun Director
Andrew T. Gotianun, Jr. Co-Vice Chairman
Michael Edward T. Gotianun Director
Efren C. Gutierrez Director
Lamberto U. Ocampo Independent Director
Val Antonio B. Suarez Independent Director
Nelson M. Bona Chief Financial Officer
Ana Venus A. Mejia Treasurer/Deputy Chief Financial Officer
Elma Christine R. Leogardo Corporate Secretary and Compliance Officer

5.1.3 Motivating
5.1.4 Staffing
- The Company has an experienced management team with an average of more than
30 years of operational and management experience in real estate development
and who also have enjoyed long tenure with both the Company and FDC. The
Company’s management team has extensive experience in and in-depth
knowledge of the Philippine real estate market and has also developed positive
relationships with key market participants, including construction companies,
regulatory agencies and local government officials in the areas where the
Company’s projects are located. Also the Company’s directors and members of
its senior management have been an integral part of its success, and the
experience, knowledge, business relationships and expertise that would be lost
should any such persons depart could be difficult to replace and may result in a
decrease in the Company’s operating efficiency and financial performance. If the
Company loses the services of any such person and is unable to fill any vacant key
executive or management positions with qualified candidates, its business and
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 results of operations may be adversely affected. To mitigate the risk of FLI’s
dependence on certain directors and members of senior management, the
Company has a succession program in place. Moreover, promotions are given to
deserving employees to ensure the succession within the management team.
- As of December 31, 2016, FLI had a total of 1,062 employees, including 207
permanent full-time managerial employees, 846 support employees and 9
consultants. Management believes that FLI’s current relationship with its
employees is generally good and neither FLI nor any of its subsidiaries have
experienced a work stoppage or any labor related disturbance as a result of labor
disagreements. None of FLI’s employees or any of its subsidiaries belongs to a
union. FLI currently does not have an employee stock option plan.
- Further, FLI provides managers, supervisors and general staff the opportunity to
participate in both in-house and external training and development programs
which are designed to help increase efficiency and to prepare employees for future
assignments. FLI has also provided a mechanism through which managers and
staff are given feedback on their job performance, which FLI believes will help to
ensure continuous development of its employees. FLI also offers employees
benefits and salary packages that it believes are in line with industry standards in
the Philippines and which are designed to help it compete in the marketplace for
quality employees.
5.1.5 Controlling

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Management Audit Checklist

Checklist YES/NO Explanation

 Does the firm use Yes
strategic management
concepts?
 Are company objectives Yes
and goals measurable
and well communicated?
 Do managers at all Yes
hierarchical levels plan
effectively?
 Do managers delegates Yes
authority well?
 Is the organization’s Yes
structure appropriate?
It is concise in the organization
chart that all office is well
communicated
Mostly of the officer of the
corporation is belong to one
family, therefore, the power of
each office is respected and well
effective.
The corporate organization chart
is clear and strictly implemented

 Are job descriptions Yes The position and its job is in

and job specifications the bylaws of the corporation
clear?
 Is employee morale Yes
high?
 Are employee Yes
turnover and
absenteeism low?
 Are organizaional Yes
reward and control
mechanism effective?

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5.2 Marketing audit
- FLI’s objective is to strengthen its market position in its core residential house and lot
business by capitalizing on economic and social trends in the Philippines and to develop
its portfolio of commercial office and retail properties. Subject to market conditions, FLI
plans to leverage its reputation as one of the market leaders in the affordable and middle-
income residential real estate segment with an established reputation and brand name.
The Company plans to expand its market reach and land bank by entering what it
perceives as underserved and underdeveloped markets in potential growth areas and
regions throughout the Philippines and by accelerating the development of new projects
in its existing markets. Because there are still a large number of Filipinos without first
homes, FLI intends to attract first-time home buyers and aggressively grow its business
to try to maintain its spot as one the market leaders in its core socialized, affordable and
middle-income residential house and lot business. In addition to retaining its position as
one of the leading residential housing and lot developers in the Philippines, FLI will also
seek to develop additional office space by capitalizing on the expected growth in the BPO
business. FLI believes that it will be able to enhance its investment portfolio’s competitive
strengths through pro-active management, asset enhancement and expansion, and by
capitalizing on its extensive real estate experience, size and access to resources, while at
the same time maintaining more regular revenue streams. Further, The Parent Company
develops customer awareness through marketing and promotion efforts and referrals from
satisfied customers. The Parent Company has a real estate marketing team, a network of
sales offices located in the Philippines and tie-ups with independent brokers in Europe,
Hongkong, the Middle East, Japan, and Singapore. FLI’s marketing personnel, together
with in-house sales agents and accredited agents, gather demographic and market
information to help assess the feasibility of new developments and to assist in future
marketing efforts for such developments. Furthermore, The Parent Company conducts
advertising and promotional campaigns principally through print and broadcast media,
including billboards, fliers, and brochures designed specifically for the target market.
Advertising and promotional campaigns are conceptualized and conducted by FLI’s

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 marketing personnel and by third-party advertising companies. These campaigns are
complemented with additional advertising efforts, including booths at shopping centers,
such as Festival Supermall, and other high traffic areas, to promote open houses and other
events. Finally, The Parent Company also believes that the OFW population, as well as
expatriate Filipinos, constitute a significant portion of the demand for affordable and
middle-income housing either directly or indirectly by remitting funds to family members
in the Philippines to purchase property. To this end, the Parent Company has appointed
and accredited independent brokers in countries and regions with large concentrations of
OFWs and expatriate Filipinos, such as Italy, Japan, the United Kingdom and the Middle
East. These brokers act as the Parent Company’s marketing and promotion agents in
these territories to promote the Parent Company and its products. The Parent Company
also sponsors road shows to promote its projects, including road shows in Europe and the
United States of America, targeting the OFW and Filipino expatriate markets. FLI also
markets its properties using the Internet.
5.2.1 Product/Services
5.2.1.1 Real estate sales segment - FLI’s main real estate activity since it started
operations has been the development and sale of residential property, primarily
housing units and subdivision lots
5.2.1.2 Leasing segment
5.2.2 Pricing

5.2.2.1 The Company believes it is able to offer customers one of the most diversified
ranges of real estate products among all developers in the Philippine real estate
market. FLI focuses its business on the socialized, affordable and middle-
income market segments, but at the same time it has designed projects that
address demand from the lowest end of the real estate market to the highest.
The Company has also expanded its portfolio to include new types of
residential developments that cater to potentially high-growth niche markets,
such as residential farm estate projects, entrepreneurial communities, medium-
rise buildings, high-rise condominiums and township developments.
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 5.2.2.2 Affordable housing: These developments are marketed and sold under FLI’s
Futura Homes brand and consist of projects where lots are typically sold at
prices ranging from above P160,000 to P750,000 and housing units from above
P450,000 to P1,500,000.
5.2.2.3 Socialized housing: These developments are marketed and sold under FLI’s
Pabahay brand and consist of projects where lots typically sell for P160,000 or
less per lot and housing units typically sell for P450,000 or less per unit
5.2.2.4 Middle-income housing: These developments are marketed and sold under
FLI’s Filinvest brand and consist of projects where lots are typically sold at
prices ranging from above P750,000 to P1,200,000 and housing units from
above P1,500,000 to P4,000,000.
5.2.2.5 High-end housing: Marketed under Filinvest Premiere brand, these
developments consist of projects where lots are sold at prices above P1,200,000
and housing units for above P4,000,000.
5.2.3 Distribution
5.2.3.1 Affordable housing projects are typically located in provinces bordering Metro
Manila, including Bulacan, Laguna, Batangas and Cavite, and in key regional
cities such as Tarlac, Cebu and Davao.
5.2.3.2 Middleincome projects are typically located within Metro Manila, nearby
provinces such as Rizal, Cavite, Pampanga and Laguna, and major regional
urban centers in Cebu, Davao, and Zamboanga.
5.2.3.3 FLI’s high-end projects are located both within Metro Manila and in areas
immediately outside Metro Manila
5.2.3.4 The Company relies on third-party brokers to market and sell its residential
housing and land development projects to potential customers inside and
outside of the Philippines. These brokers may also act as brokers for other
developers in the same markets in which the Company operates, and there can
be no assurance that they will not favor the interests of their other clients over
the interests of the Company in lease or sale opportunities, or otherwise act in

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 the Company’s best interests. There is competition for the services of third-
party brokers in the Philippines, and many of the Company’s competitors either
use the same brokers as the Company or attempt to recruit brokers away from
the Company. If a large number of these third-party brokers were to terminate
or breach their brokerage agreements, the Company would be required to seek
other external brokers, and there can be no assurance that the Company could
do so quickly or in sufficient numbers. This could disrupt the Company’s
business and negatively affect its financial condition, results of operations and
prospects. To mitigate the risk of third-party brokers terminating or breaching
their brokerage agreements with the Company, FLI offers an attractive
incentive program to reward those who are able to sell the Company’s projects.

Marketing Audit Checklist

Checklist YES/NO Explanation

 Are markets Yes The target market of Filinvest
segmented which is the low and middle
effectively? class earners is effectively
segmented
 Is the organization Yes According to survey Filinvest
positioned well among Land is the 2nd place in giving
competitors? affordable housing
 Has the firm’s market Yes The Market share of Filinvest
share been increasing? Land continuous to grow year
by year
 Are present channels Yes Filinvest Land has been doing
of distribution reliable good distributing it services
and cost effective? nationwide through there
agents

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  Does the firm have an Yes
effective sales
organization?
 Does the firm conduct Yes
market research?
 Are the product quality Yes
& customer service
good?
 Are the firm’s products Yes
and services priced
appropriately?
 Does the firm have Yes
effective promotion,
advertising and publicity
strategies?
 Are the marketing, Yes
planning and budgeting
effective?
 Do the firm’s marketing Yes
managers have adequate
experience and training?
 Is the firm’s Internet Yes
presence excellent as
compared to rivals?
Filinvest Land Incorporated – Strategic Management Paper
The Filinvest Land hired
additional third party agent
who are based on branches to
focus on acquiring new
clients
The filinvest land continues
to research possible land bank
that may acquire
Filinvest Land offers high
quality products and provides
excellent customer service
The prices of Filinvest Land is
quite lower than their
competitors
Filinvest Land focuses on
Billboards and Signage
Filinvest land Successfully
implemented planning and
budgeting
Filinvest Land managers are
well educated and well attached
to the suppliers as well as to the
government
Filinvest Land’s presence is
active on the internet by the
use of their website
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5.3 Finance/ Accounting
- FLI believes that its focus on housing and land development projects provides it with more
attractive margins and reduces its exposure to market and construction risks. FLI plans to
continue to closely monitor its capital and cash positions and carefully manage its land
acquisition costs, construction costs, cash flows and fixed charges. The Company also
prefers to enter into joint venture arrangements to develop land rather than purchasing land
outright, which reduces its capital requirements and can increase returns. Further, FLI
intends to continue to fund development costs using medium- to longterm financing, which
can help mitigate any negative effects of a sudden downturn in the Philippine economy or
a sudden rise in interest rates.
5.3.1 Financial Statements

Table 5.3.1 2015 2014 2013

ASSETS
Current Assets
Non-current Assets
Total Assets
LIABILITIES AND EQUITY
Current Liabilities
Non-current Liabilities
Total Liabilities
Equity
Total Liabilities and Equity

5.3.2 Income Statements

Table 5.3.2 2015 2014 2013

Net Sales
Cost of Sales
Gross Profit

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Operating Expenses
Current Operating Profit
Other Income
Other Expenses
Finance Costs
Share in the Profit (Loss) of an
Associate
Income Before Tax
Income Tax Expense
Net Income

5.3.3 Ratio Analysis

5.3.3.1 Liquidity Ratios

Table 5.3.3.1 2015 2014 2013

Current ratio
5.3.3.2 Leverage Ratios

Table 5.3.3.2 2015 2014 2013

Debt-to-Total-Assets Ratio
Debt-to-Equity Ratio
5.3.3.3 Activity Ratios

table 5.3.3.3 2015 2014 2013

Inventory Turnover
Fixed Assets Turnover
Asset Turnover
Accounts Receivable Turnover
Average Collection period
5.3.3.4 Profitability Ratios

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Table 5.3.3.4 2015 2014 2013
Gross Profit Margin
Operating Profit Margin
Net Profit Margin
Return on Assets
Return on Equity
Earnings Per Share
5.3.4 Investment Decision

The following table shows, for the periods indicated, the high, low and period end
closing prices of the shares as reported in the PSE:

Period Share price

High Low End
2016 1st quarter 1.89 1.50 1.53
2nd quarter 2.04 1.82 1.83
3rd quarter 2.08 1.77 1.99
4th quarter 1.84 1.32 1.77
2015 1st quarter 1.90 1.60 1.81
2nd quarter 2.04 1.67 1.68
3rd quarter 2.10 1.75 1.86
4th quarter 1.87 1.51 1.80
The number of shareholders of record as of said date was 5,735. Common shares
outstanding as of December 31, 2016 is 24,249,759,506.

5.3.4.1 FLI’s investment properties are the following:

a. A 100.0% ownership interest in Festival Supermall. Festival Supermall,
with approximately 200,000 sq.m. of floor area, is one of the largest
shopping malls in Metro Manila in terms of floor area. FLI has a long-term

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 lease agreement with FAI for the land on which Festival Supermall is
located, as well as for adjacent land that is available for mall expansion.
b. A 100% ownership interest in the common stock of Cyberzone Properties
Inc. CPI was formerly a joint venture between FLI and Africa Israel
Properties (Philippines), Inc. (“AIPPI”), which is a subsidiary of an Israeli
company with investments in residential real estate and shopping malls.
5.3.5 Financing Decision
5.3.5.1 On August 20, 2015, FLI issued to the public unsecured fixed rate bonds
with an aggregate principal amount of P 8.00 billion comprising of P 7.00 billion
7-year fixed rate bonds due in 2022 and P 1.00 billion 10-year fixed rate bonds
due in 2025. The 7-year bonds carry a fixed rate of 5.36% per annum while the
10-year bonds have a fixed rate of 5.71% per annum. FLI raised net proceeds of
P7,913,188,532 after deducting fees, commissions and expenses relating to the
issuance of the bonds. These bonds require FLI to maintain certain financial
ratios which include maximum debt-to-equity ratio of 2.0x; minimum current
ratio of 2.0x; and minimum debt service coverage ratio of 1.0x. As of December
31, 2016 and 2015, FLI is not in breach of any of these debt covenants.
5.3.6 Dividend Decision
5.3.6.1 On January 8, 2007, the Board of Directors approved an annual cash
dividend payments ratio for the Parent Company’s issued shares of twenty
percent (20%) of its consolidated net income for the preceding year, subject to
compliance with applicable laws and regulations and the absence of
circumstances which may restrict the payment of such dividends, including, but
not limited to, when Company undertakes major projects and developments
requiring substantial cash expenditures, or when the Parent Company is
restricted from paying cash dividends by its loan covenants, if any. The Board
of Directors may at any time modify such dividend payout ratio depending on
the results of operations, future projects and plans of the Parent Company. On
May 9, 2014, the BOD approved the declaration from unappropriated retained

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 earnings of cash dividend of P 0.050 per share or a total of P1.21 billion for all
shareholders of records as of June 6, 2014. On May 8, 2015, the BOD approved
the declaration from unappropriated retained earnings of cash dividend of P
0.056 per share or a total of P1.37 billion for all shareholders of record as of June
5, 2015. On April 22, 2016 the BOD approved the declaration and payment of
cash dividend of P 0.061 per share or a total of P1.48 billion for all shareholders
of record as of May 22, 2016.

Financial Audit Checklist

Checklist YES/NO Explanation

 Where is the firm

financially strong and

weak as indicated by

financial ratio

analyses?

 Can the firm raise Yes Filinvest Land can raise

needed short-term short-term capital due to its

capital reputation in relation to its

credit

 Can the firm raise Yes Filinvest Land is more on

needed long-term long-term capital through

capital through debt debt and/or equity.

and/or equity?

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  Does the firm have Yes Filinvest Land has more than

sufficient working enough capital to continue

capital? working even on an event of

a economic crisis.

 Are capital budgeting Yes

procedures effective?

 Are dividend payout Yes To Insure that their stockholders

policies reasonable? are well supported

 Does the firm have Yes Filinvest Land has good

good relations with its relationship with it’s

investors and investors and stockholders.

stockholders? All because majority of their

stockholders are belong to

one family

 Are the firm’s Yes Filinvest Land managers are

financial managers well educated and well

experienced and well- attached to their suppliers as

trained? well to the government

 Is the firm’s debt Yes Filinvest Land can maintain

situation excellent? its debt ratio well

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5.4 Production/Operation
- Since its incorporation, the Company has invested in properties situated in what the
Company believes are prime locations across the Philippines for existing and future
housing and land development projects. It is important for the Company to have access
to a steady supply of land for future projects. In addition to directly acquiring land for
future projects, the Company has also adopted a strategy of entering into joint venture
arrangements with land owners for the development of raw land into future project sites
for housing and land development projects. Such arrangements allow FLI to reduce its
capital expenditures for land and to substantially reduce the financial holding costs, which
result from owning land for development.
5.4.1 Process
- Over the years, the Company believes it has established an excellent reputation and
brand name in the property development business. If any of the Company’s projects
experience construction or infrastructure failures, design flaws, significant project
delays, quality control issues or otherwise, this could have a negative effect on the
Company’s reputation and make it more difficult to attract new customers to its new
and existing housing and land development projects. Any negative effect on the
Company’s reputation or its brand could also affect the Company’s ability to pre-
sell its housing and land development projects. This would impair the Company’s
ability to reduce its capital investment requirements. The Company cannot provide
any assurance that such events will not occur in a manner that would adversely
affect its results of operations or financial condition. To mitigate the risk of projects
not being completed on time, FLI relies on the services of its over 100 contractors
for land and construction works, many of which have been providing their services
to the Company for several years. FLI’s engineering team oversees the projects to
ensure that these are completed within specifications, within cost estimates and on
time. Furthermore, the Company has a Customer Service Department where
customers’ concerns are taken care of.

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 5.4.2 Capacity
- Over the years, the Company has accumulated an extensive, lowcost land bank. As
at 31 March 2015, the Company’s land bank totaled approximately
2,400.33hectares of raw land, including 324.44 hectares available for development
pursuant to joint venture agreements. The bulk of the Company’s land bank consists
of land situated in regional centers primarily outside of Metro Manila that FLI
believes are prime locations across the Philippines for existing and future property
development projects, including land in the nearby provinces of Rizal, Bulacan,
Batangas, Cavite and Laguna, as well as in growth areas such as Cebu, Davao and
General Santos City in South Cotabato province. The Company believes that the
diversity of its current projects and land bank will allow it to benefit from these
areas’ continued economic development. The Company also has land available for
future developments located in central and southern Philippines, which it believes
has allowed it to position itself as a leading residential project developer in these
new and expanding markets. The Company also believes that its strong reputation
and reliability as a developer allows it to attract joint venture partners with desirable
land banks, allowing it to access additional land for future development.
5.4.3 Inventory
- The firm also has a sizable land bank of 2,390ha in key growth areas equivalent to
over 10 years of development. In terms of geographic focus, FLI will continue to
expand in areas outside of Metro Manila dubbed as the “zoom towns” of the
Philippines. If we take a look at its land bank, about 66% is in the Calabarzon area
(Cavite, Laguna, Batangas) followed by Central Luzon at 22% (Bulacan, Pampanga
- Clark), with the remaining 11% in the Vismin zoom towns (Cebu, Ilo-Ilo,
Bacolod, Dumaguete, Davao and Cagayan de Oro).

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 5.4.4 Workforce
- As of December 31, 2016, FLI had a total of 1,062 employees, including 207
permanent full-time managerial employees, 846 support employees and 9
consultants. Management believes that FLI’s current relationship with its
employees is generally good and neither FLI nor any of its subsidiaries have
experienced a work stoppage or any labor related disturbance as a result of labor
disagreements. None of FLI’s employees or any of its subsidiaries belongs to a
union. FLI currently does not have an employee stock option plan.
- FLI provides managers, supervisors and general staff the opportunity to participate
in both in-house and external training and development programs which are
designed to help increase efficiency and to prepare employees for future
assignments. FLI has also provided a mechanism through which managers and staff
are given feedback on their job performance, which FLI believes will help to ensure
continuous development of its employees. FLI also offers employees benefits and
salary packages that it believes are in line with industry standards in the Philippines
and which are designed to help it compete in the marketplace for quality employees.
- The Company’s ability to plan, design and execute current and future projects
depends on its ability to attract, train, motivate and retain highly skilled personnel,
particularly architects and engineers. The Company believes that there is significant
demand for such personnel not only from its competitors but also from companies
outside the Philippines, particularly companies operating in the Middle East. Any
inability on the part of Company in hiring and, more importantly, retaining qualified
personnel could impair its ability to undertake project design, planning and
execution activities in-house and could require the Company to incur additional
costs by having to engage third parties to perform these activities. To mitigate the
risk of the Company being unable to attract and retain skilled professionals, FLI has
lined up a number of training programs to enable its employees to serve its
customers better, increase productivity and improve their skills.

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 5.4.5 Suppliers
5.4.6 Customers
5.5 Research and Development
5.6 Summary and Conclusion
5.6.1 Internal Factor Evaluation Matrix

Internal Factor Evaluation Matrix

Key Internal Factors Weight Rating Weighted Score
Strength
1.

2.
3.

4.

5.
6.

Weakness
1.

2.
3.
4.

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VI. STRATEGY FORMULATION

6.1 SWOT Matrix

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Opportunities SO Strategies WO Strategies
1 1. 1.

Threats ST Strategies
Strengths WT Strategies
Weaknesses
1. 1.

Tally of Strategies in SWOT

STRATEGY OPTIONS Frequency

Forward Integration
Backward Integration
Horizontal Integration

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 Market Penetration
Market Development
Product Development
Related Diversification
Unrelated Diversification
Retrenchment
Divestiture
Liquidation

Analysis of SWOT Matrix

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6.2 SPACE Matrix

Strategies under the Aggressive Matrix

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SPACE Matrix

Ratings
Financial Position (FP)

Industry Position (IP)

Stability Position (SP)

Competitive Position (CP)

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Conclusion

SP Average is CP Average is

IP Average is FP Average is Directional Vector Coordinates: x-axis:

Directional Vector Coordinates: y-axis:

The Republic Cement should pursue Aggressive Strategies

SPACE Matrix Analysis

6.3 Boston Consulting Group (BCG Matrix)

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 Relative Market Share

High Medium Low

High 1.0 0.50 0.0
+15 STAR Question Mark

1
Industry
Sales 3 2 6
4
Growth Rate

Medium
Cash Cows Dogs
0

Low
-15

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Division

1- Rizal
2- Batangas
3- Minuyan, Bulacan
4- Bigte, Bulacan
5- Cebu
6- Iligan

6.4 Internal- External (IE) Matrix

TOTAL IFE RATING

IFE = 3.01 STRONG AVERAGE WEAK

EFE = 2.94 3.0 to 4.0 2.0 to 2.99 1.0 to 1.99
HIGH I II III
3.00 to 4.00
MEDIUM IV V VI
2.00 to 2.99

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 LOW VII VIII IX
1.00 to 1.99

6.5 Grand Strategy Matrix

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Analysis of Grand Strategy Matrix

6.6 Summary of Matrices and Analyses

STRATEGY OPTIONS SWOT SPACE IE GRAND BCG TOTAL

INTEGRATION STRATEGIES

Forward Integration    
Backward Integration    
Horizontal Integration   

Market Penetration     
Market Development     
Product Development     
DIVERSIFICATION STRATEGIES
Related Diversification  
Unrelated Diversification 

Retrenchment
Divestiture
Liquidation

Analysis of the Summary of Matrices and Analyses

6.7 Quantitative Strategic Planning Matrix

STRATEGIC
ALTERNATIVES

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 Increase its Further
production improve the
capacity in in quality of the
milling, products
packing and offered by
clinkering the company
(Market (Product
Penetration) Development)
Key Factors Weight AS TAS AS TAS
Opportunities

Threats

Total
Strengths

Weaknesses

Total 1.00
Grand Total

Analysis of the Quantitative Strategic Planning Matrix

VII. OBJECTIVES, STRATEGY RECOMMENDATIONS AND ACTION PLANS

7.1 Strategic and Financial Objectives

Strategic Objectives

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Revised Vision Statement

Revised Mission Statement

Financial Objectives

*In thousand pesos

Year Sales Revenue Net Income
2015
2016
2017
2018
2019
2020
*Sales Revenue is based on 12% increase while net income is based on 14% increase

7.2 Recommended Business Strategies

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7.3 Recommended Organizational Strategies

7.4 Financial Projections

Republic Cement and Building Materials, Inc. and Subsidiaries

Financial Projections
December 31, 2016 to 2020

(in CURRENT (EST.) (EST.) (EST.) (EST.) (EST.)

thousand 2015 2016 2017 2018 2019 2020
pesos)
Net Sales
Cost of
Sales
Gross
Profit
Operating
Expenses
Current
Operating
Profit
Other
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Income
Other
Expenses
Finance
Costs
Share in
the Profit
(Loss) of
an
Associate
Income
Before
Tax
Income
Tax
Expense
Net
Income

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 2015 2016 2017 2018 2019 2020
ASSETS (In thousand pesos)
Current assets
Cash and cash
equivalents
Trade and
other
receivables –
net
Receivable
from related
parties
Inventories -
net
Prepayments
and other
current assets
- net

Non-current
Assets
Classified as
Held-for-Sale
TOTAL
CURRENT
ASSETS

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Property,
plant and
equipment –
net
Investment
properties
Goodwill and
other
intangible
assets – net
Deferred tax
assets
Other non-
current assets
and available-
for-sale
investments
TOTAL NON
CURRENT
ASSETS
TOTAL
ASSETS

LIABILITIES AND EQUITY

Current Liabilities
Trade and
other
payables

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Loans
payable
Income tax
payable
Derivative
liability – net
TOTAL
CURRENT
LIABILITIES
Non-current Liabilities
Loan Payable
Payable to a
related party
Provisions
Dealers’ cash
bond
Retirement
benefit
obligation
Deferred tax
liabilities
Other long-
term deposits
TOTAL
NON-
CURRENT
LIABILITIES
TOTAL
LIABILITIES
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Equity
Attributable to Equity Holders of the Parent
Share Capital
Additional
paid-in-
capital
Reserves
Retained
earnings
Total
attributable
to equity
holders of the
parent
Non-
controlling
interest
TOTAL
EQUITY
TOTAL
LIABILITIES
AND
EQUITY

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 2015 2016 2017 2018 2019 2020
Net cash from
operating Activities
Net cash from
investing Activities
Net cash used in
financing activities
Net Increase
(Decrease) in Cash
and Cash
Equivalents
Cash and Cash
Equivalents,
Beginning
Cash and Cash
Equivalents, End

7.5 Departmental Programs

Activities Team Responsible Timeline

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Product Development

Activities Team Responsible Timeline

VIII. STRATEGY EVALUATION, MONITORING AND CONTROL

8.1 Balance Scorecard

FINANCIAL PERSPECTIVE
Objective Performance Target Initiatives
Measure

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 CUSTOMER PERSPECTIVE
Objective Performance Target Initiatives
Measure
1.
2.

INTERNAL BUSINESSES PERSPECTIVE

Objective Performance Target Initiatives
Measure
1.
2.

LEARNING & GROWTH PERSPECTIVE

Objective Performance Target Initiatives
Measure

1.
2.

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IX. APPENDICES

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9.2 Financial Statements

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X. BIBLIOGRAPHY

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