Вы находитесь на странице: 1из 152

PAMANTASAN NG LUNGSOD NG MAYNILA

(University of the City of Manila)


College of Business and Government Management

Graduate School of Business

A Strategic Management Paper


CSF ENTERPRISE

Presented to the Faculty


of the
Graduate School of Business
College of Business and Government Management

In Partial Fulfilment of the Requirements


for the Degree of
Master in Business Administration

by:
Ramil Allen E. Casagan
April 2019
ii

PAMANTASAN NG LUNGSOD NG MAYNILA


(University of the City of Manila)
College of Business and Government Management

Graduate School of Business

RECOMMENDATION FOR ORAL EXAMINATION

This Strategic Management Paper for CSF ENTERPRISE (CSF),

prepared and submitted by RAMIL ALLEN E. CASAGAN, in partial fulfilment of

the requirements for the degree, Master in Business Administration, had been

examined and found satisfactory and was recommended for Oral Examination on

ANTONIO E. CASURAO, SR., D.BA


Adviser
iii

PAMANTASAN NG LUNGSOD NG MAYNILA


(University of the City of Manila)
College of Business and Government Management

Graduate School of Business

APPROVAL SHEET

In partial fulfilment of the requirements for the degree of Master in


Business Administration, this Strategic Management Paper for CSF
ENTERPRISE (CSF), was prepared and submitted to the faculty of the Graduate
School of Business College of Business and Government Management by Ramil
Allen E. Casagan.

Approved by the Committee on Oral Defense on May 14, 2019, with a


grade of

Prof. Neil B. Gamus


Chairman

Prof. Anna Maria M. Miranda Prof. Rogelio Y. Salipot


Member Member

Accepted in partial fulfilment of the requirements for the degree of


MASTER IN BUSINESS ADMINISTRATION.

JOSE A. SILERIO, R.E.E., MBA


Dean
iv

ACKNOWLEDGMENTS

To various persons who contributed in making this study possible and in

one way or another, have inspired me in coming up with this paper.

To Mr. Richard Dolina for allowing your organization to be the subject-

entity of this study and for leading me with a clear direction of this research;

To Dr. Antonio Casurao for being my adviser, for your patient guidance,

and in checking and editing my work;

To PLM – CBGM professors for your valuable comments, insights,

encouragement and support;

To Fr. Reginald Malicdem and the staff of the Manila Metropolitan

Cathedral for your understanding, assistance and prayers;

To my friends who shared with me the good and challenging times of MBA

life;

To Mama and Papa for being my inspiration and for your fervent prayers

and love, you gave me strength all the time to continue each day;

Lastly, to the TRIUNE GOD, for without His graces and blessings, this

study would not have been possible, and everything I do, are all for your glory!

Thank God and thank you all very much!


v

EXECUTIVE SUMMARY

The Original Hot Sauce Store was founded in 2005 when Mr. Richard M.

Dolina established CSF Enterprise, a retailer and distributor of imported sauces,

dressings, and condiments flavored with the hottest chili and intense spices from

around the globe. CSF is just one of the minor players in the sales and

distribution of the said sector. Growing over time, their product variation

expanded from fiery sauces, dressings, and condiments to wines, teas, spicy

flavored snacks, and canned sardines.

The entity sells its products to a niche market of hot and spicy food

enthusiast; primarily to the upper class, to foreigners, and to hot sauce

merchants which in turn sell it to down line markets. Moreover, the entity owns 2

stores in Southern Luzon carrying the store name “Original Hot Sauce Store”.

Despite the milestones of the company, the presence of various internal

and external factors affecting the entity must be responded. After various

analyses, a formulation of a market penetration strategy is recommended in

order for the company to increase its distribution channels and seize a large

market share. Partnership with high-end restaurants and hotels located in

Bonifacio Global City in Taguig is suggested to be the most effective to achieve

its strategic objectives within 5 years of operation.

If implemented successfully, it will bring in a gross profit margin of Php 30

million and a growth in its customer base after the commencement of the

proposed strategy.
vi

TABLE OF CONTENTS

Page

Title Page i

Recommendation ii

Approval Sheet iii

Acknowledgments iv

Executive Summary v

Table of Contents vi

List of Tables x

List of Figures xi

List of Acronyms xii

I. INTRODUCTION 1

A. Rationale 1

B. Strategic Objectives 2

II. COMPANY BACKGROUND 4

A. Company Profile 4

B. Business Model Canvas 5

C. Value Chain Analysis 7

D. Mission-Vision Statement 9

E. Evaluation of Mission and Vision 11

F. Organizational Structure 13

G. Executive Officers 15

H. Financial Highlights 18
vii

TABLE OF CONTENTS

Page

III. RESEARCH METHODOLOGY 19

A. Research Design 19

B. Instrumentation 20

C. Statistical & Quantitative Tools Used 21


IV. INDUSTRY AND MARKET ANALYSIS, FORECAST
24
AND PERSPECTIVES
A. General Condition of the Industry and the Market 24

B. Market Analysis 26

C. The Entity’s Position in the Market 33

D. Competitors Analysis 34

V. EXTERNAL ANALYSIS 35

A. Illustration 35

B. Societal Environment 36

a. Opportunities 36

b. Threats 42

C. Task Environment 47

D. External Factor Analysis Summary (EFAS) 51

VI. INTERNAL ANALYSIS 52

A. Illustration 52

B. Strengths 53

C. Weaknesses 56

D. Functional Audit 58
viii

TABLE OF CONTENTS

Page

E. Financial Statement Analysis 62

a. Vertical Analysis 62

b. Horizontal Analysis 70

c. Summary of Findings 80

F. Internal Factor Analysis Summary (IFAS) 82

VII. PROBLEM DIAGNOSIS 83

A. SWOT Matching 83

B. Problem Mapping 84

C. Statement of the Problem 85

VIII. STRATEGY FORMULATION 86

A. Strategic Factor Analysis Summary (SFAS) 86

B. TOWS Matrix 87

C. Internal-External (IE) Matrix 88

D. SPACE Matrix 89

E. Competitive Profile Matrix (CPM) 91

F. Boston Consulting Group Matrix (BCG) 92

G. GRAND Strategy Matrix 94

H. Summary of Strategies 96

I. QSPM Matrix 97

IX. RECOMMENDATION 99

A. Alternative Courses of Action 99

B. Decision Criteria & Weights 99

C. Analysis of Each Alternative Course 100


ix

Page

D. Scoring 104

E. Strategic Choice 105

X. STRATEGIC PLANNING 109

A. Strategy 109

B. Recommended Mission and Vision Statements 110

C. Implementation Plan 112

D. Strategy Map 127

E. Balanced Scorecard 129

List of References xv

Annexes xvi

Approval from the Company xvi

Audited Financial Statements Xvii

Appendices xxii

List of Restaurants xxii

List of Hotels xxiii

List of Gastro Pubs xxiv

Graphs, Trendlines xxv

About the Author xxvi


x

LIST OF TABLES

Table No. Title Page

1 Vision Statement Evaluation 11


2 Mission Statement Evaluation 12
3 Financial Highlights 18
4 Distribution by Format and Category 2018 26
5 Sales of Sauces, Dressings and Condiments: Value 27
6 List of Major players in the Hot Sauce Industry 28
7 List of Hot Sauce Specialty Stores 28
8 Concentration Ratio of Hot Sauce Specialty Stores 29
9 List of Major players in the Canned Sardines Industry 30
10 Concentration Ratio of Canned Sardines Brands 30
11 List of Major players in the Hot Tea Industry 31
12 Concentration Ratio of Tea Brands 32
13 The Entity’s Position in the Market 33
14 Profile of Direct Competitors 34
15 External Factor Evaluation Matrix 51
16 Management Audit 58
17 Human Resource Audit 59
18 Marketing Audit 59
19 Operations Audit 60
20 Common Sizing Statement of Income and Expenses 62
21 Common Sizing Statement of Financial Position 64
22 Liquidity Ratios 66
23 Profitability Ratios 67
24 Solvency Ratios 68
25 Efficiency Ratios 69
26 Horizontal Analysis of Statement of Income and Expenses 70
27 Horizontal Analysis of Statement of Financial Position 72
28 Horizontal Analysis of Liquidity Ratios 75
29 Horizontal Analysis of Profitability Ratios 77
30 Horizontal Analysis of Solvency Ratios 78
31 Horizontal Analysis of Efficiency Ratios 79
32 Internal Factor Evaluation Matrix 82
33 Problem Mapping 83
34 Strategic Factors Analysis Summary (SFAS) Matrix 86
35 SPACE Matrix 89
36 Competitive Profile Matrix 91
37 Summary of Strategies 96
38 Quantitative Strategic Planning Matrix 97
39 Decision Criteria and Weight 99
40 Scoring of Alternative Courses of Action 104
41 Recommended Vision Statement Evaluation 110
42 Recommended Mission Statement Evaluation 111
43 Action Plan 112
44 Forecasted Statement of Income and Expenses 113
45 Forecasted Statement of Financial Position 114
46 Forecasted Statement of Cash Flows 115
47 Forecasted 2019 Cash Budget 116
48 Forecasted 2019 Operating Expenses 117
49 Projected Statement of Income and Expenses 119
50 Projected Statement of Financial Position 120
51 Projected Statement of Cash Flows 121
xi

52 Projected Client Base 122


53 Projected Sales Distribution: Volume 123
54 Project Sales Mix 125
55 Projected Sales Distribution: Value 125
56 Cost Volume Profit Analysis 126
57 Resulting Ratios 126
58 Balanced Scorecard 129

LIST OF FIGURES

Figure No. Title Page

1 CSF Business Model Canvas 5


2 CSF Value Chain Analysis 7
3 CSF Organizational Structure 13
4 PESTLE Analysis 34
5 Porter’s Five Forces 47
6 CSF Internal Analysis 52
7 SWOT Matching 83
8 TOWS Matrix 87
9 IE Matrix 88
10 SPACE Matrix 90
11 BCG Matrix 92
12 Grand Strategy Matrix 94
13 Strategy Map 127
xii

LIST OF ACRONYMS

ACA - Alternative Courses of Action

ASPBI - Annual Survey of Philippine Business and Industry

BSP - Bangko Sentral ng Pilipinas

COS - Cost of Sales

CPM - Competitive Profile Matrix

CSF - Complete Solutions Food Enterprise

EFAS - External Factor Analysis Summary

HHI - Herfindahl-Hirschman Index

HR - Human Resource

IE - Internal-External

IFAS - Internal Factor Analysis Summary

PSA - Philippines Statistics Authority

QSPM - Quantitative Strategic Planning Matrix

ROA - Return on Assets

ROE - Return on Equity

SFAS - Strategic Factors Analysis Summary

SPACE - Strategic Position & Action Evaluation

SWOT - Strength, Weakness, Opportunity, Threat

TOWS - Threat, Opportunity, Weakness, Strength


1

I. Introduction

A. Rationale

CSF Enterprise is one of the registered entities engaged in sales and

distribution of hot and spicy food products in the Philippines. One major dilemma

the business is facing is the strong competition that exists due to large number of

players in its embraced industry; CSF needs to compete and upsurge its market

share.

This paper endeavors to formulate strategies on how the company will

muddle through the present condition of the industry, and outline procedures of

actions to achieve the stated objectives.

The first part of the paper analyzes the internal and external factors that

have impact in the business. The framework for the analyses focused on the

environmental factors and internal aspects of CSF Enterprise.

The second part of the study discusses the strategies CSF can use in

order to compete and intensify its market position in the industry. This requires

the company to develop marketing activities that will lead to the recognition of its

product and services. CSF also needs to review and revised its credit and

collection policy with the purpose of increasing its cash inflows for an efficient

operation.

The last part of the paper deliberates the necessity to invest for various

marketing activities in order for CSF to be successful. The entity should continue
2

searching for new ways to increase its market reach. The company needs to

develop and invest for perfect marketing programs which will unlock greater

opportunities for CSF to achieve its goals.

Furthermore, assumptions and projections are made for the

implementation of the suggested strategies and percentage growth of different

account titles. Various scenarios are also projected on different perspectives and

an implementation plan is created to surmount, complement and supplement

these scenarios.

B. Strategic Objectives

Developing a strategy for a firm has become a periodic corporate

undertaking alongside constant monitoring all year round. In bigger firms, a

department is institutionalized to solely devote in developing strategies. These

are proofs that strategic management is a challenge that confronts firms

nowadays.

This paper for CSF Enterprise aims to develop marketing strategies that

will effectively increase its gross margin, net income, and expand its market

reach. It specifically aims to achieve the following objectives within 5 years of

operation:

1. To eliminate the products that does not generate profits from

the entity’s product portfolio.


3

2. To develop a strategy that will improve the sales of the

various product lines.

3. To increase its customer base of the largest hotels,

restaurants, and gastro pubs in Bonifacio Global City in the

next five years.

4. To reach a Php 30 million gross margin and a Php 15 million

net income in the next five years.


4

II. Company Background

A. Company Profile

Name of the Company : CSF Enterprise

Name of Store : The Original Hot Sauce Store

Owner : Richard M. Dolina

Company Address : 1579 New Gold Bond Bldg. F.T. Benitez St.,

Ermita, Manila, NCR, Philippines

Website : https://www.csfenterprise.com

Primary Purpose : Sales and Distribution of Gourmet Products

Industry Category : Wholesale and Retail-Trade

Business Type : Food Importer and Distributor

Business Form : Sole Proprietorship

Start Date : January 2005

Tax Identification No. : 170 – 203 – 608 – 000


5

B. Business Model Canvass

KEY KEY VALUE CUSTOMER CUSTOMER


PARTNERS ACTIVITIES PROPOSITION RELATIONSHIPS SEGMENTS

1. International 1. Procurement 1. High quality 1. Customer 1. Niche market


Suppliers hot sauces Loyalty of hot and spicy
2. Marketing and other food enthusiast
2. Local food products 2. Customer Driven
Manufacturers 3. Operations Strategy 2. Hot Sauce
2. Variety of merchants
3. Government 4. Research and product lines
Agencies Development 3. Upper Class
3. Filipino snacks Filipinos
4. Retailers 5. Customer and canned
Support sardines flavored 4. Foreigners
5. Wholesalers with imported
KEY sauces and spices CHANNELS
6. Banks RESOUSRCES
1. Company Website
1. IT Infrastructure and Social Media

2. Brand 2. Online Selling


Platforms
3. Online Selling
Platform 3. Physical Stores

4. Innovation 4. Advertisements

5. Human Resource 5. Food Expos

COST STRUCTURE REVENUE STREAMS

1. Duties and Tariffs 6. Taxes and Licenses 1. Sales


2. Logistics 7. Rent
3. Marketing 8. Infrastructure 2. Interest
4. Sales and Distribution 9. Maintenance
5. Compensation 10. Research

Figure 1. Business Model Canvas


6

The entity caters its broad portfolio of hot and spicy food products to a

niche market of hot and spicy food enthusiast in the upper class which are

distributed through store purchases and online sales. These are made possible

by various suppliers of its products, different government agencies that support

the trade of goods, a bank that handles online transactions, and several

wholesalers and retailers.

In order to reach its target market while preserving the quality of its

products, CSF Enterprise have had implemented various strategies for its key

activities and a superb support from its infrastructure and human resource. Its

key activities focus on the procurement of goods, operations, marketing, and

customer support, and research.

CSF Enterprise establishes brand awareness through advertisements,

participation to food expos, and customer loyalty programs. The entity also

considers feedbacks and suggestions from customers.

All these activities that create and deliver value have a cost attached to it

mainly; the purchase of goods, compensation of employees, utilities, and

marketing activities which represent the day-to-day operation of the entity.

Annual fees such as taxes, licenses, and registration fees are also incurred

annually.
7

C. Value Chain Analysis

FIRM INFRASTRUCTURE

1. Organizational Structure
2. Quality Control

HUMAN RESOURCE MANAGEMENT


1. Recruitment and Selection
2. Compensation and Benefits
3. Training and Development
4. Performance Evaluation

TECHNOLOGY DEVELOPMENT
1. Business Software

MARGIN
2. Online Payment System

PROCUREMENT
1. Relationship with Suppliers
2. Prerequisites to different Government Agencies
3. Logistics

INBOUND OUTBOUND MARKETING


OPERATIONS SERVICES
LOGISTICS LOGISTICS AND SALES

1. International 1. Online Selling 1. Delivery 1. Ads 1. Online


Suppliers Platform 2. Billings 2. Food Expos Services
2. Local 2. Physical 3. Collections 3. Product 2. Customer
Suppliers Stores Presentations Relations
3. Logistics

Figure 2. Value Chain Analysis

The primary activities of the entity focus on inbound logistics, operation,

outbound logistics, marketing and sales, and customer services. The inbound

logistics refers to the purchase of various food products from fixed and

contracted international and local suppliers. These are then inspected for quality
8

assurance and brought to the entity’s storerooms for sales distribution.

Transports of goods are done upon request from each store and orders from

wholesalers. Automated software keeps track of this matter to ensure proper

inventory control.

CSF Enterprise has a strong infrastructure and apart from its physical

resources, it is on its way to expansion because of excellent leadership and

management. Its president, Mr. Richard M. Dolina, who is also the owner of the

company, is unwearyingly bringing the entity to its potential with the support of

the whole management. In order to maintain the quality of products and services

to keep the customers satisfied, its employees work fervently by providing

customers a great time by making them feeling comfortable, thus making them

wanting to come over again, they are also trained to handle crucial situations and

take decisions accordingly. They are also responsible in processing all

prerequisites needed which includes close coordination with different government

agencies.

The entity is undertaking research for the improvement of its existing

products and the development to introduce new ones. This is to provide

customers with new products and give a distinctive perspective to the brand so

as to be in front of the line when it comes in offering the best hot and spicy food

products. The presence of centralized business software used by the entity is

capable of automating several business processes and reports which are

otherwise complicated and time consuming.


9

D. Vision, Mission, and Core Values

Vision Statement

It is our vision to be one of the leading, reputable, and reliable

providers of high quality and authentic food products in the Philippines.

Mission Statement

It is our mission to cater and deliver premium, high-quality and

authentic food products that will bring more color and flavor for everybody

to experience.

Core Values

The core values of CSF Enterprise serve as its guidance, its

direction, and its culture; it supports the organization’s mission, vision, and

overall philosophy. It guides attitudes, actions, and decision-making and

establishes a standard against which actions can be assessed.

Faith - we glorify God through what we are and what we do. We

want to bring our skills as an expression of our faith which inspires

us to give our best in everything we do.


10

Accountability - we hold ourselves to high standards for our

actions and quality of our products. We encourage everyone to take

responsibility for their actions.

Relentless - we are never satisfied with our results because we are

always looking ahead for new ways to improve and focus on the

opportunities of where we want to go.

Malasakit - we strive to understand the worth and dignity of others

as we do ourselves. We want to create an environment that is

positive for our stakeholders.

Synergy - we are dedicated to giving our people a wealth of

opportunities to reach their full potential and to participate in making

our vision come true.


11

E. Evaluation of Mission and Vision

Vision Statement

It is our vision to be one of the leading, reputable, and reliable

providers of high quality and authentic food products in the Philippines.

Table 1. Vision Statement Evaluation

VISION STATEMENT

Criteria Yes/No Evaluation

The statement specifies what CSF Enterprise


wants to become in the near future but it did
Vivid No
not identify what type of food products they
are offering and to what sector it is offered to.

The statement specifies that they want to be


the leading company in food distribution in the
Realistic No Philippines but based on the position and
performance of the company, it will take them
a long run in order for this vision to achieve.

The statement specifies that the company still


Aspiration Yes desires to become one of the largest
distributor of food products in the Philippines.
12

Mission Statement

It is our mission to cater and deliver premium, high-quality and

authentic food products that will bring more color and flavor for everybody

to experience.

Table 2. Mission Statement Evaluation

MISSION STATEMENT

Criteria Yes/No Evaluation

The mission statement mentioned “that will


Customers Yes bring more color and flavor for everybody to
experience”.

The mission statement mentioned “to cater


and deliver premium, high-quality and
Products and Services Yes
authentic food products” yet the kind of
products they offer is not specified.

Markets No There is no statement for markets.

Technology No There is no statement for technology.

Concern for Survival No There is no statement for concern for survival.

Philosophy No There is no statement for philosophy.

The mission statement mentioned “that will


Self-Concept Yes
bring more color and flavor”.

Concern for Public Image No There is no statement for public image.

Concern for Employees No There is no statement for employees.


13

F. Organizational Chart

President

Internal Senior
Audit Manager

HR and Customer Key Regulatory


Finance Operations IT
Admin Service Accounts Affairs
Manager Manager Supervisor
Manager Manager Manager Manager

HR and Customer Regulatory


Accounting Payroll Treasury Marketing Logistics IT
Admin Service Affairs
Supervisor Supervisor Supervisor Personnel Personnel Personnel
Supervisor Personnel Personnel

HR and
Payroll Collection Sales
Admin Bookkeeper
Personnel Personnel Personnel
Personnel

Payments
Cashier
Personnel

Accounting
Assistant

Figure 3. Organizational Chart

The decentralized organizational structure of CSF Enterprise comprises of

several departments which is befitting to the need of continuing efficient

operations in their course of expansion. The entity has employed almost 35

personnel serving various offices and stores. The Owner Mr. Richard M. Dolina,

who serves as the President of the company, exclusively decides for the

company backed by his department managers and communications are

streamed down to various departments allowing fast implementations,


14

evaluations, and adjustments. Expenditures for the compensation and benefits of

employees share the largest part of the Total Operating Expenses.

Advantages

 Clear lines of authority and simple reporting relationships for

an easier communication and orderly operation.

 Clear areas of roles and responsibilities which keeps

everyone on track.

 Cost efficient due to simplified structure and non-existence

of unneeded and unnecessary job functions within the

organization

Disadvantages

 Solitary accountability to the Owner.

 Its rigid structure can hinder lateral communications with its

departments which can lead to difficulties to respond to

alterations.
15

G. Executive Officers

Richard Dolina

 Owner and the President of CSF Enterprise. (2012-Present)

 Bachelor of Science in Business Administration major in

Business Management graduate of De La Salle University -

Manila.

Henry Martija

 Senior Supervisor of CSF Enterprise.

 Bachelor of Science in Business Administration major in

Business Management graduate of Polytechnic University of

the Philippines - Main.

 More than 10 Years in service with CSF Enterprise.

Maria Clariness Casires

 Human Resource and Administration Manager of CSF

Enterprise.

 Bachelor of Science in Human Resource Management

graduate of San Beda University – Manila (formerly San

Beda College).

 More than 10 Years in service with CSF Enterprise.


16

Edelima Sumbing

 Finance Manager of CSF Enterprise.

 Bachelor of Science in Accountancy (Formerly Bachelor of

Science in Business Administration Major in Commerce)

graduate of San Beda University.

 More than 10 Years in service with CSF Enterprise.

Jennylyn Isidro

 Customer Service Manager of CSF Enterprise.

 Bachelor of Science in Business Administration Major in

Marketing Management graduate of Philippine Women’s

University.

 More than 5 years of sales experience in the Food and

Beverage Industry.

Jeannette Tan

 Key Accounts Manager of CSF Enterprise.

 Bachelor of Science in Business Administration major in

Marketing Management graduate of Central Colleges of the

Philippines.

 More than 5 years of sales experience in the Food and

Beverage Industry.
17

Larry Perez

 Operations Manager of CSF Enterprise.

 Bachelor of Science in Customs Administration graduate of

Philippine Maritime Institute - Manila.

 More than 20 years of experience in trade and logistics.

Nimfa Collado

 Regulatory Affairs Manager of CSF Enterprise.

 Bachelor of Science in Pharmacy graduate of University of

the Philippines - Manila.

 More than 10 years of experience in the Pharmaceutical

Industry.

Mary Rose Espita

 Information Technology Supervisor of CSF Enterprise.

 Bachelor of Science in Information Technology graduate of

STI College.

 More than 20 years of experience in technological industry.


18

H. Financial Highlights

Table 3. Financial Highlights

Account 2014 2015 2016 2017 2018 Trendline

Sales 41,412,563 40,662,379 33,371,377 30,801,888 33,846,345

Gross Profit 13,807,487 13,641,920 11,390,661 10,879,856 12,557,826

Net Income / Loss 2,597,497 1,955,813 2,344,062 1,995,030 1,364,203

Net Profit Margin 4.39% 3.37% 4.92% 4.53% 2.82%

Current Ratio 1.53 1.66 2.04 2.27 1.89

Debt to Assets Ratio 0.74 0.73 0.69 0.68 0.72

Return on Assets Ratio 7.74% 7.33% 11.51% 10.19% 6.17%

There is an increase of 9.88% in the entity’s sales revenue for 2018 at

Php 33.8 million while its gross profit rose by 15.42% at Php 12.6 million.

Current ratio weakened in 2018 to 1.89 due to the increase in credit

purchases from suppliers and the debt-to-assets ratio increased to 0.72 because

of additional borrowing made by the entity. Return on Assets declined to 6.17%

compared to its previous year’s 10.19% due to decline in sales.


19

III. Research Methodology

A. Research Design

The researcher used a descriptive research to develop new strategies for

the company. This type of research is used to describe the characteristics of a

phenomenon being studied; it addresses the "what" questions rather than about

how, when, or why these had occurred. (Shields and Rangarajan, 2013) The

proponent met with the owner and certain officers and employees of the entity to

relay his intentions and purposes. He then proceeded with requesting initial

information, documents and data from the entity. From these documentations, an

analysis of the financial statements was done resulting to the formulation of

interview guides with decision makers and use of survey questionnaires are used

to gather pertinent data in determining the internal environment. (Casurao 2019)

The paper has five major phases. The first phase is gathering information

about the external and the internal environment of the entity. It involves an

analysis of the industry landscape to express its opportunities and threats.

Functional audit to each department was done based on the said interview

guides to formulate its strengths and weaknesses. Supplementing this

information, the proponent looked up various secondary data such as articles,

reports, and journals relating to its peers and the industry

The next phases include identifying the problems through SWOT matching

after acquiring wider perspective and detailed information from the analysis of the
20

external and internal environment. Next phase is formulation and evaluation of

strategies using various decision tools and the selection of the most achievable

and reasonable strategy; the proposed strategies were anchored on the

practicability at the point of view of the entity.

All the above processes precede the implementation of the chosen

strategy with detailed implementation plan.

B. Instrumentation

All external and internal information used in this paper were all secondary

data such as the entity’s audited financial statements for the last five years and

the entity’s handbooks and records, various strategic management books was

also used as the main reference for matrices, tools, and other strategic

management topics; various related news articles and websites including

government agency sites like Bangko Sentral ng Pilipinas, Food and Drug

Administration, Department of Trade and Industry, and Philippine Statistics

Authority. An interview with entity’s key executive officers and survey

questionnaires using McKinsey 7-S Model and Weisbord’s 6 Box Model based

on the latest financial statements of the entity were also used to accurately

assess the functioning of the entity and determine the best strategy to be

implemented to improve the performance of the entity.


21

C. Statistical & Quantitative Tools Used

1. Current Ratio

Current Assets
Current Ratio =
Current Liabilities

2. Acid Test Ratio

Cash + Cash Equivalent + Receivables


Acid Test Ratio =
Current Liabilities

3. Cash Ratio

Cash + Cash Equivalent


Cash Ratio =
Current Liabilities

4. Net Profit Margin

Net Profit
Net Profit Margin (%) =
Net Revenue

5. Gross Profit Margin

Gross Profit
Gross Profit Margin (%) =
Net Revenue

6. Return on Assets

Revenue
Return on Assets =
Average Assets
22

7. Return on Equity

Revenue
Return on Equity =
Average Equity

8. Debt-to-Equity Ratio

Total Liabilities
Debt − to − Equity Ratio =
Total Assets

9. Proprietary Ratio

Total Equity
Proprietary Ratio =
Total Assets

10. Debt-to-Asset Ratio

Total Liabilities
Debt − to − Assets Ratio =
Total Assets

11. Accounts Receivable Turnover

Net Credit Sales


Accounts Receivable Turnover =
Average Receivables

12. Inventory Turnover

Net Credit Sales


Inventory Turnover =
Average Inventory

13. Asset Turnover

Net Sales
Asset Turnover =
Average Assets
23

14. Accounts Payable Turnover

Net Credit Purchases


Accounts Payable Turnover =
Average Payables

15. Equity Turnover

Net Sales
Equity Turnover =
Average Equity

16. Weighted Mean

W1 X1 + W2 X2 + ⋯ + Wn Xn
X=
W1 + W2 + ⋯ + Wn

Where: W = corresponding weight

X = value of any observation or measurement

17. Regression Analysis

Y = a + bx
24

IV. Industry and Market Analysis, Forecast and Perspectives

A. General Condition of the Industry and the Market

Chili based food products is one of the most popular staple on the market

today driven by worldwide demand. According to some reports, its market has

easily grown by about 100 percent, or even more, in the recent years, as makers

work to fill the demand for different flavors and brands. Now, a billion dollar

growth in the industry greatly outpaces growth of similar food products; in fact, its

sales have even grown more in the recent years.

In the Philippines, hot and spicy foods are part of the country’s

gastronomic culture so much so that there are festivals and organizations

dedicated solely to the delicious, burning sensation of downing chili-spiked

wonders. In more recent years, the industry began to set the market on fire,

evident as the industry saw a huge growth spurt. After a big jump of sales began

to slow slightly, even a moderate growth translates it to a huge amount of

opportunities.

Many opportunities in the coming years will continue the upward trend of

sales, pushing the industry to even greater heights than it has already

experienced. While some of the first major producers of chili based food products

are still in the market, there is also a big rise of new brands, as makers search

out the hottest peppers and put the hottest products in the market. These new
25

options haven’t knocked down some of the older ones, instead they have had

helped the increasing demand for these food staples.

Continually rated as one of the nation’s growing industries, the trend

shows few signs of cooling down in the near future based from various economic

experts in the food industry as they are predicting that it is going to become more

popular in kitchens all over the world. Part of the reason is the development of

packaged ready-to-eat foods that have become quite popular lately. Another is

attributed to the preference shifts to Asian, Latin and Indian cuisine all over the

world. Most people live in urban areas where restaurants from almost every

culture are available; the need for variety has grown, especially among young

people. In addition, traveling is easier than ever and a lot of Filipinos are fond of

doing is as well.

This is also evident to the increasing number of retailers which is

specialized in chili based food products. These specialty stores are few and often

cater its products to upscale patrons. Online Selling is also emerging through the

use of social media and other online selling platforms since majority of these

specialty stores are strategically located in high end areas of the metro where

inconvenience is present due to poor traffic conditions.


26

B. Market Analysis

There are few specialty stores of chili based products in the Philippines

and majority of these products are also distributed through supermarkets,

convenience stores, or sari-sari stores. CSF is a merchandising entity of various

imported and local chili based food products such as sauces, dressings, and

condiments as its major product lines, canned sardines and Filipino snacks

carrying the store name Original Hot Sauce Store.

Filipino consumers increasingly prefer to purchase food products from

modern retail outlets, which provide a convenient format for one-stop shopping.

This preference has led to the continuous expansion of both supermarkets and

hypermarkets. Importers and distributors are in direct contact with big

supermarkets, hypermarkets, and convenience stores. Smaller stores, such as

sari-sari stores are handled by agents or middle men.

Table 4. Distribution by Format and Category 2018

Sauces, Dressings, Canned Hot


Format
and Condiments Sardines Tea
Store-Based Retailing 48.8 91.3 81.9
Grocery Retailers 43.4 89.8 57.3
Non-Grocery Retailers 5.4 1.5 24.6
Non-Store Retailing 45.7 8.7 18.1
Internet Retailing 39.0 1.4 15.1
Direct Selling 6.7 7.3 3.0
Total 100.0 100.0 100.0

Source: Euromonitor
27

There is only a niche market for chili-based products since the Filipino

palate is not that into spicy as compared to other countries where spice is a

staple. But Filipinos are known to be food lover which is why introducing

extremely hot flavored sauces to the Philippine market is becoming a trend.

Hot Sauce

Sauces, dressings and condiments recorded the slowest value

growth in 2018 with Php 28.3 billion as compared to its 2017 sales value

of Php 27.8 billion. It is marginally slower compared to the previous years.

A developed area with not much room for growth and much competition

already present, sauces, dressings and condiments as the biggest

category continued to show moderate growth.

Table 5. Sauces, Dressings and Condiments Market by Retail Value Sales

Sauces, Dressings, 2016 2017 2018


and Condiments (in billion pesos)
Cooking Sauces 13.22 13.42 13.66
Dips 0.78 0.79 0.80
Pickled Products 4.53 4.59 4.68
Table Sauces 8.40 8.52 8.68
Spicy Chili/Pepper Sauces 0.41 0.42 0.42
Tomato Pastes and Purees 0.45 0.45 0.46
Other Sauces 0.02 0.02 0.03
Total 27.81 28.22 28.72

Source: Euromonitor
28

It is somehow difficult to isolate the market share of chili based

sauces, dressings and condiments from the total industry revenue since

majority of the players competing in the industry is at the same time

offering hot and spicy flavors of their brands. In a very general sense, the

classification of these products is just either hot or not.

Table 6. List of Major players in the Hot Sauce Industry

Brand Owner
Jufran NutriAsia
Sriracha Sauce Huy Fong Foods
Tabasco McIlhenny Company
Mother’s Best HDR Foods Corporation
Mama Sita’s Mama Sita's Holding Company

There are only few hot sauce specialty stores in the Philippines.

Table 7. List of Hot Sauce Specialty Stores

The Green Company


Seven Spice Shop
Assad Mini Mart
Sweatshoppe Chili Foods Store
Original Hot Sauce Store
29

The table below shows the market share of specialty stores in the country

that offers hot sauces. The computation of market share was based on the

revenue of the organizations over the industry’s total revenue for 2018. The

concentration ratio of 16.13% indicates a very low concentration in the industry.

Therefore, the presence of large companies and various hot sauce merchants

developing their own products and selling it out of stores is an evident of a pure

and intense competition in the industry.

Table 8. Concentration Ratio of Hot Sauce Specialty Stores

Revenue
Entity Market Share
(in Php)
Sweatshoppe Chili Foods Store 297,432 0.07%
Assad Mini Mart 5,608,721 1.32%
Seven Spice Shop 10,877,519 2.56%
The Green Company 17,888,420 4.21
Original Hot Sauce Store 33,846,345 7.97%
Total 68,518,437 16.13%

Sources: Personal Communication, Social Media Pages, Google Search.

Canned and Processed Fish

Sardines belong to the most commonly available types of canned

foods. Canned sardines are commonly available with tomato sauce, but

may be prepared with Filipino meals. It is one of the cheapest food

products in the Philippines which make it somehow affordable.


30

Table 9. List of Major players in the Canned Sardines Industry

Brand Owner
Ligo A Tung Chingco Trading.
555 Century Canning Corp
Family’s Universal Canning Incorporated
Young’s Town Maunlad Canning Corporation
Mega Mega Global Corporation

The canned sardines sector recorded a 36% revenue share from its

industry revenue of Php 43.3 billion in 2018, a Php 15.6 billion, 3%

decrease compared to 2017 because of the increasing number of health

consciousness consumers in the country which is deemed to be unhealthy

given the high content of preservatives and salt.

Table 10. Concentration Ratio of Canned Sardines Brands

Revenue Herfindahl –
Brand Market Share
(in billion pesos) Hirschman Index
555 Sardines 3.8 24.4 595.4
Ligo Sardines 2.5 16.0 256.0
Young’s Town Sardines 1.6 10.3 106.1
Mega 0.8
Family’s Brand Sardines 0.3
Others 6.5
Original Hot Sauce Store 0.0
Total 15.5 50.7% 957.5

Source: Euromonitor
31

The table above shows the market share of the industry’s top

players. The computation of market share was based on the revenue of

the organizations. The concentration ratio of 50.7% and HHI of 957.5

indicates a low concentration. Therefore, the industry of canned sardines

also has an intense competition in the market.

The entity also expanded its offerings to some beverage products such as

tea and alcoholic drinks.

Hot Tea

Tea penetrated households regardless of income level as health

consciousness drove growth. Consumers gravitated more towards green

tea and fruit or herbal tea products rather than black tea, which accounted

for the bulk of the category, particularly as the former are linked to health

benefits such as better digestion and aiding sleep.

Table 11. List of Major players in the Hot Tea Industry

Brand Owner
Lipton Unilever, PepsiCo
Twinings Associated British Foods
Yogi East West Tea Company LLC
Numi Numi, Inc.
Wellness Tea Traditional Medicinals
32

The hot tea sector recorded a Php 11.5 million revenue in 2018, a

1.1% increase compared to 2017’s Php 10.9 million because of the

increasing number of health consciousness consumers in the country and

the introduction of such products.

Table 12. Concentration Ratio of Tea Brands

Revenue Herfindahl –
Brand Market Share
(in million pesos) Hirschman Index
Lipton 3.7 32.2 1,036.8
Twinings 2.2 19.1 364.8
Yogi 0.9 7.8 60.8
Numi 0.6 5.2 27.0
Wellness Tea 0.2 1.7 2.9
Others 3.9
Ahmad Tea 0.0
Total 11.5 66.1% 1,492.3

Source: Euromonitor

The table above shows the market share of the industry’s top

players. The computation of market share was based on the revenue of

the organizations. The concentration ratio of 66.1% and HHI of 1,492.3

indicates a moderately concentrated marketplace. Therefore, the industry

of hot tea is somehow led by some large companies in the market.


33

C. The Entity’s Position in the Market

Table 13. The Entity’s Position in the Market

Entity Market Share


Sweatshoppe Chili Foods Store 0.07%
Assad Mini Mart 1.32%
Seven Spice Shop 2.56%
The Green Company 4.21%
Original Hot Sauce Store 7.97%
Total 16.13%

Source: Euromonitor

In table X, at 7.97% market share, the entity ranks 1st above all specialty

stores in the country that offers hot sauces.


34

D. Competitor’s Analysis

Table 14. Profile of Direct Competitors

Sweatshoppe
CSF The Green Seven Spice Assad Mini
Factors Chili Foods
Enterprise Company Shop Mart Store

Rank 1st 2nd 3rd 4th 5th

Revenue
33.8 17.9 10.9 5.6 .3
(in million pesos)

Market Share 7.97 4.21 2.56 1.32 0.07

Social Media
Yes Yes Yes No Yes
Presence

Website Yes No No No No

Online Selling
Yes No No No No
Platform

Delivery Yes No No No No

Distribution Nationwide Walk-in Walk-in Walk-in Walk-in

Hot Sauce Yes Yes Yes Yes Yes

Canned and
Yes No No Yes No
Processed Seafoods

Tea Yes Yes No Yes Yes

Sources: Personal Communication, Social Media Pages, Google Search.


35

V. External Analysis

A. Illustration

The external environment of the company is made up of several economic

forces, political and government aspects, social-cultural, technological factors

and ecological aspects. It can directly or indirectly affect the activity and the

evolution of the business.

ECONOMIC
Opportunities
Favorable Consumer Spending Outlook
Threats
The Philippine's Inflation Crisis
Volatility of Price and Exchange Rates
Competitve Intensity in the Industry

SOCIO-CULTURAL
Opportunities
LEGAL
CSF Emergence of Electronic Commerce
Opportunities
Enterprise Globalization for Food Culture
Strengthened Food Regulatory
Threats
Limited market segment

ENVIRONMENTAL TECHNOLOGY
Threats Opportunities
Packaging Waste and Sustainability Advancement in Automation

Figure 4. PESTLE Analysis


36

B. Societal Environment

1. Opportunities

Economic

1. The household expenditure grew to Php 12.87 million from

its previous year’s amount of Php 11.61 million. Food and

Non-alcoholic Beverages, sharing 42.6% of the total

household expenditure, posted a growth of 12.1% while

Health Outlays contributing 3.5% of the total expenditure

declined to 7.2%. Filipino consumer’s spending outlook on

basic goods for the year 2018 has notably improved and this

is expected to bring windfall benefits to the domestic

economy. (PSA National Accounts, 2019)

Significance to the Industry:

The increase in the prices of various commodities consumes

a great part of the family budgets and the spending on

different sorts of products is actually growing more slowly

than it has been growing. Businesses engaged in

wholesaling and retailing uses consumer spending data in

their supply and demand estimation. Supply and demand

helps businesses produce goods or services at the most


37

favorable consumer price points. Consumer spending helps

companies determine which products have the most value in

the market. It can also be used as information to find unmet

consumer needs and develop new products.

Socio-Cultural

1. Philippine e-commerce’s market revenue for 2018 amounted

to USD 840 million, an annual growth rate 12.0%, with an

expected market volume of USD 1.32 billion by 2022. Its

largest segment is in the electronics & media with revenue of

USD 234 million in 2018. The Philippines ranks first in the

world in terms of social media use and amount of time spent

online which reflects the growing number of Filipinos doing

their shopping online. This means that the country is an ideal

place for e-commerce to thrive.

Significance to the Industry:

The e-commerce market encompasses the sale of physical

goods by the way of a digital channel to a private end user.

Incorporated in this definition are purchases through

computer as well as purchases through mobile devices. It

makes easier for businesses to reach a much wider

audience at less expense than would be required if the


38

traditional retail method was to be applied, there is no

requirement to acquire or rent for shops and outlets. While

the cost of developing a good website may be substantial, it

is much cheaper than letting expensive high street

storefronts. Additionally, once you have your website

operational, you will reach a wide client base.

2. The United States isn’t the only country that has made an

impact to the food culture in the Philippines, countries like

Korea, Japan, and Italy has also made their mark in many

populated areas in the Philippines, especially through the

youth. It is inevitable that a foreign culture can make their

mark in a new country, especially when they come in

abundance. Due to this, many international restaurants like

classic Japanese sushi bars, Korean barbecue spots, and

Italian pasta and pizzerias make their way into the Filipino

community. Because of this, Filipinos have found interests

not only in their traditional ways of dining, but also found

interests in these new, international meals..

Significance to the Industry:

The opportunities in the fast food industry lie in the

globalization of the countries. People around the world are


39

beginning to accept other cultures as their own and thus the

entrance into these markets are getting easier. Globalization

of food points out that food systems are changing, resulting

to greater availability and diversity of food. Access to

varieties of food cuisine is continuously increasing due to

trade agreements of different countries. For example, is the

2015 ASEAN Free Trade which supports local

manufacturing in all ASEAN countries by eliminating tariffs

that will result to reductions on the products’ prices.

Technological

1. The food and beverage industry is one of the most

significant contributors in the Philippine economy therefore it

must also adapt to the fast-paced innovation of technology

and rise to the occasion of updates and upgrades.

Technological advancements help businesses perform

better; it cuts operating costs, and at the same time, makes

the company more efficient and gives them the opportunity

to save. Business can adopt the use technology to reduce

business costs. Basic enterprise software enables a firm to

automate business functions such as record keeping,

accounting and payroll. Mobile technology allows employees

to interact with their customers in real time. This will also


40

lessen rooms for errors and mistakes which can lessen the

number of products returned to your company. It also makes

the customers happy, improving the overall reputation of the

company. It will also give a chance for companies to operate

with a lower number of employees since automation can

even improve work that is accomplished.

Significance to the Industry:

The business world is changing rapidly and keeping up with

the latest advancements by harnessing technology that will

result in significant increase in profits and reduction of

operational costs. By automating tasks, businesses can save

hours of manual efforts every day, employees can more

utilize the time to improve the business productivity. Instead

of employing numerous employees, businesses can still

improve its efficiency by incorporating its functions to

business software. It would eventually help to make a

decrease to salaries and wages; moreover, machines are

not prone to committing mistakes. Traditional forms of

marketing are costly and outdated. Businesses should

leverage the power of internet to reach out to customers.

Instead of hiring marketing employees or outsourced

agency, the use of various social media platforms which


41

offer free and paid classifieds advertisements will come out

cheaper, yet more effective. Payment to hefty bills on mobile

and landline usages, documents storage, transportation, and

accommodation, which contributes a significant percentage

of the total operational expenses of any business, can

lessen or even omitted through the use different mobile

applications.

Legal

1. An Act strengthening and rationalizing the regulatory

capacity of the Bureau of Food and drugs (BFAD) by

establishing adequate testing laboratories and field offices,

upgrading its equipment, augmenting its human resource

complement, giving authority to retain its income, renaming it

the Food and Drug Administration (FDA), amending certain

sections of Republic Act No. 3720, as amended, and

appropriating funds thereof.

Significance to the Industry:

Businesses engaged in selling consumer food and beverage

products are required to guarantee customers that products

are pure and safe for human consumption, and that


42

companies should conform to the standards and quality

measures set by the Food and Drug Administration.

2. Threats

Economic

1. Inflation continues to accelerate from 3.4% in January 2018

to its annual rate in December 2018 of 5.1% Inflation is the

rate at which the general level of prices for goods and

services is rising and, consequently, the purchasing power of

currency is falling.

Impact to the Industry:

The high rate of inflation in 2018 was due to the rising fuel

prices and higher excise taxes imposed on oil, sugary, and

sin products. Businesses engaged in wholesaling and retail-

trade industry are very much affected due to the increase in

prices of the said products which may result to a higher cost

in operations and lower income to earn.

2. The amount of the average peso to dollar exchange rate for

December 2018 Php 52.7691 compared to its previous

year’s amount of Php 50.3947. For an import-dependent


43

country like the Philippines, the exchange rate plays a vital

role for businesses who imports and export goods.

Impact to the Industry:

Given that most transactions are denominated in US dollars

and the amounts of money involved are enormous, even a

small change in the peso-dollar exchange rates can have a

significant impact on costs, and subsequently on prices.

Devaluation will make exports cheaper and exporting firms

will benefit. However, firms importing will face higher costs of

imports. An appreciation makes exports more expensive and

reduces the competitiveness of exporting firms. However, at

least imported products will be cheaper following an

appreciation.

3. Over the past decade, the Philippines witnessed a

substantial growth in the food and beverage industry. It

involves a wide array of sellers from sidewalk vendors, wet

and dry markets, sari-sari stores, groceries, supermarkets,

warehouses, and convenience stores.


44

Impact to the Industry:

An intense competition within the industry decreases market

share and shrinks customer base, especially if the demand

for products or services is limited from the start. A

competitive market can also force businesses to lower the

prices to stay competitive, decreasing returns on each item

sold. When too many businesses produce the same

products, the market becomes flooded. As goods are

overproduced, inventory piles up. When inventory reaches

unsustainable levels, companies could have too much

capital tied up in items that are not moving on the shelf and

not having enough cash to pay debts and administrative

expenses.

Socio-Cultural

1. There is only a niche market for chili-based products since

the Filipino palate is not that into spicy as compared to other

countries like Thailand, India, and Korea, where spice is a

staple. But Filipinos are known to be foodies and are really

driven by challenge, which is why introducing extremely hot

flavored sauces to the Philippine market is becoming a

trend.
45

Impact to the Industry:

The taste preference of consumers also has potential to

affect businesses. Since the Philippines in not into extremely

hot flavored sauces, few consumers are demonstrating

preference for heat. Businesses should consider

components in introducing new variety of sauces.

Environmental

1. Masses of plastic trash is one of the most visible

manifestations of the waste crisis in the Philippines as it was

ranked as the third largest source of plastics together with

China and Indonesia. Businesses generate over 2.7 million

tonnes of plastic waste annually; a third of the plastic

packaging used globally makes its way to recycling plants,

while a third is left in fragile ecosystems and the remaining

ends up in landfill. As in developing countries like the

Philippines, businesses use throwaway packing, usually

made up of thin plastic and aluminum laminated sachets,

which are intended to sell small-serving of their products.

This has become an industry standard and company

strategies to promote their brands and offer their products

following the Filipinos’ “tingi” culture. These types of

packaging are non-recyclable and of no value, and there is


46

no infrastructure in the country capable of re-processing

them after use.

Impact to the Industry:

The high demand for packaged food products means that

there are more materials needed for its packaging. It

response to this growing problem, many local governments

have passed ordinances to regulate the use of plastics that

covers item such as shopping bags and secondary

packaging materials.
47

C. Task Environment

Threat of New entrants


LOW

• Large Capital Requirement


LOW
• Access to Consumers
LOW

Bargaining Power of Suppliers Bargaining Power of Consumers


Competitive Rivalry
HIGH MODERATE
HIGH

• Suppliers are not Substitutable • Switching Costs


• Competitve Advantage of
HIGH LOW
Large Companies
• High Differentiation • Price Sensitive Consumers
HIGH
HIGH HIGH

Threat of Substitute products


HIGH

• Low Cost of Substitute Products


HIGH

Figure 5. Porter’s Five Forces.


48

Threat of New Entrants – LOW

1. Large Capital Requirement – Low

The demand for sauces, dressings, and condiments

requires a large capital therefore it limits the entry of new

competitors in the market.

2. Access to Consumers – Low

Various companies have held a very significant

market share for a long time and loyal customers are not

very likely to try a new brand.

Bargaining Power of Suppliers – HIGH

1. Suppliers are not substitutable – High

There are only few considered suppliers offering the

same product to some extent. A high switching cost thereby

increases the bargaining power of suppliers

2. High Differentiation – High

The supplier’s product is highly differentiated due to

its extreme flavors of hotness and spiciness it provides.


49

Bargaining Power of Consumers – MODERATE

1. Switching Costs – Low

There are many brands with lower cost that are

offered in the market.

2. Price Sensitive Consumers – High

Consumers are price sensitive due to the presence of

numerous producers.

Threat of Substitute Products – HIGH

1. Low Cost of Substitute Products – High

High availability of substitutes is not a surprise

considering the presence of many local and global brand

owners providing almost the same kind of products. These

firms may be able to provide substitutes with a lower cost.

This could be fatal the company considering that switching

costs are low.


50

Competitive Rivalry – HIGH

1. Competitive Advantage of Large Companies – High

The industry is purely competitive. Competitive rivalry

is also strengthened because consumers can easily shift

from one provider to another.


51

D. External Factor Analysis Summary (EFAS)

Table 15. External Factor Evaluation Matrix

Weighted
Key External Factors Weight Rating
Score
Opportunities
1. Favorable consumer spending outlook 0.08 2 0.16
2. Strengthened food regulatory 0.06 4 0.24
3. Emergence of electronic commerce 0.14 4 0.56
4. Globalization for Food Culture 0.10 3 0.30
5. Advancement in automation 0.08 4 0.32
Threats
1. The Philippine’s inflation crisis 0.08 3 0.24
2. Volatility of price and exchange rates 0.12 3 0.36
3. Competitive intensity in the Industry 0.16 1 0.16
4. Limited market segment 0.12 2 0.24
5. Packaging waste sustainability 0.06 1 0.06
Total 1.00 2.64
Rating:
Poor (1), Average (2), Above Average (3), Superior (4)

The average total weighted score is 2.5; CSF has a total weighted score

of 2.64 which indicates that it is somehow responding to the opportunities and

threats existing in the industry in a way that is above average. With that being

said, CSF’s strategies towards taking advantage of the opportunities existing in

their industry and minimizing the effects of the external threats to the company

are not so effective.


52

VI. Internal Analysis

A. Illustration

Strengths Weaknesses

Management Human Resource

Mission, Vision, and Core Value Theft in Collection of Credit Sales


Philippines Chili Federation Affiliate
Operations
Human Resource
Absence of Research and Development
Employee Compensation and Benefit Limited customer base

Marketing
Operations
Some products do not generate profits
Presence of Regulatory Department
High Advertising and Promotion Expenses
Exclusive distributor in the Philippines
Inadequate marketing strategies

Financial
Financial
Operating Expenses maintained below 20%
No other sources of income
Low gross profit margin
Technological Leveraged vastly with Debts
Slow Inventory Turnover
Automated Business Solutions Software

Figure 6. Internal Analysis


53

B. Strengths

Management Aspect

1. Overall, the most important element is that the vision, mission, and

core values of CSF are clearly understood by its employees, and

while these may be revised through the future strategic planning

process, the management and the employees express the

importance of understanding the core values and how the

organization should function. The management believes that a high

level of employee engagement and interest will absolutely help in

the success of the business. While some frustrations and issues

exist that should be addressed, for the most part, the entity reacts

in a positive manner with an interest toward getting problems

resolved. (Dolina, personal communication, April 14, 2019)

2. CSF has a strong connection in the Philippines; it is a member of

The Philippine Chilli Federation that acts as a guild to the country’s

hot sauce clubs and hot sauce merchants. Being a member of the

Philippine Chilli Federation entails that the company will have

bigger opportunity not only to increase its market share in the

industry but also to establish linkages to suppliers and customers.

(Dolina, personal communication, April 14, 2019)


54

Human Resource Aspect

1. CSF offers compensation and benefits sufficient to hold employees

in good times and to keep benefits always affordable and modest

enough to survive the downturns. The entity embraces the

imperative of a healthy workplace environment and engages others

in its achievement in order to maintain a positive outcome in a

stressful atmosphere. He also invites his employees for a meal time

together, not just to motivate them, but also to establish a closer

bond among them. This for him is one of the strengths of the

company. In addition to all the benefits required by the law, he also

put into provision added benefits for the employees such as health

insurance, life insurance, food allowance, and retirement plan.

(Casires, personal communication, April 14, 2019)

Technological Aspect

1. CSF Enterprise uses QNE Business Solutions, tailored fit business

software, which provides management modules that include sales,

purchases, logistics, tracking, shipping, bookkeeping, payroll, and

inventory monitoring which generate financial statements, sales

reports, purchase reports and BIR forms and reports easily. (Espita,

personal communication, April 14, 2019)


55

Operations

1. CSF is an exclusive distributor of various well-known hot sauces,

dressings, and condiments offered from around the world. (Dolina,

personal communication, April 14, 2019)

2. CSF has a regulatory department which serves as the primary

liaison between the company and the government regulatory

bodies. The company has employed professionals who ensure that

the business complies with all product-related regulations. They

use their skills and influences to advise the company on legal

requirements and to shape the regulatory environment. They are

also involved in all stages of the product lifecycle giving the

company opportunities to contribute innovative ideas, product

improvements, and service models for the consumers. (Collado,

personal communication, April 14, 2019)

Financial Aspect

1. The total operating expenses of the entity which is composed of the

distribution costs and general and administrative expenses

recorded a low percentage of less than 20% compared to its total

revenues.
56

C. Weaknesses

Human Resource Aspect

1. There are various cases filed against sales collection employees

related to theft. This is due to lack of regulations and measures,

allowing collection of large amount payments through cash.

(Casires, personal communication, April 14, 2019)

Marketing and Sales Aspect

1. The company is offering various product lines and some of its

products are not generating profits.

2. Inadequate marketing strategies and programs to connect to new

customers through the use of more methods which will help

position their products in a favorable light, while opening doors for

future communication. This is showed by a low spending on

advertising and promotions in 2018, which is at only 0.21% of the

total revenue.

Operations

1. CSF Enterprise has no research and development department

which main functions are to innovate, introduce, improve product

lines and even lead to the development of new products and

procedures. (Martija, personal communication, April 14, 2019)


57

Financial Aspect

1. The entity solely depends on the sale of goods and there are no

other sources of cash inflows.

2. High percentage of cost of sales with 86.24% that led to Net Losses

from the previous years. This due to the high prices of finished

goods imported from suppliers. This is uncontrollable for the

company since their products have a predetermined and sole

provider locally and internationally.

3. The business is vastly leveraged through debts.

4. The entity has a slow inventory turnover taking 66 days to generate

revenue out of its inventory sales that indicates inadequate

marketing strategies and programs and limited distribution

channels.
58

D. Functional Audit

Table 16. Management Audit

Management Audit Assessment


Are company objectives and goals measurable and
Yes
well communicated?
Is the top management’s knowledge, skills, and
Yes
leadership style relevant to the organization?
Is the top management highly involved in the
Yes
strategic management process?

Is the organization’s structure appropriate? Yes

Are organizational reward and control mechanisms


Yes
effective?

The top management’s past work experiences and training programs had

absolutely supported CSF to cope with challenges and to handle employees

effective by providing the help and guidance they need.

Proper delegation of jobs that are aligned with the organization’s structure

gives employees participation to the company which give them a sense of

ownership. Rewards are also given to all employees in return for exemplifying

good performance which is beneficial to the company.


59

Table 17. Human Resource Audit

Human Resource Audit Assessment

Are job descriptions and job specifications clear? Yes

Are employee turnover and absenteeism low? Yes

Is employee morale high? Yes

Are employees satisfied with the existing


Yes
compensation & benefits?
Are trainings and developments for employees
n/a
aligned to the objectives of the organization?

Employee morale is high due to satisfaction with the current compensation

and benefit structure of the organization leading to a low employee turnover.

Realignment of compensation is each year as part of its recognition program.

Yet, there are minimal training programs provided by the entity to its employees.

Table 18. Marketing Audit

Marketing Audit Assessment


Is the organization positioned well among
No
competitors?
Are present channels of distribution reliable and
Partially
cost effective?
Yes, but needs
Are the firm’s products priced appropriately?
improvement

Has the firm’s market share been increasing? Yes, but slowly

Does the firm have an effective promotion, Yes, but needs


advertising, and publicity strategy? improvement
60

Due to numerous businesses engaged in the same industry as CSF, it is

having a hard time to position against its competitors, however, sales per volume

and market share channels can further be boost and improved by expanding its

distribution channels through considering other sources. The entity, even with an

online presence through its website, social media sites, and other online

platforms, still has decreasing sales. These endeavor leads to monthly meetings

with the marketing and sales team for evaluation and strategy implementation.

Table 19. Operations Audit

Operations Audit Assessment


Are supplies of entity’s products reliable and Yes, but needs
reasonable? improvement
Are facilities, equipment, machinery, and offices in
Yes
good condition?
Are inventory-control policies and procedures
Yes
effective?
Are quality-control policies and procedures
Yes
effective?
Are facilities, resources, and markets strategically
Yes
located?

The entity practices good quality control policies to maintain safety of

products for human consumption and firm inventory control method to improve

accuracy of distribution. Its facilities and equipment are updated in good

condition to maintain make jobs faster and easier increasing productivity of

employees through.
61

Although the entity’s products are reliable, the products are not well-

known in the country, and since these are manufactured in other countries, it

complements to a high inbound expenses leading a high product cost as

compared to its competitors. Its stores are strategically located with respect to its

market; yet it has only one store located in Metro Manila.


62

E. Financial Statement Analysis

a. Financial Statements Vertical Analysis

Table 20. Common Sizing Statement of Income and Expenses

2014 2015 2016 2017 2018

Sales 100.00 100.00 100.00 100.00 100.00


Less: Cost of Sales 66.66 66.45 65.87 64.68 62.90
Operating Income 33.34 33.55 34.13 35.32 37.10
Add: Interest Income 0.01 0.01 0.01 0.00 0.00
Gross Income 33.35 33.56 34.14 35.33 37.11
Less: Operating Expenses 27.08 28.75 27.12 28.85 33.08
Distribution Costs 1.54 1.97 1.60 1.10 1.69
Transportation 0.54 0.54 0.30 0.34 0.41
Delivery Charges 0.52 0.56 0.35 0.34 0.38
Gas and Oil 0.33 0.27 0.22 0.21 0.25
Advertising and Promotions 0.16 0.60 0.73 0.21 0.64
Administrative Expenses 25.53 26.78 25.52 27.75 31.38
Compensation and Benefits 15.97 16.80 14.34 18.79 20.62
Rental 5.03 4.99 6.06 3.67 4.94
Depreciation 1.31 1.58 1.85 2.00 1.82
Repairs and Maintenance 0.54 0.61 0.66 0.71 0.75
Light and Water 0.51 0.43 0.49 0.51 0.56
Communications 0.41 0.43 0.50 0.52 0.56
Office Supplies 0.42 0.24 0.25 0.19 0.31
Security Services 0.31 0.37 0.24 0.17 0.28
Commission 0.26 0.33 0.27 0.38 0.20
Representation and Entertainment 0.23 0.30 0.31 0.19 0.62
Insurance 0.14 0.23 0.26 0.26 0.15
Taxes and Licenses 0.14 0.21 0.23 0.18 0.29
Miscellaneous 0.07 0.07 0.06 0.17 0.08
Research and Development 0.19 0.19 - - 0.11
Listing Fees - - - - 0.08
Income before Tax 6.27 4.81 7.02 6.48 4.03
Income Tax 1.88 1.44 2.11 1.94 1.21
Net Income / Loss 4.39 3.37 4.92 4.53 2.82
63

Unfavorable

 The entity is dependent on a single source of revenue which is

not beneficial to the business in times of decline in sales.

 Cost of Sales is high leading to a low gross profit margin.

 The entity incurred majority of its total expenses to compensation

and benefits at 20.62%.

 The entity posted a low 0.64% expense for advertising and

promotions which for a customer-driven business is minimal.

 The entity is suffering from a very low net profit margin of 2.82%.
64

Table 21. Common Sizing Statement of Financial Position

2014 2015 2016 2017 2018

Assets

Current Assets
Cash 4.79 7.03 10.97 11.37 20.49
Trade and other Receivables 34.97 30.16 23.05 20.22 19.86
Inventories 30.95 29.11 25.47 38.81 45.55
Other Current Assets 14.67 16.79 20.03 15.26 0.30
Total Current Assets 85.38 83.09 79.53 85.67 86.21

Non-Current Assets
Property and Equipment 13.60 15.48 18.10 14.33 13.79
Other Non-Current Assets 1.02 1.43 2.37 0.00 0.00
Total Non-Current Assets 14.62 16.91 20.47 14.33 13.79

Total Assets 100.00 100.00 100.00 100.00 100.00

Liabilities and Equity

Current Liabilities
Trade and other Payables 55.49 49.91 38.82 37.61 45.61
Other Current Liabilities 0.24 0.24 0.25 0.09 0.00
Total Current Liabilities 55.73 50.14 39.08 37.70 45.61
Non-Current Liabilities
Advances from Richard M. Dolina 18.27 22.98 29.49 30.48 26.49
Total Non-Current Liabilities 18.27 22.98 29.49 30.48 26.49
Total Liabilities 74.01 73.13 68.57 68.18 72.10

Equity
Richard M. Dolina, Capital 25.99 26.87 31.43 31.82 27.90
Total Equity 25.99 26.87 31.43 31.82 27.90

Total Liabilities and Equity 100.00 100.00 100.00 100.00 100.00


65

Favorable

 The entity having 20.49% cash account is enough to manage the

day-to-day operation and cover current liabilities of the business.

 The entity has 65.72% non-cash current assets which are all

readily convertible to cash upon sales and collection of credit

from customers.

 The 26.49% advances from the owner is non-interest bearing

and do not have specific credit terms.

Unfavorable

 Trade and other Receivables posted a 19.85% high which is

directly related to credit sales from customers and advances

made by employees.

 Bulks of its asset are in inventories.

 Trade and other Payables account have a significant 45.61%

value from the total liabilities and equity which directly related to

credit purchases from suppliers.

 The entity is vastly leverage by debts.


66

Table 22. Liquidity Ratios

2014 2015 2016 2017 2018

Current Ratio 1.53 1.66 2.04 2.27 1.89

Current Assets 20,063,173 15,525,055 11,336,598 11,740,229 13,342,248

Current Liabilities 13,096,881 9,368,468 5,570,510 5,166,865 7,058,218

Acid Test Ratio 0.98 1.08 1.38 1.24 0.89

Current Assets – Inventories 12,790,428 10,085,867 7,705,428 6,421,673 6,292,289

Current Liabilities 13,096,881 9,368,468 5,570,510 5,166,865 7,058,218

Cash Ratio 0.09 0.14 0.28 0.30 0.45

Cash and Cash Equivalents 1,126,539 1,313,791 1,564,192 1,558,887 3,171,413

Current Liabilities 13,096,881 9,368,468 5,570,510 5,166,865 7,058,218

Favorable

 The 1.89 current ratio denotes that the company is capable of

paying its short term obligations because of a large portion of

readily convertible cash assets.

Unfavorable

 Acid test ratio at 0.89 being lower than its current ratio of 1.89

indicates that bulks of its asset are in inventory.

 The 0.45 cash ratio indicates that the entity is liquid enough to

cover its short term financial obligations.


67

Table 23. Profitability Ratios

2014 2015 2016 2017 2018

Net Profit Margin 4.39% 3.37% 4.92% 4.53% 2.82%

Net Income 1,818,248 1,369,069 1,640,844 1,396,521 954,942

Net Sales 41,412,563 40,662,379 33,371,377 30,801,888 33,846,345

Gross Profit Margin 33.34% 33.55% 34.13% 35.32% 37.10%

Gross Profit 13,807,487 13,641,920 11,390,661 10,879,856 12,557,826

Net Sales 41,412,563 40,662,379 33,371,377 30,801,888 33,846,345

Return on Assets 7.74% 7.33% 11.51% 10.19% 6.17%

Net Income 1,818,248 1,369,069 1,640,844 1,396,521 954,942

Total Assets 23,498,943 18,683,746 14,255,096 13,704,628 15,476,046

Return on Equity 29.77% 27.27% 36.62% 32.03% 22.12%

Net Income 1,818,248 1,369,069 1,640,844 1,396,521 954,942

Total Equity 6,107,846 5,021,061 4,480,392 4,360,192 4,317,549

Favorable

 Return on equity of 22.12% does not necessarily mean a good

financial performance yet the entity has the ability to generate

profit without needing as much capital.

Unfavorable

 A gross profit margin of 37.10% indicates that the company is

losing a huge portion of its profit with costs directly related with

the inbound of goods.

 Net profit margin of 2.82% and return on assets ratio of 6.17%

indicates that the company is not making enough income from

the utilization of its assets.


68

Table 24. Solvency Ratios

2014 2015 2016 2017 2018

Debt to Equity Ratio 2.85 2.72 2.18 2.14 2.58

Total Liabilities 17,391,097 13,662,684 9,774,704 9,344,436 11,158,497

Total Equity 6,107,846 5,021,061 4,480,392 4,360,192 4,317,549

Proprietary Ratio 0.26 0.27 0.31 0.32 0.28

Total Equity 6,107,846 5,021,061 4,480,392 4,360,192 4,317,549

Total Assets 23,498,943 18,683,746 14,255,096 13,704,628 15,476,046

Debt to Assets Ratio 0.74 0.73 0.69 0.68 0.72

Total Liabilities 17,391,097 13,662,684 9,774,704 9,344,436 11,158,497

Total Assets 23,498,943 18,683,746 14,255,096 13,704,628 15,476,046

Unfavorable

 Solvency ratios of 2.58 for the debt-to-equity ratio, 0.28 for the

equity-to-asset ratio, and 0.72 for the debt-to-asset ratio indicate

that the business is vastly leveraged by debts.


69

Table 25. Efficiency Ratios

2014 2015 2016 2017 2018

Receivable Turnover 0.75x 0.50x 0.50x 0.50x 0.50x

Net Credit Sales 6,162,803 2,817,114 1,643,032 1,385,433 1,537,155

Average Receivables 8,217,071 5,634,229 3,286,064 2,770,865 3,074,310

No. of Days in Fiscal Year 360 360 360 360 360

No. of days in Cycle 714 499 354 324 327

Inventory Turnover 5.69x 7.48x 9.19x 5.79x 4.80x

Net Sales 41,412,563 40,662,379 33,371,377 30,801,888 33,846,345

Average Inventory 7,272,745 5,439,188 3,631,170 5,318,556 7,049,959

No. of Days in Fiscal Year 360 360 360 360 360

No. of days in Cycle 63 48 39 62 75

Total Assets Turnover 1.76x 2.18x 2.34x 2.25x 2.19x

Net Sales 41,412,563 40,662,379 33,371,377 30,801,888 33,846,345

Average Assets 23,498,943 18,683,746 14,255,096 13,704,628 15,476,046

No. of Days in Fiscal Year 360 360 360 360 360

No. of days in Cycle 204 165 154 160 165

Payable Turnover 0.62x 0.81x 1.09x 1.26x 0.98x

Net Credit Purchases 8,087,740 7,556,071 6,051,809 6,482,825 6,905,977

Average Payables 13,040,528 9,324,236 5,534,229 5,153,959 7,058,218

No. of Days in Fiscal Year 360 360 360 360 360

No. of days in Cycle 580 444 329 286 368

Unfavorable

 The entity has a low inventory turnover at 4.80x and it takes 75

days to sell its inventory which indicates inefficiency in selling its

finished products.

 The entity has low asset turnover at 2.19x taking it 165 days to

generate revenue using its assets. This indicates presence of

unutilized assets to generate more sales.


70

b. Financial Statements Horizontal Analysis.

Table 26. Horizontal Analysis of Statement of Income and Expenses

2014 2015 2016 2017 2018 Trendline

Sales 100.00 98.19 80.58 74.38 81.73

Cost of Sales 100.00 97.88 79.63 72.17 77.12

Gross Profit 100.00 98.80 82.50 78.80 90.95

Interest Income 100.00 129.28 92.49 35.52 49.11

Total Profit 100.00 98.81 82.50 78.79 90.94

Operating Expenses 100.00 104.25 80.70 79.25 99.84

Distribution Costs 100.00 125.26 83.43 53.09 89.65

Administrative Expenses 100.00 102.98 80.54 80.83 100.46

Income before Tax 100.00 75.30 90.24 76.81 52.52

Income Tax 100.00 75.30 90.24 76.81 52.52

Net Income / Loss 100.00 75.30 90.24 76.81 52.52


71

Favorable

 Cost of sales is anticipated to fall as sales revenue is dropping,

yet its decrease is less than of the sales revenue; and if this

remains, gross profit margin will continue to increase in the next

few years.

 Despite its increasing trend in the start, there is still a slight

decrease in the trendline of the total operating expenses due to

some cost cutting measures, and if everything remains

constant, total operating expenses will continue to fall.

Unfavorable

 Total sales as well as gross profit is decreasing and if this

remains, gross profit margin will continue to decline in the

succeeding years.

 Net income account is in downward trend and if everything

remains equal, net income will also continue to decline.


72

Table 27. Horizontal Analysis of Statement of Financial Position

2014 2015 2016 2017 2018 Trendline

Assets

Current Assets

Cash 100.00 116.62 138.85 138.38 281.52

Trade and other Receivables 100.00 68.57 39.99 33.72 37.41

Inventories 100.00 74.79 49.93 73.13 96.94

Other Current Assets 100.00 91.04 82.83 60.69 1.35

Total Current Assets 100.00 77.38 56.50 58.52 66.50

Non-Current Assets

Property and Equipment 100.00 90.47 80.73 61.46 66.76

Other Non-Current Assets 100.00 111.51 141.24 - -

Total Non-Current Assets 100.00 91.94 84.94 57.17 62.11

Total Assets 100.00 79.51 60.66 58.32 65.86


73

2014 2015 2016 2017 2018 Trendline

Liabilities and Equity

Current Liabilities

Trade and other Payables 100.00 71.50% 42.44% 39.52% 54.13%

Other Current Liabilities 100.00 78.49% 64.38% 22.90% -

Total Current Liabilities 100.00 71.53% 42.53% 39.45% 53.89%

Non-Current Liabilities

Advances from Owner 100.00 100.00% 97.90% 97.28% 95.48%

Total Non-Current Liabilities 100.00 100.00% 97.90% 97.28% 95.48%

Total Liabilities 100.00 78.56% 56.21% 53.73% 64.16%

Equity

Richard M. Dolina, Capital 100.00 82.21% 73.35% 71.39% 70.69%

Total Equity 100.00 82.21% 73.35% 71.39% 70.69%

Total Liabilities and Equity 100.00 79.51% 60.66% 58.32% 65.86%


74

Favorable

 The entity has an increasing trend in cash account which

signifies the liquidity of other non-cash assets. When everything

remains constant, cash account will continue to escalate

through asset utilization.

 The decreasing trend in other non-current assets can be

attributed to its depreciation; conversely, the business is not

capital intensive so they may have few or no non-current assets.

 The advances from the owner, which consumes the whole part

of non-current liabilities, were decreasing, and if everything

remains constant, the debt will be paid off in the near future

signifying that the business will be financed wholly by their own

resources.

 The owner’s equity showed a continuous decline due to

declining net income of the entity; if everything remains

constant, it can lead to solvency.


75

Table 28. Horizontal Analysis of Liquidity Ratios

. 2014 2015 2016 2017 2018 Trendline

Current Ratio 1.53 1.66 2.04 2.27 1.89

Current Assets 100.00 77.38 56.50 58.52 66.50

Current Liabilities 100.00 71.53 42.53 39.45 53.89

Acid Test Ratio 0.98 1.08 1.38 1.24 0.89

Current Assets - Inventories 100.00 78.85 60.24 50.21 49.20

Current Liabilities 100.00 71.53 42.53 39.45 53.89

Cash Ratio 0.09 0.14 0.28 0.30 0.45

Cash 100.00 116.62 138.85 138.38 281.52

Current Liabilities 100.00 71.53 42.53 39.45 53.89

Favorable

 Notwithstanding a downward trend in the current assets, there is

still an upward trend in the current ratio; and if this trend

continues, the company will continuously satisfy its current

obligations.
76

Table 29. Horizontal Analysis of Profitability Ratios

2014 2015 2016 2017 2018 Trendline

Net Profit Margin 4.39% 3.37% 4.92% 4.53% 2.82%

Net Income 100.00 54.80 139.79 187.50 195.37

Net Sales 100.00 98.19 80.58 74.38 81.73

Gross Profit Margin 33.34% 33.55% 34.13% 35.32% 37.10%

Gross Profit 100.00 100.64 88.23 92.04 118.58

Net Sales 100.00 98.19 80.58 74.38 81.73

Return on Assets Ratio 7.74% 7.33% 11.51% 10.19% 6.17%

Net Income 100.00 54.80 139.79 187.50 195.37

Total Assets 100.00 79.51 60.66 58.32 65.86

Return on Equity Ratio 29.77% 27.27% 36.62% 32.03% 22.12%

Net Income 100.00 75.30 90.24 76.81 52.52

Total Equity 100.00 82.21 73.35 71.39 70.69

Favorable

 Notwithstanding a downward trend in the profitability ratios,

there is still an upward trend in the gross profit margin due to

higher increase of sales than that of cost of sales, and if this

trend continues, the entity will continuously its gross margin in

the next years.


77

Table 30. Horizontal Analysis of Solvency Ratios

2014 2015 2016 2017 2018 Trendline

Debt to Equity Ratio 2.85 2.72 2.18 2.14 2.58

Total Liabilities 100.00 78.56 56.21 53.73 64.16

Total Equity 100.00 82.21 73.35 71.39 70.69

Proprietary Ratio 0.26 0.27 0.31 0.32 0.28

Total Equity 100.00 82.21 73.35 71.39 70.69

Total Assets 100.00 79.51 60.66 58.32 65.86

Debt to Assets Ratio 0.74 0.73 0.69 0.68 0.72

Total Liabilities 100.00 78.56 56.21 53.73 64.16

Total Assets 100.00 79.51 60.66 58.32 65.86

Unfavorable

 Debt-to-equity ratio and debt-to-assets ratio are both in

downward trend and proprietary ratio is in upward trend which

connotes that the company is still financing its operations

through debts.
78

Table 31. Horizontal Analysis of Efficiency Ratios

2014 2015 2016 2017 2018 Trendline

Accounts Receivable
0.50x 0.72x 1.02x 1.11x 1.10x
Turnover

Net Credit Sales 100.00 98.19 80.58 74.38 81.73

Average Receivables 100.00 68.57 39.99 33.72 37.41

Inventory
5.69x 7.48x 9.19x 5.79x 4.80x
Turnover

Net Sales 100.00 98.19 80.58 74.38 81.73

Average Inventory 100.00 74.79 49.93 73.13 96.94

Total Assets
1.76x 2.18x 2.34x 2.25x 2.19x
Turnover

Net Sales 100.00 98.19 80.58 74.38 81.73

Average Assets 100.00 79.51 60.66 58.32 65.86

Accounts Payable
0.62x 0.81x 1.09x 1.26x 0.98x
Turnover

Net Credit Purchases 100.00 93.43 74.83 80.16 85.39

Average Payables 100.00 71.50 42.44 39.52 54.13

Favorable

 An upward trend was seen in the accounts receivable turnover

due to decreasing receivables and an uptrend was seen in the

account payable turnover due to slow payments to creditors.

This is an indication that the company is managing its debts and

cash flow effectively.


79

c. Summary of Findings

Favorable Results

 The entity posted a profitable performance due to its

high sales revenue, however its trendline is slowly

going down over the last years due to increasing cost

of sales; everything being equal, its profitability will

crossover to losses in the next 3 years.

 Total operating expenses are low due to subsequent

cost cutting measure made by the entity. With its

steady downward trend and with everything being

constant, the entity may increase its net income in the

next 3 years.

 The entity displayed a positive liquidity due to

conversion to cash of highly liquid assets. Should

everything be constant, the entity can expect its

liquidity to improve in the next 3 years.


80

Unfavorable Results

 The entity posted a low percentage of gross margin

due to its high percentage of cost of sales. However,

in the last 5 years, it shows an increasing trendline

due to greater increase in sales than of cost of sales.

If everything remains constant, the entity’s gross profit

margin will continue to rise.

 The debt-to-equity ratio is high indicating the entity's

dependence to debt in financing its assets. With an

upward trend and everything remain constant; the

company may become insolvent over the next few

years.

 The entity shows a low asset turnover indicating many

unutilized assets to generate more sales. However,

revenue is declining in a slow pace while assets are

steadily improving. Should everything be constant, the

entity will eventually improve its revenue performance

through asset utilization.


81

F. Internal Factors Analysis Summary

Table 32. Internal Factor Evaluation Matrix

Weighted
Key Internal Factors Weight Rating
Score
Strengths
1. Philippine Chili Federation Affiliate 0.08 3 0.24
2. Online store and selling platforms 0.12 4 0.48
3. Presence of regulatory department 0.06 3 0.18
4. Exclusive distributor in the Philippines 0.14 4 0.56
5. Operating Expenses are maintained low 0.10 3 0.30
Weaknesses
1. Loose credit collection policy 0.06 2 0.12
2. High cost of products 0.12 2 0.24
3. Limited customer base 0.14 1 0.14
4. Low gross profit margin 0.08 1 0.08
5. Slow inventory turnover 0.10 1 0.10
Total 1.00 2.44
Rating:
Major Weakness (1), Minor Weakness (2), Minor Strength (3), Major Strength (4)

The average weighted score for IFE matrix is 2.5; CSF obtained a below

average total weighted score of 2.44 which indicates that the organization is

weak internally and should plan to improve its operations through implementing

effective strategies.
82

VII. Problem Diagnosis

A. SWOT Matching

Threats Opportunities
1. The Philippine’s inflation crisis 1. Favorable consumer spending outlook

2. Volatility of price and exchange rates 2. Strengthened food regulatory

3. Competitive intensity in the Industry 3. Emergence of electronic commerce

4. Limited market segment 4. Globalization for Food Culture

5. Packaging waste sustainability 5. Advancement in automation

Weaknesses Strengths
1. Loose credit collection policy 1. Philippine Chili Federation Affiliate

2. High cost of products 2. Online store and selling platforms

3. Limited customer base 3. Presence of regulatory department

4. Low gross profit margin 4. Exclusive distributor in the Philippines

5. Slow inventory turnover 5. Operating Expenses are maintained low

Figure 7. SWOT Matching


83

The weaknesses that were not addressed by either of the opportunities

and strengths are:

 High cost of products

 Limited customer base

 Low gross profit margin

B. Problem Mapping

Table 33. Problem Mapping

Symptoms Cause Main Cause

Minimal purchases
High cost of products
from suppliers

Niche market Insufficient venue


Limited customer base
for the upper class for product selling

Some products do not


Low gross profit margin
generate profits
84

C. Statement of the Problem

Main Problem

 Insufficient venue for product selling.

Specific Problems

 High cost of products due to minimal purchases from

suppliers.

 Limited market segment due to a discriminating market for

the lower class.

 Low gross margin due to products that do not generate

profits.
85

VIII. Strategy Formulation

A. Strategic Factors Analysis Summary (SFAS)

Table 34. SFAS Matrix

Short Duration
Key Strategic

Intermediate

Comments
Weighted

Duration

Duration
Factors

Weight

Rating

Score

Long
S2 Online stores and
0.14 5 0.70 x
selling platforms

S4 Exclusive
distributor in the 0.06 3 0.18 x
Philippines

S5 Operating
expenses are 0.08 3 0.24 x
maintained low

W2 High cost of
0.10 2 0.20 x
products

W3 Limited consumer
0.12 2 0.24 x
base

O3 Emergence of
0.16 5 0.80 x
electronic commerce

O5 Advancement in
0.10 4 0.40 x
automation

T2 Volatility of price
0.12 3 0.36 x
and exchange rates

T3 Competitive
intensity in the 0.08 3 0.24 x
industry

T4 Limited market
0.14 2 0.28 x
segment

Total Scores 1.00 3.64


86

B. TOWS Matrix

External Opportunities (O) Threats (T)


O1 Favorable consumer T1 The Philippine’s
spending outlook inflation crisis
O2 Strengthened food T2 Volatility of price
regulatory and exchange rates
O3 Emergence of T3 Competitive intensity
electronic commerce in the Industry
O4 Globalization for T4 Limited market segment
food culture T5 Packaging waste
O5 Advancement in sustainability
automation

Internal
Strengths (S) S–O Strategies S–T Strategies
S1 Philippine Chili Federation S1, S2, S4, O3, O4, O5 Send S1, T1, T3 Launch products
Affiliate product offerings to hot sauce locally made
S2 Online store and selling merchants and enthusiast
platforms S2, T3 Offer free delivery for
S3 Presence of a S3, O3 Prepare multimedia large transactions
regulatory department campaigns about the
S4 Exclusive distributor products offered S4, T1, T2 Practice forward
In the Philippines contracts with suppliers
S5 Operating expenses S5, O3, O5 Invest in digital
are maintained low marketing and automated S5, T1 Minimize unnecessary
selling platforms outlays to reduce operating
expenses

Weaknesses (W) W–O Strategies W–T Strategies


W1 Loose collection policy W1, O5 Strengthen credit and W2, W4, T2, T3 Review
collection policy through the and modify pricing
W2 High cost of products use of online services and discounts strategy

W3 Limited consumer base W2, W3, O4, O5 Prepare W4, W5, T3, T4 Make use of
multimedia campaigns about social media and other digital
W4 Low gross profit margin the products offered marketing programs to
increase brand awareness
W5 Slow inventory turnover W4, W5, O3, O5 Invest in
digital marketing and W4, W5, T3 Add physical
automated selling platforms stores and outlets to diversify
its locations
W5, O4 Increase customer
base through collaborations W5, T4 Increase customer
with food service companies base through collaborations
with food service companies

Figure 8. TOWS Matrix


87

C. Internal-External Matrix

Total IFE Rating = 2.44

Strong Average Weak


Total EFE Rating = 2.64

3.00 to 4.00 2.00 to 2.99 1.00 to 1.99

High
I II II
3.00 to 4.00

Medium V
IV VI
2.00 to 2.99 CSF Enterprise

Low
VII VIII IX
1.00 to 1.99

Figure 9. IE Matrix

Cells IV, V, and VI suggest hold and maintain strategy. This means

intensive and aggressive tactical strategies. The entity should pursue strategies

focused on increasing market penetration and product development. This means

intensive and aggressive tactical strategies. The entity strategies should focus on

market penetration, market development and product development. From the

operational perspective, a backward integration, forward integration and

horizontal integration should also be considered. (www.maxi-pedia.com retrieved

April 2019)
88

D. Space Matrix

Table 35. Space Matrix

Internal Analysis: External Analysis:

Financial Position (FP) Environmental Position (EP)


Return on Assets +3 Inflation Rate -2
Efficiency +1 Competition -5
Gross Profit Margin +2 Consumer Spending -2
Liquidity +3 Barriers of Entry -3
Revenue Increase +1 Risk -4
Financial Position Average +2.0 Stability Position Average -3.2

Competitive Position (CP) Industry Position (IP)


Product Quality -2 Growth Potential +5
Market Share -6 Financial Stability +2
Customer Loyalty -3 Increasing Potential Market +4
Technological Advancements -2 Access to Financing +3
Product Life Cycle -2 Resource Utilization +4
Competitive Position Average -3.0 Industry Position Average +3.6
89

Figure 10. SPACE Matrix

In Figure 10, the SPACE matrix tells that the entity should pursue a

competitive strategy. The entity is competing in an unstable industry that is why it

needs to use its internal strengths to develop market penetration and

development strategy such as product development, integration with other

companies to increase gain advantage over its competitors.


90

E. Competitive Profile Matrix

Table 36. Competitive Profile Matrix

Sweatshoppe
The Green Seven Spice Assad Mini
Critical CSF Enterprise Chili Foods
Company Shop Mart
Success Weight Store
Factors
Rating Score Rating Score Rating Score Rating Score Rating Score

Advertising 0.10 3 0.3 2 0.2 2 0.2 1 0.1 2 0.2

Product Quality 0.14 4 0.56 4 0.56 4 0.56 4 0.56 3 0.42

Price Competitiveness 0.17 2 0.34 2 0.34 2 0.34 3 0.51 3 0.51

Website 0.09 3 0.27 1 0.09 1 0.09 1 0.09 1 0.09

Financial Position 0.10 4 0.4 3 0.3 3 0.3 2 0.2 2 0.2

Customer Loyalty 0.12 3 0.36 3 0.36 2 0.24 3 0.36 2 0.24

Market Share 0.15 4 0.6 3 0.45 3 0.45 2 0.3 1 0.15

Profitability 0.13 4 0.52 3 0.39 3 0.39 2 0.26 2 0.26

Total 1.00 3.35 2.69 2.57 2.38 2.07

Rating:
Major Weakness (1), Minor Weakness (2), Minor Strength (3), Major Strength (4)

Based on the table above, CSF is the strongest in terms of all factors.

Overall, CSF is the strongest among the competitors as indicated with the total

weighted score of 3.35 followed by the Green Company with the total weighted

score of 2.69.
91

F. Boston Consulting Group Matrix

Figure 11. BCG Matrix

Based on the table above, one (1) product line is in cash cows which

generate more cash than it consumes. This product covers majority of the entity’s

operating costs. The entity’s own brands together with two product lines are

under the stars quadrant which also generates cash for the entity, yet it also

consumes a lot. Two (2) product lines are in the question mark that needs an

aggressive marketing in order for it to become stars. Three (3) product lines are
92

in poor dogs which are suggested to be eliminated from the entity’s product line

offerings since they do not generate profits for the entity and continuously

incurred losses from the previous years.


93

G. Grand Strategy Matrix

Rapid Market Growth

Quadrant 2 Quadrant 1

Product Development Product Development


Market Development Market Development
Market Penetration Market Penetration

Strong Competitive Position


Weak Competitive Position

Horizontal Integration Backward Integration


Divestiture Forward Integration
Liquidation Horizontal Integration
Related Diversification

Retrenchment CSF Enterprise


Related Diversification
Unrelated Diversification Related Diversification
Divestiture Unrelated Diversification
Liquidation Joint Ventures

Quadrant 3 Quadrant 4

Slow Market Growth

Figure 12. Grand Strategy Matrix

The grand strategy matrix shows that CSF falls under Quadrant IV; the

position of the firm suggests there is a need to make some drastic changes

quickly to avoid further demise and possible liquidation. Diversification and Joint

Ventures are suggested in order to create a vast market for products and

services. These firms also have the strength to launch diversified programs into

more promising growth areas. (www.mbaknol.com retrieved April 2019)


94

 Market Growth – SLOW

Growth in hot sauces current value sales in the Philippines

increased by an average rate of 1.02% for the previous years due

to the increase of new products and transactions boost growth in its

volume sales to foodservices and its competitive landscape

remains fragmented.

Any industry whose annual growth in sales is below 5%

could be considered to have slow growth. (David, 2017)

 Competitive Position – STRONG

CSF, having a niche market for the upper class and

foreigners in the Philippines, still has a strong competitive position

versus other specialty stores that offer various brands of hot

sauces. Having an 8% market share based for all non-grocery

retailing for whole sauces, dressings, and condiments sector.


95

H. Summary of Strategies

Table 37. Summary of Strategies

Strategies SFAS TOWS IE SPACE GRAND TOTAL


Market Penetration 1 10 1 1 13
Market Development 1 1 1 3
Product Development 1 1 1 1 4
Backward Integration 1 1
Forward Integration 1 1
Horizontal Integration 1 1
Related Diversification 1 1
Unrelated Diversification 1 1
Joint Ventures 1 1
Retrenchment 1
Divestiture 0
Liquidation 0

Based from the Table 36, the strategist concluded that among the strategy

options are market penetration, market development and product development.

These strategies are consistently recommended by TOWS, SFAS, I/E, SPACE

and GRAND Strategy Matrix.


96

I. Quantitative Strategic Planning Matrix (QSPM)

Table 38. Quantitative Strategic Planning Matrix (QSPM)

Market Market Product


Key Factors Weight Penetration Development Development
AS TAS AS TAS AS TAS

Opportunities
1. Favorable consumer
0.08 3 0.24 2 0.16 1 0.08
spending outlook
2. Strengthened food
0.06 - - - - - -
regulatory
3. Emergence of electronic
0.14 3 0.42 2 0.28 1 0.14
commerce
4. Globalization for Food
0.10 4 0.40 3 0.30 2 0.20
Culture
5. Advancement in
0.08 3 0.24 4 0.32 2 0.16
automation
Threats
1. The Philippine’s inflation
0.08 0.08 2 0.16 4 0.32 3
crisis
2. Volatility of price and
0.12 - - - - - -
exchange rates
3. Competitive intensity in
0.16 4 0.64 3 0.48 2 0.32
the Industry
4. Limited market segment 0.12 4 0.48 3 0.36 2 0.24
5. Packaging waste
0.06 - - - - - -
sustainability
Total 1.00 2.58 2.22 1.38

Strengths
1. Philippine Chili
0.08 2 0.16 3 0.24 4 0.32
Federation Affiliate
2. Online store and selling
0.12 4 0.48 3 0.36 2 0.24
platforms
3. Presence of regulatory
0.06 - - - - - -
department
4. Exclusive distributor in
0.14 3 0.42 2 0.28 1 0.14
the Philippines
5. Operating Expenses are
0.10 - - - - - -
maintained low
Weaknesses
1. Loose credit collection
0.06 - - - - - -
policy
2. High cost of products 0.12 4 0.48 3 0.36 2 0.24

3. Limited customer base 0.14 3 0.42 4 0.56 2 0.28

4. Low gross profit margin 0.08 4 0.32 3 0.24 2 0.16

5. Slow inventory turnover 0.10 - - - - - -

Total 1.00 2.88 2.04 1.38

Total Attractiveness Score 4.86 4.26 2.76


97

Based on the QSPM, market penetration will be the most effective

strategy among the alternatives with total attractiveness score of 4.86. Market

development and product development on the other hand, had a total

attractiveness score of 4.26 and 2.76 respectively.


98

IX. Recommendation

A. Alternative Courses of Action

ACA 1 - Market Penetration

Supply products to Hotels, Restaurants and Gastro Pubs in

Bonifacio Global City.

ACA 2 - Market Development

Open retail store in Bonifacio Global City to accommodate

customer demand opportunity within the area.

ACA 3 - Product Development

Launch Canned Tuna and Corned Beef flavored by imported hot

sauces.

B. Decision Criteria and Weight

Table 39. Decision Criteria and Weight

Criteria Weight
Effectiveness 0.35
Cost Efficiency 0.30
Ease of Implementation 0.20
Sustainability 0.15
Total 1.00
99

C. Analysis of Each Alternative Course

ACA 1 - Market Penetration

Supply products to Hotels, Restaurants and Gastro Pubs in

Bonifacio Global City.

Background

The entity has successfully distributed its product to various

consumers through retailing via store outlets located in malls such as

Nuvali in Laguna, Ayala Mall in Tagaytay, and Lucky China Town in

Manila and wholesaling to various hot sauce merchants but these are not

enough to generate significant income for the company.

Advantage/s

 Hotels, Restaurants and Gastro Pubs located in Taguig City

are the appropriate venue for products selling since its target

market are from the upper class and foreigners.

 Increase in sales with access to a larger customer base and

at the same time increases awareness of the store through

referrals.

 Can be used as an ingredient for food preparation, as

condiment in the food section, and as product available for

sale to guests.
100

 It allows Hotels, Restaurants and Gastro Pubs to choose

from a more targeted list of sauces, dressings, and

condiments that may not be available for purchase from

another distributor and potentially eliminate the need to

purchase entire pallets of products.

Disadvantage/s

 Uncertain preference of guests for extreme hot flavors.

 Price will be much less than selling directly to customers.

ACA 2 - Market Development

Open retail outlets in Bonifacio Global City to accommodate

customer demand opportunity within the area.

Background

The physical stores of the entity serve as its retail outlets and

generate good sales for the company. Even having a strategic location of

stores in the developing areas of Nuvali and Tagaytay, there is still an

untapped portion of its niche market in Metro Manila especially in the busy

streets of Makati and Taguig where the upper class and foreigners stroll

and reside.
101

Advantage/s

 Storefronts increase sales opportunities.

 Special offers and price cuts attract higher demand and

more sales.

 Large scale of population being the center of trade and

business in the country.

Disadvantage/s

 Opening a physical store is a lot costlier due to expenses

such as rent, improvements, maintenance, salaries, and

utilities.

 Chances of having a wide customer base are minimal in

opening a physical store.

ACA 3 - Product Development

Launch Canned Tuna and Corned Beef flavored by imported hot

sauces.

Background

The entity offers a wide array of products and majority of it are

imported from other countries. Filipinos loves food and they will absolutely

like the superb hotness and spiciness of food products if it will be flavored

to the usual Filipino food.


102

Advantage/s

 As consumer tastes and interests evolve, product

development can help the business leverage opportunities to

market to these new preferences.

 A product launch generates attention for a company. When a

business issue a press release that gets published, people

read about this new product and, at the same time, learn

about or get introduced to the company.

 Launching a new product successfully and sells well can

cover the development and launch costs, and generate

profits for the company.

Disadvantage/s

 Although new product development is a proactive response

to the continual changing landscape of customer tastes,

those same tastes will continue to evolve even as you're

developing your new products.

 Risks on failing to achieve sales and the product being

unsuccessful.

 Competitors’ dominance in the market.


103

D. Scoring

Table 40. Scoring of Alternative Courses of Action

Criteria Weight ACA 1 ACA 2 ACA 3

Effectiveness 0.35 3 1.05 1 0.35 2 0.70

Cost Efficiency 0.30 3 0.90 2 0.60 1 0.30

Ease of Implementation 0.20 3 0.60 2 0.40 1 0.20

Sustainability 0.15 2 0.30 1 0.15 3 0.45

Total 1.00 2.85 1.50 1.65


104

E. Strategic Choice

Corporate Level Strategy

Market Penetration

After careful analysis and evaluation of the Alternative Courses of

Action, the strategist recommends market penetration by supplying to

Hotels, Restaurants and Gastro Pubs in Bonifacio Global City.

In order to reach Php 100 million gross margin while reaching in the

next 5 years of operation, the entity should extend the reach of its

products to various high-end restaurants, hotels and gastro pubs located

in Taguig City. CSF must competitively increase its presence in order to

cover its unmet demand and increase its customer base. This will also

give opportunity for CSF to be recognized by various companies also for

possible collaborations.
105

Business Level Strategy

Focused Differentiation Strategy

Businesses do not only compete based on differentiation, they also

choose for a small segment of the market to provide goods. Since the

target market of the entity is a niche, it should concentrate its efforts on a

particular sales channel such as extending its reach to various hotels,

restaurants, and gastro pubs to make way for more opportunities and thus

lead to increased market share and profitability.


106

Functional Level Strategy

Marketing and Sales Department

In line to functional strategy, it is recommended to develop a

distribution plan. One of the sections of the entity’s marketing plan should

describe the channels to distribute the products to customers. The various

distribution channels differ in costs, customer relationships, complexity

and the resources required to operate the channel. The marketing and

sales department should make sure the distribution channels they select

match and reinforce the goals and objectives of the marketing plan.

Logistics and Operations Department

In line to functional strategy, it is recommended to strengthen its

inventory management. An up-to-date inventory count should always be

available to ensure that its products are always available and can handle

bulk order transactions. Forward contracts should also be practiced in

order to minimize the effect of volatile exchange rates.

Finance Department

In line to functional strategy, it is recommended to strengthen its

credit and collection policy as its customer base increases. This will help

the entity monitor credit sales and lessen doubtful accounts transactions.
107

Human Resource Department

In line to functional strategy, it is recommended to ensure the

delegation of employees under the key and accounts division who will be

assigned and will focus on business to business transactions such as

looking for the appropriate hotels, restaurants and gastro pubs in Taguig

City, product presentations to management, locking up contracts, and

constant after sales service.

Information Technology Department

In line to functional strategy, it is recommended to strengthen its

information system to form closer relationships not just with customers but

also with suppliers through sophisticated extranets. CSF should automate

orders and payment system especially for business to business

transactions. Downloadable form detailing CSF’s products and a constant

communication platform should also be available to reduce processing

time and make it easier for an individual or a company to transact with

CSF.
108

X. Strategic Planning

A. Strategy

ACA 1 - Market Penetration

Supply products to Hotels, Restaurants and Gastro Pubs in

Bonifacio Global City.


109

B. Recommended Mission and Vision Statements

Vision Statement

It is our vision to become one of the leading and reliable distributors

of high quality hot sauces, and spicy flavored Filipino snacks and canned

fish products.

Table 41. Vision Statement Evaluation

VISION STATEMENT
Criteria Yes/No Evaluation

The statement clearly explains what the


Vivid Yes
company wants to achieve.
The statement specifies that they want to
Realistic Yes become the leading distributor in its products’
respective market and industry.
The statement specifies that the company
desires to be the most preferred, most
Aspiration Yes
profitable, and most efficient distributor in the
Philippine Market.
110

Mission Statement

It is our mission to guarantee the continued success 6 of our

customers1 and the community8 by supplying wide portfolio of hot and

spicy food products with exceptional quality and value2 in the Philippine

market3, to attain good customer satisfaction7 equipped with new ideas,

efficient systems4 and motivated employees9 to ensure the profitability and

growth of the company5

Table 42. Mission Statement Evaluation

MISSION STATEMENT

Criteria Yes/No Evaluation

The statement explains what the company


Customers Yes
aims for its customers.

The statement clearly defines what the


Products and Services Yes
company is offering.

The statement clearly defines what the


Markets Yes
company is offering.
The statement states that it embraces
Technology Yes innovation and new ideas to improve the
business.
The statement states that it ensures the
Concern for Survival Yes
profitability and growth of the company.
The statement states that its aim is to
Philosophy Yes guarantee the continued success of its
stakeholders
The statement states that it seeks to provide
Self-Concept Yes customer satisfaction through their product
offerings.
The statement explains what the company
Concern for Public Image Yes
aims for the community.

The statement explains what the company


Concern for Employees Yes
aims for its employees.
111

C. Implementation Plan

Table 43. Action Plan

Time Frame
Objectives

Indicator
Possible
Involved

Success
Hurdles
People

Return
Steps

Cost
Research and To come up with 2 Weeks Key n/a n/a None List of possible
evaluation of the the list of Accounts hotels,
possible hotels, possible hotels, Department restaurants, and
restaurants, and restaurants, and gastro pubs
gastro pubs in gastro pubs in in
Metro Manila Metro Manila

Management To enable 1 Day Executive P 3,000.00 n/a None List of selected


Meetings discussion Officers stores in Metro
based on Manila approved
information, Key by the owner
sharing of ideas, Accounts
and selection of Department
hotels,
restaurants, and
gastro pubs

Budget and store To prepare the As needed Finance n/a n/a None None
requirements files, funds, and Department
preparation products needed

Product proposal To seek 1 Month Key P 50,000.00 n/a Disapproval Approved


to the selected approval for the Accounts of proposed Product
hotels, use of product to Department products proposal
restaurants, and their businesses
gastro pubs
contract review
and approval

Agreement To execute 1 Month Chief n/a n/a None Approved


review and contracts or Executive documents
approval agreements Officer

Creation of To develop a 1 Month Key n/a n/a None Distribution Plan


distribution plan distribution Accounts
programs that Department
would help
monitor sales
mix and sales
forecast

Execution To distribute Continuous Operations Costs per Revenue Decreasing Continuous and
CSF products to Department volume of demand increasing
the selected delivery and orders distribution to
hotels, hotels,
restaurants, and restaurants, and
gastro pubs gastro pubs

Evaluation and To check the Continuous Key n/a n/a n/a Feedbacks,
Monitoring performance of Accounts Comments, and
the products Department Evaluation
Reports
112

5-Year Financial Forecast

Table 44. Forecasted Statement of Financial Performance

2019 2020 2021 2022 2023


Sales 34,523,272 35,213,738 35,918,012 36,636,373 37,369,100

Cost of Sales 21,577,045 21,832,517 22,089,578 22,348,187 22,608,306

Gross Profit 12,946,227 13,381,220 13,828,435 14,288,185 14,760,795

Interest Income 1,634 1,798 1,978 2,175 2,393

Total Profit 12,947,861 13,383,018 13,830,412 14,290,361 14,763,187

Operating Expenses 11,530,962 11,876,891 12,233,198 12,600,194 12,978,200

Distribution Costs 1,383,715 1,425,227 1,467,984 1,512,023 1,557,384

Administrative Expenses 10,147,247 10,451,664 10,765,214 11,088,171 11,420,816

Income before Tax 1,416,899 1,506,127 1,597,214 1,690,167 1,784,988

Income Tax 425,070 451,838 479,164 507,050 535,496

Net Income 991,829 1,054,289 1,118,050 1,183,117 1,249,491


113

Table 45. Forecasted Statement of Financial Position

2019 2020 2021 2022 2023

Assets

Current Assets

Cash 1,008,180 935,268 569,362 1,354,534 2,168,183

Trade and other Receivables 3,452,327 3,521,374 3,591,801 3,663,637 3,736,910

Inventories 12,946,227 13,381,220 13,828,435 14,288,185 14,760,795

Other Current Assets 69,848 104,772 157,158 235,737 353,605

Total Current Assets 17,476,583 17,942,634 18,146,756 19,542,094 21,019,493

Non-Current Assets

Property and Equipment 1,632,731 1,534,220 1,435,709 1,337,199 1,238,688

Total Non-Current Assets 1,632,731 1,534,220 1,435,709 1,337,199 1,238,688

Total Assets 19,109,314 19,476,854 19,582,466 20,879,292 22,258,181

Liabilities and Equity

Current Liabilities

Trade and other Payables 9,615,660 8,907,004 7,887,877 7,982,778 8,078,320

Other Current Liabilities 125,000 187,500 234,375 292,969 366,211

Total Current Liabilities 9,740,660 9,094,504 8,122,252 8,275,747 8,444,531

Non-Current Liabilities

Advances from Richard M. Dolina 4,059,276 4,018,683 3,978,496 3,938,712 3,899,324

Total Non-Current Liabilities 4,059,276 4,018,683 3,978,496 3,938,712 3,899,324

Equity

Richard M. Dolina, Capital 5,309,378 6,363,667 7,481,717 8,664,834 9,914,325

Total Equity 5,309,378 6,363,667 7,481,717 8,664,834 9,914,325

Total Liabilities and Equity 19,109,314 19,476,854 19,582,466 20,879,292 22,258,181


114

Table 46. Forecasted Statement of Cash Flows

2019 2020 2021 2022 2023

Operating Activities

Profits (Loss) for the year 991,829 1,054,289 1,118,050 1,183,117 1,249,491

Depreciation 501,067 98,511 98,511 98,511 98,511

Decrease (Increase) in:

Trade and other receivables -378,017 -69,047 -70,427 -71,836 -73,273

Inventories -5,896,268 -434,993 -447,214 -459,751 -472,609

Other Current Assets -23,283 -34,924 -52,386 -78,579 -117,868

Increase (Decrease) in:

Trade and other payables 2,557,441.36 -708,655.43 -1,019,127.00 94,901.02 95,541.91

Other current liabilities 125,000 62,500 46,875 58,594 73,242


Net Cash provided by
-2,122,230 -32,320 -325,719 824,957 853,036
Operating Activities
Investing Activities

Decrease (Increase) in:

Property and equipment - - - - -

Other noncurrent assets - - - - -


Net Cash provided by
- - - - -
Investing Activities
Financing Activities

Increase (Decrease) in:

Settlement of Advances -41,003 -40,593 -40,187 -39,785 -39,387


Net Cash provided by
-41,003 -40,593 -40,187 -39,785 -39,387
Investing Activities

Net Increase (Decrease) in Cash -2,163,233 -72,912 -365,906 785,172 813,649

Cash Beginning, 3,171,413 1,008,180 935,268 569,362 1,354,534

Cash, Ending 1,008,180 935,268 569,362 1,354,534 2,168,183


115

Table 47. Forecasted 2019 Cash Budget

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year

Cash, Beginning 634,283 951,424 317,141 1,268,565 3,171,413

Receipts

Sales Revenue 6,904,654 10,356,982 3,452,327 13,809,309 34,523,272

Total Cash Receipts 7,538,937 11,308,406 3,769,469 15,077,874 37,694,686

Less: Disbursements

Cost of Sales 4,315,409 6,473,114 2,157,705 8,630,818 21,577,045

Distribution Costs 276,743 415,115 138,372 553,486 1,383,715

Administrative Expenses 2,029,449 3,044,174 1,014,725 4,058,899 10,147,247

Settlement of Advances 8,201 12,301 4,100 16,401 41,003

Total Cash Disbursements 6,629,802 9,944,703 3,314,901 13,259,604 33,149,010

Total Use of Cash 274,852 412,279 137,426 549,705 1,374,262

Cash, Ending 909,135 1,363,703 454,568 1,818,270 4,545,675


116

Table 48. Forecasted 2019 Operating Expenses

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year

Distribution Costs

Transportation Costs 100,864 67,243 569,479 134,486 336,214

Delivery Charges 94,194 62,796 31,398 125,593 313,981

Gas and Oil 62,101 41,401 20,700 82,801 207,003

Advertising and Promotions 157,955 105,303 52,652 210,607 526,516

Total Distribution Costs 415,115 276,743 138,372 553,486 1,383,715

Administrative Expenses

Compensation and Other Benefits 1,457,805 971,870 485,935 1,943,740 4,859,351

Rental 349,634 233,089 116,545 466,178 1,165,445

Depreciation 1,503,201 1,002,134 501,067 2,004,268 5,010,671

Repairs and Maintenance 159,973 106,649 53,324 213,297 533,243

Light and Water 119,044 79,363 39,681 158,726 396,814

Communications 119,104 79,402 39,701 158,805 397,012

Office Supplies 65,914 43,943 21,971 87,885 219,713

Security Services 60,435 40,290 20,145 80,580 201,449

Commission 41,889 27,926 13,963 55,853 139,631

Representation and Entertainment 131,004 87,336 43,668 174,672 436,679

Insurance 31,639 21,093 10,546 42,185 105,464

Other Administrative Expenses -995,468 -663,645 -331,823 -1,327,290 -3,318,225

Total Administrative Expenses 3,044,174 2,029,449 1,014,725 4,058,899 10,147,247

Total Operating Expenses 3,459,289 2,306,192 1,153,096 4,612,385 11,530,962


117

Financial Assumptions

 An annual increase in net sales by 20% due to commencement of

the proposed strategy.

 An annual decrease in cost of sales of only 2% due to inflation.

 Operating expenses will have a 10% annual increase and

movements of accounts are based on the average percentage

change of the previous years.


118

5-Year Financial Projections

Table 49. Projected Statement of Financial Performance

2019 2020 2021 2022 2023

Sales 40,615,614 48,738,737 58,486,485 70,183,782 84,220,538

Cost of Sales 21,288,519 24,775,525 28,755,855 33,337,296 38,601,080

Gross Profit 15,840,090 19,982,882 25,149,188 31,582,702 39,583,653

Interest Income 2,229 3,343 5,015 7,522 11,283

Total Profit 15,842,318 19,986,225 25,154,203 31,590,224 39,594,936

Operating Expenses 12,314,620 13,546,082 14,900,690 16,390,759 18,029,835

Distribution Costs 2,462,924 2,709,216 2,980,138 3,278,152 3,605,967

Administrative Expenses 9,851,696 10,836,866 11,920,552 13,112,607 14,423,868

Income before Tax 3,527,698 6,440,143 10,253,513 15,199,464 21,565,100

Income Tax 1,058,309 1,932,043 3,076,054 4,559,839 6,469,530

Net Income 2,469,389 4,508,100 7,177,459 10,639,625 15,095,570


119

Table 50. Projected Statement of Financial Position

2019 2020 2021 2022 2023

Assets

Current Assets

Cash 29,341,364 31,294,866 34,457,054 41,735,926 53,645,415

Trade and other Receivables 8,123,123 9,747,747 11,697,297 14,036,756 16,844,108

Inventories 4,372,151 5,074,563 5,883,052 6,811,955 7,877,097

Other Current Assets 406,156 487,387 584,865 701,838 842,205

Total Current Assets 42,242,795 46,604,563 52,622,268 63,286,476 79,208,825

Non-Current Assets

Property and Equipment 21,337,981 23,437,981 26,037,981 27,637,981 28,637,981

Total Non-Current Assets 21,337,981 23,437,981 26,037,981 27,637,981 28,637,981

Total Assets 63,580,776 70,042,544 78,660,249 90,924,457 107,846,806

Liabilities and Equity

Current Liabilities

Trade and other Payables 4,419,543 5,891,653 6,829,157 7,905,997 9,140,405

Other Current Liabilities 125,750 188,625 235,781 294,727 368,408

Total Current Liabilities 4,545,293 6,080,278 7,064,938 8,200,723 9,508,814

Non-Current Liabilities

Advances from Richard M. Dolina 3,690,251 3,321,226 2,989,103 2,690,193 2,421,174

Total Non-Current Liabilities 3,690,251 3,321,226 2,989,103 2,690,193 2,421,174

Equity

Richard M. Dolina, Capital 55,345,231 60,641,040 68,606,207 80,033,541 95,916,819

Total Equity 55,345,231 60,641,040 68,606,207 80,033,541 95,916,819

Total Liabilities and Equity 63,580,776 70,042,544 78,660,249 90,924,457 107,846,806


120

Table 51. Projected Statement of Cash Flows

2019 2020 2021 2022 2023

Operating Activities

Profits (Loss) for the year 2,469,389 4,508,100 7,177,459 10,639,625 15,095,570

Depreciation 501,067 787,708 787,708 787,708 787,708

Decrease (Increase) in:

Trade and other receivables -4,738,488 -1,624,625 -1,949,549 -2,339,459 -2,807,351

Inventories 2,677,807 -702,411 -808,490 -928,903 -1,065,142

Other Current Assets -359,591 -81,231 -97,477 -116,973 -140,368

Increase (Decrease) in:

Trade and other payables -2,638,674.84 1,472,109.78 937,503.95 1,076,839.39 1,234,408.86

Other current liabilities 125,750 62,875 47,156 58,945 73,682


Net Cash provided by
-1,962,741 4,422,526 6,094,311 9,177,783 13,178,508
Operating Activities
Investing Activities

Decrease (Increase) in:

Property and equipment - -2,100,000 -2,600,000 -1,600,000 -1,000,000

Other noncurrent assets - - - - -


Net Cash provided by
- -2,100,000 -2,600,000 -1,600,000 -1,000,000
Investing Activities
Financing Activities

Increase (Decrease) in:

Settlement of Advances -410,028 -369,025 -332,123 -298,910 -269,019


Net Cash provided by
-410,028 -369,025 -332,123 -298,910 -269,019
Investing Activities
Net Increase (Decrease) in Cash -2,372,769 1,953,501 3,162,188 7,278,872 11,909,489

Cash Beginning, 31,714,133 29,341,364 31,294,866 34,457,054 41,735,926

Cash, Ending 29,341,364 31,294,866 34,457,054 41,735,926 53,645,415


121

Table 52. Client Base

Client Base
2019 2020 2021 2022 2023
Hotels 5 10 15 20 25
Restaurants 10 15 20 25 30
Gastro Pubs 5 10 15 20 25
Total 20 35 50 65 80

Table 53. 2019 Projected Demand

Projected Demand
In-Store Online Gastro
Hotels Restaurants Total
Sales Sales Pubs
(in units)

Hot Sauce

Habanero Hot Mustard Pepper Sauce 4,797 1,599 1,199 1,399 700 9,694

Ass Reaper 2,702 901 675 788 394 5,460

Batch #114 Jamaican 1,177 392 294 343 172 2,378

Batch #37 Garlic Style 1,177 392 294 343 172 2,378

Chipotle Pepper Sauce 2,031 677 508 592 296 4,104

Extra Hot Habanero Pepper Sauce 2,180 727 545 636 318 4,406

Habanero and Garlic Pepper Sauce 5,427 1,809 1,357 1,583 791 10,968

Garlic Habanero Pepper Sauce 2,180 727 545 636 318 4,406

Jalapeño Pepper Sauce 2,180 727 545 636 318 4,406

Mild & Sweet Habanero Pepper Sauce 2,180 727 545 636 318 4,406

Original Habanero Hot Sauce 6,541 2,180 1,635 1,908 954 13,219

Scorpion Pepper Sauce 552 184 138 161 81 1,116

Scotch Bonnet Pepper Sauce 1,308 436 327 382 191 2,644

Xxxtra Reserve Pepper Sauce 1,308 436 327 382 191 2,644

Ketchup

Black Pepper Ketchup 1,265 422 316 369 185 2,557

Chipotle Ketchup 512 171 128 149 75 1,035

Habanero Ketchup 1,765 588 441 515 257 3,566

Jalapeno Ketchup 2,132 711 533 622 311 4,309


122

In-Store Online Gastro


Hotels Restaurants Total
Sales Sales Pubs

Steak Sauce
Steak Pepper Sauce 1,283 428 321 374 187 2,592

Seasoning & Rubs


Chili Garlic – Mild and Original 501 167 125 146 73 1,012
Chili Garlic – Ghost Pepper 180 60 45 53 26 364
Chili Garlic – Habanero 144 48 36 42 21 292
Chili Garlic – Hot and Crispy 328 109 82 96 48 663
Reaper Garlic 1,665 555 416 486 243 3,364

Bouillon Cubes
Bouillon Beef Cubes 598 199 149 174 87 1,208
Bouillon Chicken Cubes 598 199 149 174 87 1,208
Bouillon Pork Cubes 598 199 149 174 87 1,208
Bouillon Shrimp Cubes 598 199 149 174 87 1,208

Salsa and Dips


Batch #174 Fire Roasted Jalapeno 207 69 52 60 30 418
Batch #218 Smoked Jalapeno 290 97 72 84 42 585
Batch #37 Habanero Garlic Salsa 331 110 83 97 48 669

Sardines
Reaper Sardines 28,853 9,618 7,213 8,416 4,208 58,308

Shrimp Paste
Reaper Shrimp Paste 758 253 190 221 111 1,532

Snacks
Reaper Fish Cracker 2,153 718 538 628 314 4,350
Reaper Mixed Nuts 1,937 646 484 565 283 3,915
Reaper Mushroom Chips 235 78 59 68 34 475
Reaper Peanut 3,616 1,205 904 1,055 527 7,308
123

In-Store Online Gastro


Hotels Restaurants Total
Sales Sales Pubs

Chili Oils
Chili Chutney 609 203 152 178 89 1,230
Chili Chimichurri 761 254 190 222 111 1,538
Pickled Chili Garlic 609 203 152 178 89 1,230
Pineapple Habanero Jam 913 304 228 266 133 1,846
Spicy Moringa Pesto 1,015 338 254 296 148 2,051
Spicy Papaya Atchara 1,522 507 381 444 222 3,076

Tea
Camomile & Lemongrass Infusion 774 258 194 226 113 1,564
Lemon and Ginger Infusion 658 219 164 192 96 1,330
Mixed Berries & Hibiscus Infusion 1,316 439 329 384 192 2,659
Mixed Citrus Infusion 3,403 1,134 851 993 496 6,878
Rooibos and Cinnamon Infusion 2,520 840 630 735 367 5,092
Rosehip, Hibiscus, & Cherry Infusion 2,030 677 508 592 296 4,103
Strawberry & Kiwi Infusion 4,486 1,495 1,122 1,308 654 9,066

Wine, Liquor, & Spirit


Apple White Wine 566 189 141 165 82 1,143
Blackberry Red Wine 566 189 141 165 82 1,143
Carolina Reaper Vodka 29 10 7 8 4 58
Grapefruit Rose Wine 377 126 94 110 55 762
Lambanog Ginger Sour 1,102 367 276 321 161 2,227
Lambanog Puro 259 86 65 76 38 524
Passion Fruit 566 189 141 165 82 1,143
White Sangria 566 189 141 165 82 1,143

Wing Sauce
Buffalo Blue Cheese 787 262 197 230 115 1,591
Spicy Honey Habanero 562 187 141 164 82 1,136
Teri-Yah-Ki 900 300 225 262 131 1,818
124

Table 54. Projected Sales Mix

Sales Mix
2019 2020 2021 2022 2023
(in Php)
Hot Sauce 17,261,636 20,713,963 24,856,756 29,828,107 35,793,729
Ketchup 3,553,866 4,264,640 5,117,567 6,141,081 7,369,297
Steak Sauce 507,695 609,234 731,081 877,297 1,052,757
Seasoning & Rubs 751,389 901,667 1,082,000 1,298,400 1,558,080
Bouillon Cubes 264,001 316,802 380,162 456,195 547,433
Salsa and Dips 548,311 657,973 789,568 947,481 1,136,977
Sardines 3,005,555 3,606,667 4,328,000 5,193,600 6,232,320
Shrimp Paste 142,155 170,586 204,703 245,643 294,772
Snacks 1,076,314 1,291,577 1,549,892 1,859,870 2,231,844
Chili Oils 4,122,485 4,946,982 5,936,378 7,123,654 8,548,385
Tea 4,934,797 5,921,757 7,106,108 8,527,329 10,232,795
Wine, Liquor, & Spirit 2,985,248 3,582,297 4,298,757 5,158,508 6,190,210
Wing Sauce 1,462,162 1,754,595 2,105,513 2,526,616 3,031,939
Total 40,615,614 48,738,737 58,486,485 70,183,782 84,220,538

Table 55. Projected Sales Distribution

Sales Distribution
2019 2020 2021 2022 2023
(in Php)
In-Store Sales 19,495,495 23,326,360 25,962,151 28,459,523 30,588,899
Online Sales 6,498,498 7,720,216 9,171,617 10,895,880 12,944,306
Hotels 4,873,874 6,433,513 8,492,238 11,209,754 14,796,875
Restaurants 5,686,186 7,505,766 9,907,611 13,078,046 17,263,021
Gastro Pubs 2,843,093 3,752,883 4,953,805 6,539,023 8,631,510
Total 40,615,614 48,738,737 58,486,485 70,183,782 84,220,538
125

Table 56. Cost Volume Profit Analysis

Cost Volume Profit Analysis


2019 2020 2021 2022 2023
(in Php)
Contribution Margin Ratio 73.01% 75.26% 77.32% 79.21% 80.94%
Sales 40,615,614 48,738,737 58,486,485 70,183,782 84,220,538
Fixed Cost 1,351,767 1,486,944 1,635,639 1,799,203 1,979,123
Variable Cost 10,962,853 12,059,138 13,265,052 14,591,557 16,050,712
Target Income 15,840,090 19,982,882 25,149,188 31,582,702 39,583,653
Break-even Point in Sales 1,851,526 1,975,806 2,115,430 2,271,448 2,445,111
Target Income Sales 23,547,818 28,528,453 34,641,768 42,143,813 51,348,809
Margin of Safety 38,764,088 46,762,931 56,371,055 67,912,334 81,775,427

Table 57. Resulting Financial Ratios

Financial Ratios 2019 2020 2021 2022 2023


Current Ratio 9.29 7.66 7.45 7.72 8.33
Acid Test Ratio 8.33 6.83 6.62 6.89 7.50
Cash Ratio 6.46 5.15 4.88 5.09 5.64
Gross Profit Margin 39.01% 41.01% 43.01% 45.01% 47.01%
Net Profit margin 6.08% 9.25% 12.27% 15.16% 17.92%
Return on Assets 3.88% 6.44% 9.12% 11.70% 14.00%
Return on Equity 4.46% 7.43% 10.46% 13.29% 15.74%
Debt to Equity Ratio 0.15 0.16 0.15 0.14 0.12
Equity Ratio 0.87 0.87 0.87 0.88 0.89
Debt Ratio 0.13 0.13 0.13 0.12 0.11
Inventory Turnover 7.11x 10.32x 10.68x 11.06x 11.47x
Asset Turnover 1.05x 0.73x 0.79x 0.83x 0.85x
126

D. Strategy Map

To become one of the leading and reliable distributors of high quality


hot sauces, and spicy flavored Filipino snacks and canned fish
products.

Reduce Increase
FINANCIALS
Unnecessary Outlays Profit Margin

Improve Increase Improve


CUSTOMERS
Customer Experience Market Share Brand Awareness

INTERNAL Improve Expand


BUSINESS Internal Distribution
PROCESSES Efficiency Channel

Provide
LEARNING
Employee
AND GROWTH
Trainings

Figure 13. Strategy Map


127

The strategic map of CSF Enterprise explains that Learning and Growth

will improve Internal Business Processes, which helps achieve Customer and

Financial Objectives. By improving human capital, employees will improve their

skill set that will result to some improvement in the operational procedures. On

the other hand, by intensifying their marketing activities, CSF Enterprise will be

able to increase brand awareness and customer experience. All these

improvements will lead to increase in company’s profit.


128

E. Balanced Scorecard

Table 58. Balanced Scorecard

Objectives Metrics/Target Time Expectation Responsible

Financial Perspective

Key Accounts
Increase Profit Margin Reach P30 Million Within 5 years
Marketing and Sales

Reduce Unnecessary
At least 10% Annually Finance
Outlays

Customer Perspective

Improve Provide after-sales


Continuously Customer Service
Customer Experience support and services

Increase Market Reach 10% Market Key Accounts


Within 5 Years
Share Share Marketing and Sales
Increase marketing
Improve Key Accounts
efforts to sub-urban Continuously
Brand Awareness Marketing and Sales
and rural areas

Operational Perspective

Improve Internal Implement Quality


Continuously Regulatory Affairs
Efficiency Control

Tighten Credit and Implement Strict


Continuously Finance
Collection Policy Policies

Expand Open 3 retail stores in


Within 5 Years Top Management
Market Reach the Philippines

Learning and Growth Perspective

Provide Employee
100% coverage Annually Human Resource
Trainings

Execute Research Develop hot and Key Accounts


Within 5 Years
and Development spicy food products Marketing and Sales
xv

List of References

Ayuyao, M. (2018, December 15) Manila’s most notable food trends in 2018

Retrieved from http://cnnphilippines.com/life/leisure/food/2018/12/14/food-

trends-2018.html

Casurao, A. (2019). Strategic Financial Plan: A Tool for Finance Managers

David, F. (2017). A Competitive Advantage Approach, Concepts and Cases

Dolina, R. (2019, April). Personal Interview.

Euromonitor (2018). Philippine Packaged Food Industry

Fitch Solutions (2019, April 8). The Philippines: Market Profile

Retrieved from http://emerging-markets-research.hktdc.com/business-

news/article/Asia/The-Philippines-Market-Profile/mp/en/1/1X000000/1X0604-

RX.htm

IFEX Philippines Secretariat (2017). Philippine Food Industry

Retrieved from http://www.ifexphilippines.com/en/General-Info/Philippine-

Food-Industry
xvi

Philippines Investor Relations Office. (2018). Philippines keeps robust growth in

2018. Think Growth, Think Philippines p.1)

Philippine Statistics Authority (2019). Retail and Wholesale Trade

Retrieved from https://psa.gov.ph/fies-index?page=1

Santander Trade. (2019, April) Distributing a Product.

Retrieved from https://en.portal.santandertrade.com/analyse-

markets/philippines/distributing-a-product/

Singh, P. (2016, September 7) A closer look at the Philippines distribution

landscape. Retrieved from http://blog.frontierstrategygroup.com/2016/09/

closer-look-philippines-distribution-landscape/

The Original Hot Sauce Store. (2019, March) Company Profile and Products.

Retrieved from https://theoriginalhotsaucestore.com/

Usmani F. (2019, February 03). What is a functional organization structure?

Retrieved from https://pmstudycircle.com/2012/08/what-is-a-functional-

organization-structure/

Wheelen, T. (2017). Strategic Management and Business Policy


xvii

Annexes

Approval of the Company


xviii

Audited Financial Statements


xix

Audited Financial Statements


xx

Audited Financial Statements


xxi

Audited Financial Statements


xxii

Appendices

List of Restaurants

1. Backyard Kitchen + Brew 41. Spectrum


2. Cow and Chicken Modern 42. Zuni Restaurant
Brunch Dining 43. Man Ho
3. Pepeton’s Grill 44. China Blue
4. Handle Bar and Grill 45. Tapenade
5. Buffalo Wild Wings 46. Yakumi
6. Stockton Place 47. Waterside Latin Inspired
7. Las Flores 48. Foo’d
8. L'Opera Ristorante Italiano 49. Caffe Puccini
9. Lartizan 50. Dario Ristorante
10. Lemuria 51. Lemuria
11. Crystal Jade Dining 52. Aubergine
12. Mango Tree 53. Ponte Rialto
13. Canton Road 54. Melo’s
14. Tomatito 55. Chef’s Table
15. Mecha Uma 56. Toki Japanese Fusion
16. Raging Bull Chophouse & Bar 57. Magosaburo
17. Fukudaya Japanese Dining 58. The Hall
18. Restaurant 101 59. Hanaichi
19. M Dining 60. Tantris
20. L’ Entrecote 61. Oriental Chinese French Fine
21. Locavore Dining
22. Namoo House 62. Trattoria Poggio Antico
23. Ponte Rialto Ristorante 63. Donosti Pontxos
24. Sagana French Bistro 64. Filos
25. Brotzeit 65. Wagyu Beef
26. NIU 66. Teppan Okochi
27. F All Day Dining 67. Ikomai
28. The Grand Kitchen 68. Romulo
29. No. 8 China House 69. Basil
30. Chef Jessie 70. Mamou Too!
31. Aruga Cafe 71. Restoran Garuda
32. Blackbird 72. Mulberry Door
33. Heat 73. Wholesome Table
34. Cru Steakhouse 74. Black Sheep
35. Samba 75. Todd English
36. Sala Restaurant 76. Va Bene
37. High Street Lounge 77. Perfect Pint
38. Benjarong 78. Marmalade Kitchen
39. Finestra Italian Steak 79. Bowery
40. Sky Garden 80. Crisp on 28th
xv

List of Hotels

1. F1 Hotel
2. Grand Hyatt Manila
3. Shangri-La
4. Ascott
5. Seda
6. MaxStays
7. City Park Hotel
8. Venice Luxury
9. Morgan Suites
10. Forbestown Place
11. Avant
12. Oasis Regency
13. Manila Marriott
14. The Peninsula
15. Raffles
16. Discovery Primea
17. Marco Polo
18. Holiday Inn
19. Conrad
20. Rockwell
xvi

List of Gastro Pubs

1. Oarhouse
2. Tambayan Gastrobar
3. Tipsy Pig Gastropub
4. Draft Gastropub
5. Locale Gastrobar
6. OnBoard Game + Gastro Pub
7. Pig Tales
8. Social House
9. Pastor’s Gastro Pub
10. Tap Station
11. Brotzeit German CoBier Bar
12. Big Bad Wolf
13. Union Jack Tavern
14. The Glass Jar Mnl
15. Marcus
16. Monkey MIC
17. Tomato Kick
18. Universe Gastrolounge
19. Rehab Gastrobar
20. Pablo’s Pub
21. The Fifth
22. Jab’z Gastrobar
23. Tipple and Slaw
24. Handle Bar and Grill
25. Draft
26. Rue Bourbon
27. Rocket Room
28. A’ Toda Madre Tequila
29. The Bar
30. Antidote
xvii

Graphs and Trendlines

Graph Trendline

Total Assets
Total Liabilities and Equity

Sales

Cost of Sales

Gross Profit

Net Income
xviii

About the Author

RAMIL ALLEN E. CASAGAN


0977-850-1898
ramil.casagan@gmail.com

SUMMARY OF QUALIFICATIONS

Certified Bookkeeper

EDUCATION

Pamantasan ng Lungsod ng Maynila 2017-Present


Master of Business Administration

Lyceum of the Philippines University - Manila 2011-2015


BSBA Major in Management Accounting
President – Junior Philippine Institute of Accountants (JPIA)

Colegio de Sta. Rosa - Intramuros 2007-2011


Secondary

Training/Work Experience

RCAM - Manila Cathedral October 2015 to Present


Accounting and Audit

Philippine Business for Social Progress April 2015 to September 2015


Finance Associate

Convergys October 2014 to March 2015


Accounts Receivable