Holy Angel University School of Business and Accountancy Angeles City, Pampanga

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Strategic management – Tan Song Bok Realty
HOLY ANGEL UNIVERSITY

School of Business and Accountancy
Angeles City, Pampanga
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Tan Song Bok (TSB) Realty and Development Corporation

______________________________________________________
In Partial Fulfillment
Of the Requirement of the Subject
Strategic Management
_______________________________________________________
Presented to:
Dr. Claudia Cayanan
Presented by:
Escoto, Christoper
Pineda, John Michael
Ramos, Ira Tricia
Sangalang, Beanne Careleen
Tolentino, Aniel Paul
(imPREST Group, A-431)

_________________________________________________________
February 04, 2019

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Executive Summary
Tan Song Bok (TSB) Realty & Development Corporation is one of the major real estate
developers in Angeles City and Central Luzon. It was founded in 2000 and had since developed
countless well-known establishment in Angeles and Mabalacat. TSB is the developer of JENRA
which is known for its affordable prices and customer-friendly services.The company is in a
good position of competition as it is no.3 in terms of market share. The company garnered a
rating of 2.96 out of 4.00 in the competitive profile matrix, 0.64 points away from the market
leader. This demonstrates the company’s strong position where accessibility, quality, expansion,
recreational and healthcare facilities, advertising, security, management, social responsibility,
customer service and price competitiveness are considered to be critical success factors in the
industry.
The company is also responding to its external environment in an above average manner
with a rating of 2.96 out of 4.00. The main opportunities of the company are Angeles being fifth
as the most peaceful city in the Philippines, incorporating block chain system, new railway
system, expected increase in global real estate transaction, and the growth of tourism. As for the
threats, the issues on the opening of Newpoint and SM Telabastagan, growth of online retail
market, increase of inflation rate, and higher assessed value of commercial properties were
identified.
Internally, the company is near the average position with an IFE rating of 2.48 out of
4.00. Its strengths includes leading estate developer, close to landmarks, large market
share,lower pricing of rentals, and good corporate social responsibility. The challenges,however,
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are minimal promotions, diversification and employees, maintenance of facilities and recent
decline in financial performance.
The main strategic issues of the company include coping with the increasing economic
pressures like competitors opening of new malls and online retail market. Though there are
opportunities present like the increase in tourism, the competitors would also take advantage of
such opportunity. To put the company in a more competitive position in the future, some internal
issues need to be addressed like the minimal promotions, little diversification and maintenance of
facilities.
Based on all the inputs in the strategy formulation process and analysis, the company
needs to prioritize product development strategies that will be integrated with market penetration
strategies to better improve the operations of the company. Furthermore, these strategies will be
supported by other operational strategies to achieve the objectives and goals of the company.
The product development strategies include (a) Opening food parks near tourist spots, (b)
Enhancing transparency, efficiency, and cost savings by adopting blockchain system, (c)
Opening a shopping mall providing high-end products like Newpoint and SM Telabastagan, (d)
Improving facilities by hiring experienced staffs, (e) Opening office buildings, and (f) Providing
affordable promotional packages for lessees.
Included on this part will be the market penetration strategies of (a) Establishing new
buildings for rent around Angeles City and landmarks, (b) Intensify marketing investments such
as advertising activities focusing on the low price rentals and hiring agents or brokers.
Industry Analysis
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One of the biggest business generating billions in revenue yearly and providing plentiful
opportunities for entrepreneurs is the real estate industry. Amadeo (2018) had defined real estate
as the property, land, buildings, air rights above the land and underground rights below the land.
The term real estate means something physical or tangible. In addition, Amadeo stated that there
are four types of real estate. The first one is the residential real estate which includes both new
construction and resale of homes. The second one is commercial real estate which includes
shopping centers and strip malls, medical and educational buildings, hotels and offices. The third
is industrial real estate which includes manufacturing buildings and property, warehouses and
lastly, land which includes vacant land, working farms and ranches.
The need for real estate transactions escalated as cities developed. It encompasses the
many facets of property, not only development, selling and leasing but also appraisal, marketing
and management of commercial, industrial, residential and agricultural properties (Loosvelt,
2018). Furthermore, Sena (2018) stated that real estate is a cyclical industry. It actively reacts to
macroeconomic trends such as interest rates, population growth, and economic strength. It
fluctuates depending on the national and local economies.
The constant growth in the past years in the real estate industry is attributable to the
increase in demand for residential and commercial properties which are driven by various factors
and these factors or demand drivers include the increase in the population, growing numbers of
businesses, and growing number of workers who need to live near their workplace. The rising
number of tourists in the country also open opportunities and possibilities to the real estate sector
in terms of hotels which serve as their home for a short period of time and also in terms of
investment that the tourists may invest in the country by means of creating businesses and
opportunities for the people (Ortiguero, 2018).

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According to Berry et. al. (2018), the real estate industry today is on an accelerating
disruption curve that will give a big impact to industry leaders for them to look for new ways of
doing business and have interactions with their customers. Real estate industry will no longer be
just a simple aggregation of buildings and people because it will be affected by modern
technologies so it must innovate and adapt to the growing demands of life. Real estate companies
can maximize their value by partnering with innovative startups and by embracing robotics and
cognitive automation not only to eliminate the inefficiency of the industry in the past years but
also for compliance, risk mitigation, and decision making.
There are two dominant types of real estate tech startups namely operations-related firms
and financial tech-related firms. The former is focus on leasing, facilities management, property
search, and smart building technologies while the latter is focus on enabling new and diverse
financial and investment services such as digital lending platforms, online property investment,
and real estate transaction services. The combination of robotic process and cognitive automation
can have a big impact on the real estate industry by helping the enterprises increase efficiencies
and reduce error by replicating human actions and judgment with speed and quality. It is very
important for real estate companies to adapt to changes in the environment by engaging and
investing to the new technologies that are arising today (Berry et al., 2018).
Based on macroeconomic accounts of Philippine Statistics Authority (2017), Real Estate,
Renting & Business Activities (RERBA) slows down expanded by 5.3 percent growth in the
third quarter of 2018, slower than the 7.8 percent growth posted in the same period in 2017. The
growth was driven by real estate which grew by 11.1 percent, faster than the 10.8 percent growth
in the previous year.

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Renting and other business activities slowed down to 3.4 percent as compared with 9.5
percent in the third quarter of 2017. On the other hand, ownership of dwellings accelerated to 3.3
percent from 2.8 percent growth in the previous year (PSA, 2017).
According to Philippine Statistics Authority (2017), real estate activities of apartment
buildings, non-residential and dwellings dominates the real estate sector. Final results of the
2015 Annual Survey of Philippine Business and Industry (ASPBI) showed that a total of 4,826
establishments in the formal sector of the economy were engaged in real estate activities.
Real estate buying, developing, subdividing and selling employs the highest number of
workers (PSA, 2017). In 2015, the total employment for the sector reached 74,300. About 98.4
percent of the total employment or 73,126 workers were paid employees and the remaining 1,174
(1.6%) were working owners or unpaid workers.
Industry-wide, majority of the workers were employed at real estate buying, developing,
subdividing and selling with 35,087 employees (47.2%). Real estate buying, selling, renting,
leasing and operating of apartment buildings, non-residential and dwellings and real estate
activities on a fee or contract basis followed with 23,803 employees (32.0%) and 9,299
employees (12.5%), respectively.
For the year, the sector paid a total compensation amounting to PHP26.3 billion,
equivalent to an average annual compensation of PHP358,999 per paid employee. Real estate
buying, developing, subdividing and selling paid the highest compensation amounting to
PHP15.6 billion or 59.6 percent. Real estate buying, selling, renting, leasing and operating of
apartment buildings, non-residential and dwelling and real estate activities on a fee or contract
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basis came next as second and third with total compensation of PHP5.7 billion and PHP3.4
billion, respectively (PSA, 2017).
Moreover, employees in real estate buying, developing, subdividing and selling received
the highest average annual compensation with PHP454.8 thousand per employee, surpassing the
sector average of PHP359.0 thousand per employee. On the other hand, workers of real estate
buying, selling, renting, leasing and operating of apartment buildings, non-residential and
dwellings had the least average annual compensation with only PHP240.7 thousand per
employee (PSA, 2017).
According to Philippine Statistics Authority (2017), real estate buying, developing,
subdividing and selling contributes the major share in income and expense. The sector generated
a total income of PHP534.5 billion. Real estate buying, developing, subdividing and selling
shared more than half of the total income (58.3%) equivalent to PHP311.4 billion. Real estate
dwelling placed afar second with PHP183.6 billion (34.3%). Real estate activities on fee or
contract basis earned the third highest income of PHP21.5 billion (4.0%).
Total expense incurred by the sector amounted to PHP353.2 billion in 2015. As the main
contributor in income, real estate buying, developing, subdividing and selling also registered the
biggest percentage of the total expense with PHP218.3 billion or 61.8 percent. Real estate
dwelling ranked second as well with PHP105.0 billion (29.7%); real estate activities on a fee or
contract basis came in third with PHP18.1 billion (5.1%).

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Real estate buying, developing, subdividing and selling posts the highest change in
inventories. Total change in inventories (ending less beginning inventory) amounted to PHP38.2
billion in 2015.
Real estate buying, developing, subdividing and selling reported majority of the change
in inventory with PHP36.3 billion (95.0%). In addition, two other industries obtained positive
value namely, real estate activities on a fee or contract basis, PHP2.6 billion and other real estate
activities with own or leased property, PHP664 thousand.
Investors and fund managers still value real estate as a strong performer despite a testing
environment and it is not without its challenges (Sethuraman, 2018). It is not surprising that the
real estate industry is one which has been met by many challenges this past decade. However, it
is important to take a moment to reflect on how those challenges may be changing as the housing
market rebounds and optimism creeps back in (Tradewind, 2015).
Financial challenge is one of the main issues that the real estate industry is facing. While
the continued growth in the capital market means that credit is still more readily available than it
has been in the recent past, be on guard for the inevitable end of the honeymoon period. While
interest rates rates remain low, their eventual rise might cause anxiety and make consumers
indecisive and wary of taking on new loans (Tradewind, 2015).
Another issue is cultural challenge. The focus on sustainability is also becoming a key
cultural challenge in real estate. Companies are becoming concerned with creating healthier
workplaces for their employees and the environment. Millennials look for the same water and
power conservation in their own homes and are also more concerned with sustainability
(Tradewind, 2015).
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The third major challenge facing the real estate market is the rapid advance of
technology. The office space needs of companies are also changing as they find better and more
efficient ways of doing things. With employees working from home instead of a centralized
office, telecommuting is also becoming a more viable option in many industries. Brick and
mortar retail enterprises are being replaced by online shopping, which means less malls and strip
malls and more office spaces (Tradewind, 2015).
According to Paine (2018), a trend that has been going on for several years now and is
unlikely to stop anytime soon is peer to peer communication. Discussion forums and social
networking sites, it has never been easier for people to bypass realtors altogether and to make
peer-to-peer deals with no middleman, all thanks to the rise of the internet. Another trend in the
real estate sector is that artificial intelligence gets better and better at processing natural
language, as well as the chat bots that AI powers.
The real estate industry has changed a lot over the last decade. New technologies are
having a surprising amount of impact on the way that real estate agents do their jobs. At the same
time, companies in the industry are giving consumers more choices when it comes to buying and
selling property (Paine, 2018).
Business Profile
History
Tan Song Bok (TSB) Realty & Development Corporation is one of the leading real estate
developers in Angeles City and Central Luzon. Established in 2000 by Mr. Tan Song Bok, it has
developed numerous iconic establishments around Angeles and Mabalacat such as JENRA
Grand Mall, Jumbo JENRA Angeles, Dau and Sindalan, and Sacred Heart Medical Center. It
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also leases out several Jollibee, Greenwhich and Mang Inasal food chain outlets and other
properties belonging to its mother company, JENRA Group of Companies.
Tan Song Bok (TSB) Realty and Development Corporation is one of the leading real
estate developers in Angeles City and in Central Luzon. TSB was established in the year 2000 by
Mr. Tan Song Bok, the company's Chairman of the Board. TSB is the real estate arm of the
JENRA Group of Companies.
TSB Realty is the developer of JENRA establishments in Angeles City and Mabalacat,
known for its affordable prices and customer-friendly services. As an anchor of business
development, it actually pioneered the mall scene in Central Luzon.
With its growing line of community based commercial shopping centers, TSB aims to
provide world-class retail service and urban development to its valued consumers, coupled with
the most affordable prices and the best deals. All of these encapsulates JENRA's retail
philosophy of providing the best services and products to the buying public. JENRA's wide pool
of tenant mix and business partners that ranges from high-end establishments to thrift shops,
guarantees the mall-goers an excellent, world-class JENRA experience.
Vision
“TSB Realty & Development Corporation envisions itself as the biggest and successful
real estate developer in Northern and Central Luzon providing the best service, most advanced
technology, up to date knowledge on local and international real estate markets and efficiency of
top international developers.” (JobStreet, 2018)
Table 1
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Vision Statement Analysis
Criteria Yes/No Remarks
Plausible Yes “TSB Realty & Development Corporation envisions itself

chance of
success as the biggest and successful real estate developer in Northern
and Central Luzon…”
Focused Yes “...providing the best service, most advanced technology,

concept
up to date knowledge on local and international real estate
markets and efficiency of top international developers.”
Noble purpose Yes “TSB Realty & Development Corporation envisions itself
as the biggest and successful real estate developer in Northern
and Central Luzon providing the best service, most advanced
technology, up to date knowledge on local and international real
estate markets and efficiency of top international developers.”
Plausible chance of success
Does our vision statement represents a dream that is beyond what we think is possible?
The vision statement of TSB represents a dream that is possible.
Does it represent the mountaintop of where the company is headed?
TSB’s statement states that they want to be the biggest and most successful real estate
developer in Northern and Central Luzon. That serves as the mountaintop they want to reach.
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Focused concept
Does our vision statement clarify the direction in which our organization needs to move?
The company’s vision shows where TSB want to move. They want to provide the best
service, get the most advanced technology and up to date knowledge.
Does it clarify the future direction the company is headed?
TSB’s vision shows where company is headed. They want to provide the best service, get
the most advanced technology and up to date knowledge.
Does it clarify the customer focus our company should have?
The vision statement of TSB does not clarify the customer focus the company should
have.
Does it clarify the market position our company should try to occupy?
The vision statement of TSB states that it wants to be the most successful real estate
developer in Northern and Central Luzon.
Does is clarify the business activities our company wants to pursue?
TSB’s vision wants to provide the best service, most advanced technology, up to date
knowledge on local and international real estate markets and efficiency of top international
developers
Does is clarify the capabilities our company plans to develop?

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The vision statements of the company states that it wants to provide the best service, most
advanced technology, up to date knowledge on local and international real estate markets and
efficiency of top international developers
Noble Purpose
Does our vision statement give employees a larger sense of purpose?
TSB’s vision statement provides its employees with a larger sense of purpose by
inspiring its employees to achieve its mission.
Is our vision statement worded in such a way that our employees see themselves as “building a
cathedral” rather than “laying stones”?
Although TSB’s vision is to be the most successful real estate developer in Northern and
Central Luzon, they also provide the ways they can become this and that is by providing the best
service, most advanced technology, up to date knowledge on local and international real estate
markets and efficiency of top international developers.
Mission
“Our mission is to produce quality and economically viable projects through the
collaborative efforts of our highly motivated and well trained staff and the excellent planning and
direction of our top managers.” (JobStreet, 2018)
Table 2
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Mission Statement Analysis
Component Yes/No Remarks
Customers No not stated
Products/services Yes produce quality and

economically viable
projects
Markets No not stated
Technology No not stated
Survival, growth, and Yes planning and direction of

profitability our top managers
Philosophy No not stated
Self-concept Yes produce quality and

economically viable
projects
Public image Yes produce quality and

economically viable
projects
Employees Yes well trained staff
The mission statement of TSB lacks 4 components: customers (1), markets (3),
technology (4), and Philosophy (6). It consists of 32 words which is fewer than 150 words in
length. It has also a broad scope and does not include any monetary amounts. It is
environmentally responsible because it aims to produce economically viable projects. Whatever
components and characteristics lacks in this statement, it clearly states what the company’s
business is all about.
Proposed Vision Statement

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TSB Realty & Development Corporation envisions itself as the biggest and most
successful real estate developer in Northern and Central Luzon, providing its clients with only
the best service, latest technology, up to date knowledge on local and international real estate
markets, and efficiency of top international developers.
Table 3
Proposed Vision Statement Analysis
Criteria Yes/No Remarks
Plausible Yes “TSB Realty & Development Corporation envisions itself

chance of
success as the biggest and most successful real estate developer in Northern
and Central Luzon…”
Focused Yes “...providing its clients with only the best service, latest
concept
technology, up to date knowledge on local and international real
estate markets, and efficiency of top international developers.”
Noble purpose Yes “TSB Realty & Development Corporation envisions itself
as the biggest and most successful real estate developer in Northern
and Central Luzon, providing its clients with only the best service,
latest technology, up to date knowledge on local and international
real estate markets, and efficiency of top international developers.”
Plausible chance of success
Does our vision statement represents a dream that is beyond what we think is possible?
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The proposed vision statement of TSB represents a dream that is possible.
Does it represent the mountaintop of where the company is headed?
TSB’s proposed statement states that they want to be the biggest and most successful real
estate developer in Northern and Central Luzon. That serves as the mountaintop they want to
reach.
Focused concept
Does our vision statement clarify the direction in which our organization needs to move?
The company’s proposed vision shows where TSB want to move. They want to provide
the best service, latest technology, up to date knowledge, and efficiency of top international
developers.
Does it clarify the future direction the company is headed?
TSB’s proposed vision shows where company is headed. They want to provide the best
service, latest technology, up to date knowledge, and efficiency of top international developers.
Does it clarify the customer focus our company should have?
The proposed vision statement highlights its focus on the company’s customers by stating
that it wants to provide its clients with the best service, latest technology, up to date knowledge,
and efficiency of top international developers.
Does it clarify the market position our company should try to occupy?
The proposed vision statement of TSB states that it wants to be the most successful real
estate developer in Northern and Central Luzon.

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Does is clarify the business activities our company wants to pursue?
TSB’s proposed vision wants to provide the best service, latest technology, up to date
knowledge, and efficiency of top international developers.
Does is clarify the capabilities our company plans to develop?
The proposed vision statements of the company states that it wants to provide the best
service, latest technology, up to date knowledge, and efficiency of top international developers.
Noble Purpose
Does our vision statement give employees a larger sense of purpose?
TSB’s proposed vision statement provides its employees with a larger sense of purpose
by inspiring its employees to achieve its vision.
Is our vision statement worded in such a way that our employees see themselves as “building a
cathedral” rather than “laying stones”?
The proposed vision statement of TSB provides the ways they can achieve its vision and
that is by providing the best service, latest technology, up to date knowledge, and efficiency of
top international developers.
Proposed Mission Statement
Our mission is to produce quality and economically viable projects to our clients in
Northern and Central Luzon using state of the art technology and the collaboration of our highly
motivated and well trained staff and the excellent planning and direction of our top managers
without sacrificing the company’s morals, employees’ integrity and environmental safety.
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Table 4
Proposed Mission Statement Analysis
Component Yes/No Remarks
Customers Yes our clients
Products/services Yes produce quality and

economically viable
projects
Markets Yes Northern and Central Luzon
Technology Yes state of the art technology
Survival, growth, and Yes planning and direction of

profitability our top managers
Philosophy Yes without sacrificing the

company’s morals,
employees’ integrity and
environmental safety
Self-concept Yes produce quality and

economically viable
projects
Public image Yes produce quality and

economically viable
projects
Employees Yes well trained staff
The proposed mission statement of TSB does not lack any components. It consists of 55
words which is fewer than 150 words in length. It has also a broad scope and does not include
any monetary amounts. It is environmentally responsible because it aims to produce
economically viable projects. It has all the components needed in a mission statement and it
clearly states what the company’s business is all about.

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Logo
Figure 1 – TSB Realty Company Logo

The logo of Tan Song Bok Realty and Development Corporation comprises of three
parts. First of this is the symbol of buildings. This represents that the company is a realty and
development corporation. It symbolizes that the nature of the business is in real estate. The
second symbol is the leaf. This is placed in front of the buildings. This leaf symbolizes beginning
and growth. As a realty and development corporation, Tan Song Bok (TSB) creates and develops
real estate. This is embodied by the combination of the first two symbols. Lastly, the shortened
version of the company’s name is found in the logo.
Environmental Scanning
External Environment
Economic Environment
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According to Investopedia (2017), interest rate is the amount charged, expressed as a
percentage of principal, by a lender to a borrower for the use of assets. It is the fee paid for
borrowing the money. The interest rate in the Philippines had been rising throughout 2018. As
based from the Bangko Sentral ng Pilipinas official website, Monetary Board had hiked the
interest rate for the fifth time last September. This move brought the overnight reverse
repurchase rate to 4.75 percent as compared to 3 percent at the start of the year.
Figure 2 - Philippine Interest Rate
Source: Nikkei Asian Review – Philippine interest rate reach highest mark in a decade (2018)
The higher interest rates would discourage banks from borrowing from other banks and
they will be more inclined to restrict the releasing of their money to the public. The real estate
services firm Colliers International (2018) had said that the rising interest rates could dampen
low to mid-income residential demand over the next twelve to twenty-four months. There has
been slowdown on real estate launches for the first half of amid developers’ concern over higher
interest rates.
Furthermore Rappler business news (2018) had stated that the continuous hikes on
interest rate by Bangko Sentral ng Pilipinas was to curb inflation. Last July 2018, the inflation
rate rose to 5.7 percent, the fastest in five years, due to the increase in the prices of food and
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beverage products. And last October it was held at 6.7 percent which was the fastest in nearly a
decade.
Though amid the slower growth, the property sector was still likely headed to historic
highs in demand and supply with the major segment such as office, residential and leisure in
2018 as stated by the Colliers firm. For despite the challenges, the Philippines was still the third
fastest growing economy in the region (6 percent), behind Vietnam (6.8 percent) and China (6.7
percent) as reported by The Philippine Star Global (2018).
Interest rate can significantly affect the cost of financing used to purchase real estate
properties. Mr. Vince Abejo, senior vice president and cluster head of Filinvest Land Inc., had
said that when interest rates go down, people are more inclined to buy property, thus increasing
real estate sales. It is also true that when interest rates go up, people are not inclined to borrow
from banks, thus reducing the real estate sales. In addition, the change in interest rate affects
inflation. According to Ralf Rivas of Rappler, raising the interest rates creates a ripple effect in
the economy. With the higher borrowing cost, the people will spend less. The low consumer
spending would then push businesses to lower their prices. And it is important to lower it for
accelerating inflation is a challenged for the property sector for it curtails consumer spending.
Socio-cultural Factors
Real estate is one of the most important national treasures in economically developed
countries because the market as a whole cannot be conceivable without the real estate market
(Geipele et. al., 2013). To assess the factors influencing the real estate market, it is necessary to
determine the trends impacting the industry and their implications.

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According to Shelley Cernel (2018), millennials are one of the major causes of some
significant change in the commercial real estate industry. Currently, there are almost 80 million
Millennials now earning paychecks, and their influence in the workplace, in communities, and in
capital markets is continuously growing. They have increased demand for multifamily housing
that offers resort-style amenities with the convenience of being in a walkable community.
Similarly, their demand for job flexibility has resulted in a rise in coworking and alternative
office spaces.
People like the convenience of being able to purchase items easily through online
shopping, but on the other hand, they still like being able to see personally and touch the items
they are buying. Those companies that can embrace both e-commerce and brick-and-mortar will
be the true winners in this retail battle because they will be in the best position to meet changing
consumer demands. Buyers are looking for retailers that offer engaging, memorable, interactive
shopping experiences (Cernel, 2018).
According to Cernel (2018), the sharing economy is disrupting multiple industries,
including the lease of office space. There is an increased demand for co-living, co-working, and
community-driven spaces and this is reshaping how we think about commercial real estate, as
spaces become more flexible and tenants fill more of a customer role. The concept of “space-as-
a-service” is beneficial. It enables property managers to maximize returns on spaces that may
otherwise be unusable or difficult to rent out.
Foreign investors are flocking to properties in secondary and tertiary markets. They are
confident that increased demand for properties will generate a large return in the coming years.
Foreign investment is helping to expand growth beyond primary markets. Multifamily has long
been the preferred property type, but as certain cities become overbuilt, investors are shifting to
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industrial properties, helping to create new jobs and increase demand for those cities (Cernel,
2018).
A news article, entitled “Retail Apocalypse: These big retailers closing stores, filing for
bankruptcy” by Thomas Barrabi, which was published last January 04, 2018 on Retail FOX
Business, revealed that some of the United States’ most prominent retailers are shuttering stores
or declaring bankruptcy in recent months amid sagging sales in the troubled sector.
The rise of ecommerce outlets like Amazon has made it harder for traditional retailers to
attract customers to their stores and forced companies to change their sales strategies. Many
companies have turned to sales promotions and increased digital efforts to lure shoppers while
shutting down brick-and-mortar locations.
Roughly 25 retailers could file for bankruptcy in 2018, according to data from real estate
firm Cushman & Wakefield. Store closures are expected to increase 33 percent this year to more
than 12,000 locations.
Real estate is undergoing a lot of change and social movements are helping to shape the
industry. Globalization provides a myriad amount of opportunities. The growth of global trade of
goods and services and tourism provides the opportunity of expansion of locations and tourist
destinations. But socio-cultural factors do not come without disadvantages. Several news articles
show that thousands of stores have closed due to the increased demand of online shopping.
Although there are still consumers who want to shop personally and go to stores, many
consumers prefer purchasing from the internet because of convenience.

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Real estate industry has, no doubt, its own opportunities and threats. A company, in order
to survive, needs to be flexible, be engaging to consumers and to deal effectively with every
situation that will come their way.
Political and Legal Factors
Republic Act No. 9646 is the existing law that regulates the practice of real estate service
in the Philippines. This law is known as the “Real Estate Service Act of the Philippines”. This
Republic Act has been in effect since June 29, 2009. It was signed by former President Gloria
Macapagal-Arroyo. It aims to develop and nurture through proper and effective regulation and
supervision a corps of technically competent, responsible and respected professional real estate
service practitioners whose standards of practice and service shall be globally competitive and
will promote the growth of the real estate industry (Real Estate Service Act of the Philippines,
2009).
Presidential Decree No. 464 by the former President Ferdinand Marcos which
implemented a real estate tax code in the Philippines. This law gives a clear rundown of how real
properties should be assessed and appraised for tax purposes. It aims to have proper distribution
of the tax burden of real estate properties (DMCI Homes Leasing, 2015)
The first factor, Republic Act No. 9646, talks about the whole real estate industry. This
law will affect the entire industry since it regulates the practice of the said industry. It states all
the do's and dont's that real estate companies must follow in order to continue running their
business here in the Philippines and not incur any penalty. The Real Estate Service Act of the
Philippines provides real estate businesses with the laws that they must comply with. This means
that compliance is expected from the said companies and this would make running the business
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somewhat harder.
The second factor, which is the Presidential Decree No. 464, established a real estate tax
code in the country. This ensures that all real properties will be assessed properly for tax
purposes and for the security of all parties involved.
Technological
Recent disruption that gets a lot of attention these days is the blockchain technology
specifically bitcoin and other cryptocurrency. According to Google dictionary (2018), blockchain
is digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded
chronologically and publicly. It is expected to dramatically affect the global economy including
the real estate industry because of its de-centralized, immutable and “trust-less” system it offers;
making it a natural fit for application to real estate (Epstien & Hamilton, 2018). As studied by
Cheng-Shorland (2018), crytocurrencies may be incorporated in real estate transactions,
however, real estate buyers, sellers, and renters main interest comes from the blockchain’s
security, transparency and efficiency innovations. These are the benefits that will allow the
industry to standardize and scale online transactions. A more reliable means of tracking the
ownership of assets of all types can be provided by blockchain. Epstien and Hamilton (2018)
stated that blockchain also facilitates transactions between parties without the need for escrows,
banks, title companies, governments and other intermediaries”
Improved efficiency for information sharing and security of transactions are the main
advantages of incorporating blockchain systems in the real estate industry. These improvements
become possible through the application of a transparent information storage and system. It
allows a decentralized consensus from its users making the information publicly encoded in the
26
system. Blockchain allows the use of multiple listing services (MLS), smart identity, and smart
contracts (KMC Savills, 2018). This will then allow the user to view property listings of one
another, giving convenience for the parties involved. Additionally, the smart information allows
lessees to check the initial transactions on his selected property, and lessors to monitor the
background of the lessee (KMC Savills, 2018).
Environmental
The quality of the environment has a great impact on real estate companies because these
factors affect the value of properties that may become a big factor on the decisions made by the
customers. Environment is also one of the basic needs of the people for they want to have a
secure surroundings and a high scenic value. Scenic value is a significant factor in determining
the value of real estate. Of course, the location and aesthetic value of the place are also important
for a real estate to attract customers. The presence of a clean and healthy living environment with
a beautiful greenery and forests greatly affect the attitude and mindset of the buyers. One factor
that affects real estate companies is pollution wherein it gives a large effects on the prices and
values of properties. Then, with the new project of the government which is the train from
Manila to Clark and vice versa, there is a big possibility that there will be more people going in
Pampanga that can also lead to a higher level of pollution. The increasing level of pollution on
these areas can give a negative impact on the buyers. Real estate assets must be valuated in
relation to the conditions of the environment that surrounds the place of lots and properties
(NREH, 2017).
Real estate developers must consider the environment that surrounds their assets because
it is a critical factor to success. It is very important for real estate companies to find a very good
27
location for their properties in order to attract customers because a very nice location can be an
opportunity for the firm to be successful while an inaccessible location could be a threat for the
success of the company.
Competitors
The competition between real estate developers is very extreme especially here in
Pampanga because of the increasing number of competitors. To maintain competitive advantage
with competitors, a company must learn the strategies of its contenders by having competitive
intelligence and also by company research and analysis. Real estate companies must continually
innovate because the strategies today may not be effective tomorrow. Marketing strategies serve
a big help for real estate developers to sell their properties easily. Finding out the strengths and
weaknesses of competitors can also help a company to stay ahead of them. Companies must also
take into account their own strengths and weaknesses in order for them to be on the right tract on
to sustained its advantage more effective and efficient (Vision37™ Marketing Group , 2018).
Competitors of Tan Song Bok (TSB) are continually building more properties especially
in Angeles City. The building of New Point mall is a threat for TSB because besides of the mall
on the lower portion it has also condominium rooms on the top portion.
Strengths, weaknesses, opportunities, and threats analysis must be taken into account by
companies like real estate developers in order to maintain their competitive advantage over their
competitors. An increase in the number of competitors can decrease the sales and income of a
company that is why it must create effective strategies to stay ahead of its contenders.
Competitive Profile Matrix
The Competitive Profile Matrix (CPM) identifies a firm’s key contenders in a particular
industry and its specific weaknesses and strengths in relation to each company’s strategic
28
position. One of the competitors of TSB is Juan D. Nepomuceno Sons, Inc. and this is the main
competitor of TSB especially in Angeles City.
Juan D. Nepomuceno Sons, Inc. was established on January 5, 1979 primarily to own,
administer, and hold real properties as well as personal properties. It was started by earning
rental income from few buildings and then in 1985, the company started its journey in real estate
development. During the years of expansion, it has developed many properties that are being
leased by banks, government offices, insurance companies, restaurants, bakeshops and flower
shops. This company also established the Nepo Mall and Entec building in Angeles City. The
company is continually expanding its operations also by building subdivisions like Holy Angel
Village and Villaggio Real.
Another competitor of Tan Song Bok is the commercial side of SM Development
Corporation. SM started its commercial presence in Pampanga when it opened SM City
Pampanga last November 11, 2000. This is followed by the opening of SM City Clark on May
12, 2006. Its third branch SM City San Fernando Downtown opened last July 12, 2012. The
latest branch, SM City Telebastagan, opened last May 18, 2018.
Critical success factors in a CPM include not only internal issues but also external issues
that is why the ratings refer to strengths and weaknesses, where 4=major strength, 3=minor
strength, 2=minor weakness, and 1=major weakness.
The critical success factors for the industry wherein the TSB and JDN will be rated are
security, quality, expansion, recreational and healthcare facilities, advertising, accessibility,
management, social responsibility, customer service, and price competitiveness. Security is a
very important factor for the buyers and lessee in choosing their properties and offices because a
safe place is the priority of the people before going on any place. Accessibility of location is also
29
important for this is also a reason why people are leasing and buying houses like when it is near
their place of business and of course, if the location of business is accessible, there will be more
customers. Quality and price competitiveness are somehow related to each other because there
are different perspectives between people regarding these factors, some people choose quality
over quantity, other people prioritize quantity over quality, and there are also people who choose
to take into account both quality and quantity. Management and customer service are also related
as these two are communicating directly to customers and they must be given also importance
because communication to customers is a very important part in doing business. Recreational and
healthcare facilities are also needed especially in a subdivision for the people to have a better and
healthy life. Advertising and social responsibility are also related because in doing social
responsibility, the name of the company is being spoken by the people that is why it is also
somehow a kind of advertisement and these are very important for the customers to be informed
by the innovations that the company is doing for them. Lastly, expansion, which is a very
significant factor in making business and in maintaining competitive advantage with the
competitors.
Table 5
Competitive Profile Matrix
TSB JDN SMDC

Critical success factors Weight Rating Score Rating Score Rating Score
1. Accessibility .16 3 .48 3 .48 4 .64

2. Quality .12 3 .36 3 .36 4 .48
30
3. Expansion .12 3 .36 4 .48 4 .48
4. Recreational and .10 3 .30 3 .30 4 .40

Healthcare
Facilities
5. Advertising .10 2 .20 3 .30 4 .40
6. Security .10 3 .30 3 .30 3 .30

7. Management .08 3 .24 3 .24 3 .24
8. Social .08 3 .24 3 .24 3 .24

Responsibility
9. Customer Service .08 3 .24 3 .24 3 .24
10. Price .06 4 .24 3 .18 3 .18
competitiveness
Totals 1.00 2.96 3.12 3.60
The overall ratings show that SMDC has the highest rating among the three and JDN
Sons, Inc. has a higher rating than TSB. This means that SMDC utilizes its critical success
factors better than its competitors. This is understandable since SMDC is a bigger than the two
competitors presented above. JDN also scored higher that TSB. This suggests that the former is
better in one factor that has a greater weight than the one factor that the latter is better. If we
would analyze it further, the only difference in the rating is in the advertising and price
competitiveness.
The External Factor Evaluation (EFE) Matrix
The EFE matrix helps and guides strategists to evaluate and summarize the external
factors that affect the industry such as economic, social, cultural, demographic, environmental,
political, governmental, legal, technological, and competitive information.

31
There are lots of external factors that could affect the company but a set of opportunities
and threats have been given priority in order to show the response of the company on these
important matters. The weight of the factors are determined based on their approximate potential
impact on the income, revenues, cost of goods sold, and operating expenses of the company. The
opportunity that has been given the highest weight is Angeles City is the no. 5 most peaceful city
in the Philippines followed by the new railway system from Manila to Clark and vice versa
which has the same weight of importance with incorporating block chain systems. The other
opportunities are given with the same weight of importance. These are considered opportunities
because as the place of business progresses, the economy would also rise and would lead to more
business opportunities for TSB. Then, in terms of threats, the continually expansion of its major
competitor which is the Juan D. Nepomuceno Sons, Inc. has been given the highest weight of
importance among threats followed by news regarding the Southeast Asia’s online retail market
set to grow at 23% in 2018 and the opening SM Telebastagan. The higher assessed value of
commercial properties by 30% compare to residential properties has been given the least weight
of importance among the threats but it must be given with attention by the management of the
company. These are considered threats because the competitors of TSB have expanded their
operations and therefore competition would rise. This could lead to customers patronizing the
competitors over TSB.
Table 6
EFE Matrix
Key External Factors Weight Rating Weighted

Score
Opportunities
1. Angeles City is no.5 most peaceful city in the Philippines .16 3 .48
2. Incorporating block chain systems in the real estate industry .10 2 .20
32
3. The new railway system from Manila to Clark and vice versa .10 3 .30
that will be completed in 2021
4. Global commercial real estate business in the Asia Pacific in .08 3 .24
term of overall real estate transaction volumes in 2019 are
expected to rise by five per cent
5. The growth of tourism by more than 10% .08 3 .24
Threats
6. The extension of Nepo Mall with the Newpoint mall in 2016 .14 4 .56
by JDN Sons, Inc.
7. Southeast Asia’s online retail market set to grow at 23% in .10 3 .30
2018
8. The opening of SM Telebastagan in 2018. .10 3 .30
9. Inflation rate in Central Luzon raised to 4.5% in 2018 .08 2 .16
10. Higher assessed value of commercial properties by 30% .06 3 .18

compare to residential properties
Totals 1.00 2.96
On the overall weighted score, the company lies approximately above average in
responding to external factors that affect its operations. The company is continually planning of
potential expansion for the possible increase in the number people who are going in the city
brought by the new railway system, recognition, and increase in tourism. The company is also
maintaining its price competitiveness in order to counter the expansion of its competitors.
Porter’s Five Forces Model

Porter’s five forces model has been used by many industries throughout the years for
developing strategies. The real estate industry in Pampanga especially in Angeles City is being
controlled by the two major player which are the TSB and JDN Sons, Inc. wherein TSB mainly
focused on commercial properties while the latter is focused on commercial properties and
residential properties.
33
A. Rivalry Among Competing Firms - Moderate
The rivalry among competing firms is just moderate because the two companies are
already well established and really gain popularity in the present times because of different
strategies that they are using. TSB is focused on Jenra Malls by leasing the stalls to businessmen
while JDN Sons, Inc. is not only focus on leasing stalls to people but it also expanded its
operations by building residential houses.
B. Potential Entry of New Competitors - Low
Potential entry of new competitors is really weak and low because of the barriers to entry.
These barriers are usually the capital requirement, experience, brand loyalty, and government
regulations. Entering into a real estate business requires a large amount of capital and only few
businessmen can afford it. People used to make business with people that they know for a long
time because of the relationship that is being built between the company staffs and the customers
or tenants.
C. Potential Development of Substitutes – Low
Potential development of substitute products is really low because of the limited spaces in
the places where the major competitors are located. Real estate depends on the available land and
the available commercial space in Angeles City is pretty much occupied by current commercial
real estate companies.
D. Bargaining Power of Suppliers - Strong
Bargaining power of suppliers is strong because there are only few suppliers of
commercial spaces for leasing purposes and the cost of switching from one company to another
is high because the tenant will lose the benefits that he/she receives from the present company.
34
E. Bargaining Power of Consumers - Moderate
Bargaining power of consumers is just moderate or not so high and not so low because
the spaces are not really differentiated and there are only few suppliers of such space.
Figure 3 – Porter’s Five – Forces Model
Internal Environment
Management/Organization
The management of TSB Realty & Development Corporation is composed of four
departments such as Property & Engineering, Finance & Accounting, Safety & Security, and
Leasing & Marketing headed by Mr. Byron John T. Siy, general manager. The organization has
44 employees to date according to their human resource head. In terms of management style, it
uses paternalistic style wherein the managers make decisions in best interests of its key
employees after meeting or consultation with them. When it comes to planning, the management
rarely use strategic management concepts.
Regarding the policies for employees, official office time is nine hours per day including
one hour lunch break. Only administration personnel have 5 working days and for operations,
one day off is provided. Employees are expected to arrive at work before they are scheduled to
35
start and be at their work station productively engaged in TSB Realty business by the scheduled
start time. Five minutes grace period (5) is provided for employees.
Compensation
Salaries are credited normally during the fifth and twentieth of every month. All vacation
leave forms must be submitted in advance (two days before request). For sick leaves, form must
also submitted after absence and for two days or more, medical certificate with ‘fit to work’
notice from the doctor must be attached together with the form; otherwise, the employee may not
be allowed to return to work. All changes in schedules must be notified via submitting a form
(eg. change in day off, change schedule, offset).
Operation during Holidays
The whole mall closes only during Good Fridays and for all other days they are
operational. During special and legal holidays, they have a skeletal workforce. For legal
holidays, they provide additional 100% premium for those who worked and only regular salary
will be given for those not scheduled to work. For special holidays, 30% premium will be given
if they work. For daily paid employees, ‘no work, no pay’ policy shall apply for special holidays.
Organizational Chart
36
Figure 4 – TSB’s Organizational Chart
Marketing
Target Market
JENRA mall is widely known as a shopping mall for the masses. In terms of income
levels, the products are aimed for the level C,D, and E or persons who have average annual
income of Php 62,000 to Php 603, 000 (pinoymoneytalk, 2017). And in consideration of that,
TSBs target market are tenants whose products/services are of masses level.
4 Ps
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Products/services offered by the company:
a. Leasable spaces for all properties (both short-term and long-term) of the JENRA
Group of Companies. These include:
➢ Billboard spaces
➢ Exhibits - short term (job fair, fliers, and others.)
➢ Kiosks - non-food and standalone stall
➢ Stalls
o Regular stall : In-line stalls measuring more than 30 square
meters
o Micro stall : In-line stalls measuring 30 square meters or less
o Food carts
b. Developer of Business Establishments/Projects put up by the JENRA Group of
Companies through contractors and suppliers.
TSB has two major products and services that they offer. First, they offer leasable space
through the construction of JENRA branches. These malls are then leased out to different
businesses and serve as the main source of income for TSB. The second major service it provides
is the development of projects under the JENRA Group of Companies. TSB serves as the real
estate arm of the said group and performs the various real estate activities of the group.
Prices
Table 7
Average Price Range in All JENRA Branches
Average Price Range

Category Upper Ground Second Floor Third Floor
Regular Stalls P 800/sqm P 600/sqm P 18K-20K
Micro Stalls P 20K-25K P 18K-20K P 18K-20K
38
Kiosks P 25K-30K P 15,000.00 P 15K-20K

Food Carts P 25,000.00 Not Applicable P 10,000.00
Presented on the table above is the average price range of renting or leasing a
commercial space in a JENRA mall. According to the marketing management of TSB, Nepo
Mall, which is one of their competitors, is estimated to be 10-20 percent higher in pricing of
prime locations and 10 percent higher in other floors.
Place/ Location Map
Figure 5 – Map highlighting the location of Jenra Mall
Every JENRA mall branch have their own TSB office but the head office is located at the
fourth floor administrative office of Jenra Grand Mall, Sto. Rosario Street, Angeles City,
Pampanga.
TSB has placed a JENRA branch or two in every major city in Pampanga. This makes it
more accessible than its main competitor, JDN whose commercial spaces are more focused in
Angeles City.
Promotional Strategies
TSB have several promotional strategies for prospective and existing tenants. For
prospective tenants, 5-10 percent discount directly on rent is applied. Also, there is shorter time
for the holding of the security deposit paid by the tenant in case of default. Normally, the
39
security deposit will be hold by TSB for 4 months but now has been shortened to 2-3 months.
Furthermore, stalls can be leased for a minimum of six months and not for one year.
For existing tenants, in order to encourage their stay, 3 percent discount on fixed rental
will be applied for payment on or before the due date. In addition, if an existing tenant referred a
prospective one applicable rent discount will be applied.
Competitors
A major competitor of TSB is the Juan D. Nepomuceno Sons, Inc. which was
incorporated on January 5, 1979 primarily to own, hold, manage and administer real and
personal properties. According to the official website of JDN Sons, Inc., they have decided to
establish the Nepo Mall in 2002. The mall was constructed on a 16,795 square meter lot owned
by JDN Sons, Inc. and started operations in December 2002.
In addition to that, in year 2010, the company constructed nine story building with a total
leasable space of about 7000 square meter. The first floor has been leased out to a bank, a
convenience store, and a restaurant. The 2nd to the 8th floors are intended for Business Process
Outsourcing companies. Aside from a function room and a lush meeting room on the 9th floor.
The building has a CAA certified helipad for convenient and safe.
40
Figure 6 – Nepo Mall
Another big commercial real estate presence in Pampanga is SM Development
Corporation. SM started its commercial presence in Pampanga when it opened SM City
Pampanga last November 11, 2000. This is followed by the opening of SM City Clark on May
12, 2006. Its third branch SM City San Fernando Downtown opened last July 12, 2012. The
latest branch, SM City Telebastagan, opened last May 18, 2018.
Financial Ratios
Statement of Financial Position (2014 - 2017)

41
TAN SONG BOK REALTY AND DEVELOPMENT CORPORATION

STATEMENTS OF FINANCIAL POSITION
(in Pesos)
Year Ended: December 31
Notes 2015 2014
ASSETS
Current Assets
Cash 2/3/4/5/6 1,822,913 1,539,091
Receivables, net 2/3/4/5/7 14,529,211 6,620,863
Other current assets 2/8 3,625,582 7,035,474
19,977,706 15,195,428
Non-current Assets
Property and Equipment, net 2/3/9 611,106,674 485,228,654
Deferred tax asset 2/3/10 8,107,315 7,600,470
619,213,989 492,829,124
639,191,695 508,024,552
LIABILITIES AND EQUITY
Current Liabilities
Trade and other payables 2/3/4/5/11 64,170,598 43,975,878
Loans payable 2/3/4/5/18 130,000,000 20,000,000
194,170,598 63,975,878
Non-cureent Liabilities
Due to related parties 2/3/4/5/18 410,257,286 413,043,557
604,427,884 477,019,435
Equity
Share Capital 2/12 10,000,000 10,000,000
Retained Earnings 2 7,263,811 3,505,117
Reserve for declaration of stock dividends 13 17,500,000 17,500,000
Reserve for future improvements 13 - -
34,763,811 31,005,117
639,191,695 508,024,552
42

STATEMENTS OF FINANCIAL POSITION
Notes 2017 2016
ASSETS
Current Assets
Cash 2/3/4/5/6 P 2,126,214 P 2,399,486
Receivables, net 2/3/4/5/7 40,750,543 22,684,066
Other current assets 2/8 2,360,756 3,625,582
45,237,513 28,709,134
Non-current Assets
Property and Equipment, net 2/3/9 815,372,520 727,105,913
Deferredtax asset 2/3/10 6,930,047 6,940,402
822,302,567 734,046,315
P 867,540,080 P 762,755,449
LIABILITIES AND EQUITY
Current Liabilities
Trade and other payables 2/3/4/5/11 P 212,211,941 P 203,672,426
Loans payable 2/3/4/5/12 155,000,000 70,000,000
367,211,941 273,672,426
Non-cureent Liabilities
Due to related parties 2/3/4/5/18 450,997,291 445,945,462
818,209,233 719,617,888
Equity
Share Capital 2/12 10,000,000 10,000,000
Retained Earnings 2 21,830,848 15,637,561
Reserve for declaration of stock dividends 13 17,500,000 17,500,000
49,330,848 43,137,561
P 867,540,080 P 762, 755, 499
43
Statement of Comprehensive Income (2014 – 2017)

44

STATEMENTS OF COMPREHENSIVE INCOME
(in Pesos)
Notes 2015 2014
Rental Income 2 96,252,498 93,772,608

Direct Costs 2/14 8,129,994 79,491,200
Gross Profit from Operations 14,952,514 14,281,408
Interest from Banks 2 39,264 52,426
Gross Profit 14,991,778 14,333,834
Administrative Expenses 2/15 9,299,731 9,210,524
Net Income before Finance Cost 5,692,047 5,123,310
Finance Cost 12 331,042 323,194
Net Income before Income Tax 5,361,005 4,800,116
INCOME TAX EXPENSE 2/3/19 1,602,311 1,649,915
Net Income 3,758,694 3,150,201
Other Comprehensive Income - -
Total Comprehensive Income 3,758,694 315,201
45

STATEMENTS OF COMPREHENSIVE INCOME
Notes 2017 2016
Rental Income 2 P 116,073,740 P 100,382, 220

Direct Costs 2/14 95, 338, 912 77,788,411
Gross Profit from Operations 20,734,828 22,593,809
Interest from Banks 2 2 53,968 28,617
Gross Profit
Administrative Expenses 2/ 15 10,017,333 9,809,631
Net Income before Finance Cost 10,771,463 12,812,795
Finance Cost 12 1,937,500 857,500
Net Income before Income Tax 8,833,963 11,955,295
Income Tax Expense 2/3/19 2,640,667 3,581,545
Net Income 6,193,286 8,373,750
Other Comprehensive Income - -
Total Comprehensive Income P 6,193,286 P 8,373,750
Statement of Cashflows (2014 – 2017)

46
Statement of Cashflows
2016 2015 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income before finance cost 12,812,795 5,692,047 5,123,310
Adjustments for:
Depreciation 28,437,506 25,381,204 24,636,582
Impairment loss 0 0 43,319
Interest from banks (28,617) (39,264) (52,426)
Changes in operating resources and liabilities 41,221,684 31,033,987 29,750,785
Decrease (increase) in operating resources:
Receivables (8,154,855) (7,908,348) (6,620,863)
Other current assets 0 3,409,892 3,417,842
Increase (decrease) in operating liabilities:
Trade and other payables 139,501,828 20,194,720 (2,158,777)
Net cash provided by (used in) operations 172,568,657 46,730,251 24,388,987
Interest received 28,617 39,264 52,426
Income taxes paid (2,414,632) (2,109,156) (2,073,152)
Interest paid (857,500) (331,042) (323,194)
Net cash provided by (used in) operating activities 169,325,142 44,329,317 22,045,067
CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of properties and equipment
Net cash provided by (used in) investing activities (144,436,745) (151,259,224) (1,234,296)
CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings 0 130,000,000 20,000,000
Repayment of borrowings (60,000,000) (20,000,000) (40,000,000)
Net proceeds from (payments to) related parties 35,688,176 (2,786,271) (480,669)
Net cash provided by (used in) financing activities (24,311,824) 107,213,729 (20,480,669)
NET INCREASE (DECREASE) IN CASH 576,573 283,822 330,102

CASH AT BEGINNING OF YEAR 1,822,913 1,539,091 1,208,989
CASH AT END OF YEAR 2,399,486 1,822,913 1,539,091
47

STATEMENT OF CASH FLOWS
Years Ended
Notes 2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income before finance cost 10,771,463 12,812,795
Adjustments for::
Depreciation 9/14/2015 36,278,902 28,437,506
Interest from banks (53,968) (28,617)
Operating income before working capital changes 46,996,397 41,221,684
Changes in operationg resources and liabilities
Decrease (increase) in operating resources:
Receivablles 7 (18,066,477) (8,154,855)
Other current assets 8 (1,588,303) -
Increase (decrease) in operating liabilities:
Trade and other payables 11 11,392,645 139,501,828
Net cash provided by (used in) operations 38,734,261 172,568,657
Interest received 53,968 28,617
Income taxes paid 19 (2,630,322) (2,414,632)
Interest paid 12 (1,937,500) (857,500)
Net cash provided by (used in) operating activities 34,220,407 169,325,142
CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of properties and equipment
net cash provided by (used in) investing activities 9 (124,545,509) (144,436,745)
CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings 12 160,000,000 -
Repayment of borrowings 12 (75,000,000) (60,000,000)
Net proceed from (payments to) related party 18 5,051,830 35,688,176
Net cash provided by (used in) financing activities 90,051,830 (24,311,824)
NET INCREASE (DECREASE) IN CASH (273,272) 576,573
CASH AT BEGINNING OF YEAR 4 2,399,486 1,822,913
CASH AT END OF YEAR 4 2,126,214 2,399,486
Statement of Changes in Equity (2014 – 2016)

48

STATEMENT OF CHANGES N EQUITY
Years Ended
Notes 2015 2014
SHARE CAPITAL 13 10,000,000 10,000,000
RETAINED EARNINGS
Balance at beginning of year 3,505,117 8,854,916
Net income 3,758,694 3,150,201
Appropriation during the year - (17,500,000)
Reversal of appropriation during the year 13 - 9,000,000
Balance at end of year 7,263,811 3,505,117
RESERVE FOR DECLARATION OF STOCK DIVIDENDS

Balance at beginning of year 17,500,000 -
Appropriation during the year 13 - 17,500,000
RESERVE FOR FURTHER IMPROVEMENTS

Balance at beginning of year - 9,000,000
Reversal of appropriation during the year 13 - (9,000,000)
Balance at end of year - -
34,763,811 31,005,117
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STATEMENTS OF CHANGES IN EQUITY
(in Pesos)
Notes 2016 2015
SHARE CAPITAL 13 10,000,000 10,000,000
RETAINED EARNINGS
Net income 8,373,750 3,758,694
Appropriation during the year - -
Reversal of appropriation during the year 13 - -
RESERVE FOR DECLARATION OF STOCKS DIVIDENDS

Appropriation during the year 13 - -
RESERVE FOR FURTHER IMPROVEMENTS
Balance at beginning of year - -

Appropriation during the year 13 - -
Balance at end of year - -
43,137,561 34,763,811
50
Table 8
Financial Ratios
RATIOS TYPE 2015 2016 2017
Liquidity Current Ratio 10.29% 10.49% 12.32%

Quick Ratio 8.42% 9.17% 11.68%
Leverage Debt to total assets ratio 94.56% 94.34% 94.31%

Debt to equity ratio 1738.67% 1668.19% 1658.62%
Long term debt to equity ratio 1180.13% 1033.78% 914.23%
Times-interest earned 17.19 14.94 5.56
(or coverage)
Activity Other current assets turnover 26.55 27.69 49.17

Fixed Assets turnover .16 .14 .14
Total Assets turnover .15 .13 .13
Profitability Gross profit margin 15.53% 22.51% 17.86%
Operating profit margin 5.91% 12.76% 9.28%

Net operating margin 3.91% 8.34% 5.34%
Return on total assets .59% 1.10% .71%
Return on stockholders' equity 10.81% 19.41% 12.55%
Growth Sales 2.64% 4.29% 15.63%

Net income 19.32% 64.77% -26.04%
The financial performance of Tan Song Bok Realty Corporation could be analyzed by
comparing the financial ratios for the past three years. Its liquidity which is its capacity to pay its
short term debts could be seen to increase through the years.
The financial ratios also show that TSB is debt financed and not equity financed. This is
evidenced by its debt to total assets ratio which has been relatively consistent at 94% percent for
the past 3 years. Its debt to equity ratio also shows that the amount of its liabilities is far greater
than its equity.

51
The other current asset turnover has greatly increased in three years. It started at 26.55 at
2015 and rose to 49.17 at 2017. This means that the amount of income that the other current
assets of the company produces has increased. On the other hand, its fixed assets turnover has
decreased and its total assets turnover has also decreased.
2017 has not been a good year for Tan Song Bok Realty Corporation. All of its
profitability ratios decreased compared to the ratios last 2016. This is not that bad because even
if there is a decrease in profitability because it is still more profitable in 2017 than it was in 2015.
TSB’s sales for 2017 has increased by 15.53 % but this is not reflected on its net income
because there is a decrease of 26.04%. This could be attributed to the increase in direct costs.
Process Flowchart
In order to acquire leasable spaces on TSB, the first thing to do by the prospective tenant
is to submit the initial requirements which composed of the following: letter of intent or lease
proposal, the company profile, colored pictures of existing branches if there are any, colored
pictures/brochures of merchandise/service menu list, the perspective plan for the shop front, and
filled out tenant information sheet to the leasing and marketing department. Every JENRA mall
have their own TSB office where prospective tenants can inquire.
Then step two will be the signing of the lease contract. For that, the tenant should submit
the following: DTI/ SEC certificate, valid IDs, TIN of the owner or business certificate of
registration form BIR, business permits, and billing statements to the leasing and marketing
department.
After that, step three will be the payment of security deposit. The payment may be in
cash, check or direct deposit and will be under the accounting department.
52
Step four will be the submission of plans and design for the store to the engineering
department. The store plan submitted will be reviewed by respective departments and any
evaluations or recommendation made should be observed. And step five will be the approval of
the final plans and design by the engineering department.
Step six will be working permit and gate pass requisition. Gate pass should be secured for
the materials, equipment, furniture and initial inventory needed for the store and for the store
personnel. Working permit should be acquired to authorize the tenant or tenant contractors to
work in the property.
Last step will be the clearance to operate and briefing of house rules. Before the issuance
of clearance, testing and commissioning will be done by the engineering department. And the
tenant should present a As-Built-Plan in order to validate that the approved plans were duly
followed. This clearance to operate shall be signed by respective departments.
Table 9
Process Flowchart
Department and Person
PROCEDURE In Charge
STEP Department: Leasing &
1 SUBMISSION OF INITIAL REQUIREMENTS Marketing Department
• LETTER OF INTENT OR LEASE PROPOSAL Assisted by :

• COMPANY PROFILE __________________________
• COLORED PICTURES OF EXISTING BRANCHES (if there is any)
• COLORED PICTURES /BROCHURES OF
Date and Time :
MERCHANDISE/SERVICE __________________________
• MENU LIST (for food concept business)
• PERSPECTIVE PLAN / SHOP STOREFRONT
Signature :
• TENANT INFORMATION SHEET –to be filled out by incoming
___________________________
tenant
Remarks:
Note: *Prescreening and/or evaluation will be conducted by Leasing and Marketing Department
prior presentation of the Lease Proposal. Upon review and conformity of the client to the stipulated
terms and conditions of the Lease Proposal, he/she may proceed to the next step.
53

2 SIGNING OF LEASE CONTRACT Marketing Department
• DTI/SEC CERTIFICATE
Assisted by :
• VALID IDS __________________________
• TIN NO. OF OWNER/BUSINESS
• CERTIFICATE OF REGISTRATION FROM BIR
Date and Time :
• BUSINESS PERMITS – to follow
__________________________
• BILLING STATEMENTS
(e.g.: electric & water bills, bank statements, phone bill and others)
Signature :
___________________________
STEP PAYMENT OF SECURITY DEPOSIT Department: Accounting

3 Department
*Payments may be in cash, check, or direct deposit Assisted by :

__________________________
*Date of the PDC is subject for approval of the Management
*For direct deposit, below is TSB Realty & Development Corp. bank information (For
Date and Time :
verification purposes, validated deposit slip should be submitted)
__________________________
BANK ID : RCBC Signature :

___________________________
ACCOUNT NAME : TAN SONG BOK Realty & Dev. Corp.
ACCOUNT NO. : XXX-XXX-XXX-XXX Remarks:
STEP SUBMISSION OF PLANS AND DESIGN Department: Engineering

4 Department
• Perspective Plan and Store

Signage
Assisted by :
• Electrical Load Requirements __________________________
• Electrical Plan and
Architectural Plan – for fixed
54
stall/kiosk or Date and Time :

__________________________
if applicable
• Mechanical Plan – for fixed

Signature :
stall/kiosk or if applicable ___________________________
• Construction Guidelines – to
be discussed by Engineering
Department Remarks:
• ELECTRICAL PACKAGE/
ENGINEERING SERVICES
OFFER (OPTIONAL)
A ll remarks or recommendations made by the respective department should be observed.

Corrected plans shall then be reverted back to the Engineering Department for final
evaluation and approval.
Step APPROVAL OF PLANS AND DESIGN Department: Engineering

5 Department
•
Approval of Perspective Plan
and Store Signage - initial Assisted by :
evaluation or __________________________
approval (for aesthetic design only) shall be done by Leasing and
Marketing Department. Date and Time :

__________________________
• Approval Electrical Load
Requirements
Signature :
• Approval Electrical Plan and
___________________________
Architectural Plan – for fixed
stall/kiosk or
if applicable
• Approval of Mechanical Plan –

for fixed stall/kiosk or if
applicable
STEP WORKING PERMIT AND GATE PASS REQUISITION

6
• Gate Pass (for ingress materials, ISSUED/ASSISTED BY :

equipment, furniture and initial
inventory)
• Service Request (Optional, Gate Pass :
request for electrical and mechanical ___________________________
assistance of
Maintenance Team)
• Working Permit (To authorize the Working Permit :

Tenant or Tenant’s Contractor to ___________________________
work inside the
55
property)
• Temporary Gate Pass (for Service Request :

store sales ___________________________
representatives/personnel)
Temporary Pass :
___________________________
NOTE: *Before the ingress date, incoming tenant is expected to accomplish these
forms to avoid delays or any conflict.
*Temporary gate pass will be issued by the Security Department while Service
Request Form will be issued by the Engineering Department.

7 CLEARANCE TO OPERATE & BRIEFING OF HOUSE RULES Marketing Department
ORIENTATION
• Clearance to Operate
▪ Kiosk and Food Carts - shall be accomplished Three Assisted by :
(3) days prior the commencement date. __________________________
▪ Fixed Stalls – shall be accomplished Five to Seven (5
– 7) days prior the commencement date.
Date and Time :
• House Rules Orientation – to
__________________________
be scheduled.
Signature :
Notes: ___________________________
*Testing and Commissioning will be conducted by the Engineering Department, prior

issuance of the clearance. For fixed stalls, As-Built-Plan shall be submitted by the lessee to
properly identify if approved plans were duly followed. Remarks:
*Clearance to operate will be signed by respective departments. .
*Daily, weekly and monthly exhibits (not more than 3 months) are exempted to this
guideline. Clearance shall be issued on the same date of the settlement of the rental
requirements and approval of merchandising displays.
Corporate Social Responsibility
According to the Big Commerce (2003), corporate social responsibility is the integration
of socially beneficial programs and practices into a corporation's business model and culture.
Companies are encourage to be more aware of the impact they have to the rest of the society. As
a movement to that, TSB is one of the supporters of JENRA Foundation, Inc. Based from the
56
data gathered from the company, JENRA Foundation, Inc. (JFI), created in 2003 by Chairman
Tan Song Bok (TSB), was established as a way of giving back to the society by the Tan Family
for their never-ending support to the JENRA brand. For the past years, JFI have constructed
school buildings, held charity events and philanthropic activities. And in 2013, JFI was officially
launched as the corporate social responsibility arm of JENRA group of companies under the
leadership of Byron John Siy, acting as the Executive Director. Until today, the foundation
continuously strives to reach more and wider recipients of its program and activities.
Internal Factor Evaluation (IFE) Matrix
Strengths
Well-established and leading real estate developer
Since 2000, TSB has developed numerous iconic establishments around Angeles and
Mabalacat such as JENRA Grand Mall, Jumbo JENRA Angeles, Dau and Sindalan, and Sacred
Heart Medical Center. It also leases out several Jollibee, Greenwhich and Mang Inasal food
chain outlets and other properties belonging to its mother company, JENRA Group of
Companies.
Close proximity to various landmarks

57
JENRA Mall and various JENRA supermarkets of TSB are located in Angeles City
which is a highly urbanized city where different malls and universities are also located like
Newpoint Mall, NEPO Mall, Holy Angel University and many more.
Large market share
For 2017, the total revenues of TSB totaled P116,073,740 as compared to previous year’
sales in which they generated P100,382,220. Additionally, TSB has greater revenue than any
other malls in Angeles City except JDN Sons Inc. malls and SM Malls which are its main
competitors.
Lower pricing of rentals
According to the marketing management of TSB Realty, NEPO Mall, which is one the
mall of their competitors, are estimatedly to be 10-20 percent higher in pricing of prime locations
and 10 percent in other floors.
Well-established Corporate Social Responsibility
TSB Realty supports JENRA Group of Companies with its corporate social responsibility
since 2003 when it creates the JENRA Foundation Inc. For the past years, JFI have constructed
school buildings, held charity events and philanthropic activities which led to make the company
more socially responsible and known for socially beneficial programs and practices.
Weaknesses
Minimal promotions
According to the marketing manager of TSB, they do not invest much in promotions as
they are already well-known in the market.

58
Little diversification
The company only focus on commercial real estate wherein they only provide rental
services and develop their malls under JENRA Group of Companies.
Minimum employees
The organization has 44 employees to date according to their human resource head.
Lower maintenance of facilities
The facilities of rental buildings of TSB are not well maintained as they do not expend
much in maintenance. Furthermore, they have not yet renovated their old malls which include
JENRA Mall and some of its JENRA supermarket in Angeles City.
Decline in Financial Performance
The financial ratios show that TSB Realty is debt financed and not equity financed. This
is evidenced by its debt to total assets ratio which has been relatively consistent at 94% percent
for the past 3 years. Its debt to equity ratio also shows that the amount of its liabilities is far
greater than its equity.
Table 10
IFE Matrix
Internal Factor Weight Rating Weighted
Score
Strengths
1. Well-established and leading real estate developer 10% 3 0.30
2. Close proximity to various landmarks 10% 4 0.40
3. Large market share 13% 3 0.39
4. Lower pricing of rentals 9% 3 0.27
5. Well-established Corporate social responsibility 8% 3 0.24
Total
Weaknesses
1. Minimal promotions 12% 1 .12
2. Little diversification 10% 2 .20
3. Minimum employees 8% 2 .16
4. Lower maintenance of facilities 10% 2 .20
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5. Decline in Financial Performance 10% 2 .20

Grand Total 2.48
Based on the result of the IFE Matrix, the internal performance of Tan Song Bok is
slightly below average. There is a deficit of .02 since its score is 2.48 and the industry average is
2.5. This means that TSB has a weak internal position.
Strategy Formulation
Grand Strategy
According to Francis (2018), the Grand Matrix Strategy is a formulation tool used to
create alternative and different strategies for the company. It is based on two dimensions:
competitive position and market growth. Grand Strategy Matrix has four quadrants and each
quadrant has different sets of strategies to consider which are listed in sequential order of
attractiveness. Any entity can be positioned in one of the four quadrants.
Quadrant I refer to firms with strong competitive position and rapid market growth. Firms
in this quadrant have an excellent strategic position and they need to focus on current markets
and products. Focusing in current markets means the adoption of strategies such as market
penetration and market development, while focusing on current products indicates adoption of
product development strategy.
Firms located in quadrant II are characterized with weak competitive position and have
rapid market growth. Their existing approach in the market place must be evaluated because they
need to know why they are ineffective in the market and they should come up with a new
60
strategy so that their strategic position will improve. The recommended strategies for this
quadrant are to develop products, market, and to penetrate the market.
Firms that has weak competitive position and slow market growth are in Quadrant III.
This firm must make noticeable changes to sustain the position of the company. The highest
priority strategy for this quadrant is retrenchment followed by diversification. The other options
are liquidation or divestiture of the business.
Lastly, the firms in quadrant IV are those with strong competitive position but have slow
market growth. These firms are better to go into related or unrelated integration in order to make
a vast market of products or services. Moreover, they are characterized as firms with high cash
flow but has limited internal growth so they need and often can pursue concentric, horizontal, or
conglomerate diversification successfully.
MARKET GROWTH RATE: Slower than GDP and previous years’ trend.
The market growth rate of TSB's industry is both slower than GDP and previous years'
trend. According to Philippine Statistics Authority (PSA), the GDP posted a 6.1 percent growth
in the fourth quarter of 2018, resulting in the 6.2 percent full-year growth for 2018 while real
estate industry posted a 4.4 percent growth only in the fourth quarter. This year's growth in real
estate industry is also slower than the 6.6 percent growth recorded in the previous year. The
increased inflation rate of 5.1 percent and growth of Southeast Asia's online retail market at 23
percent has negatively impacted the industry to grow at a slower pace.
COMPETITIVE POSITION: High

61
Based on the CPM, TSB's competitive position is strong having rating of 2.96 which is
higher than the average score of 2.5 indicating that the company has a well-maintained
competitive advantage. However, the company is slightly behind JDN having a higher rating of
3.12 mainly because of the latter's greater market expansion and advertising. Nonetheless, TSB's
price competitiveness is stronger than JDN.
RAPID MARKET GROWTH
Quadrant II Quadrant I
1. Market development 1. Market development
2. Market penetration 2. Market penetration
3. Product development 3. Product development
4. Horizontal integration 4. Forward integration
5. Divestiture 5. Backward integration
6. Liquidation 6. Horizontal integration
7. Concentric diversification
WEAK STRONG
COMPETITIVE COMPETITION
POSITION POSITION
Quadrant III Quadrant IV
1. Retrenchment 1. Concentric diversification
2. Concentric diversification 2. Horizontal diversification
3. Horizontal diversification 3. Conglomerate diversification
4. Conglomerate diversification 4. Joint ventures
5. Divestiture
6. Liquidation TSB
SLOW MARKET GROWTH
Figure 7 – Grand Strategy
Based on the result of grand strategy matrix, the recommended strategies would be to
focus on the concentric diversification, horizontal diversification, conglomerate diversification,
and joint ventures so that it will enable the company to capitalize in the higher growth in GDP
and gain more competitive advantage over its competitors.
TOWS Matrix
62
According to Tim Friesner (2018), TOWS analysis is a tool which is used to generate,
compare and select strategies. Strictly speaking it is not the same as SWOT analysis, and it is
certainly not a SWOT analysis which focuses on threats and opportunities. TOWS is a tool for
strategy generation and selection; SWOT analysis is a tool for audit and analysis. One would use
a SWOT at the beginning of the planning process, and a TOWS later as you decide upon ways
forward.
Four TOWS strategies
Strength/Opportunity (SO) - Here you would use your strengths to exploit opportunities.
Weakness/Opportunity (WO) - Indicates that you would find options that overcome
weaknesses, and then take advantage of opportunities. So, you mitigate weaknesses, to exploit
opportunities.
Strength/Threat (ST) - One would exploit strengths to overcome any potential threats.
Weakness/Threat (WT) - The final option looks least appealing; after all, would relish using a
weakness to overcome a threat? With Weakness/Threat (WT) strategies one is attempting to
minimize any weaknesses to avoid possible threat.
STRENGTHS – S WEAKNESSES – W
Table 11
TOWS ANALYSIS S1. Well-established and W1. Minimal promotions
TOWS
leading real estate W2. Little diversification
Matrix developer W3. Minimum employees
S2. Close proximity to W4. Lower maintenance of
various landmarks facilities
S3. Large market share W5. Recent decline in
S4. Lower pricing of rentals financial performance
S5. Well-established
Corporate social
responsibility
OPPORTUNITIES – O SO STRATEGIES WO STRATEGIES
O1. Angeles City is no.5 most SO1. Establishing new WO1.Opening food parks
peaceful city in the Philippines buildings for rent around near tourist spots (W2, O3,
63
O2. Incorporating block chain Angeles City and O5)

systems in the real estate landmarks WO2. Enhancing
industry (S1,S2,O1,O3,O5) transparency, efficiency, and
O3. The new railway system SO2.Opening new cost savings by adopting
from Manila to Clark and vice commercial stalls in other block chain system (W1, W5,
versa that will be completed in countries and advertising O2)
2021 as a leading low priced
O4. Global commercial real socially responsible
estate business in the Asia company.
Pacific in term of overall real (S1,S3,S4,S5,O4)
estate transaction volumes in
2019 are expected to rise by
five per cent
O5. The growth of tourism by
more than 10%
THREATS – T ST STRATEGIES WT STRATEGIES
T1. The extension of Nepo ST1. Opening a shopping WT1. Intensify marketing
mall with the Newpoint mall in mall providing high-end investments such as
2016 by JDN Sons, Inc. products like Newpoint and advertising activities focusing
T2. Southeast Asia’s online SM Telabastagan (S1, S3, on the low price rentals and
retail market set to grow at T1, T3) hiring agents or brokers
23% in 2018 (W1,T1,T3,)
T3. The opening of SM WT2. Improving facilities by
Telabastagan in 2018. hiring experienced staffs
T4. Inflation rate in Central (W4,W3,T1,T3)
Luzon raised to 4.5% in 2018 WT3. Opening office
T5. Higher assessed value of buildings (W2,T1,T2)
commercial properties by 30% WT4.Providing affordable
compare to residential promotional packages for
properties lessees (W1, T4, T5)
Market Penetration strategies are:
SO1. Establishing new buildings for rent around Angeles City and landmarks. (S1,S2,O1,O3,O5)
WT1. Intensify marketing investments such as advertising activities focusing on the low price
rentals and hiring agents or brokers. (W1,T1,T3,)
Product Development strategies are:

64
WO1.Opening food parks near tourist spots (W2, O3, O5)
WO2. Enhancing transparency, efficiency, and cost savings by adopting block chain system.
(W1, W5, O2)
ST1. Opening a shopping mall providing high-end products like Newpoint and SM Telabastagan
(S1, S3, T1, T3)
WT2. Improving facilities by hiring experienced staffs (W4,W3,T1,T3)
WT3. Opening office buildings (W2,T1,T2)
WT4.Providing affordable promotional packages for lessees. (W1, T4, T5)
Market Development strategy is:
SO2.Opening new commercial stalls in other countries and advertising as a leading low priced
socially responsible company. (S1,S3,S4,S5,O4)
IE Matrix
IFE=2.48
65
EFE=2.86
Figure 8 –
IE Matrix
According to Francis (2018), the Internal-External (IE) Matrix are divided into three
major regions that have distinct strategy implications. First, the weighted scores that fall into
cells I, II, or IV can be described as “grow and build”. Intensive market penetration, market
development, and product development or integrative backward integration, forward integration,
and horizontal integration strategies are most appropriate for these divisions. Second, weighted
scores that fall into cells III, V, or VII can be managed best with “hold and maintain” strategies;
market penetration and product development are two commonly utilized strategies for these
types of divisions. Third, weighted scores that fall into cells VI, VIII, or IX is “harvest or
divest”; retrenchment and divestiture are the suggested strategies for those that fall into these
divisions. (Francis, 2018).
The IFE MATRIX total weighted score is 2.48, which means that TSB is lightly less than
average in terms of internal position, while the EFE MATRIX total weighted score is 2.86,
which implies that TSB has a strong ability to respond to external factors.
The IE MATRIX tells us that TSB should hold and maintain (Quadrant V) its position. Being
around the Cell I means that TSB is a successful organization. However, the results also suggest
that for continuous improvement, TSB should still conduct strategies related to market
penetration and product development.

66
QSPM
The Quantitative Strategic Planning Matrix (QSPM) determines the attractiveness of
several strategies based on the internal and external factors that have been identified. It
comprises the third stage of the strategy formulation analytical framework that indicates which
among the identified strategies is the most important and appropriate in the current situation of
the company and which is the best (David & David, 2017.
Based on the summary of strategies, the more suitable strategies are market penetration
and product development. These are the strategies that will be evaluated using attractive scores
based on the external and internal factors that have been identified with their corresponding
weight of importance or impact.
Table 12
QSPM
KEY FACTORS Market Product

Penetration Development
WT AS TAS AS TAS
Opportunities
Angeles City is no.5 most peaceful city in 16% 3 0.48 2 0.32
the Philippines
Incorporating block chain systems in the 10% - - - -
real estate industry
The new railway system from Manila to 10% - - - -
Clark and vice versa that will be completed
in 2021
Global commercial real estate business in 8% 4 0.32 3 0.24
the Asia Pacific in term of overall real
estate transaction volumes in 2019 are
expected to rise by five per cent
The growth of tourism by more than 10% 8% 2 0.16 3 0.24

Threats
The extension of nepo mall with 14% 3 0.42 4 0.56
the newpoint mall in 2016 by JDN Sons,
Inc.
67
Southeast Asia’s online retail market set to 10% - - - -

grow at 23% in 2018
The opening of SM Telabastagan in 2018. 10% 3 0.30 4 0.40
Inflation rate in Central Luzon raised to 8% 3 0.24 2 0.16
4.5% in 2018
Higher assessed value of commercial 6% - - - -
properties by 30% compare to residential
properties
Total Weight 100%
Strengths
Well-established and leading real 10% 3 0.30 2 0.20
estate developer
Close proximity to various landmarks 10% 3 0.30 4 0.40
Large market share 13% 3 0.39 2 0.26
Lower pricing of rentals 9% 2 0.18 3 0.27
Corporate social responsibility 8% - - - -

Weaknesses
Minimal promotions 12% 3 0.36 2 0.24
Little diversification 10% 3 0.30 2 0.20
Minimum employees 8% - - - -
Lower maintenance of facilities 10% 2 0.20 4 0.40
Financial ratios 10% 3 0.30 4 0.40

Total Weight 100% 4.25 4.29

Sum Total Attractiveness Score
On the opportunities, the expected increase by five percent in the commercial real estate
business in terms of overall real estate transaction volume in 2019 has been given with a score of
4 in market penetration because of the increase in demand on these industry that can increase the
profit of the company. With the same opportunity, a score of 3 is given to product development
because customers or lessees will be willing to spend more on quality products that can attract
many consumers. The new recognition of Angeles City is given a score of 3 in terms of market
penetration as this can serve as an opportunity for the company to increase their market share in
the city and a score of 2 in terms of product development because it is also needed in order to
68
promote innovations. The growth in tourism is given a higher score in product development
because it is very important to develop products that can match the standards of the customers
especially those that came from developed countries. The other two opportunities were not given
scores because they do not affect the given two strategies.
On the threats, the threat of increase in inflation is more important in terms of market
penetration as cost is not capitalized compared to product development wherein because of the
development, the products will just have a higher value that can decrease the demand of
customers. The expansion of the operations of competitors is given a higher scores on product
development as this is a better way to maintain the competitive advantage of the company to
counter the increase in operations of the competitors.
On the strengths, in terms of market penetration, the company being a well establish one
is given a score of 3 because a well-known company will always on the priority of the
consumers. The close proximity to various landmarks is given a higher score on product
development as it is the best strategy when there are different competitors in a particular area.
The low pricing of rentals is given a higher score in terms of product development because a low
price must also consider the quality of its products.
On the weaknesses, the product development can significantly impact the low
maintenance of facilities and the recent decline in the financial performance as this will be a way
to overcome such weaknesses and to turn them into strengths. Of course, the market penetration
can have a high impact on the minimal promotions and little diversification because it is a really
good strategy on such kind of situation.
BCG MATRIX
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BCG matrix, created by the Boston Consulting Group, is also known as the Boston or
growth share matrix. This matrix provides a framework for analyzing products according to
growth and market share. The matrix has been used since 1968 to help companies gain
information on what strategies would help them capitalize on market share growth opportunities
(Martin, 2018).
Relative market share is one of the dimensions used to evaluate business. Higher
corporate’s market share results in higher cash returns and this is because a firm that produces
more, benefits from higher experience curve and economies of scale, which results in higher
profits. Another dimension used to evaluate a business is market growth rate. High market
growth rate means higher earnings but it also consumes lots of cash, which is used as investment
to prompt further growth (Jurevicius, 2013).
According to Jurevicius (2013), there are four quadrants in the BCG Matrix:
Dogs - hold low market share compared to competitors and operate in a slowly growing market
Cash cows - the most profitable brands and should be “milked” to provide as much cash as
possible
Stars - operate in high growth industries and maintain high market share
Question marks - the brands that require much closer consideration. They hold low market
share in fast growing markets consuming large amount of cash and incurring losses.
70
Figure 9 –
BCG
Market Growth Rate

6.6 % (PSA, 2017)
Relative Market Share
Relative market share= Company’s market share (sales/revenue) / Market share it does not
control (Kennan, 2019)
Company’s market share= Company’s sales/revenues / Industry’s total sales/revenues (Nickolas,
2018)
Company’s market share= 116,073,740/501,500,000,000

=0.000231453120638
Relative market share= 0.000231453120638/.999768546879362
=0.000231506703587 or 0.023%
In the figure above, Tan Song Bok Realty Development Corporation lies in the “Question
Marks” quadrant. As seen in the figure, it has a very low market share but a high market growth
rate. Even though companies have low market share, businesses that fall in this quadrant have
high grow prospects and have the potential to turn into stars. However, they require very close
consideration and companies are advised to invest in question marks if the product has the
potential for growth, or to sell if it does not (Martin, 2018). Therefore, for TSB Realty
Development Corporation, the recommended strategies are market penetration, market
development, product development or divestiture.

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SPATRES
The Strategies, Programs, Activities and Tasks, and Resource Requirements (SPATRES)
are set based from the strategies derived on the TOWS Matrix—Market Penetration and Product
Development Strategy. The SPATRES is made by the researchers for the company to follow in
order to maximize the firm’s strengths and opportunities as well as to develop its weaknesses and
conquer threats against the business.
Market Penetration
Objective 1: To identify undeveloped segments in the realty development industry and
penetrate the market.
Tan Song Bok Realty Development Corporation can pursue the said strategy in order for
the company to acquire additional market share in the industry.
Strategy 1: Establishing new buildings for rent around Angeles City and landmarks.
(S1,S2,O1,O3,O5)
The company must acquire new projects due to the increased demand for infrastructure.
Infrastructures are important for faster economic growth. This will also help franchisees to have
location for their businesses. The need for additional infrastructure can be demonstrated by the
increased demand for communication services, especially telecommunication. Additional
infrastructures would also mean additional assets and wider scope of business, thereby making
Tan Song Bok Realty Development Corporation stand strong in a highly competitive market.
STRATEGIE PROGRAM ACTIVITIE TIME PERSON/ RESOUR

S S FRAME CE
72
DEPARTMENT REQUIRE
RESPONSIBLE MENT
(BUDGET
Strategy 1: Project 1. At least Consultant for market Average

Establishing Proposal Scheduling a one study consulting
new buildings Program meeting to month fee -
for rent discuss the P250,00
around proposal
Angeles City 2.Identifying
and the need for
landmarks. specific
resources
such as
materials,
services and
their lead
time
3.
Submission
of project
proposal
3. Project
amendment
Constructio 1. Identifying At least Project manager Salaries

n undevelopme four and other
Developme d market months expenses -
nt Program segments inn P5,000,00
Pampanga 0
2.
Scheduling
of
construction
activities
3.
Monitoring
the
development
of
73
infrastructure
s
Objective 2: Restructure a mature market by driving out competitors
The following strategy can be pursued by TSB Realty and Development Corporation in
order to restructure a mature market by driving out competitors:
Strategy 1: Intensify marketing investments such as advertising activities focusing on the low
price rentals and hiring agents or brokers. (W1,T1,T3,)
The company must conduct a much more aggressive promotional campaign, supported by
a pricing strategy designed to make the market unattractive for competitors. Intensifying
marketing investments will make the company acquire more customers from its competitors near
its location. Provided, however, that the company will allocate more capital for advertising
programs to market its low price rentals with a competitive comparison with its competitors.
Hiring agents or brokers will also enable them to facilitate this strategy.
Strategies Program/s Activities Time Frame Person/ Resource/
s
Department
In-charge
Strategy 1: Marketing 1. Make and Continuous Web *Salaries
Intensify and display Designer and

74
marketing Advertising tarpaulins in benefits-
investments Low Price populated P17,000/m
such as Rentals to areas onth
advertising Prospective
2. Social *Printing
activities Tenants
Media expense
focusing on Program
Marketing and
the low price
by making allowance –
rentals and
company’s P45,000
hiring agents
own website
or brokers.
3. List
(W1,T1,T3,)
company in
online
directories
Product Development
Objective 1: To improve the operations of the company by prioritizing and giving benefits
to its customers or lessees.
Strategy 1: Providing affordable promotional packages for lessees (W1, T4, T5)
In order to attract lessees to lease spaces, of course, a company needs to offer some
benefits to them. Recently, several companies are offering a lot of promotional packages and
discounts on their customers or clients in order to catch the taste and minds of the people. This is
75
a good strategy that the company should adapt to match the continuous innovations of its
competitors.
Strategy 2: Improving facilities by hiring experienced staffs (W4,W3,T1,T3)
In the recent years, the development of technology brought a great change in the industry.
People are being trained in using technology effectively that is why it is an advantage for a
company to hire those people with experienced on such technology developments that can help
the company to improve its operations and facilities. These more experienced individuals can
make a great impact on the company in making the operations and facilities of the company
more efficient and effective that may attract the eyes of customers or lessees and also these
individuals can help in reducing cost that the company may incur because of trial and error
processes.
STRATEGIES PROGRAM ACTIVITIES TIME PERSON/ RESOURCE

FRAME REQUIREME
DEPARTMEN NT
T (BUDGET)
RESPONSIBLE
Strategy 1: Research and 1. Gather

Providing development ing
affordable programs. releva
promotional nt
packages for inform
ation P 2,000 for the
lessees transportation
regardi Research and
ng and researching
development expenses of the
custom 1 month team
er team.
satisfa
76
ction.
2. Ask
some
experts
in
develo
ping
promot
ional
packag
es.
3. Evalua
tion of
the
data.
Promotional 1. Develo
packages ping
programs. the
promot
ional
packag
es that
will be
benefi
cial for
the
custom
ers or
lessees P 1,000 for the
. survey forms
6 months Operational that will be
2. Makin managers.
g distributed.
survey
s on
the
custom
ers
regardi
ng
these
packag
es.
3. Monit
oring
the
77
effecti
veness
of this
strateg
y.
Strategy 2: Resource 1. Develo

Improving management ping
facilities by programs ways
hiring on P 10,000 for
experienced how to job advertising
attract Human resource expenses
staffs team
job 1 month
seeker
s.
2. Develo
ping
criteria
in
hiring
individ
uals.
3. Selecti
ng the
most
suitabl
e
person
for the
job.
Objective 2: To increase the market share of the company
Strategy 1: Opening food parks near tourist spots (W2, O3, O5)
The company should open food parks near famous landmarks. The food park then can
incorporate the history of the landmark as its themes. It is important to be not left behind with the
current trends and an instagram-worthy food park is one way to be lead in the competition. The
food park will still be within the services offered by TSB since it will only rent-out spaces for
food stalls.
78
Strategy 2: Opening a shopping-mall providing high-end products like Newpoint and SM
Telabastagan.
Throughout the years, the people preferences has been constantly changing. More people
are gravitating to higher quality products.It is acceptable to them to spend additional money if it
means an increase in quality. TSB is known for its affordable products but it can open a mall
catering to high-end products in order to increase its market share. A variety of commercial real
estate can help the company to be more known and successful.
STRATEG PROGRA ACTIVITIES TIME PERSON/DEP RESOURECE

IES M FRAME ARTMENT REQUIREME
RESPONSIBL NT
E (BUDGET)
Strategy 1: Research 1. Finding a At least Consultant for Consulting Fee

Program possible lot one Market study - P250,000
Opening to convert to month
a food park
food parks near
landmarks
near tourist 2. Market Study
3. Approval of
spots the
executives
Constructi 1. Setting a At least Engineering Salaries, other

on of the meeting with one year Department/ expenses, and
Food Park the people to Project various
be involved manager equipment
with the acquired for
construction the office-
for the P20,000,000
finalization
of the project
79
2. Preparing the
necessary
resources for
the project
3. Actual
Construction
Advertisin 1. Apply social At least Marketing Salaries and

g Program media one Department printing
marketing month expenses-P 20,
2. Printing 000
flyers
3. Updating the
company’s
website
Strategy 2: Research 1. Locating a At least Marketing Salaries-P10,

Program viable spaces one Department 000, 000
Opening a to establish month
the mall
shopping- 2. Purchasing
the most
mall feasible
option
providing 3. Assessing
which
high-end companies to
invite to be
products tenants
like
Newpoint
and SM
Telabastaga
Actual 1. Meeting of At least Engineering Salaries, other

constructi the involved one year Department/ expenses, and
on of the persons for Project various
shopping the Manager equipment
mall construction acquired for
80
2. Preparation the mall -P 15,

of the 000, 000
necessary
resources to
be used
3. Actual
Construction
Strategy 3: Research 1. Make a study At least Consultant for Consulting

Opening Program or research one market study fee- P250,000
office potential month
buildings Activities locations for
the
construction
of office
buildings
2. Market study
3. Finalize the
project
proposal
Constructi 1. Set a meeting At least Project Salaries, other

on of with the four manager expenses, and
Office persons months various
Buildings involved in equipment
the planning acquired for
Activities of the offices- P
construction 15,000,000
2. Identifying the
needed
resources in
the project
3. Continuous
monitoring
of the project
81
Objective 3: Improve research & development and innovation
The following strategy can be pursued by TSB Realty and Development Corporation in
order to facilitate market growth by improving research and development and innovation:
Strategy 1: Enhancing transparency, efficiency, and cost savings by adopting blockchain system.
(W1, W5, O2)
To remain competitive and achieve successful product development, strategy of product
development must be particularly suitable for a business where the product needs to be
differentiated. Adopting blockchain technology will enable the company to improve its
transparency, efficiency, and cost savings which are value added activities to develop the
product. To facilitate this strategy, the company must invest in research and development that
focus on incorporating the blockchain system and conducting a prototype system that will
measure the effectivity and efficiency of the said system.
Strategies Program/s Activities Time Frame Person/ Resource
Department Requiremen
In-charge t (Budget)
Strategy 1: 1.Research 1. Blockchain 2 months IT Specialists *Consultation
Enhancing and system and other
transparency, development orientation expenses
efficiency, program approx.
and cost P800,000

2. Testing
82
savings by program
adopting
blockchain
3. Prototype
system. (W1,
development
W5, O2)
4. Adaptation
2.
of the
Implementati
Continuous Audit and Monthly
program
on program
Compliance Salary of
Group P18,000/empl
5. Evaluation oyee
of
effectiveness
and
efficiency
83
REFERENCES
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https://www.thebalance.com/real-estate-what-it-is-and-how-it-works-3305882 (Accessed
23 November 2018)
Barrabi, T. (2018). Retail Apocalypse: These big retailers closing stores, filing for bankruptcy.
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from: https://deloitte.wsj.com/cio/2018/01/04/2018-commercial-real-estate-industry-
outlook/. (Accessed 22 November 2018)
Cernel, S. (2018). Socio-Cultural Trends Shaping Commercial Real Estate. Retrieved from:
https://www.investormanagementservices.com/resources/blog/socio-cultural-trends-
shaping-commercial-real-estate/
David, F & David, F. (2017). Strategic Management Concepts and Cases. 16th edition. Pearson
Education South Asia PTE. LTD. Philippines.
Francis, A. (2018). Internal-External (IE) Matrix. Retrieved from:

https://www.mbaknol.com/strategic-management/internal-external-ie-matrix. (Accessed
1 Feb, 2019)
Geipele, I., Geipele, S. & Stāmure, I. (2013). Characteristics of Socio-Economic Issues and Their
Possible Resolution in the Housing Market of Latvia. Retrieved from:
http://www.inase.org/library/2013/rhodes/bypaper/EBA/EBA-25.pdf
JobStreet (2018). Tan Song Bok Realty and Development Corporation. Retrieved from:
https://www.jobstreet.com.ph/en/companies/702518-tan-song-bok-realty-and-
development-corporation
Juvericius, O. (2013). BCG growth-share matrix. Retrieved from:

https://www.strategicmanagementinsight.com/tools/bcg-matrix-growth-share.html.
(Accessed 1 Feb, 2019).
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Kennan, M. (2019). How Do You Calculate a Company's Relative Market Share?. Retrieved
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Yt_bt7MiDhC-gw. (Accessed 1 Feb, 2019).
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http://www.vault.com/industries-professions/industries/real-estate.aspx. (Accessed 23
November 2018)
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https://www.businessnewsdaily.com/5693-bcg-matrix.html. (Accessed 1 Feb, 2019).
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https://www.investopedia.com/ask/answers/033015/how-do-i-determine-particular-
companys-market-share.asp. (Accessed 1 Feb, 2019).
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https://www.bworldonline.com/state-of-the-philippine-real-estate/ (Accessed 22
November 2018)
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1

Strategic management – Tan Song Bok Realty

HOLY ANGEL UNIVERSITY

Tan Song Bok (TSB) Realty and Development Corporation

Dr. Claudia Cayanan

(imPREST Group, A-431)

February 04, 2019

recreational and healthcare facilities, advertising, security, management, social responsibility,

decline in financial performance.

affordable promotional packages for lessees.

and management of commercial, industrial, residential and agricultural properties (Loosvelt,

fluctuates depending on the national and local economies.

opportunities for the people (Ortiguero, 2018).

also for compliance, risk mitigation, and decision making.

Based on macroeconomic accounts of Philippine Statistics Authority (2017), Real Estate,

in the previous year.

According to Philippine Statistics Authority (2017), real estate activities of apartment

(1.6%) were working owners or unpaid workers.

employees (12.5%), respectively.

billion, respectively (PSA, 2017).

employee (PSA, 2017).

According to Philippine Statistics Authority (2017), real estate buying, developing,

contract basis came in third with PHP18.1 billion (5.1%).

activities with own or leased property, PHP664 thousand.

market rebounds and optimism creeps back in (Tradewind, 2015).

indecisive and wary of taking on new loans (Tradewind, 2015).

malls and more office spaces (Tradewind, 2015).

language, as well as the chat bots that AI powers.

selling property (Paine, 2018).

properties belonging to its mother company, JENRA Group of Companies.

JENRA Group of Companies.

development, it actually pioneered the mall scene in Central Luzon.

guarantees the mall-goers an excellent, world-class JENRA experience.

top international developers.” (JobStreet, 2018)

Vision Statement Analysis

Criteria Yes/No Remarks

Plausible Yes “TSB Realty & Development Corporation envisions itself

and Central Luzon…”

Focused Yes “...providing the best service, most advanced technology,

markets and efficiency of top international developers.”

as the biggest and successful real estate developer in Northern

and Central Luzon providing the best service, most advanced

technology, up to date knowledge on local and international real

estate markets and efficiency of top international developers.”

Plausible chance of success

The vision statement of TSB represents a dream that is possible.

Does it represent the mountaintop of where the company is headed?

service, get the most advanced technology and up to date knowledge.

Does it clarify the future direction the company is headed?

the most advanced technology and up to date knowledge.

Does it clarify the customer focus our company should have?

developer in Northern and Central Luzon.

Does is clarify the business activities our company wants to pursue?

Does is clarify the capabilities our company plans to develop?

efficiency of top international developers

Does our vision statement give employees a larger sense of purpose?

inspiring its employees to achieve its mission.

cathedral” rather than “laying stones”?

markets and efficiency of top international developers.

direction of our top managers.” (JobStreet, 2018)

Mission Statement Analysis

Component Yes/No Remarks

Customers No not stated