Strategic Management Paper

Strategic
Management
Submitted to:
Professor Aurellado
Strategic Management
Regis – 08
Submitted by:
Diaresco, Mico
0
Table of Contents
1. EXECUTIVE SUMMARY --------------------------------------------------------------------------------------- 2

2. INTRODUCTION ------------------------------------------------------------------------------------------------- 4
3. RESEARCH DESIGN AND METHODOLOGY ----------------------------------------------------------- 7

3.1 Research and Design ------------------------------------------------------------------------------------ 7
3.2 Scope and Limitations ---------------------------------------------------------------------------------- 7
4. MISSION AND VISION ------------------------------------------------------------------------------------------ 8

4.1 Company's Current Mission and Vision -------------------------------------------------------------- 8
4.2 Revised Vision Statement ----------------------------------------------------------------------------- 10
5. EXTERNAL ANALYSIS --------------------------------------------------------------------------------------- 11

5.1 Economic Forces --------------------------------------------------------------------------------------- 11
5.2 Political Forces ------------------------------------------------------------------------------------------ 18
5.3 Social Forces -------------------------------------------------------------------------------------------- 19
5.4 Technological Forces ---------------------------------------------------------------------------------- 20
5.5 Environmental Forces ---------------------------------------------------------------------------------- 21
5.6 Porter's 5 Forces Analysis ----------------------------------------------------------------------------- 22
5.7 External Factor Evaluation ---------------------------------------------------------------------------- 26
5.8 Competitive Profile Matrix ---------------------------------------------------------------------------- 30
6. INTERNAL ANALYSIS ---------------------------------------------------------------------------------------- 34

6.1 Internal Audit ------------------------------------------------------------------------------------------- 34
6.2 McKinsey's 7s ------------------------------------------------------------------------------------------- 42
6.3 Internal Factor Evaluation ----------------------------------------------------------------------------- 48
6.4 SWOT Analysis ----------------------------------------------------------------------------------------- 52
6.5 Strategic Position & Action Evaluation Matrix (SPACE) ---------------------------------------- 57
6.6 Boston Consulting Group Matrix --------------------------------------------------------------------- 59
6.7 Internal External Matrix (IE) -------------------------------------------------------------------------- 60
6.8 Grand Strategy ------------------------------------------------------------------------------------------ 60
6.9 Summary of Strategies --------------------------------------------------------------------------------- 61
6.10 Quantitative Strategic Planning Matrix (QSPM) ------------------------------------------------- 62
7. STRATEGIC AND FINANCIAL OBJECTIVES --------------------------------------------------------- 62

7.1 Strategic Objectives ------------------------------------------------------------------------------------ 63
7.2 Recommended Strategies ------------------------------------------------------------------------------ 64
8. FINANCIAL PROJECTION ---------------------------------------------------------------------------------- 67

8.1 Basis and Assumptions--------------------------------------------------------------------------------- 67
8.2 Projected Income Statements-------------------------------------------------------------------------- 71
8.3 Projected Balance Sheet ------------------------------------------------------------------------------- 73
9. STRATEGY MAP DEPARMENTAL PROGRAMS ----------------------------------------------------- 75
10. STRATEGY EVALUATION, MONITORING & CONTROL --------------------------------------- 80

10.1 Balance Scorecard ------------------------------------------------------------------------------------ 80
11. Appendix --------------------------------------------------------------------------------------------------------- 81
1
1. Executive Summary
The goal of this strategic management paper is to develop strategies for South Stream
Commercial Development Inc. (SSCDI) since it is a relatively new company in the real estate
industry specifically in the commercial development segment. SSCDI was established in 2012
with its flagship project Seasons Mall Lipa. Now on its second and bigger development
compared to Seasons Mall Lipa, Seasons Mall Molino is SSCDI’s project that will make pave
the way to the real estate industry by being the exclusive licensee of Flow House Manila. Board
sports culture (skateboard, surfing and wakeboarding) continues to grow in popularity in the
country. SSCDI will introduce flowboarding as new board sport by creating Flow House Manila.
Flow House Manila is the new indoor/outdoor waterpark attraction that stimulates the riding of
the wave in the ocean.
With the growth of the construction industry particularly in the commercial development, it is an
opportunity for SSCDI to venture on Seasons Mall Molino and Flow House Manila to create a
lifestyle destination mall. Being new in the industry, SCCDI’s competitive profile score is 1.45
lowest among other competitors since we used the top 3 commercial developers (SM Super
Malls, Robinsons Malls and Ayala Mall) as benchmarks since SSCDI’s goal is to compete with
the top 3 players in the next 10-15 years
Based on the EFE SSCDI scored 2.5, which is the average score. There possible opportunities
that the company is not maximizing and also threats that are not properly addressed. An example
to consider is to lease out building J to a BPO company. This will make the development a work
and play lifestyle destination. SSCDI should also take advantage to the additional infrastructure
such as LRT Line 1 extension and construction of highways, which can greatly help with the
accessibility of the development.
Based from the result of SPACE Matrix and the BCG Matrix, the summaries of strategies are the
same. These strategies are market penetration, market development and product development.
For the IE Matrix, the result was in quadrant 5, which is to hold and maintain strategy.
2
After weighing the external and internal factors, business strategies and organizational strategies
were formulated. Business strategies such as tapping into BPO companies to lease out building J
as land lease. Another business strategy is to sell sub-license of Flow House Manila to expand
the brand and to do possible joint ventures with other commercial developers. For the
organizational strategies, creation of additional department for Flow House was recommended to
cater the sub-licensing aspect of the business.
3
2. Introduction
Company Background
South Stream Commercial Development, Inc. (SSCDI) is a private company specializing in

real-estate related activities such as investment, development, administration and trade of
commercial mixed-use properties. Through partnerships with other companies, South Stream
also engages in providing services related to tenant charters and real estate consulting.
Our clientele include national retailers for whom we identify, develop and establish new
business locations. Commercial property owners depend on our expertise in managing,
marketing and leasing their properties, and private investors entrust their financial resources
to us to development projects. We provide these clients with real estate expertise and strategic
decisions and advantages while maintaining a high degree of professionalism, honesty and
integrity in all aspects of conduct.
SSCDI will bring in Flow House in the up-coming Seasons Molino Mall located in Bacoor,
Cavite. SSCDI is the exclusive licensee of Flow House in the Philippines. Flowboarding is
already a popular sport in the United States, United Kingdom, Singapore, Thailand and in
many other countries. In the Philippines this will be made available exclusively by SSCDI.
This will serve a great marketing tool to attract prospective tenants.
Board culture (surfing, wakeboarding, skate boarding, wind surfing, etc.) has become popular
in the Philippines in the past years and continues to grow in popularity today. We at SSCDI
will be introducing Flowboarding as a new board sport in the country by creating Flow House
Manila in our new development. Flow House Manila is an indoor/outdoor water park
attraction that simulates the riding of the waves in the ocean. Flow House Manila is a unique
lifestyle venue destination for all board enthusiasts of various skill levels and ages that
provide the ocean experience while remaining in the comfort of the city. At the center of
Flow House Manila is the FlowRider Double, a watersport attraction that simulates the riding
of waves in the ocean. This provides a platform for generating additional revenues in the form
4
of food & beverage, retail and events. The inclusion of Flow House Manila in our
development will be the marketing tool that will be our differentiator.
Projects:
Seasons Mall Lipa
A 1,700 sq. meter property located in Lipa, Batangas. The project began in May 2012 and was
completed last May 2013. Currently, the occupancy rate of the mall is at 93%
Illustration 1: Seasons Lipa
5
Seasons Mall Molino
A 25,778 sq. meter property located in Molino Blvd., Molino Cavite. The mall is divided into
8 clusters. The 1st 3 clusters including Flow House Manila are set to open by the first quarter
of 2015.
Illustration 2: Season Mall Molino (Aerial Perspective)
Illustration 3: Flow House Manila at Seasons Mall Molino
6
3. Research Design and Methodology
3.1 Research and Design

Various sources were used for the external analysis of the part of the paper. For the
growth of the construction and real estate industry, data were sourced from Philippine
Statistics Authority and Philippine Constructors Association Inc. Real estate research
firms namely KMC Mag Group, Tholons and Jones Lang LaSalle were used to showcase
the trends retail/commercial aspect of the real estate. Other economic data were source
from Euromonitor. Market size and parameters were based on local government statistical
data and research conducted by our Business Development Unit.
For competitor’s data and information, personal inquiry and company websites were used
to gather information such as lease rates, current projects, upcoming projects and audited
financial statements.
The company’s data such as current lease contracts, investor’s contracts, and financial
statements were used with the permission from the President and the Board of Directors.
Other department heads namely Leasing Director, Project Manager and HR Manager,
were interviewed for the comprehensiveness of the internal analysis of the paper this
paper.
3.2 Scope and Limitations
This Strategic Management paper centers on the Seasons Mall Molino project. Since
South Stream Commercial Development Inc. (SSCDI) was incorporated in 2012, the
audited financial statements available are only for 2012-2013. The paper will also tackle
Flow House Manila’s business model since this will be the main attraction of the
company’s newest project. Financial projections of Flow House Manila will also be
presented in this paper in order to strengthen the company’s advantage against its
competitors.
7
4. Mission and Vision1
4.1 Company’s Current Mission and Vision

Vision
“To be the leading developer in the commercial and mixed-used property industry while
remaining committed to quality and total customer satisfaction “
Mission
“Surpassing all investors’ and clients’ expectations in addressing real estate
development needs through marketing innovations and expert development.”
Core & Operation Philosophy
Market innovation by continuously seeking new and creative approaches to address the
demands of the dynamic real estate industry and effectively differentiate our company
from competitors
Development concept
The company is committed to the continual improvement and development of our skills
and abilities to widen the scope of expertise and build upon our core competencies.
Operation Philosophy is focused on serving on the needs of clients and driving revenue
growth. We seek to exceed client expectations in all aspects of operations. Our board of
directors and highly motivated executive team are committed to steering the organization
according to the values and principles that have guided our success thus far. We pride
ourselves in our attention to detail and comprehensive evaluation processes, especially in
the development strategy
1
http://southstreamcdi.com/about-us/
8
Analysis of Mission and Vision
Criteria Yes/No
Is it aspirational? Yes
Is it inspirational? Yes
Is it achievable? Yes
Is it clear? Yes
Table 1: Mission & Vision Analysis
The current vision statement, it is broad and not time bound. As a newly established
company, a clear and measurable vision would be critical to the business success. The
company does not aim to compete directly to the big players such as SM Supermalls,
Robinsons Malls and Ayala Malls but would rather focus on the niche market, which is to
create commercial properties outside Metro Manila and put attraction/s such as Flow
House Manila to differentiate the company with other commercial developers.
Components Stated Comments

Customers Yes It is stated in the Mission Statement
“Surpassing all investors’ and
clients’ expectations”
Products and services Yes It is stated in the Mission statement
by was defined in the Vision
statement as “developer of commercial
and mixed-used property”
Markets Yes SSCDI’s Investors and clients
Technology Yes Technology marketing innovations
and expert development
Concern for survival, Yes “addressing the real estate
growth and stability development needs through market
innovation and expert development”
Philosophy Yes Company’s Philosophy is stated and
subdivided it into Market
Innovation, Development Concept
and Operation Philosophy
Self-concept Yes Stated in the Development Concept
Concern for public Yes “focused on serving on the needs of
image clients and driving revenue growth.
We seek to exceed client expectations
in all aspects of operations”
9
Concern for Yes This was stated in the Development
employees Concept “committed to the continual
improvement and development of
our skills and abilities to widen the
scope of expertise and build upon
our core competencies”
Table 2: Components of current Mission & Vision
4.2 Revised Vision Statement
To be one of the leading commercial developers in independent and dependent component

cities by 2025 and to contribute to its urbanization while remaining committed to quality
and total customer satisfaction.
Revised Mission Statement
SSCDI’s mission is to surpass all investors’ and clients’ expectations by creating

commercial properties that adapt and enhance where we live, work and play. SSCDI shall
be responsible in creating awareness for a sustainable environment to help revitalize the
city. The company is also committed in steering the organization by giving importance to
attention to detail, comprehensive evaluation and more importantly building relationships
to clients and shareholders.
Components Stated Comments

Customers Yes It is stated in the Mission Statement
“Surpassing all investors’ and
clients’ expectations”
Products and services Yes It is stated in the Mission statement
by was defined in the Vision
statement as “developer of commercial
and mixed-used property”
Markets Yes SSCDI’s Investors and clients
Technology Yes Technology marketing innovations
and expert development
Concern for survival, Yes “giving importance to attention to
growth and stability detail, comprehensive evaluation and
more importantly building
relationships clients and
shareholders”
10
Philosophy Yes Company’s Philosophy is stated and
subdivided it into Market
Innovation, Development Concept
and Operation Philosophy
Self-concept Yes Stated in the Development Concept
Concern for public Yes “SSCDI shall be responsible for to
image create awareness for a sustainable
environment to help revitalize the
city”
Concern for Yes This was stated in the Development
employees Concept “committed to the continual
improvement and development of
our skills and abilities to widen the
scope of expertise and build upon
our core competencies”
Table 3: Revised Components of Mission and Vision
With the proposed mission and vision statement of SSCDI, it now covers all of the 9
components of a mission statement. The mission and vision statement is now concise,
measurable and time bound.
5. External Analysis
5.1 Economic forces

5.1.1 Construction and Real Estate
Construction and real estate contributed 8.5% and 8.1% respectively to the 6.1%
annual GDP growth for 2014. 2
The total number of construction projects based on the approved building permits was
29,616 for 3rd quarter of 2014, which posted a 1.6% increase compared to 2013 data.
The CALABARZON region has the highest number of construction projects with
6,881 (23.2%). Metro Cavite has the highest number of construction projects in
CALABARZON with 1,919 (6.5%) in the provincial level.3 (Figure1)
2
http://www.nscb.gov.ph/
3 Construction Statistics – Philippine Statistics Authority
11
Illustration 4: Distribution of Construction Projects by Region
From 29,616 construction projects, 3,832 (12%) projects were commercial type
buildings.4
4 Construction Statistics – Philippine Statistics Authority
12
Figure 1: Total Number and Type of Construction Building
Commercial developers are aggressively expanding to compliment with the expansion

of the international brands in food and beverage and retail such as Ramen Nagi, Tim
Ho Wan, H&M and Zara.5 The SM Group plans to invest P38.8 billion into the retail
sector, focusing on areas outside Manila. 6
Relevance:
The growth in the construction and real estate particularly in commercial development
gives South Stream Commercial Development Inc. an opportunity to the tap into a
growing industry. The company should take advantage of getting these new brands to
lease out spaces in the mall to compliment the company’s attraction Flow House
5
Jones Lang LaSalle
6
KMC Mag Group
13
Manila. This creates an opportunity for the company to get good brands as tenants and
at the same time attract mall goers.
5.1.2 Growth and Expansion of Business Process Outsourcing (BPO)
Based from the 2014 research of Tholons on Top 100 Outsourcing Destinations,
Philippines moved up from 3rd in 2013 to 2nd in 2014. One of the reasons for this is
according to the study conducted by BSP, the Philippines is a favored location for
BPOs because the workforce is equipped with good conversational English skills and
deeply understands and appreciates the Western Culture.7 With the fast growing
BPO industry, companies are now moving outside to set up offices outside Metro
Manila to lower operation costs. According to CBRE Philippines, the creation of
integrated BPO centers “lifestyle destinations” outside Metro Manila will continue to
attract foreign investors into the country. Lifestyle destinations will provide work and
play components patterned to the Central Business Districts in Metro Manila where
offices and other leisure activities are present in one area.8
Relevance:
With the continuous expansion of BPOs particularly outside Metro Manila, SSCDI can
utilize this to make Seasons Mall Molino a complete “Lifestyle Destination” where
both work and play are present. Flow House Manila will capture the play aspect while
a cluster of the mall specifically bldg. J can be an opportunity for a BPO office.
(Figure 3) This is also an advantage for prospective tenants because they can extend
their operating hours as BPO offices operate 24/7.
7 Banko Central Review

8 http://www.cbre.com.ph/
14
Illustration 5: Seasons Mall Molino Site Plan
Based on the study of BPOs in the Philippines conducted by the International Labour
Office Geneva, the average age of BPO employees in the country is between 23 to and
28 years.9 With the booming BPO industry, the middle class in the country increases
due to the above average earnings of BPO employees.10 (Figure 4). The implication is
an increase in consumer consumption as BPO workers spend more easily on lifestyle
products such as electronic gadgets and they also have high regards for work life
balance.
9
http://www.ilo.org
10 research.hktdc.com
15
Figure 2: Average Monthly Wage of Selected Industries in 2014 (in USD)
Relevance:
Given the average age (25y/o) of the BPO employees and by setting up a BPO office
at Seasons Mall, this automatically meets the target market of Flow House Manila.
The said market composes 50% of the total target market of Flow House Manila.
(Figure 5)11
Percentage of Riders
20%
30%
Students
Young Professionals
Foreign Tourists
50%
Figure 3: Percentage of Riders Chart
11 Flow House Manila Business Plan
16
Flow House Target Market Defined12
I. Students (Male & Female)
Individuals in this demographic will comprise 20% of Flow House Manila’s

customers. They will generally be between the ages of 10-21 years old and are
supported by parental income with a household income will be greater than 1
million. These are the youth of the Philippines who have more time for leisure and
are eager to actively participate in a new sport.
II. Young Filipino Professionals (Male & Female)
Young Filipino Professionals will comprise 50% of our market share. These are
individuals between the ages of 22-35 years with annual net income of P250,000 and
above. It is especially important to this demographic to find work life balance
through engaging in athletic activities.
III. Foreign Tourists
These are flowboarding enthusiasts who are either currently competing or aspiring to
compete in Flow boarding tournaments or are simply passionate fans of flowboarding.
These individuals generally have expendable income and flexible work-life and family
arrangements. In the winter months, their local weather prevents them from
participating in this activity, hence they travel to more temperate climates to regions
such as South East Asia. Flow House Manila will have a competitive advantage over
other Flow House accommodations in South East Asia due to economically favorable
tourism accommodations and the lower cost of FlowRider admission.
12 Flow House Manila Business Plan
17
5.2 Political Forces
5.2.1 Department of Transportation and Communication (DOTC) LRT-1 Extension
DOTC awarded the P65 billion contract of the Light Rail Transit Line 1 extension to
the Metro Pacific Investments Corporation (MPIC) and Ayala Corporation. The LRT
line 1 will extend from Pasay City to Bacoor Cavite. The extension project will pass
through Parañaque, Las Piñas and the last station will be in Barangay Niog in Bacoor
Cavite13
Relevance:
With this project, this will be an opportunity for the company since our development
will be more accessible to neighboring cities in NCR particularly those from the
northern areas. The last station of the LRT-1 extension is in Barangay Niog Bacoor
which is the same area as Molino Blvd where our development is located.
Illustration 6: LRT Line -1 Extension Project Map
5.2.2 Construction of Daang Hari-SLEX Link Road Project
Department of Public Works and Highways (DPWH) the implementing agency for the
road project together with Ayala Corporation started constructing the 4km toll road
which is expected to be completed in 1st quarter of 2015. This will start from Daang
13
ppp.gov.ph
18
Reyna and Daang Hari in Las Piñas and Bacoor to SLEX via Susana Heights
Interchange in Muntinlupa. The construction is at 68% complete as of January 2015.14
Relevance:
With the increasing road infrastructures being developed it becomes an advantage for
SSCDI because projects are more accessible.
5.3 Social Forces

5.3.1 Extreme Sports Become Mainstream in the Philippines
Extremes sports such as skate boarding, surfing and wakeboarding that were once
popular with only a niche group has now become more mainstream especially to the
Filipino youth ages 13-29 years old.15 Wake boarding was introduced in the country in
2006 and started to become mainstream in 2010. Currently there are 8 wake parks in
nationwide. Last March 15, 2014 the first urban skate park the Mountain Due Skate
Park was opened at the Circuit Makati.16
14
ppp.gov.ph
15
Euromonitor
16
http://www.rappler.com/sports/philippines/53538-a-quarter-pipe-of-their-own
19
17
Illustration 7: Cable Wake Parks in the Philippines

Relevance:
Boards sports are starting to gain popularity in the country. Filipinos are starting the
embrace these kinds of sports. This is evident with the number of cable wake park
installations nationwide from 2006 to present around 8 cable wake parks. This is an
opportunity for SSCDI to introduce a flowboarding as a new board sport through the
creation of Flow House Manila. Flowboarding is fusion of four board sports, which are
surfing, wakeboarding, skate boarding and snow boarding.
5.4 Technological Forces

• Technology and innovation plays a vital role in the growth of the real estate industry.
Commercial developers use technology such as solar power to differentiate themselves
from other developers. An example of which is when SM North Edsa added solar panels
to their parking buildings, which expected to provide 30% saving to their power
17
http://www.wakescout.com/directory/category/cable-park/asia/philippines
20
consumption. By doing this SM North Edsa became the world’s biggest solar powered
mall18.
Relevance:
SSCDI applies technology by bringing in the FlowRider by Waveloch. It is a patented
water attraction (FlowRider) of which SSCDI has the exclusive license. This would be
the company’s niche to be able to differentiate versus the big players in the industry.
5.5 Environmental Forces

• The threats of climate change make the commercial developers careful in creating
developments. Commercial developers carefully look at properties that are not flood
prone areas.
• Commercial Developers like SM starting to use solar panels on their mall to minimize
the carbon footprint.
Relevance:
SSCDI can use the major commercial developers as a benchmark in creating eco-
friendly developments.
18
http://www.abs-cbnnews.com/business/11/24/14/sm-north-edsa-now-worlds-biggest-solar-powered-mall
21
5.6 Porter’s 5 Forces Analysis
Threat of
New
Entrants
MEDIUM
Rivalry among
Bargaining Exisiting Bargaining
Powers of Competitors Power of
Suppliers Buyers
HIGH
MEDIUM MEDIUM
Threat of
Subtitute
LOW
Figure 4: Porter's
5.6.1 Rivalry among Existing Competitors – HIGH
Rivalry within the industry defined by Porter is a tool to help understand the risk competitors
may face when competing for market position. This determinant applies in the real estate
industry.
Industry Growth
The real estate industry is steadily growing at a rate of 18.4% in 2012, according to a research
done by Colliers International. In the real estate business especially in commercial
development, it requires a large capitalization due to the construction. We benchmark our
22
company with the leaders of commercial development such as SM Super Malls, Robinsons
Malls and Ayala Land for the reason that we also want to be known in the country. We
consider them as a benchmark for competitors for since their developments are quite far from
ours. The company’s goal is to compete with the big players with in the next 10-15 years.
5.6.2 Threat of New Entrants - MEDIUM
Product Differentiation
Most of the existing firms within the real estate industry are able to establish their brand on
the market and were able to gain customer loyalty through the differentiation of their
commercial spaces available for lease. In observing their current advertising activities, it is
evident that existing firms spend heavily in marketing to continually gain market share, which
will make it hard for new entrants to penetrate the market.
Capital Requirements
In relation to the real estate industry, large amount of financial resources are required for new
entrants in order to establish their brand. Not only are they required to spend on advertising
but also it is also essential for them to spend heavily on architects and contractors for the
construction of their facilities. They also have to allocate funds to cover the various permits
mandated by the government.
5.6.3 Bargaining Power of Suppliers - MEDIUM
For the real estate industry, there are three determinants that are applicable to analyze the
bargaining power of suppliers. These are supplier concentration, importance of volume to
supplier and impact of inputs to cost differentiation.
Supplier Concentration
• Landowners are also considered a supplier in this industry. In Molino Blvd, about 80% of
the land is owned by one family. This strengthens the bargaining power of the land owner
because they own majority of the land.
23
• The independent architects and contractors who design and construct real estate facilities.
Currently, there are 6,088 licensed contractors and builders based on the Philippines
Constructors Association Metropolitan Chapter’s list. These Contractors are categorized
according to size and capability to take on a project. With the large number of contractors
locally, supplier concentration is high which weakens their bargaining power.
Importance of Volume to Supplier

• The more land the landowner owns the higher the bargaining power since the buyers does
not have control over the land.
• Contractors are divided into segments of classes. The basis of their segment is the budget
of the project that they are bidding for. A triple-A contractor can bid for projects that
amount to three hundred million pesos and above.
Impact to cost or Differentiation

• Landowners contribute to product differentiation with the size and the location of their
properties. Value of their land depends on the how “prime” the location is.
• The output of architects, contractors and builders are major contributors to the product
differentiation tactics and cost structure of the industry. Moreover, the output of these
suppliers is dependent on the size and capability of their respective firms.
SSCDI has a limited bargaining power to the supplier (land owner) since there is only one
supplier of the land in the area.
For SSCDI to select a contractor, a construction bidding is being conducted. At least 3

contractors are asked to join the bidding process. SSCDI takes into consideration each
contractors experience, track record, cost and specially the quality of work. This will be then
compered with the estimated and recommended costing by our project managers before we
award the project to the winning contactor.
24
5.6.4 Threats of Substitutes – LOW
Real estate is a fragmented industry. The product that the industry offers is a tangible and
would be hard to substitute.
Here are some of the substitutes in commercial developments:
On-line shopping / Delivery

On line shopping and delivery provides a hassle-free shopping experience to the customers.
Food trucks
These new businesses are considered as a substitute to our prospective tenants.
Other independent commercial establishments with in the area

These are landowners along Molino Blvd., which converts their parcel of land into
commercial establishments.
5.6.5 Bargaining Powers of Buyers – MEDIUM
The industry buyers are the prospect tenants of the commercial development. The industry
has a standard rate of available lease spaces. Lease prices may vary depending on the size and
location of the available lease space. For Seasons Mall, there is a premium on the spaces for
lease especially the ones near Flow House Manila. The average size of the commercial spaces
is available in Seasons Mall is estimated between 100-180 sqm. This lease price also varies if
the prospect tenant is a popular brand “anchor tenant” or a new player. Anchor tenants are the
known brands in the food, retail, services industry. Examples to this are, Jollibee Group for
the food beverage, Bench Group for the retail and Banco de Oro for the services.
25
5.7 External Factor Evaluation
The External Factor evaluation (EFE) matrix is tool used for evaluating the current business
conditions. The EFE table shows the different opportunities and threats to the industry that
can affect the company. It is a good tool in identifying how well the company responds to
each opportunity and threats of the industry.
Table 4: EFE Matrix
5.7.1 Opportunities
26
O1 – Increasing population of target demographics in NCR and CALABARZON
specially the middle class and young professionals (Rating 2)
National Capital Region
The National Capital Region (NCR), more commonly referred to as Metropolitan Manila, is
the country’s premiere urban region. Season Mall Molino and Flow House Manila will draw
heavily from this region as it has the highest population density and economic mobility in the
Philippines
Population Area Population

Density
11,855,975 636 km2 18,567/km2
Table 5: NCR Population Density
Cavite and Bordering Provinces

In addition to Metro Manila, Seasons Mall and Flow House Manila will also be targeting the
bordering provinces of Cavite, namely Laguna and Batangas. These regions also have high
population densities and combined with Metro Manila comprise a population base of almost
20 million persons.
Province Population Area Pop. Density Rank

Cavite 3,090,691 1,574 km2 1,950 / km2 2nd
Laguna 2,669,847 1,918 km2 1,392 / km2 3rd
Batangas 2,377,395 3,120 km2 763 / km2 6th
Table 6: Cavite, Laguna, Batangas Population Density
The total population of the target demographics of the company is

Region/Province Population
Metro Manila 11,855,975
Cavite 3,090,691
Laguna 2,669,847
Batangas 2,377,395
Total: 19,993,908
Table 7: Total Population of the Target Area
Given the total population of the target areas of Season Mall and Flow House Manila, it will
be further broken down to the specific social class in order to get the potential size of the
target market. Based from Euromonitor data, 25.3% of the total population of the country
27
consists of upper class with 0.1% and middle class 25.2% respectively. This will be the
primary target market of Season Mall and Flow House Manila. With this, the estimated total
target population is 5,058,458.72.
O2 – Extreme Sports Becoming Mainstream in the Philippines (Rating 3)
Stated in the social forces part of the paper, extreme sports such as wakeboarding,
skateboarding and surfing is slowly becoming mainstream sports for the Filipino youth ages
13-29. These growing enthusiasts are also the target market of the company because these
markets are the ones who are going to try the sport Flowboarding at Flow House Manila.
O3 – Increase in Commercial Establishments to Compliment the Expansion of

International Retail Brands (Rating 2)
As previously discussed in the economic factor segment of the paper, more international
brands in retail and food and beverage are coming in the country. This is one of the reasons
why SSCDI the exclusive licensee brought in Flow House to create a niche in the commercial
development industry and also to attract the international retail and F&B brand to lease spaces
in the mall.
O4 – Continuous Growth of the BPO Industry and Expanding Outside Metro Manila
(Rating 2)
The BPO industry employs an estimate of 926,000 workers with an average age of 25. Based
for the Business Process Association of the Philippines (IBPAP), they included Cavite as one
of the “next wave cities” for BPO companies. With this, it is an opportunity for the SSCDI to
tap this industry by offering BPO companies to lease space in Seasons Mall. Another
opportunity that the company can gain for this is that the BPO employees are one of the target
markets for Flow House Manila.
28
O5 – Government Infrastructure Projects (LRT Line, Highways & Bypass roads)
(Rating 2)
With the increase in government infrastructure projects particularly in Cavite, this greatly
benefits the commercial developer. In the case of SSCDI, Molino Blvd was constructed as a
bypass road to some neighboring towns of Cavite (Imus and Dasmariñas). Another
government project which is the LRT line 1 extension gives a great opportunity for the
company to tap the target market in NCR. This project makes our development very
accessible via public transport since the last station for LRT line 1 extension is in the same
area where Seasons Mall is located. The construction of the Daang Hari exit in SLEX also
makes it easier to go to our development since it shortens the travel time of the motorists.
5.7.2 Threats
T1 – Increasing Competition among Industry Players (Rating 3)
Commercial developers today creates developments that are sustainable where work, live and
play are present in one area. SSCDI should be at par with its competitors in terms of work and
play. Flow House Manila is covering the play aspect in the development. For the work aspect,
the leasing team should consider BPO companies as their target tenants.
T2 - Climate Change - risk of flooding in some areas that might affect operations
(Rating 2)
For SSCDI’s developments, the Business Development department carefully chooses the
areas of the project. SSCDI makes sure that the areas are not prone to floods. The company
also invests well in the drainage systems of its developments as an added step for flood
prevention.
29
T3 – ASEAN Integration (Rating 2)
With the ASEAN integration, there will be an increase in foreign investments coming in the
country. This poses a threat in the commercial real estate industry because the commercial
developments and standards should be at par with other leading ASEAN countries.
T4 - Government Issuance and Licenses (Rating 3)
With the government’s red tape and corrupt practices, getting permits and licenses poses a
threat in the industry. This can cause delays in construction and operations. We experienced
during our first months in construction, when the local government does not want to release
our construction permits until we pay the “extra” fees.
5.8 Competitive Profile Matrix (CPM)
SSCDI is newly established company engaged in commercial development. Below are

the company profiles of the top players in the industry. These companies will be used as
the benchmark for the CPM.
SM Supermalls
The company started in 1958 as Shoemart with its first store in Manila. SM Super Malls
is under SM Prime Holdings, which is the consolidated of all real estate subsidiaries of
SM. Currently, there are 50 SM malls nationwide and in provinces in China.19
Robinsons Malls
Robinsons Malls is owned and operated by Robinsons Land Corporation the 2nd largest
mall operator in the country. The company was incorporated in 1997 and currently has 37
malls nationwide. 20
19
http://www.smprime.com/corporate-profile
30
Ayala Malls
The company was incorporate in 1988. Ayala Malls is a real-estate subsidiary of Ayala
Land which is an affiliate of Ayala Corporation. Currently, has 12 malls nationwide and
is the 3rd largest shopping mall retailer in the Philippines.21
5.8.1 Critical Success Factors
CSF 1: Advertising
Advertising plays an important role for a mall developer. This is where the company
attracts potential tenants and mall-goers. With advertising, the company shows its
differentiation with the others. A weight of 10% was given for this factor.
CSF 2: Financial Position

It is important for a company to have a strong financial position in order for the business
to operate. A company should generate enough income to support its operations and pay
off its liabilities. With this, a 20% weight was given.
CSF 3: Adequacy in Capitalization

The commercial development real estate industry is very capital intensive. Developers
need more than a million in capitalization to finance all the expenses to start a project. A
weight of 15% was given for this factor.
CSF 4: Price Competitiveness

Pricing is important in the commercial development real estate industry. Value adding
components such as additional attraction and activity centers add value to the lease rates
of a development. Its importance was given a 15% weight. The table below shows the
projected lease rate income per building at Seasons Mall.
20
http://www.robinsonsmalls.com/
21 http://www.ayalaland.com.ph/malls-restaurants-philippines/
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Table 5: Projected Lease Rate Income
As seen in the table above, lease prices increases as the leasable area near Flow House
Manila because it is considered as a prime location. As seen on the perspective, Buildings
F, G & H are the prime locations in the development.
Illustration 10: Seasons Mall Molino Perspective
CSF 5: Project Quality

The quality of the project such as additional amenities and over all design gives an
advantage to the developers. It would be easier to lease out the commercial spaces if the
development has good quality. With this, a weight of 5% was given
32
CSF 6: Brand Management
Brand management is important for commercial developers because this sets the target
market (tenants and mall-goers). 10% weight was given for this factor.
CSF 7: Track Record of Developer

This factor is very important for customers (tenants and mall goers). Prospect tenants tend to
choose developers who are known in the industry over the new players. A weight of 15%
was given for this factor.
CSF 8: Geographical Expansion

This factor is important because its shows the capabilities of the company to expand. This
also increases awareness for the brand for the prospect tenant and mall goers. 10% weight
was given for this factor.
5.8.2 Competitive Profile Matrix (CPM) Ratings
SSCDI is a newly establish corporation in the commercial development industry. The

company compares the business to the top commercial developers in the country to use a
benchmark.
Table 6: CPM Matrix

SSCDI scored the lowest average score of 1.45. This rating is expected the company was
compared against the top 3 commercial developers. In addition, the top 3 commercial
developers have subsidiaries in the real estate business such as residential, resorts and office
spaces. The only advantage of the company is the price competitiveness since SSCDI has
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flexible lease prices and terms. One example for the Seasons Mall Molino, some clusters are
being offered as lease and build at a lower rate to prospect tenants. The only requirement for
this is to follow the façade of the entire development. Comparing this to the top 3 players,
they fully construct and finish the development and charge a fixed amount in lease rates.
Based on the ratings above, SM Malls has the strongest competitive position over its
competitors. SM Malls strengths against all its competitors are in terms of track record,
financial position, capitalization, advertising and geographical expansion.
6. Internal Analysis
6.1 Internal Audit
6.1.1 Management & Culture

The directors and upper management are handling SSCDI’s current management and
operations. Since SSCDI is a start-up corporation being run by relatively young board of
directors and upper management, the possibility of implementing change is high. The
implementers are aggressive in expanding the company and are willing to invest in strategies
to further improve the state of the company.
The company is slowly creating structure by adding departments that are vital to its
operations. The company also holds a Management Committee (MANCOMM) meeting once
a month to strategize and to make sure that the managers of each department are aligned to the
objectives of the company. Managers are encouraged to do one-on-one discussions with their
subordinates to strengthen the employee’s engagement and to make sure that every employee
knows the company’s direction.
Since the company is in the growth stage, it is like a sponge that absorbs and adapt to changes
quickly. This is one of the qualities considered as strength of the company.
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6.1.2 Marketing and Sales
Marketing and sales activities of SSCDI are geared towards negotiations and closing of deals
with potential tenants of the development. Even if the mall is not yet finished, the leasing
department offers pre-selling of commercial spaces at discounted rates. Flow House Manila
plays a very important role in marketing the development. This is one of the reasons why
SSCDI got the exclusive license to bring in the attraction, Flowrider to create a niche in the
commercial real estate industry. SSCDI’s strategy is to do a Grand Launch of Flow House
Manila first before the mall. This way, it is easier for the leasing team to market the mall for
potential tenants. The marketing team, rely heavily in social media to promote Flow House
Manila and Seasons Mall Molino primarily because our country is the leader in social media
usage based from a survey conducted by the Global Web Index.
22
Figure 5: Global Social Network Penetration

Using the internet and social media to promote our development is one of the best ways in
promoting with minimal expense. With the use of internet and social media, one can easily
reach the target market.
Since January 2015, we started the “testing phase’ of Flow House Manila by doing a test run
of the FlowRider 3 times a week for 3-4 hours. We let our friends test the Flowrider in
exchange of promoting it on their social media pages and to bring friends that have high
22
http://wearesocial.sg/
35
influence in social media such as celebrities athletes, sports enthusiasts, models, etc. So far
the campaign is doing well because we tapped celebrities for free to try the FlowRider and
promote on their social media pages. (Illustration 11)
36
Illustration 8: Social Media Pages of Celebrities and Socialites
Through the examples illustration 11, our social media sites gained popularity. The Integra
page of Flow House Manila has seen an increase from 500+ followers in December 2014 to
2788 followers as of February 2015. For Flow House Manila’s Facebook page, followers
almost doubled from 1600+ likes during December 2014 to 3,122 as of February. (Illustration
9)
23 24
Illustration 9: Flow House Manila Instagram and Facebook Page
23
instagram/flowhousemanilaph
24
facebook.com/flowhousemanila
37
With these free exposures from celebrities and socialites, print and media companies started
contacting the company for a free feature and coverage of Flow House Manila. (Illustration 13
& 14)
Illustration 10: Media Coverage

• Playground - Solar Sports TV
• Unang Hirit – GMA 7
• MARS – GMA News TV
• GMK – UNTV
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Illustration 11: Print Exposure
• Explore Magazine (February Issue)
• Uno Magazine (February Issue)
With these marketing efforts, the Seasons Mall Molino begins to be recognized with the help
of Flow House Manila.
6.1.3 Technology
One of the activities of the company’s R&D that gave value to the consumer is the acquisition
of Flowrider technology. As previously mentioned in the company’s overview, Flow House
Manila is an attraction to the new Season Mall Molino that gives excitement and thrill to
potential customers of the mall and its tenants. This technology is exclusive to the company as
well the use of the brand name of Flow House. This also shows the company’s capability to
compete by showcasing innovation to its development.
6.1.4 Operations
Since SSCDI is a relatively new company, employees are still limited. The total number of
employees of the company is twenty-six (26). This number includes the admin and
maintenance team Seasons Mall Lipa. For the legal and financial aspect of the company,
SSCDI outsourced the services and will continue to do so until the need to put up a
department arises.
6.1.5 Human Resource

The activity of the HR Department (HRD) is heavy on recruitment since it is a relatively new
company. The department focuses in acquiring talents that are best fit with the openings in the
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company. The company should strengthen the HRD so it can also focus on training and
development of the employees.
6.1.6 Finance
Since SSCDI is currently constructing its second project, the company ruses the financial
ratios to check the liquidity of the company. In terms of profitability, financial ratios are
negative since the company still poses a net loss. The tables below will show the company’s
financial ratios.
Profitability Analysis
Figure 6: Return on Sales
Return on sales for 2012 is zero (0) due to high fixed costs. SSCDI started the construction of
the first development last 2012 and finished construction mid of 2013. No income was
generated for the year 2013. On 2013 the company posted a negative on return on sales
because operations of the mall started on the mid-year of 2013 and only 5 out of 12 spaces
were occupied amounting to Php 3.6M in rent. In addition to that SSCDI started to pay rent
for the Seasons Mall Lipa amounting to 3 million pesos.
Figure 7: Return on Assets
Loss in 2013 is attributed to the 7 non-occupied spaces with an estimated amount of P4.2M
for Seasons Mall Lipa since the mall started its full operations in mid 2013 and also the
increasing overhead costs such as operational expenses of the head office.
40
Figure 8: Return on Equity
SSCDI’s return on equity measures the ability of the company to generate acceptable
returns for the capital invested by the company owners. For 2012 and 2013 still posses a
negative ROE or capital deficiency because the current assets are less than its current
liabilities. Most of the assets of the company amounting to P79,909,058 are non current
assets such as construction in progress and security deposits. Currently the company is
short in liquidity assets.
Liquidity Analysis
Liquidity ratios measure the liquidity and the ability of the company to pay its long and
short-term obligations.
Figure 9: Current Ratio
Current ratio is below 1 for 2012 and 2013 because Seasons Mall Molino is still under
construction and not operating. Increasing liabilities in the form of non-interest bearing
advances from the stockholders for its working capital requirements and payable upon
demand.
Leverage and Solvency Analysis
Figure 10: Debt Ratio
SSCDI stockholders provided non-interest bearing advances to the company for the initial
working requirements.
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6.2 McKinsey’s 7s
6.2.1 Strategy
Differentiation
SSCDI’s strategy is to put up Flow House Manila with the FlowRider as an added attraction
in the development. With this, it creates a niche from the big players in the commercial real
estate industry. Another strategy that the company made is being the exclusive licensee of all
the products of Waveloch. This means only SSCDI can bring the attraction in the country.
With this, SSCDI is allowed to sublicense the attraction and this will give additional revenue
for the company.
Conclusion – Effective
With the company’s efforts to put Flow House Manila in the development, the company sold
its very 1st sub-licensee of Flow House in Pampanga and it will open on mid 2015. There is an
increase of inquiries of “anchor tenants25” such as Starbucks Group, Café France and various
banking institutions. It also gained interests from the big players in commercial
development. SSCDI is starting to get noticed by the big players such as Ayala Land, Starmall
and LimKetKai group. They are interested in sub-licensing the Flow House Business Model
in their commercial developments.
6.2.2 Structure
SSCDI’s has a very lean organizational structure mainly because the company is relatively
new and currently strengthening the organizational structure. Since both Season Mall Molino
and Flow House Manila are not operational, some departments are being shared to minimize
the operational cost of the company.
25
popular brands in retail, food & services
42
Figure 11: Current Organization Structure
Conclusion – Effective but can be improved
With the sharing of department structure of the company, it minimizes the operational cost
while still being able to manage the daily activities of each department. This management
strategy is effective until before Flow House Manila and Seasons Mall Molino opens.
Separating the organizational structure of Flow House Manila is important once it becomes
fully operational so it would be easier to identify the costs such as operational expense and
sales of each company.
43
Figure 12: Proposed Complete Organization Structure of Flow House Manila
6.2.3 System
Currently, all the systems of the businesses (Flow House Manila & Seasons Mall) are
centralized under SSCDI. All the processes and procedures come from SSCDI given that the
management structure is being shared.
Accounting System
Currently all accounting processes are outsourced to an accounting firm. They are in-charge
of record keeping. The accounting firm uses Xero software for the online bookkeeping.
SSCDI pays a monthly retainer’s fee to the accounting firm.
Conclusion – Effective until before Flow House Manila and Seasons Mall Molino operates
The current systems of the business may be effective now since Flow House Manila and
Seasons Mall is not yet operational. Once these operates and expands, SSCDI should start
decentralizing management decisions.
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HR System
The company’s HR department uses biometrics to track the attendance of all the employees.
The biometrics data is used as the basis for the computation of the monthly salary. The HR
Specialist manually computes for each employee’s salary and encode it into excel.
Conclusion – Not Effective

The HR system is not effective since most of the processes are done manually the chances of
committing errors are high. The manual process maybe acceptable for now but once the
company has multiple developments, it would be better to invest in automating this process.
6.2.4 Shared Values

Objectives and Goals
SSCDI’s objectives and goals should always be aligned with its mission and vision. Every
employee should be guided on the purpose and their value in the company. However, the
mission and vision of the company has not been given importance. With this some of the
employees are misguided.

The company especially the MANCOMM should sit down and do strategic planning and goal
setting in order to be reminded of the company’s mission and vision. With this it will
minimize the distractions of the MANCOMM members and they can easily relay it to their
subordinates so that everyone is aligned.
6.2.5 Style
Management Style
Currently, the management style of the company is authoritarian leadership particularly to the
rank and file employees up the specialists (front liners). The HR department is very strict on
the tardiness of the front liners (Table 10).
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Table 7: Tardiness Chart
The company wants to instill the value of punctuality for the front liners. For the upper
management, work schedule is more flexible.
All levels employees should follow the handbook at all times. There are corresponding levels
of sanction depending on the gravity of the offense of the employee.
The current style of management is effective for the company since it is a new company rules
must be established. Management should be strict with the compliance of the “house rules”
Culture
The company’s culture is patterned on the Japanese work culture. An example to this is when
a visitors or a director passes by your workplace, you should stand up to acknowledge their
presence. Another culture established by the company is creating and maintaining good
relationship with all our clients, suppliers and partners. The company does this by simply
remembering their special moments such as birthdays and anniversaries by sending them an
SMS and sending them gifts such as cakes, fruit baskets or bouquet of flowers. With this way
they see that the company values them.
Our clients, suppliers and partners appreciate the gestures that we do for them. This
strengthens our relationship with them.
6.2.6 Staff
Currently our HR department sources good quality employees. This can be proved the low
attrition rate of the company. For the 2 years that it has been operating the attrition rate was
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only 1 fixed term employee (FTE) year on year. The company also conducts performance
evaluations to measure how effective the employee and to give feedback on the areas for
improvement of the employee. Managers are highly encouraged to conduct 1on1 sessions
with subordinates to keep them engaged and prepare them for bigger roles in the future.
Employees are more engaged and driven by conducting 1on1’s. It also lifts the morale of the
employees. However, the HR should provide training programs for the employees to further
develop their skills.
6.2.7 Skills
Since the organization of the company is lean, multitasking is one of the skills the managers
and front liners exhibit. Most of the employees are can function roles when needed.

Multitasking can create confusion of work for the employee that can end up not completing
the task assigned to them. This can also cause stress and burnout for an employee.
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6.3 Internal Factor Evaluation
Table 8: IFE Matrix
Strengths and Weaknesses Rating and Importance
6.3.1 Strengths
S1 - Customer Service: Strong relationship with partner tenants and suppliers (Rating
3)
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The service activities of SSCDI are geared towards their direct customers and tenants. Since
part of the SSCDI’s business philosophy is building relationship, our leasing team works very
closely with our prospect tenants such as Jollibee group, Puregold Price Club Inc. and
Starbucks to name a few. They make sure that all of their concerns are being addressed prior
the turn over of the unit. The inclusion of Flow House Manila in Seasons Mall Molino is
considered a support activity for the tenants of the mall. It attracts people to visit the mall. In
effect it increases the potential customers of their tenants.
We also value our relationship with our outsourced architects and contractors and other
suppliers. Same effort should be exerted in building a good relationship with your customers
and suppliers since both are equally important. SSCDI personalizes the relationship for both
suppliers and customers by constant communication and conducting visits to their offices and
remembering their special occasions such as birthdays, anniversary and other events.
S2 – Human Resource: HRD is keen in hiring adept employees (Rating 3)
As discussed previously on the 7 McKinsey part of the paper, the company has a low attrition
rate due to efforts of HR. The department also maintains a harmonious working environment
by encouraging 1on1 sessions of the manager and subordinate.
S3 – Product: Exclusive licensee of Flow House Manila in the Philippines (Rating4)
SSCDI is the exclusive licensee of Flow House from the US. Flow House is an entertainment
destination. SSCDI will introduce a new water board sports called Flowboarding.
Flowboarding is already a popular sport in the United States, United Kingdom, Singapore,
Thailand and many other countries and will be made available in the Philippines exclusively
by SSCDI.
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The concept of the business focuses on the end-user and his or her individual sporting
pursuits. Other business aspects of Flow House Manila are the Restaurant & Bar, Retail
Shop, Events and Sponsorships and Sub-licensing.
S4 – Management: Management track record and Net Worth (Rating 3)
The directors and management’s credentials is considered one of the strengths of the
company. The directors were able to finance the Seasons Lipa project with out the loans from
financial institutions. They also have other successful businesses such as real estate, other
commercial establishments, and consultancy. The chairman and the CFO’s SALN is estimated
at 350 million while the President CEO’s SALN is at 180 million.
S5 – Location: Accessibility of the Mall
Seasons Mall Molino is located along the Molino Blvd. which the bypass highway for other
neighboring towns in Cavite (Kawit, General Trias, and Dasmariñas). The location will be
accessible for commuters once the LRT 1 extension project finishes because the last stop for
the extension will be right beside the development.
S6 – Inventory Management: The ability to manage the spaces being leased (Rating 3)
The leasing team properly allocates the spaces to specific brands that potential consumers will
look for. They also carefully study the tenant mix per cluster of the mall in order to provide
maximum revenue for the prospect tenant and the company.
6.3.2 Weaknesses
W1 – Industry: New Player in the Industry (Rating 1)
Being a new player in the real estate industry is very challenging. When it comes to malls
commercial developments, most of the people go to the top malls such as Ayala Malls and
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SM Malls. We are still far from the top players but we want to use them as a benchmark in
order for us to keep on improving our brand.
W2 – Financial: Still establishing a credit facility with banks and other financial
institutions (Rating 1)
SSCDI is a start-up company and operating for just a little over three years, it is really
difficult to apply for a credit facility with banks. Without the help of any credit facility, it will
be hard for the company to expand since cash from investor’s funds all projects and
sometimes it causes tight cash flow for operations.
W3 – Compensation: Company should provide competitive compensation & benefits for

the employees
Since SSCDI is a new company, the benefits are not that competitive. A competitive
compensation and benefit package will help attract, retain and motivate employees. There are
a lot of advantages of a company giving competitive compensation and benefits. One example
is it gives the employee job satisfaction since they are rewarded fairly with the amount of
work they put in. Another example is by providing competitive compensation and benefits; it
gives the company an advantage to get great talents to work for the company.
Currently the compensation and benefits that SSCDI gives to their employees are only the
basic benefits required by the Philippine government these are; SSS, Pag-ibig, Phil-health and
13th month pay.
W4 – Sales: Lack of capability to negotiate due to unfinished construction (Rating 1)
The marketing and sales activities of SSCDI are geared towards negotiations and closing of
deals with potential tenants. These activities are essential to the end consumers because they
also look for the availability of their preferred brands, products and services. So far, the
marketing and sales team has been able to secure letter of intent LOI with known brands in
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food service, entertainment and commerce companies they can start processing the LOIs once
the development is ready for turn over.
W5 - Organization: Small organization (no. of employees) (Rating 1)
Given that SSCDI is a start-up company, the organization is relatively small compared to
other companies that are into commercial development. With this, employees ended up
multitasking with work and it can create confusion to the employees that can lead to burnout.
The company’s direction is to add more manpower as we also increase the number of
developments.
6.4 SWOT Analysis

6.4.1 SWOT Matrix
Table 9: SWOT Matrix
52
The EFE and the IFE tables were used in the SWOT analysis for the strategy formulation.
SO1 – Provide personalized service that will leave a lasting impression to all tenants and
suppliers. One example to this is by remembering all of the birthdays of all the suppliers and
tenants and sends them a gift or at least a text message. With this way it strengthens the
relationship with the tenants and suppliers. (S1, O1)
SO2 – HR Department to hire employees for Flow House Manila who has an interest in
Surfing, Wakeboarding, Skateboarding and other boards sports. Their skills and lifestyle can
attract their friends with the same interest. (S2, O2)
SO3 – Sell sub-licensees of Flow House Manila to other developers with in the country (S3,
O2, O3)
SO4 – Use the credibility of the directors to establish new relationships to suppliers and
customers that may lead to possible joint venture. (S1, S3)
SO5 – Use the accessibility of the mall to attract mall goers and potential tenants. (S1, S3, O1,
O2, O4)
SO6 – Use Flow House Manila as a marketing tool to sell lease out spaces and justify
premium prices on space near the attraction (S2, S4, S5, O1, O2, O3, O4)
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Table 10: Strength & Opportunity Strategies
ST1 – Growing connections by establishing partnerships to further grow the relationship

with tenants and suppliers. This may result to possible joint ventures (S1, S3, T1, T3)
ST2 – Maintaining a good working environment and professionalism can be an edge to the
competition (S1, S2, S4, T1, T3)
ST3 – Providing a highly quality product (Flow House Manila) to attract tenants and
customers to patronize the development (S3, T1, T3)
ST4 – The directors’ credibility and net worth can show that they can compete with other
competitors (S4, T1, T3)
ST5 – Accessibility of the mall makes it easier to market and attract prospect tenants. (S1,
S3, T1, T2)
ST6 – Pre-sell the spaces while construction is on going. Give special rates for prospect
tenants that will avail on the pre-selling phase (S5, T1, T3)
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Table 11: Strength and Threat Strategies
WO1 – Create marketing activities to promote the development to increase awareness of the
prospect tenants and customers. Finish the project in phases so that the company can make
use of the spaces that are completed (W1, O1, O2, O3, O4)
WO2 – Maximize the moratorium of lease by pre-selling commercial spaces at a discounted

lease rate while other parts of the development are under construction. This will pose a
lesser risk for the banks since the development is partially operating (W2)
WO3 – Create incentives such as percentage for every successful tenant referrals to all
employees. (W3, O3)
WO4 – Use Flow House Manila as leverage to attract tenants and customers in the
development. Sales team can discuss about Flow House and the benefits of it will bring to
the tenants (W1, W4, O1, O3. O4)
WO5 – Provide training to equip employees to handle various tasks (W5)
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Table 12: Weakness and Opportunity Strategies
WT1 – Establish good relationship with the landlord and always include in the contract the
right to purchase the land clause and the right of first refusal if the land lord suddenly decides
to sell the land where the mall is located. (W1, W2, T1, T3)
WT2 – Use the other businesses of the directors as a guarantor to SSCDI in order for the bank
to grant credit facilities. (W1, T1,)
WT4 – Create marketing campaigns such as above the line and social media that will promote
Flow House Manila to create leverage. (W4, T1)
Table 13: Weakness and Threat Strategies
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6.5 Strategic Position & Action Evaluation Matrix (SPACE)
Figure 13: SPACE Matrix Analysis
Figure 14: SPACE Matrix
57
With the given Financial Position (FP), Competitive Position (CP), Industry Position (IP) and
Stability Position (SP), scores, it is in the competitive quadrant. SSCDI should strengthen its
financial aspects once the Seasons Molino Mall and Flow House Manila opens. Since the
directors are funding the company, it is somehow limited. To strengthen the balance and
provide the funds in order to complete the project, the company should do the following:
• Apply for credit facilities in banks once the company turns 3 year and if parts of
the mall have been opened.
• Look for other financial institutions a side from banks that will finance the project
• Try to look for investors that are willing to fund future projects.
• Look into joint venture for Flow House Manila by partnering with the top
commercial developers in the country
By strengthening the company’s financial aspect, it can expand and create more projects.
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6.6 Boston Consulting Group Matrix
Based form the BCG Matrix, Sales, Leasing and Flow House Manila falls under the Star
quadrant. For leasing, there are a lot of opportunities that team can tap. One of which is the
growing demand of BPO spaces outside Metro Manila. Another thing that the leasing team
can do is to always use Flow House Manila as their selling point for sub-leasing the spaces.
For sales it would be easier to sell sponsorship packages since flowboarding is a new sport.
Flow House Manila also falls in the stars quadrant since it is a new concept and there are
several revenue generating aspects such as the ticket sales from the ride (40% of the total
revenue), income form the food and beverage business (40% of the total revenue), retail
shop sales (10% of the total revenue) and sales from events (10% of the total revenue).
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6.7 Internal External Matrix (IE)
Figure 15: IE Matrix
Based from the weighted scores of the EFE and IFE, SSCDI falls into quadrant V hold and
maintain with both IFE and EFE are average scores. With this, the company should
intensively concentrate on the market penetration and product development.
6.8 Grand Strategy
Figure 16: Grand Strategy Matrix
For SSCDI, which has a strong competitive position and a rapid market growth falls into
Q1. With this, the company should do the following aggressive strategies:
• Market Penetration
• Market Development
• Product Development
• Backward Integration
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• Forward Integration
• Horizontal Integration
• Related Diversification
6.9 Summary of Strategies
Table 14: Summary of Strategies
Based on the summary of strategies, the strategies that are most effective for SSCDI are
Market Penetration, Market Development and Product Development. Market penetration is
present in all strategies.
61
6.10 Quantitative Strategic Planning Matrix (QSPM)
62
Table 15: QSPM Matrix
Based on the QSPM matrix above, the strategy that stood out for SSCDI is product
development with a score of 4.155. This is followed by market penetration with a score of
3.92. The 3rd strategy on the QSPM matrix is the market development with 3.685.
7. Strategic and Financial Objectives
7.1 Strategic Objectives

SSCDI should provide additional commercial services on the entertainment segment to
target new customer segments and to expand to new geographical markets. Based on the
matrices, the strategies directs into market penetration and product development. Since it
is a newly established company, SSCDI should focus on growing Flow House Manila by
sublicensing in other areas in the country. Since SSCDI is the exclusive licensee of all of
the products from Whitewater, this is the niche of the company to tap into other markets,
develop the sport in the country and to expand the Seasons Mall in other areas.
63
7.2 Recommended Strategies
Business Strategies
Increase in revenue for Seasons Mall Molino by tapping to BPO companies to occupy the
space for Bldg J. (O1, O4 & S6)
As mentioned in the external analysis of the paper, SSCDI can maximize the growth of
the BPO companies and their direction to expand to neighboring cities outside Metro
Manila by offering the space for building J. The leasing team can offer the building J
currently at 20% completed at land lease rate provide that the prospect BPO company
will finish the construction and fix the necessary permits BPO operations. The current
lease price for building J is at Php400 per sqm. with the total projected monthly rental of
Php 1,216,400 per month. Offering building J wit the discount at 250 per sqm. as long as
they will continue to build the structure. This will have lower a lease income amounting
to Php 760,250 per month but it is still above the lease of SSCDI to the land owner by
Php 100 per sqm.
Impact of the Strategy

With this strategy, it will improve the cash flow of the company and it will lessen the
expenses in the construction. This strategy is is also beneficial for Flow House Manila
since BPO employees are one of its target markets.
Generate at least 2 sub-licensees per year for Flow House Manila (O1, O2, O3, S1, S3,
S4 & W1)
Adding sub-licensees of Flow House Manila will generate additional revenues for the
Company. This will also strengthen the relationship suppliers (Whitewater & contractors)
with the continuous business transactions.
Sub-Licensee Projected Costs and Revenue
64
FlowRider
Equipment Cost 46,440,000
Marketing Fees (US) 1,849,000
Sub-License Fee 5,000,000
Site Infrastructure
Floor Area Cost Per
Meter2 Meter2
Exterior Space (Including Furniture) 1,300 15,000 19,500,000
Interior Space (Including Furniture) 500 15,000 7,500,000
Consulting Fees (Architect &
Engineer) 1,965,943
82,254,943
Table 14: Breakdown of investment cost for Flow House Manila Sub-licensee
Explore Joint Ventures with other developers (O3, S1, T1, W1 & W2)
The company should explore possible joint ventures with other known developers to help
expand the company (Seasons Mall & Flow House Manila). Having a joint venture with a
known commercial developer puts SSCDI in a good position in terms of competition.
Impact to of the strategy

With this strategy, it can create possible joint ventures with other developers it will
benefit the company financially. This will also establish the credibility of the company
since it will be partnered with known developer. It will be easier for the company to
establish credit facilities with banking and other financial institutions with this strategy.
Lastly, this will also help develop and market in flowboarding as a new sport in the
country.
This also develops a profitable and reliable commercial center or mall that contributes to
the progress of a city since it provides accessibility and availability of products and
services as well as employment to the surrounding areas.
Organizational Strategies
Additional Department that would cater for the sub-licensees of Flow House Manila (S2,
W3 & W5)
65
Since part of the business model of Flow House Manila is sub-licensing, and the target
number of sub-licensees of the company is 12 Flow Houses nationwide. With the
company should create a department that would cater to the needs of the sub-licensees
after the 4th sub licensee. The department will consist of the following employees;
• Sublicense Manager – Will be in-charge with the all the coordination with the
sub-licensees. The manager will do site visits to inspect the operations of the sub-
licensees. The manager will be directly reporting to the GM
• Wave Engineer – Will be in-charge for the troubleshooting of the sub-licensee’s
flowrider. The engineer will also conduct a yearly maintenance check up of the
equipment
• Procurement staff – will be in-charge of the coordination of the deliveries with the
suppliers for the sub-licensees such as food inventory, apparel inventory and
flowboarding equipment inventories.
Impact to strategy
In the creation of this department, it will make sure that the support is given to all sub-
licensees. This will also maintain the relationship with our clients and will help sustain
the quality of the brand.
Employee training for learning and development (S2, W3 &W5)
Training and development will provide the employees with benefits by enhancing their
skills and preparing them for bigger roles. The company will also benefit with the
learning and development with the improvement of the employee’s performance. This
will also maintain a healthy work culture.
Impact to Strategy
By providing training and development it boosts the morale of the employees. This also
shows that the company is investing for the growth of their employees. This will also
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address one of the company’s weaknesses in compensation and benefits for its
employees.
Another recommended strategy is to offer for franchising the Flow House brand help with
the expansion of Seasons Mall. See Appendix 1.
8. Financial Projection
8.1 Basis and Assumptions
Seasons Lipa
• The basis for the 2014 gross revenue is the monthly lease and tenant occupancy of
Seasons Lipa for the 12 spaces. (Table 14)
• Annual land lease rate of SSCDI for Seasons Lipa with 5% escalation for 2014
amounting Php 3,114,580.35.
• 5% Escalation rate is projected year on year for 2014-2015
• Common Use Service Area fee (CUSA) is computed Php 60 per sqm
Table 15: Seasons Lipa Land Lease Rate
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Table 16: Tenant Summary List with Income
• 2014 estimated revenue based from the lease income of Seasons Lipa amounts to Php 5,004,055.01 at 93% occupied
Season Mall Molino

• No operations for 2014
• 2015 Revenue is based on the lease income building J, A and Open Space 2 amounting to Php 22,170,000
• Common Usage Service Area Fee (CUSA) is computed at Php 100 per sqm
• 2016 Seasons Mall is 70% occupied all 9 clusters with an projected lease income of Php 58,962,254.40
• 5% escalation on rent starting on 2016 onwards
• Land lease for Season Molino will start on April 2015 amounting to P1,654,947.60 per month
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Table 17: Seasons Mall Lease Rates
Table 18: Projected Lease Income Seasons Mall Molino
69
Flow House Manila
Table 19: Feasibility Flow House Manila
70
8.2 Projected Income Statements
Seasons Lipa & and Molino
Table 20: Income Statement Seasons Mall
71
Flow House Manila Consolidated Income Statement
Table 21: Income Statement Flow House Manila
72
8.3 Projected Balance Sheets
Seasons Lipa & Molino
Table 22: Seasons Malls Balance Sheet
73
Projected Balance Sheet Flow House Manila
Table 23: Flow House Manila Balance Sheet
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9. Strategy Map Departmental Programs
9.1 Strategy Map
Figure 16: Strategy Map
Financials
SSCDI can maximize lease revenue sub-licensing 2 Flow House Manila every year and a target
of 100% leased out spaces for Seasons Lipa. With sub-licensing Flow House Manila this will
generate additional revenue for the company. With sublicensing, the business will grow it will
also increase the awareness of the sport
Customer
Achieving a positive income for the company, SSCDI should open all clusters of Seasons Mall
by end of 2015. The opening of Flow House Manila in Seasons Mall Molino will make the make
a lifestyle destination mall.
Process Perspective
75
The company should have is to have manuals and procedures to have an efficient operations.
This will serve as guidelines for the operations of the company. For the company to further
improve it operations, it should invest information technology in some processes such as payroll
and procurement in order to avoid human errors. With these efforts, it gives the company a room
for growth.
Learning and Growth

To achieve learning and growth, the company should prepare their employees to handle big task
by providing apt training to enhance their skills. This will also be beneficial for the company
since their employees will be ready to take on bigger tasks. Another opportunity for the growth
of the company is apply Six Sigma for process improvement. Lastly, strategic planning should be
performed at least once year for everyone to be aligned with the direction of the company.
9.2 Departmental Programs
Seasons Mall
Proposed Construction Timeline for Season Molino
Table 24: Construction Timeline
• Estimated completion of the entire development will be in November 2015

• Phase 1 (March) – Bldg A, Open Space 2 (Flow House Manila)
• Phase 2 (April) – Bldg J. (Shell Structure)
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• Phase 3 (May) - Open Space 1 landscape
• Phase 4 (July) – Bldg F, G & H
• Phase 5 (Sept) – Bldg D.
• Phase 6 (Nov) – Bldg B, C & E
With the proposed construction timeline, Finishing Seasons Mall Molino in phases will be more
beneficial for the company since other buildings can start to generate income while the other are
still under construction.
Marketing Calendar for Seasons Lipa and Molino

The company plotted the several marketing activities for the development for 2015
Season Lipa
Table 25: Marketing Calendar Seasons Lipa
Seasons Molino
Table 26: Seasons Mall Molino Marketing Calendar
77
These marketing programs of the malls will generate additional foot traffic that will help the
tenants.
Flow House Manila
Calendar of events for Flow House Manila
Table 27: Flow House Manila Marketing Calendar
Weekly Events
These are events that are designed to generate additional traffic and awareness especially during
the off-peak days. These events will boost FlowRider sales as well as food and beverage sales.
These events are segmented to its specific target market. Sample of the events are the following
• Happy Hour
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• Acoustic Night
• Student buy 1 take 1
• Ladies Night
• Family Funday Sunday
Programs
Programs are designed to highlight what Flow House Manila, which is the sport of flowboarding.
These programs will entice riders to try FlowRider and will encourage repeat riders to be
regulars of the sport.
• Lessons
• Flow Camp
• Wave Shows
Major Events
Flow House Manila will feature major events during holidays. Most events will run for multiple
days and will feature major and minor sponsors. These events are prime opportunities for brands
to display product and service offerings. Some samples of the events are:
• New Year Kick-off Party
• Summer Kick-off Party
• Labor Day
• Independence Day Celebration
• Flow House Anniversary Party
Competitions
Flow House Manila will be host to small local competitions as well as international
competitions. Flow House Manila is part of the international flowboarding competitions headed
by Flowboarding League of the World (FLOW) and will be a great venue for international brand
exposure.
• Flow Tours
• Flow Jams
• Flow League
79
Private events
These events are for individuals and organizations who wish to rent out event spaces for social
gatherings and companies who seek for conferences, meetings, awarding ceremonies and team
buildings. These are custom tailored to the requirements of the specific client and will catering
and flowrider packages
• Corporate events
• Private parties
The Flow House Manila marketing program will also generate foot traffic and awareness of the
sport. These programs will also give additional revenues for the company in terms of
sponsorships, event bookings.
10. Strategy Evaluation, Monitoring & Control
10.1 Balance Scorecard
Table 28: Balance Scorecard Summary
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Appendix
Appendix 1: Franchise Application process and Terms
a. Letter of Intent
Sub-Licensee candidates will be required to submit a Letter of Intent to signify
intent to purchase a Flow House sub-license and become a partner with SSCDI.
The LOI will need to demonstrate financial resources, the proposed location of
Flow House and the intended market for the proposed location. Upon receipt of
the LOI, Flow House will evaluate the validity of the proposition and determine
whether or not to allow candidates to proceed with the application process.
b. Application Form
Upon approval by the Board of Directors of the Letter of Intent, sub-licensee

candidates will be required to fill out and submit a Sub-licensee Application
Form. The form will contain the candidate’s personal information, business
experience and background, knowledge of Flow House installations, financial
resources and intent for proposed Flow House installation.
c. Grant of License
Prior to the grant of license, a Memorandum of Agreement (MOA) will be issued

and signed. The terms of the MOA will require proof of funds and issue a
timeline for construction and tender of payment. Upon satisfaction of the terms of
the MOA, a sub-license agreement will be drawn and a sub-license will be granted
to the assignee.
d. Assigning Market Areas
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Market areas will be assigned on the following basis:
1. 50 kilometer radius
2. No more than 20% overlap between proposed Flow House location and
existing installations
3. Subject to discretion and approval of Board of Directors
4. Determine sufficiency of market demographics
5. Determine if overlaps with existing or future planned Flow House
locations will comprise too large of key market share
6. Determine if bodies of water or other geographical and logistical factors
create sufficient barriers to transportation to negate the distance
requirement
e. Trademark Standards and Requirements
Brand image and maintenance is extremely important to the success of Flow

House. All Flow House locations must adhere to a strict set of standards for usage
of the logo in low resolution or substantially altered logos will not be acceptable.
A Brand Book with logo and marketing material guidelines will be issued.
f. Terms and Renewal
Sub-licenses will be granted in 5-year terms. During the term, bi-annual

inspections and reviews will be made to determine adherence to Flow House
guidelines and standards. If the sub-licensee is found lacking in any respect,
SSCDI will issue a report and require the matter to be resolved within 90 days. If
the sub-licensee is found in continual violation, termination will be subject to the
discretion of SSCDI’s Board of Directors.
Renewal of the sub-license is subject to approval by SSCDI’s Board of Directors

and will be based on but not limited to the following factors:
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1. Profitability and performance of sub-licensee
2. Appropriate representation of the Flow House Brand
3. Violations of Flow House Manila standards and requirements
g. Facility Standards and Maintenance
The design, build out and maintenance of facilities must meet the standards of
Flow House Manila. Guidelines detailing materials and finishes as well as
maintenance and safety standards will be issued and monitored. The combination
of wet elements and the excitement the attractions inspire creates an environment
that may potentially result in injuries of staff and customers. Every effort will be
made in the design and maintenance of facilities to reduce risk of injury. Our
customers expect a high standard of quality and safety. Their expectations must
be met at every outlet.
h. Products and Operations Standards and Requirements
The continual and safe operation of FlowRider and other related products is
essential to the profitability of Flow House installations. Such products require
technical expertise and strict adherence to maintenance schedules and guidelines.
In addition to onsite training, a manual detailing all wave operations and training
will be issued.
i. Personnel and Supervision
The safety and complete satisfaction of Flow House customers is highly

dependent on the training and training implementation of Flow House personnel.
Guidelines for day-to-day operations as well as emergency scenarios will be
issued by Flow House Manila. Additionally, management and other essential staff
83
will be required to report to training facilities and programs as specified by Flow
House Manila.
j. Advertising
A portion of the royalties paid to SSCDI will be dedicated to the nationwide

advertising campaign of Flow House. Additionally, sub-licensed Flow House
installations will be required to implement local marketing campaigns with
strategic guidance from Flow House Manila. Guidelines for marketing material
and samples will be issued by Flow House Manila on a quarterly basis.
k. Transfer of License
In the event a sub-licensee desires to sell or transfer the sub-license, the transfer
will be subject to the discretion of SSCDI. In the case of such instances, SSCDI
will have priority to retain control and ownership of the Flow House installation
per the terms outlined in the initial sub-license agreement. If SSCDI determines
to forego the acquisition, the third party in question will be subject to the
discretion of SSCDI and must resubmit the application form and follow the
process of applying for a sub-license.
l. Default and Termination
SSCDI reserves the right to terminate any and all sub-licenses in the instance of
but not limited to lapse of payment or repeated non-adherence and violation of
guidelines and standards as set by Flow House Manila.
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Appendix 2: Flow House Manila Income Statement per Business
85
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Appendix 3: Assumptions
Consolidated
Gen and Admin Expenses is 5% of total cost os sales
Marketing Expenses is 5% of Gross sales
Flowrider
5% growth annually
Cost of sales is 30% from total revenue
5% increase in expenses except for miscellaneous expense.
Miscellaneous expense = 0.5% of gross sales
Depreciation and amortization is straight line for 20 years
Rent for all businesses is reflected in flowrider
Rent cost is for interior at Php 700/sqm for 500sqm. For exterior at Php300/sqm at
1,300sqm
Depreciation and Amortization for all businesses is reflected in flowrider
Utilities Expense is for all businesses is reflected in flowrider
Utilities expense - total consumption is 180kw per hour annually for the entire
operations (Flowrider, Retail, F&B, Events) 365days operation with an ave of 13.2
hours per day
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Retail & F&B
5% growth annually
Cost of sales for Retail is 50% from total revenue
Cost of sales for F&B is 35% from total revenue
Depreciation, Rent, Utilities and Repairs are absorbed by Flowrider
Events
5% growth annually
Cost of sales is 30% from total revenue
Miscellaneous expense = 0.5% of gross sales
Salaries and Expenses - amount allotted for additional manpower during events
Appendix 4: Notes to Income and Balance Sheet Projections Seasons Mall Molino
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1. EXECUTIVE SUMMARY --------------------------------------------------------------------------------------- 2

3. RESEARCH DESIGN AND METHODOLOGY ----------------------------------------------------------- 7

4. MISSION AND VISION ------------------------------------------------------------------------------------------ 8

5. EXTERNAL ANALYSIS --------------------------------------------------------------------------------------- 11

6. INTERNAL ANALYSIS ---------------------------------------------------------------------------------------- 34

7. STRATEGIC AND FINANCIAL OBJECTIVES --------------------------------------------------------- 62

8. FINANCIAL PROJECTION ---------------------------------------------------------------------------------- 67

9. STRATEGY MAP DEPARMENTAL PROGRAMS ----------------------------------------------------- 75

10. STRATEGY EVALUATION, MONITORING & CONTROL --------------------------------------- 80

11. Appendix --------------------------------------------------------------------------------------------------------- 81

South Stream Commercial Development, Inc. (SSCDI) is a private company specializing in

Illustration 1: Seasons Lipa

Illustration 2: Season Mall Molino (Aerial Perspective)

Illustration 3: Flow House Manila at Seasons Mall Molino

3.1 Research and Design

3.2 Scope and Limitations

4.1 Company’s Current Mission and Vision

Core & Operation Philosophy

Components Stated Comments

4.2 Revised Vision Statement

To be one of the leading commercial developers in independent and dependent component

Revised Mission Statement

SSCDI’s mission is to surpass all investors’ and clients’ expectations by creating

Components Stated Comments

5.1 Economic forces

4 Construction Statistics – Philippine Statistics Authority

Commercial developers are aggressively expanding to compliment with the expansion

5.1.2 Growth and Expansion of Business Process Outsourcing (BPO)

7 Banko Central Review

Figure 3: Percentage of Riders Chart

11 Flow House Manila Business Plan

Individuals in this demographic will comprise 20% of Flow House Manila’s

II. Young Filipino Professionals (Male & Female)

III. Foreign Tourists

12 Flow House Manila Business Plan

Illustration 6: LRT Line -1 Extension Project Map

5.2.2 Construction of Daang Hari-SLEX Link Road Project

5.3 Social Forces

Illustration 7: Cable Wake Parks in the Philippines

5.4 Technological Forces

5.5 Environmental Forces

5.6.1 Rivalry among Existing Competitors – HIGH

5.6.2 Threat of New Entrants - MEDIUM

5.6.3 Bargaining Power of Suppliers - MEDIUM

Importance of Volume to Supplier

Impact to cost or Differentiation

For SSCDI to select a contractor, a construction bidding is being conducted. At least 3

Here are some of the substitutes in commercial developments:

On-line shopping / Delivery

Other independent commercial establishments with in the area

5.6.5 Bargaining Powers of Buyers – MEDIUM

Table 4: EFE Matrix

Population Area Population

Cavite and Bordering Provinces

Province Population Area Pop. Density Rank

The total population of the target demographics of the company is

O2 – Extreme Sports Becoming Mainstream in the Philippines (Rating 3)

O3 – Increase in Commercial Establishments to Compliment the Expansion of

T1 – Increasing Competition among Industry Players (Rating 3)

T4 - Government Issuance and Licenses (Rating 3)

5.8 Competitive Profile Matrix (CPM)

SSCDI is newly established company engaged in commercial development. Below are

5.8.1 Critical Success Factors