Escolar Documentos
Profissional Documentos
Cultura Documentos
of the requirements
for STRAMAN (Strategic
Management)
submitted to
Mr. Francis Loseo
TABLE OF CONTENTS
I.
Executive Summary
II.
III.
Introduction
IV.
External Analysis
V.
Industry Analysis
19
VI.
Company Analysis
VII.
Strategy Formulation
VIII.
IX.
5
6
25
45
52
63
d. SWOT
68
e. SPACE
71
f. I-E Matrix
74
g. Grand Strategy
75
h. Summary of Strategies
77
77
Recommendations
a. Strategic Objective
82
b. Recommended Strategies
83
c. Financial Projection
85
d. Departmental Programs
93
100
b. Contingency Plan
102
X. References
X.
103
Appendix
a. Financial Statements
106
I.
Executive Summary
Mang Inasal is the Philippines fastest growing barbecue fast food chains which serves
chicken barbeque, pork barbecue and other delicacies that are Filipino favorites. Being the
market leader in the barbecue fast food chain industry, Mang Inasal is in a good position.
Mang Inasal ranked first in the CPM with the rate of 3.80, 0.85 more than the second placer.
This means that Mang Inasal excels and has a strong position considering price
competitiveness, marketing and advertising initiatives, market share, product and service
quality, branding and image, and product variety as the key factors.
The trending barbecue industry is the reason for Mang Inasals continuous growth. However,
with the presence of its competitors and as fast food industry becomes saturated, Mang Inasal
needs to exert more effort to further its market share. Other opportunities for Mang Inasal are
technological advancement in the field of poultry production, growing number of people who
uses Internet and mobile phones, increase in potential franchisee and demand for packaged
food products. Other external factors that Mang Inasal is facing are health risk of poultry
products while Filipinos are looking for healthier lifestyle, increase in number of foreign and
local competitors. Despite the threats, Mang Inasal still managed to respond to the different
external factors in above average manner with an EFE rating of 2.75.
Internally, Mang Inasal is also doing good having a rating of 2.95 in the IFE. Being a market
leader in barbecue fast food industry through being proactive in marketing and advertising,
and having strategic locations for their restaurants and having partnership to different
companies like Decos and Oracle, gave Mang Inasal a good rating. Despite their poor
restaurant environment, inconsistencies in the distribution and quality of products, Mang
Inasal still manage to respond well to the internal factors.
Market Development is the most suitable strategy of the business having a rating of 4.25
rating in QSPM supplemented by Market Penetration with a rate of 3.85 and Product
Development with a rate of 3.80. Market development strategy is to branch out stores in
Mindanao specifically in urbanized cities. Market penetration strategy includes 1)Hire new
product endorsers 2) Increase brand visibility by taking advantage of advertising on mass
transportation systems 3) Intensify social media marketing 4) Organize a Mang Inasal
Franchise Summit to attract potential franchisees. Product Development Strategies are 1)
Forming a department regulating and evaluating branches and employee performances 2) Set
up a sanitation compliance team to ensure that sanitary standards are met for each branch 3)
Conduct research through mobile and online surveys 4) O3 Build a smooth communication channel
for faster distribution of products from the supplier to the branches.
With the use of these strategies, Mang Inasal will continue to exceed its competitors
having a ratio of 0.79 in the return on equity compare to others.
II.
Introduction
Mang Inasal is one of the most prosperous fast-food chains in the Philippines.
Founded by Edgar Injap Sia II, it started its operations in Iloilo City, Philippines, and the
number of branches currently continues to grow in number. Right from the start, Mang Inasal
was already able to catch the attention of the Filipinos since its products are mostly, if not
entirely, Filipino in nature. Because of its increasing number of branches around the country,
Mang Inasal provides numerous job opportunities to many, whether the available
opportunities are on the supplier, the management, or the employees. Right from the very
beginning, Edgar Sia already spurred Filipinos interests in Robinsons Place, Iloilo City,
Philippines. What he did was he distributed this initial success in Iloilo City to TATC, Roxas
City, Capiz (second branch), to Marymart Mall, Iloilo City (third branch), to Mall of Asia,
Manila, and soon afterwards, to the rest of the Philippine Islands.
Mang Inasal is known for the swiftness and accuracy of its services, quality of
its products, and its variety of food choices. The National Meat Inspection Service gave
Mang Inasal a certified Double A on its commissaries (one in Iloilo and one in Manila),
assuring safety when consuming their products. Apart from safety, Mang Inasal also allowed
its Research and Development Department (RDD) to makes sure that all of its products are
fresh and hygienic. The RDD also takes the responsibility of developing new products in
Mang Inasals menu. In order to raise concerns in branches scattered everywhere within the
country, Mang Inasal has its Support System to transmit to its main department and act upon
giving remedial solutions. With cooperation between different departments, Mang Inasal
remains to be one of the healthiest businesses in the Philippines.
IV.
External Analysis
Economic Performance and Forecasts
Market becomes saturated due to booming fast food industry
Food is one of the basic needs of every people, with these; food industry is growing as
time pass by. Many people choose to put up or franchise different fast food chain as their
business since this industry has a rapid growth.
No . o f Sto re s
Chowking
Mang Inasal
Greenwich
Mcdonalds
As of 2011, the number of fast food industry in the Philippines continuous to grow with
Jollibee has the highest number of branches in the country. Mang Inasal has 423 branches as
of 2011 and still continues to grow this 2012.
Re1evance:
As the market for fast food industry becomes more saturated, it means more competitors,
direct or indirect, for Mang Inasal. Presence of more competitors means more choices for the
people and it can take away the market share of Mang Inasal which may cause them a
decrease in their sales.
High number of foreign companies entering the fast food market vs. local brands
Passing of the Foreign Investment Act made the foreign investors to easily conduct
businesses here in our country. The government gives incentives and other benefits that
would encourage foreign investors to invest in our country. Some the reasons why foreigners
invest in our country are low costs of doing a business. Wages are low compared to other
countries like US. It is estimated that foreign investors can save 30%-40% in the cost of their
business here in the Philippines. As the third largest English-speaking country in the world, it
serves as an advantage for the Philippines as foreign investors can communicate with its
employees easily. Another reason of foreign investors to invest in our country is that because
of the tax benefits and incentives given by the government. Philippines also served as a
strategic location for the reason of just few hours flight in the different major capital in the
country and also reaching 500 million people of the Association of Southeast Asian Nation
(ASEAN). Lastly, as Asian nation is starting to integrate a free trade between the countries of
ASEAN, investors can take advantage of it and also capturing the ASEAN market.
As you can see from the graph that there is an increase of Foreign Investors here in our
country. Though it decreases in the year 2007 because of the financial crisis happened and
the decrease continued until 2009. However, investments increases at this time as some of the
investors chose to invest in the country especially those who are based in Japan to have
offices because of the fear of the tsunami incident in Japan last year.
Relevance:
The presence of the foreign investors would more competitors for Mang Inasal especially
if they engaged in a food service industry. Mang Inasal may lose some of it current market
share as customers have more choices of fast food chain and restaurants in where they can
dine in. Foreign businesses may exhibit better services, which can also be a factor of the loss
of market share of Mang Inasal.
Socio-cultural Factors
Trending barbecue fast food industry
According to Family Income and Expenditure Survey that 42.6 percent of the Filipino
households income were spent on food. The increase in the number of workers who are
engaged in business and administrative jobs and shifting consumers preferences towards
leisure and convenience resulted to the rise in demand for fast food services. It is now
became a trend and routine for middle class earners to eat at different fast food chain which
causes the presence of 32,000 fast food outlets in the Metro Manila area only.
Today, the trend of barbecue fast food industry is in hype. As you can see in the graph
that there are total of 604 branches of the top barbecue fast food chains in the country where
Mang Inasal has the leading number of outlets nationwide, having 423 branches.
10
Relevance
Mang Inasal, as a part of the barbecue fast food industry, can take advantage of the
increasing trend for this industry. These would help them generate higher income and
increase further its market share. They can also take this opportunity to attract more
customers and outnumber its competitors.
The top industries in the Philippine franchises are water refill franchises since water is a
basic necessity for every person, education and training franchises as fresh graduates looking
for review centers for their licensure examination, bakery as bread has been a part of the
Filipino culture especially pandesal, bar and caf franchises, personal care franchises,
service-type franchise, fast food chains, restaurants and food cart franchises as food is a basic
11
Relevance:
Mang Inasal also offers franchising to the community. In fact, it is one of the fastest
growing franchises in our country. The fact it came from the fast food chain and restaurant
franchises then it would continue to grow. A lot franchisee means more income for Mang
Inasal and it will be introduce to different places especially to those areas where Mang Inasal
is not present yet.
More Filipinos are moving to urban area as an increase in demand in packaged food
products.
As more Filipinos migrate to urban areas for the reason of better job opportunities and a
lot of people who are working and does not have the time to prepare their own food, it
increases the demand for the packaged food products for an ease in meal preparation. This
made them to eat in different fast food chains, restaurants and other independent food
establishments like the carinderia for a cheaper food service.
2010
100
61.3
38.7
26.3
12
Full-Service Restaurants
Cafes/Bars
28.4
26.6
28.0
26.1
27.6
25.6
27.3
25.0
26.7
24.2
26.2
23.5
Street Stalls/Kiosks
18.8
19.6
20.2
20.3
20.7
20.7
4.5
4.5
4.5
4.4
4.5
4.6
2.6
2.6
2.6
2.6
3.0
3.2
As you can see form the graph that the market share of fast food industry continues to
grow overtime and it grows faster during the year 2007 to 2010, which has the market share
from 24% to 26.3%.
Relevance:
An increase in demand for packaged would also mean an increase in demand for fast
food chain where Mang Inasal is a part of. More Filipinos moving to urban areas to look for
job opportunities would be a factor to Mang Inasal since they can employ workers from these
people.
13
According to the World Health Organization that by 2012, there will be 2.3 billion adults
who are overweight and more than 700 million are obese. In 2003, it is reported that 19.6%
of the Filipino population are overweight and 4.9% are obese. The numbers continue to
increase during these days. Consumers are becoming more health conscious looking for more
healthier and organic products.
Relevance
Most of the products of Mang Inasal are meat which has high saturated and transfat that
can lead to obesity and heart disease. For customers who are looking for a healthier food,
eating in Mang Inasal may not be a good option for them and this may lead to a decrease in
the market share of Mang Inasal as people will shift their interest to those restaurants who
offer organic foods.
14
As you can see from the figure that bird flu cases increases from 2003 to 2006 then it
falls in 2007. Although the cases and deaths of bird flu falls down, people are still being
caution especially if there is a bird flu scare in the country.
Relevance
Since the major product of Mang Inasal is its Chicken Inasal, health related risks of
poultry can decrease the sales of Mang Inasal as people will avoid poultry products because
of the fear of having a sickness that they can get from it.
15
Technological Factors
Technological advancements in the field of production
Many producers are interested to other alternatives in raising their chickens and technological
advancements can help with these problems. They are looking to a type of chicken, which
can be more suitable for outdoor production and niche markets. Out with the conventional
poultry industry and it is now genetically refined. Chickens now grow faster, has a broad
breast and limited feather for easier plucking and other traits that are considered desirable for
raising large number of birds. Chickens now reach five pounds in six to seven weeks due to
their rapid growth.
Relevance
Because of the new technologies that are discovered in order to grow more chickens than
usual, supply of chicken would not be a problem for Mang Inasal since it is their major
products. The genetically refined chickens would also be bigger than the conventional
chicken which can be an advantage for Mang Inasal because they will be able to serve bigger
chickens to their customers. This would mean higher satisfaction for the customers.
Union, at the beginning of 2000 there are only 250 million users of Internet and 500 mobile
subscriptions globally. But when 2011 approaches, it grows to 5 billion mobile users and 2
billion Internet users worldwide.
As you can see from the two figures above that the trend for using the Internet and
Mobile Phones is increasing rapidly. Though Internet users fall during 2007-2008 where
there is an recession, it still managed to increase during the year of 2009 until now.
Relevance
Through Negostar Deal Biz Loop 99, transactions of Mang Inasal were made easier and
even reduce the cost of Mang Inasal which allows them to offer affordable prices to their
customers. Negostar Deal Biz Loop 99 offers unlimited talk to Mang Inasals employees,
franchisees and suppliers for just P99.00 per month. Mang Inasal was able to reach its
connections in just an affordable price, which is an advantage to them.
17
Legal Factor
Compliance to sanitary standards
According to the Chapter 3 of the Presidential Decree No. 856 which is the code of
sanitation, that no one is authorized to operate a food establishment without securing a
sanitary permit from the local health office. The sanitary permit should be posted in the
visible part of the restaurant. Employees should also have a Heath Certificate issued by
the local health authority. All foods should also come from suppliers or sources which are
approved by the local health authority. The construction and location of the restaurant
should also comply with structural requirement prescribed the code of sanitation. Other
equipment and material used in the business should also follow the code of sanitation.
Relevance
Mang Inasal, as a food establishment, should also abide with the laws provided in
the sanitation code. They should also maintain cleanliness in their different branches
in order to pass the sanitary test of the government. Sanitary standards are also
important for the customers of Mang Inasal since they want to ensure that the food
they are eating are safe.
V.
Industry Analysis
a. Industry and Market Segments
Food Service Industry
18
Food Service Industry is one of the industries, which are in rapid growth as there
are increase in number of people who wants to have a prepared meal in the short time and
at most reasonable prices. Food Service Industry is an industry, which produces and sells
foods and serves its consumers. There are different types of food establishment that are
being set up in our country in our time now like big restaurants and fast food chain, small
canteens and carinderias or even the in demand food carts.
19
Price (PHP)
39.00-55.00
29.00-87.00
49.00
25.00-55.00
30.00-89.0
49.00
37.00-62.00
Famous fast food chains offer affordable prices for the masses and even cater
budget meals, which are more affordable. The segment share of the middle income to this
type of industry is large compared to people with larger income beside from the
affordable prices it offers, it is also a factor that the food they offer is for the masses.
20
Pricing
Pricing will depend on the target market of the fast food companies. There are
food chains which have higher prices compared to others which are affordable by middle
to low income household. Prices will also depend on the products served by the different
fast food companies. It will also depend on the bulk of your orders for the reason that fast
food companies offers meals with lower prices but the serving is also small compared to
the products in their normal price.
Fast Food
Mang Inasal
Bacolod Chicken Inasal
Chic-Boy
Distribution Channels
Farmers/
Growers
Price Range
P 49.00-99.00
P 49.50-99.50
P 49.00 99.00
Manufacturers
Distributors
Consumers
Food
Chains
The common distribution channels for food service industry is that it started with
farmers and growers of the raw materials or supplies that the food chains will need in
order to produce their products. Some of these materials will go to manufacturers to
produce other products which will also be used by different fast food chains such as
21
goods like dairy products and the like. After that, these products will go to different
distributors or the suppliers of the products of these food chains. Fast food companies
have lots of different suppliers whom to supply the ingredients for their products. They
will have a different supplier or every ingredient of their products. After the delivery of
their supplier, then it will be given to the different branches of the company for cooking
and serving its customers. Products are only distributed through the different branches of
the company nationwide or globally.
22
In recent years, starting a fastfood business has never been easier. Mang Inasal is
one of the numerous fastfood chains that expanded their number through franchising.
Mang Inasals founder and CEO Edgat Injap Sia divulged in an interview that more
than 90% of Mang Inasal branches in the Philippines are owned by Mang Inasal
franchisees. However, as a franchiser Mang Inasal is able to earn income through royalty
fees and other fees required to start the Mang Inasal franchise.
Many people are attracted to start a franchise because brands like Jollibee, Mcdonalds
and Mang Inasal already have a customer base and marketing initiatives, and business
strategies. According to an interview with Ms. Andrea Tan Lim, a franchisee of Mang
Inasal, It is easy to enter the industry but the hard part is maintaining the business
because of the presence of competitors.
23
VI.
Company Analysis
24
http://www.manginasal.com/about.html
Yes/No
Why?
Yes
Mang Inasal aims to become the best fast-food
barbecue food chain in the Philippines.
Yes
Yes
No
25
Mang Inasal intends to give its customers an amazing Pinoy dining experience.
The firm competes in the Philippine fast food market and is currently one of the most
prosperous fast-food chains in the country. Throughout the years, Mang Inasal gives the
customers their best product and service quality to gain their customers desires for their
product. By means of their effective implementation, Mang Inasal intends to gain
customer dependence for the companys survival, growth, and profitability in the long
run. Unlike other fast-food chains, Mang Inasal has an efficient method for serving their
customers, focused mainly on refilling its customers plates (unlimited rice, free soup,
etc.). With these traits together with their large workforce and developed processing
system, Mang Inasal has an exceptional competitive advantage. Also stated in the
companys vision, Mang Inasal provides job opportunities for jobless people, as well as
available suppliers, giving it a good public image. In accordance to law, Mang Inasal
gives employee benefits to its workers.
b. Recommendations
Recommended Vision
By 2017, Mang Inasal will be the preferred quick service restaurant by Filipinos
everywhere in the Philippines.
Parameter
1. Customers
2. Products & services
3. Markets
4. Technology
5. Concern for survival,
growth, profitability
6. Philosophy
7. Self-concept
8. Concern for employees
9. Concern for public
image
10. Concern for nation
building
Yes/No
If yes, which part of the statement
Yes
provide our customers
Yes
great pinoy dining experience
No
No
No
No
No
No
No
No
26
The new vision now indicates a clear indication when will it be attained. In five
years, Mang Inasal will be have every branch in the Philippines as it continues to grow
every single day. The old vision is vague as it just answers everywhere and does not
indicate whether it is outside or inside the Philippines.
Recommended Mission
To consistently provide Filipinos with a variety of pinoy foods to choose from
especially our famous chicken inasal. Moreover, we are committed to provide our
customers a great pinoy dining experience, to achieve growth by having more
branches, to take care of our employees, to take care of our environment and to also
give something back to society. As leading in the barbeque fast food industry, our
company promotes Integrity, Honesty and welfare of every individual working in
Mang Inasal.
The old mission was too short; the new mission indicates that the firm will
provide its customers variety of pinoy foods with a great dining experience. The new
mission also mentions about having growth, concern for employees, image and
society. Furthermore, by having the firm to promote Integrity, Honesty and welfare of
its employees, this will help Mang Inasal to grow and develop new things in the
future.
Internal Audit
Management Audit
The company uses basic strategic management concepts like the Backward
27
Integration, by getting raw materials and products from their suppliers. Although the
firm uses this, some of its franchises dont have Certified Public Accountants in
managing their financial statements. This means that they do not have standardized
management strategies in all of its franchises and this is very hard for them to fully
organize the business.
The firms objectives and goals are measurable and well communicated to its
employees, managers and franchisees. They see to it that they have the same ideas
and intentions for Mang Inasal to develop.
28
improved the position of Mang Inasal being the 3 rd fast food chain to have the most
number of branches in the country.
Fast Food
Chain
Jollibee
Chowking
Mang Inasal
Greenwich
Mcdonalds
No. of
Branches
686
431
423
330
325
Market Shares
The companys market share is still the leading fast food chain with the development
of JFC. The firm outnumbered its competitors by having four times the number of
branches it has in the country.
Barbeque Fast
Food Chain
Mang Inasal
No. of
Branches
423
Reyes Barbeque
90
Chic-Boy
71
Bacolod Chicken
Inasal
20
29
the years.
Product
The company has a limited variety of products to choose from. Since the barbeque
fast food industry is trending, its competitors and other businesses entering the market
easily imitate the products of Mang Inasal. However, the firm is still leading because
of its fast services in delivering the food to its costumers.
Pricing
The price of the products of the firm fit aptly. The products are very affordable that
entices the customers to by from them. Nevertheless, its key competitors also imitate
the prices of their products as they follow the firm.
Promotions Capability
The company proactively promotes its products as people can see in billboards and tv
advertisements of Mang Inasal everywhere. The firm spends a lot on promotion and
advertising their products in order for them to have more customers. Also, the firm
has a famous endorser that also made Mang Inasal more popular and increasing the
companys profit.
Financial Audit
Growth
Sales Growth
The increase in the sales of the company grew significantly. As the business
30
continues, it will have more sales as more stores of Mang Inasal open nationwide.
Revenue Growth
The revenue growth of the company grew 97% from 2008 to 2009. The sales
compensate the operating expenses, taxes and other expenses in gain more than
enough to sustain the business. From 2009 to 2010, the revenue grew 62% and in the
upcoming years, the revenue will still continue to significantly grow.
31
company as more of its stores are opening. Bacolod Chicken Inasal has a 49.73%
sales growth but it did not compensate the net loss of the company.
Profitability
Margin Growth
In 2009, the margin growth of the company is at its highest and it decreased in 2010.
Comparative Margins
Chic-Boy has a higher gross profit margin than Mang Inasal. However, Mang Inasal
has a higher operating profit margin and net income margin compared to Chic-Boy
32
Return on Assets
The return on asset of the company improved from 26% in 2009 to 33% in 2010. The
companys competitors are far behind with an 8% of Chic-Boy and -1.19% of
Bacolod Chicken Inasal.
33
Return on Equity
Mang Inasals return on equity decreased from 79% in 2008 to 69% in 2009. The
10% decrease was not a hindrance to the company as it increased 129% in 2010. The
return on equity of its competitors is -28.5%.
34
Asset Turnover
A decrease of 1.7 in 2009 in the asset turnover is the worst rate. However, it grew
3.77 in 2010, as it is a good sign that the company is using its assets in generating
sales. The key competitors average is still lower than Mang Inasal only 2.47 asset
turnover.
35
Liquidity
Mang Inasal is still leading as the most liquid in terms of current and quick ratio.
Despite this, there is still a decline in the current ratio and quick ratio of Mang Inasal
2009 and 2010.
36
Cash Flow
Investing activities mainly provides the companys cash. In 2008, cash was provided
in the operating activities of the business. There is no amount of financing activities
in 2008 and investing activities in 2010.
37
Working Capital
The working capital of the company increases every year. In 2010, it has a 98.36%
growth from 2009 and due to this, the company can cover the companys liabilities
during the year.
Working Capital
2008
2009
2010
Amount
717,282.30
Growth
69.65%
3,107,207.4
7
185,894,260
81.25%
98.36%
Solvency
Leverage Ratio
Bacolod Chicken Inasal is the most highly leveraged compared to the other
companies. This can lead to the insolvency of the business if this still continues.
Mang Inasal is least leveraged compared to its key competitors with a debt ratio of
0.28.
38
Production Audit
The company has very fast service in delivering food to the table of its customers.
The employees are organized and efficiently work to be able to maintain its fast
services. The facilities and amenities of the company are in good condition that
enables the employees to work in a healthy environment. The companys firm are
strategically located almost everywhere as the branches can be seen where there are
many people, which gains the firm a lot of attention. The company has advanced
internal operating system that is very easy for the managers and owners of the firm to
monitor every branch in the country.
Information Systems
In 2009, Mang Inasal partnered with Oracle, which is the most complete, open and
integrated business software and hardware systems, with more than 370,000
customers globally. Oracle will helps Mang Inasals efficiency in running the
business. In addition, Oracle has state of the art multiple operating system options
39
that gives customers unmatched benefits from industry-leading products and low total
cost of ownership.
7S FRAMEWORK
Strategy
The company proactively promotes their products, which is in line in the trending
barbeque fast food industry that attracts many customers and made Mang Inasal
popular. The numerous branches of the company also made Mang Inasal very
successful as people can see the fast food chain almost everywhere in the country.
The integration strategy of the company is the turning point of success. Jollibee
bought 70% of the shares of Mang Inasal made the firm more popular and Jollibee is
known to be one of the best in promoting their products and leading fast food industry
in the country.
Based from the Porters Five Forces, the purchasing power of consumer is strong as
the products only ranges from P49 to P99. The company generates a big amount of
income as more customers buy products from Mang Inasal branches nationwide that
is cost affordable.
Evaluation: Effective
Capitalizing on advertising the company that shows their products are delicious yet
very affordable and increasing number of branches are the advantages of Mang Inasal
from its competitors, as more customers will buy from them. In addition, the public
40
admired the company as Jollibee bought 70% of the shares of the company. This
made the Mang Inasal worthy that caught the attention of one of the biggest company
in the Philippines and considers buying the business.
Shared Values
The mission statement does not state any core values of the company. However, the
company shows compassion by helping alleviating the unemployment of the country
since it provides job opportunities to Filipinos. Also, the company provides job
opportunities in certain areas to community members as they provide supplies for the
company to operate.
Ferdinand J. Sia
President/COO
//
//
OPERATIONS
Elmer Hementera
VP-Operations
BUSINESS
FINANCE AND
COMMISSARY TREASURY HUMAN RESOURCE MARKETING
Enri
Ruiz
De
DEVELOPMENT
CONTROLLERSHIP
James V. Dy
Shella A. Sia
Jess Nemenzo
Marvin Ramos
Venancio C. Parcon VP-Commissary EVP-Treasury Corporate HR Manager Luzuriaga
Marketing
Manager
BDD Head
VP-Finance
of the departments of the company has its main functions. All of the information
regarding the management of the company disseminated from the chairman all the
way to its employees. The construction of the business development department,
which its main objective is to improve and create new stores, made a big impact on
the companys growing status as it continuously creates new Mang Inasal branches
nationwide.
Evaluation: Good
The company has a good organizational structure especially when company created
the business development department that is they key of the success of the business,
as its main objective is to build more branches of Mang Inasal.
Systems
The companys information dissemination is good as employees and staffs are well
informed of the new projects and business plans that the company has in store for its
customers. Each department does their roles effectively in making the business
successful. The heads of the different departments see to it that their staffs do the
tasks assigned to them and able to manage their own departments. Before the
franchisees manage their own branch of Mang Inasal, they are first instructed of how
to manage and operate their own branches for it to be successful. The company
promotes consistency with all of its branches so that it will be managed well.
42
Evaluation: Good
Consistency is one of their priorities in managing the company. As the number of
branches of the company is increasing, they see to it that they provide outstanding
and exceptional products and services to its consumers in every branch that they own.
Style
The companys success is attributed to its high standards. It can be summarized into
F.S.C. The company believes that every food (F) served to their customers must
meet the standards set by the company. Excellent customer service (S) is one of the
backbones of the company, where the employees are expected to deliver with a fast
and courteous service at all times. Cleanliness (C) is very important for Mang Inasal
both inside and outside the store as the employees clean the restaurant and they
themselves have presentable appearance at all times.
Evaluation: Helpful
The high standard of the company is the main reason why Mang Inasal is very
successful. The company sees to it that they have the utmost services, operation and
management of the business. The employees are trained well in serving its customers
and they must comply with the fast services that the company promotes.
Staff
Employee growth is supported through series of trainings that the company provides.
In March 2010, the company has a new training center, which has a mock-up of a
typical Mang Inasal store. The training center is a part of the companys drive in
improving its services, management, services and food quality. This is a certification
43
program for all of its employees and soon it will become a requirement prior to the
opening of new Mang Inasal stores. The company has good compensation and benefit
package to encourage their employees to work their very best. The company also
provides career pathing of its employees that provides opportunities for them to
pursue a higher career in the company.
Evaluation: Effective
The certification program for the employees is an effective way to promote the
consistency and to have better operations in the company. This will not only serve as
a growth of the company but also to its employees. The employees are given
opportunities to grow and excel in their careers as the company gives them a chance
to prove themselves that they are qualified in earning a higher position in the
company.
Skills
The company has intensive trainings for its employees to be efficient and promote the
companys high standards. The managers also trained and continuously learn the
latest systems in operating the store and people management skills.
Evaluation: Good
The skills are in line with the goals of the company to be the best and have the fast
services in delivering food to its customers. The company is able to attain their goal
through managing and training the employees.
44
VII.
Strategy Formulation
Rating 3 - This helps promote the firm to expand more branches across the Philippines,
as many customers are fond of the growing barbecue fast food industry. Mang Inasal is
leading with 423 branches nationwide as the number 1 barbecue fast food chain. It also
ranked 3rd, as the biggest fast food industry in the Philippines.
2008
2009
423
300
2010
2011
45
Rating 2 - There are some recent studies that will help in producing poultry faster
through poultry genetics. Ultra Natural Plus is a poultry feed additive containing more
than 20 enzymes combined with beneficial organic plant extracts of natural origin in a
concentrated, easy to use and mix liquid form. Used as a poultry drinking water additive
for poultry broilers, layers and turkey grower applications. Although it is still not
available in the Philippines, this will help the firm to produce more food in a short period
of time. This will help the sales of Mang Inasal to grow and generate more income in the
future.
O3 Growing number of people who uses Internet and Mobile Phones (Technological)
http://business.globe.com.ph/sme/news/mang-inasal-opens-300th-branch
Rating 2 - Globe Business opens Globe Negostar, which aims to aid small and medium
enterprises (SME), to help them cut on cost of operations and boost productivity. Mang
Inasal uses this as it helps them expand more branches and easily communicate with its
employees, suppliers and franchisees through the services of Globe.
46
No. of People
2002
2005
2007
2008
2009
Year
Rating 3 People today recognize franchising as a new way of starting a new business
instead of thinking their own concept. Franchising is very easy because many businesses
accept franchising their products and services. Although franchising can be costly, but
there are many benefits like the brand name and they can assistance with the management
of the firm to help them put up a successful business.
O5 Increase in demand for packaged food products due to more people moving to
urban areas
http://www.nzte.govt.nz/explore-export-markets/market-research-by-industry/Food-andbeverage/Pages/Food-and-beverage-market-in-the-Philippines.aspx
Rating 2 More Filipinos are expected to move to urban areas because of better work
opportunities so that they can provide for their own families that they cannot sustain
47
living in rural areas. This will increase the demand for packaged food products. However,
affordability will remain an important factor due to the limited disposable income of most
households. Mang Inasal offers affordable meals that will pass the budget of most
Filipinos.
Rating 3 - Annual reports of Jollibee Food Corporation and Alliance Global Group,
INC., These companies control more than half of the fast food industry market share. It
describes how saturated the market is.
Number ofPhilippines
Stores of Mang Inasal
(As of 2011)
No. of Stores
500
400
300
50
2008
100
423
2009
423
200
100
2010
300
0
Mang Inasal
90
Reyes
Barbecue
71
Chic-Boy
2011
20
Bacolod
Chicken
Inasal
48
No. of Stores
700
600
500
400
300
200
100
0
Jollibee
Chowking
Mang
Inasal
Greenwich Mcdonalds
T2 Decline of Palay
Production that may lead to inflated rice prices (Economic)
http://countrystat.bas.gov.ph/
Rating 1 Serving unlimited rice has captures a lot of customers for Mang Inasal.
However, due to the declining Philippine agriculture, rice prices have plummeted to
nearly P60 per kilo last 2008. Palay production must be stable and consistent to obtain
price stability for rice.
0.00%
2005 2006 2007 2008 2009 2010 2011
-5.00%
49
Rating 2 - As we all know, Mang Inasal offers unlimited rice for most of its meals.
However, more and more Filipinos are leaning towards a healthier lifestyle for longevity
and tranquility.
Rating 3 - Mang Inasal's most famous product is chicken. The article above describes
how avian fluenza or bird flu moves and being transferred from imported frozen poultry
to humans. It discusses the danger of catching the said disease through imported frozen
poultry.
T5 High number of foreign companies entering the fast food market vs. local brands
(Economic)
http://www.tripleiconsulting.com/main/philippines-business-registration/find-out-why
Rating 3 Many foreign companies enter in the Philippines because of the low cost and
high income in doing business in the country. Also, globalization is happening
worldwide, especially in the Philippines. Filipinos widely accept products and services
offered by foreigners and oftentimes, they prefer these to local brands. Mang Inasal will
50
have a hard time in selling their products, as many competitors will enter the country in
the future.
3. EFE Matrix
OPPORTUNITIES
O1 Trending barbecue fast food industry
Rating
Weighted
Score
Socio-cultural
0.2
0.6
Technological
0.10
0.2
Technological
0.10
0.2
Socio-cultural
0.10
0.3
Socio-cultural
0.05
0.1
Economic
0.15
0.45
Economic
0.05
0.05
Socio-cultural
0.05
0.1
Socio-cultural
0.10
0.45
Economic
0.10
0.3
2.75
51
Fortunately, Mang Inasal is part of an another branch for fast food service simply because
their products, pricing and level of quality are different from the key players of the
Philippine Fast Food Industry- Jollibee Food Corporation and Alliance Global Group, Inc
(the master franchise holder of McDonalds in the Philippines). Key competitors of Mang
Inasal were limited to three- Chicboy and Bacolod Chicken Inasal. These companies along
with Mang Inasal have the same product line (barbeque or grilled food) and pricing is
almost identical.
Chic-Boy has been constantly growing and it is the archrival of Mang Inasal for
52
it also offers the same level of quality in all aspects, i.e. food and service. Chic-Boy also
offers an unlimited rice and unlimited iced tea, which Mang Inasal pioneered in the
Barbeque Fast Food Industry.
Bacolod Chicken Inasal is the oldest of the four but its slow growth and expansion
has been the biggest factor of their small market share even though they are the pioneer of
serving chicken inasal in the metro.
53
54
CSF #8 Accessibility
Accessibility in the location of stores of the company is very important to attract
and entice customers. It is very important factor in having a business because by having
good and accessible location, the company will generate more income as more customers
55
http://www.philstar.com/Article.aspx?
articleId=763242&publicationSubCategoryId=70
http://www.youtube.com/watch?v=aPuqUl-64zs
56
regarded as the fastest growing fast food chain in the country. In the Barbeque Fast Food
Industry, Mang Inasal is the clear market leader.
Source: http://business.globe.com.ph/news/mang-inasal-opens-300th-branch
57
58
Some things to love about this place: its name (dont you just love the pun on
chickboy?), the pre-inflationary prices (a steaming bowl of sinigang at P49!) and the
deadly, highly addicting combination of chicken inasal and roasted pork belly which are
the house specialties.
Source:
http://www.annalyn.net/2010/05/31/chic-boy-balamban-liempo-goes-to-manila/
CSF#5 Chic-Boys Branding and Image (4)
Despite the Chic-Boy Caterpillar Scandal was first posted through social media,
Chic-Boy continues to thrive and build their brand against all odds. Also, Chic-Boy is
leading in terms of its branding and image as its target market are the young professionals.
Sources: http://newsinfo.inquirer.net/109857/%E2%80%98look- there%E2%80%99scaterpillar-on-my-veggies%E2%80%99
59
60
61
Chicken Inasals consumer base is limited to the metro because they have not expanded
to rural provinces especially northern Luzon.
62
Mang
Inasal
ChicBoy
Bacolod
Chicken
Inasal
Critical Success
Factors
Weight
Rate
Score
Rate
Score
Rate
Score
Price
Competitiveness
0.30
1.2
0.9
0.6
Marketing and
Advertising
Initiatives
0.20
0.8
0.4
0.6
Market Share
0.10
0.4
0.3
0.2
Product Quality
0.05
0.2
0.15
0.1
Branding and
Image
0.1
0.3
0.4
Product Variety
0.05
0.1
0.15
0.2
Service Quality
0.05
0.2
0.15
0.1
Accessibility
0.15
0.6
0.45
0.3
Total
3.8
2.90
0.2
2.30
63
Rating 4 - Mang Inasal makes itself known through all the promotional tools
possible and it also makes sure that it makes the company present to masses. Mang
Inasals endorser is Mark Bautista were you can see his face on billboards and print ads.
Last year, the 11-11-11 advertisement of Mang Inasal became a mystery to the public;
you can see it everywhere from billboards to commercials. This advertising strategy made
Mang Inasal more popular as many are curious and excited for what is going happen on
the said date. Mang Inasal wishes for the masses to retain the catchy jingles and
commercials it presents, bringing more customers to the fast food chains thus increasing
profit for the company.
Rating 3 - Mang Inasal became the largest barbecue fast food chain in the Philippines by
being accessible and putting up many outlets nationwide, through its affordability and
products suited according to Pinoy taste.
64
Rating 3 - Mang Inasal has widened its scope placing its stores strategically, letting its
customers access their stores with convenience. Having hundreds of branches across the
country, finding the nearest Mang Inasal store wouldnt be such a burden. Having high
visibility, it will always be an option for consumers to dine-in and enjoy the services of
the firm has to offer.
S4 Intensified employee competency through establishment of a new training facility
and program (Employee)
http://business.inquirer.net/money/topstories/view/20100814-286799/Union-of-batchoyand-inasal-creates-a-business-boom
Rating 3 The owner of Mang Inasal, Edgar J. Sia, partnered with the owners of Decos
Original batchoy. Chicken inasal products go together with batchoy and this will be a
great product and additional brand to carry with the expansion of the firm. With the help
of Sias Injap Investments Inc., Decos has six restaurants in Iloilo and plans to have
more branches in Manila.
Rating 4 - Mang Inasal partnered with Oracle, which is one the most compete and
integrated business software and hardware systems that will help Mang Inasal with their
internal operating systems. This will also help the firm, as more branches are being set up
65
nationwide and by this system, it will be very easy to be monitored by the managers and
owners of the firm the operations that have done by its employees.
Rating 2 Mang Inasal has a limited variety of products to choose from. Customers
satisfaction will diminish; the company should add more products to their menu so that
customers will buy more from them.
66
Rating 2 Mang Inasal commissary in the country works at the top of its game but as it
expands to other provinces, constraints will surely be faced. The firm has no capacity to
maintain this kind of system in every branch in the Philippines in order to suplly
ingredients 24/7.
Rating 2 There are feedbacks from customers that the quality of products served in the
branches of Mang Inasal are different from one anothr. Some branches offers good
quality of their product line, while others doesnt have the ample quality that consumers
should enjoy. Mang Inasal has a problem with its inconsistent uniformity with the taste of
their foods that is a problem because the firm has a hard time in monitoring because it has
too many branches to control.
Rating 3 Mang Inasal has stores that open 24/7. This is very costly for the company
because there are only few customers who buy from them at the middle of the night, thus
generating a low amount of income.
67
3. IFE Matrix
Key External Factors
STRENGTHS
S1 Aggressive in promoting
their products
S2 Market leader in the
barbecue fast food chain
S3 Accessibility: Strategic
locations catering to the masses
S4 Intensified employee
competency through
establishment of a new training
facility and program
S5 Increased operational
efficiency through acquisition of
an enterprise resources planning
software
WEAKNESSES
W1 Poor restaurant environment
W2 Limited products offered to
consumers
W3 Inconsistency in distribution
of products
W4 Deficiency in assessing and
evaluating branch and employee
performances
W5 Unable to maximize 24hour services
Total
Weighted Score
Strategy
0.15
0.6
Product
0.05
0.15
Strategy
0.15
0.45
Employee
0.10
0.4
Strategy
0.10
0.4
Resources
Product
0.10
0.05
2
2
0.2
0.1
Resources
0.10
0.2
Operations
0.15
0.3
Product
0.05
0.15
2.95
d. SWOT
The SWOT matrix helps develop four types of strategies, which are the StrengthsOpportunities
(SO),
Weaknesses-Opportunities
(WO),
Strengths-Threats
(ST)
and
Weaknesses-Threats (WT).
68
SWOT Matrix:
69
STRENGTHS (S)
S1 Aggressive in promoting their products
WEAKNESSES (W)
W1 Poor restaurant environment
OPPORTUNITIES (O)
O1 Trending barbecue fast food
industry
SO STRATEGIES
S1-O1 (Market Penetration) Hire new
product endorsers i.e. John Lloyd Cruz and
Anne Curtis
O2 Technological advancements in
the field of poultry production
WO STRATEGIES
W3-O3 (Product Development) Build a
smooth communication channel for
faster distribution of products from the
supplier to the branches
W4-O4 (Product Development) Form a
department for auditing and evaluating
the companys financial statements and
books of records.
W1-W2-O3 (Product Development)
Conduct research through mobile and
online surveys
SWOT MATRIX
ST STRATEGIES
S1-T1-T5 (Market Penetration) Intensify
social media marketing
WT STRATEGIES
W2-T3-T4 (Related Diversification)
Adding more and healthier products their
menu i.e. pinakbet, chopseuy and laing
70
e. SPACE MATRIX
The Strategic Position and Action Evaluation (SPACE) Matrix, is a fourquandrant framework that indicates whether the firm needs an aggressive, conservative,
defensive or competitive strategy for the organization. There are four factors that are very
important to determine the firms strategic position, which are the financial position,
competitive position, stability position and industry position.
71
It is very easy to put up a business in the Philippines, especially in the fast food
industry. A rating of -5 is given to the barriers to entry into market because there are a lot
of competitors in the food industry. The price range of competing products is -3 as more
business sells affordable meals to Filipinos. A -2 rating for the inflation rate as prices of
products continues to increase. The technological change rating is -1 since more new
products are being invented and sold worldwide and technology is growing faster over
the years.
72
Financial Strength
High Assets Turn-over
Liquidity
Net Revenue
Average
Industry Strength
Growth Potential
Profit Potential
Resource Utilization
Average
Economic Stability
Price range of competing products
Inflation Rates
Rating
+3
+6
+5
+4.67
-5
-1
-2.75
+5
+5
+3
+4.33
-3
-2
-1
-1
-2
-2
-1.5
Corporation that is a prestige and a well-known brand. The product and service quality
rating is -2 as it product line is appropriate to its prices that are low cost budget meals for
the people to enjoy.
Space Matrix:
Based from SPACE matrix, Mang Inasal belongs in the Aggressive quadrant. The firms
should pursue backward, forward and horizontal integration, market penetration, market
development, product development and related or unrelated diversification.
73
f. Internal-External Matrix
Based on the I-E matrix, Mang Inasal falls in cell V. The recommended strategies are
hold and maintain for the firm. Market penetration and product development strategies
can be used.
Total Weighted Score for IFE= 2.95
Total Weighted Score for EFE= 2.75
4.0
3.0
2.0
74
II
IV
III
VI
Mang Inasal
VII
VIII
IX
3.0-4.0
2.0-2.99
1.0-1.99
Result: Hold and maintain
Strategies: Market Penetration and Product Development
g. Grand Strategy Matrix
Using the Grand Matrix Strategy, firms are positioned in in one of the four quadrant
depending on the firms competitive position and industry growth.
75
I
Market Development
Market Penetration
Product Development
Forward Integration
Backward Integration
Horizontal Integration
Related Diversification
III
Retrenchment
Related Diversification
Unrelated Diversification
Divestiture
Liquidation
IV
Related Diversification
Unrelated Diversification
Joint Venture
76
Weak
Competition
Position
Strong
Competition
Position
Slow Market
Growth
Mang Inasal falls under the quadrant one of the grand strategy matrix. Under this
quadrant, market development, market penetration, product development and related
diversification are available for business. However, Mang Inasal cannot adapt horizontal
integration for they are bought by its competitor Jollibee Food Corporation. Forward
Integration is not also available since Mang Inasal dont offer merchandise that can be
directly sold. Lastly, Backward Integration will not be appropriate since Mang Inasal has
different suppliers.
h. Summary of Strategies
After doing the TOWS, SPACE, Internal-External, and Grand Strategy Matrices,
different recommended strategies where tallied to determine the most common option
for the firm.
Market Penetration
Market Development
Product Development
TOWS
X
X
X
SPACE
X
X
X
I-E
X
X
GRAND
X
X
X
TOTAL
4
3
4
77
Forward Integration
Backward Integration
Related Diversification
Horizontal Integration
Concentric Diversification
Alliance/Merger
Divestment
Liquidation
X
X
X
X
X
X
X
X
2
2
3
2
0
0
0
0
The most common options are Market Penetration and Product Development. For
the third strategy, Market Development and Related Diversification got the same
total. However, market development strategy will suit the company better.
On Opportunities:
Market Penetration is effective when usage rate of customers could be increased
significantly. A rating of 4 is given to more Filipinos are moving to urban area since this
will help in order to increase the market share of Mang Inasal since new customers will be
tapped by the firm through its advertisements.
Market development is most suitable when there are new channels of distribution will be
available. Increase in number of potential owners through franchising receives a rate 4 for
the reason that the new franchisee will be able to provide new location of Mang Inasal store
78
which are not yet tapped. A rate of 3 is given to Market Penetration for the same
opportunity since new store of Mang Inasal will be able to attract new customers.
A rating of 4 is given to product development for trending barbecue fast food industry for
it is most acceptable since Mang Inasal competes in a high-growth industry. Technological
advancements in the field of poultry production and growing number people who uses
Internet and mobile phones also receives a rating 4 for this can help in order for Mang
Inasal to improve their products and customer services.
On Threats
Product Development is highly applicable to compliance to sanitary standards. Mang
Inasal should always check the sanitation of their different branches and enhance its service
for sanitation; therefore it receives a rating of 4. Market Penetration got a rating of 2 since it
is not that much applicable to this factor.
Market Penetration is used in order to increase sales through marketing efforts. High
number of foreign companies entering the fast food market vs. local brands would mean
more competitors. Thus, further marketing efforts is needed by Mang Inasal in order to
penetrate and attract customers from its different competitors.
A rating of 4 is given to the Product Development for Saturation of the market due to
booming fast food industry. Mang Inasal should improve its products and menu in order to
compete with its direct and indirect competitors and those established and new fast food
79
Health related risks of poultry products and Filipinos are looking for healthier lifestyles
are not rated for the reason the three strategies are not applicable to these factors.
On Strengths
As a market leader in the barbecue fast food chain and being aggressivein promoting their
products, market penetration is the best strategy to use. Mang Inasal can continue to do
more advertising and do promos in order to drag bigger market. A rating of 3 is given to
Market Development in order for Mang Inasal to expand more their areas to the different
parts of the Philippines and go International. Being a leader not only in market share but
also in marketing and advertising its products, they can also focus on improving their
product or add more to their menus through product development in order to keep its
customers more satisfied.
Market Development is most suitable to the accessibility of the locations of the restaurant
to masses. Mang Inasal could expand to the different provinces of the Philippines especially
to those areas where there are lesser Mang Inasal restaurants.
The three strategies are not suitable intensified employee competency though
establishment of new training facility program and increased operational efficiency through
acquisition of an enterprise resource.
80
On Weaknesses
The weakness of inconsistency in distribution of products can be solved through adding
more commissaries in order for the different restaurants to have a better distribution of
products. A rating of 3 is give to product development since inconsistency of distribution
would also mean inconsistency of the products. Mang Inasal can further improve their
services.
The weaknesses that there are only limited products offered to consumers can be solved
through product development. Mang Inasal can create new products and specialties that
they will cater to its customers. A rating of 2 is given to market penetration and 1 for
market development since they are not suitable to these factors.
81
KEY FACTORS
Weight
Opportunities
1. Trending barbecue fast food
industry
2. Technological advancements
in the field of poultry
production
Market
Penetration
TS
AS
Market
Development
TS
AS
Product
Development
TS
AS
0.20
0.20
0.60
0.80
0.10
0.20
0.30
0.40
0.10
0.30
0.20
0.40
4. Increasing
number
of
potential owners through
franchising
5. More Filipinos are moving to
urban area
Threats
1. Market becomes saturated
due to booming fast food
industry
0.10
0.30
0.40
0.10
0.05
0.20
0.15
0.05
0.15
0.45
0.30
0.60
2. Compliance to sanitary
standards
0.05
0.10
0.15
0.20
0.05
0.10
0.10
0.40
0.30
0.20
0.15
0.60
0.45
0.30
0.05
0.20
0.15
0.10
0.15
0.45
0.60
0.15
0.10
0.10
0.10
0.05
0.05
0.10
0.20
0.10
0.20
0.40
0.30
0.15
0.05
0.20
0.15
1.0
0.1082
1
3.85
4.25
3.8
VIII. Recommendations
a. Strategic Objective
The strategic objective of to maintain its dominance of the barbecue fast food
industry here in the Philippines by adding more and healthier products, branching out thirty
more branches in Mindanao, increasing its advertising efforts through hiring new product
endorsers, taking advantage of advertising on public mass transportation systems and fixing
administrative deficiencies.
Mang Inasal is currently on top of the barbecue fastfood industry. In 2011, Mang Inasal
generated a gross profit of P432, 200,000.00 and total expenses of P383, 100,000.00. Mang
Inasal was able to achieve a net income of P49, 100,000.00 and Mang Inasals liabilities
amount to P374, 943,939.00. However, Edgar "Injap" Sia, founder and CEO Mang Inasal,
knows that there would come a time when Mang Inasal will stop expanding. The question
will be how will Mang Inasal handle an inevitable drop in sales and expansion. An
assessment of their strength and weaknesses, along with the external opportunities and
threats, has concluded that Mang Inasal should focus more on product development.
Mang Inasal has been dominating the middle class. Most of their consumers are
students and people from the labor force. It would be very important for them to continue
dominating this class because here in the Philippines about 35% of the population is part of
the labor force and are students.
b.
Recommended Strategies
1. Market Development Strategies
a. S3-T1 Branch out stores in Mindanao specifically in urbanized cities
83
84
Through this franchise summit, Mang Inasal will be able to discuss and explain the
nature and procedures of a branch and acquring a franchise. This will help Mang Inasal
attract potential franchisees.
3. Product Development
a. W4-O4 Form a department for regulating and evaluating branches and employee
performances to enhance employee competency and branch longevity for potential
franchisees
b. W1-W4-T2 Set up a sanitation compliance team to ensure that sanitary standards
are met for each branch
Mang Inasal must establish an Evaluation and Regulatory Department as well as a
Sanitation Compliance Team. These two newly instituted departments will help maintain
above average employee performances and a relatively healthy franchise fiscal year
performance.
85
communication channel between the distributor (commissary) and the branch so that
delivery and emergency replenishment of stocks will be set and will be on time.
c. Financial Projection
Financial Objective
The financial objectives of Mang Inasal are to increase its net income by 25% and
increase in return of equity by 50% consecutively through 2012, 2013, and 2014.
Financial Assumptions
This year, as Mang Inasal faces its competitors (i.e. Chic-boy and Bacolod Chicken Inasal),
Mang Inasal may experience a slower growth than before (also considering inflation and
exchange rates).
Market Condition
The fast food industry has been growing and (expectedly) will still continue to grow in the
future. With this assumption, there will/might come a time when Mang Inasal will be
"outmatched" by another fast food company.
86
Equipment Performance/Durability
As technology advances and as Mang Inasal continues (hopefully) to grow, Mang Inasal
would be able to purchase more advanced equipments that will improve the efficiency in
selling/producing their products.
MANG
INASAL
CHIC
-BOY
BCI
Rating
1. CURRENT RATIO
1.19
0.79
0.29
2. QUICK RATIO
3. INVENTORY
TURNOVER
0.93
0.61
n/a
23.29
13.96
n/a
4. DEBT RATIO
5. TIMES INTEREST
EARNED
6. OPERATING
INCOME RETURN ON
INVESTMENT
7. OPERATING
PROFIT MARGIN
8. TOTAL ASSET
TURNOVER
9. FIXED ASSET
TURNOVER
10. RETURN ON
EQUITY
11. RETURN ON
ASSET
0.28
0.41
2.05
41.83
5.14
n/a
0.47
0.14
-1.19
0.13
0.12
-0.26
3.77
0.37
11.93
0.74
4.57
13.2
8
0.79
0.13
-0.7
0.33
0.08
-1.19
87
From a financial perspective, Mang Inasal is doing better than its competitors.
Ultimately, Mang Inasal has the greatest return on equity with a ratio of 0.79 during the
year 2010, compared to that of Chic-boy and Barbecue Chicken Inasal (BCI) with ratios
0.13 and 0.7 (deficiency), respectively. (The n/a indicated on BCI Inasal is because BCI
has no report on its inventory and interest expense.)
MANG INASAL
(CURRENT AND
PREVIOUS)
2010
2009
Rating
1. CURRENT RATIO
1.19
1.24
2. QUICK RATIO
0.93
1.10
3. INVENTORY
TURNOVER
23.2
9
17.3
8
4. DEBT RATIO
0.28
0.62
5. TIMES INTEREST
EARNED
6. OPERATING
INCOME RETURN ON
INVESTMENT
7. OPERATING
PROFIT MARGIN
8. TOTAL ASSET
TURNOVER
41.8
3
33.5
4
0.47
0.38
0.13
0.22
3.77
1.70
9. FIXED ASSET
TURNOVER
10. RETURN ON
EQUITY
11. RETURN ON
ASSET
11.9
3
7.43
0.79
0.69
0.33
0.26
88
Receivables (Net)
During 2012, Mang Inasal is expected to have a significant decrease in Accounts
Receivables. This phenomena is evident because there has been a decrease in most of the
Financial Ratios for the year 2011, yet Operating Income Return on Investment remains
positive, which means that the firm is still making profit. But in 2014, Mang Inasal is
expected to lend firms/people more plus interest, resulting to further increases in
Accounts Receivable.
Inventories
In 2012, Mang Inasal is expected to not sell as much as 2011 (by looking at the financial
ratio); therefore, inventories increase. But in 2013, suppose there will be foreigners who
will be residing in the country, given the current positive growth in the Philippine economy
(around 3% aggregately). But, in 2014, Mang Inasal is expected to experience a tight
competition between rising number of competitors, old and new (given a limited
population).
Other Current Assets
89
Mang Inasal is expected to have an increasing number of other assets (e.g. prepaid
expenses, scrap value of equipment) during its operations.
90
Capital Stock
The capital stock is assumed to be constant throughout 2012, 2013 and 2014.
CURRENT RATIO
QUICK RATIO
INVENTORY
TURNOVER
DEBT RATIO
TIMES INTEREST
2008
3.57
2.75
2009
1.24
1.1
2010
1.19
0.93
2011
1.09
0.85
2012
1.42
1.14
2013
1.84
1.51
2014
2.39
2.00
71.21
0.98
n/a
17.38
0.62
33.54
23.29
0.28
41.83
4.23
0.61
21.89
2.42
0.48
34.41
2.34
0.38
36.67
2.10
0.30
40.11
91
EARNED
OPERATING INCOME
RETURN ON
INVESTMENT
OPERATING PROFIT
MARGIN
TOTAL ASSET
TURNOVER
FIXED ASSET
TURNOVER
RETURN ON EQUITY
RETURN ON ASSET
0.021
0.008
1
0.38
0.47
0.71
0.74
0.77
0.83
0.22
0.13
0.83
0.59
0.55
0.53
2.62
1.7
3.77
0.08
0.81
0.66
0.52
8.50
1.29
0.014
7.43
0.69
0.26
11.93
0.79
0.33
0.28
0.21
0.08
2.61
0.24
0.09
2.24
0.27
0.10
1.88
0.33
0.12
Overall, Mang Inasal should be doing well financing its available assets due to
increases in Operating Income Return on Investments. But, Mang Inasal made financial
sacrifices such as borrowing money (also subjected to more interest expenses) and buying
more financial assets (expansion). The buying 70% of Mang Inasal by Jollibee had the
greatest impact on Mang Inasals Financial Ratios (leading to decreases in all ratios
except Operating Income Return on Investments). But according to how Mang Inasal is
doing in the first quarter of 2012, Mang Inasal should be able to regain its financial
growth in assets in the next 5 years, unless affected by externalities. In the projected
financial statements, Mang Inasal is expected to have a slower growth or a decreasing
growth as it faces new competitors. But, by comparing the financial ratios of Mang Inasal
with Chic-boy and Reyes Barbecue, Mang Inasal is still leading in the barbecue fast food
industry.
92
Financial Objective
Mang Inasal should have an increase in Return on Equity by 50% consecutively
throughout the years 2012, 2013, 2014 to maintain competitiveness and profitability
while maintaining a low cost level (around just a 15% increase) relative to its gross
income.
93
d. Departmental Programs
Each and every department of Mang Inasal has an important role for the implementation
and effectiveness of market and product development strategies.
94
Strategy Map
Development of Extended
Share Holder Value
Expanded Growth of
Capitalization
Human Capital
Establishment of an evaluation
and regulatory body and a
sanitation compliance team
Consistent employee
performance will not only be an
asset to the company but it will
be a bridge for a better
customer-business relationship.
based paradigm.
Communication Solutions
and a Customer Management
System.
Marketing
Mang Inasal's marketing development has been developing strategies and brand direction
which will contribute to Mang Inasal's desire to become a leader in innovation, creativity,
95
and customers relations in the years to come. The marketing department must focus more
on brand awareness and they must realize that mouth to mouth marketing is still the best
and cost-efficient way to market your brand and product. Aside from the conventional
marketing schemes, Mang Inasal must understand the value of of their asset and working
with their strengths.
Operations
Mang Inasal's Newsletter reports that the Operations department started the year with the
release of the revised Operations manual for the five basic stations namely kitchen,
counter, quality control, dining and grill. Recently, OD released the revised Cash Control
Policies, brought about by the opportunities encountered by the stores in handling of sales
and funds. OD is in the continuing process of reinforcing the knowledge and skills of the
management team members and crew on the Basics of our Operations focusing not only
96
on the systems and procedures embodied in the revised Operations Manual, but on other
aspects of running the business as well. Skills of managers in the achievement of sales
objectives and management of controllable expenses are now being honed with store
management teams coming up with daily targets for sales and expenses. How sales targets
are achieved, (good Cycle of Service, GRC concept, etc.) as well as ways to manage
expenses, are the orders of the day. Recently, OD has also started teaching the managers
how to compute for the food cost, the biggest expense in the PnL. Upcoming Operations
activities are focused on how to manage food cost and food cost variance troubleshooting.
Business Development
According to Mang Inasal NewsLetter, BDD or Business Development Departments
97
creation on January 2009 made a big impact on Mang Inasals growing status (number of
stores built, alignment to quality and improvement and creation of new store designs).
From its 100 total stores opened in five years (2003-2008), a phenomenal achievement was
recorded when it opened 100 stores in just a year (2009) - a mark on history not only in
Mang Inasal but in the whole fast-food industry as well. As BDD is gearing up towards its
300th store in October of this year (with more than 50 stores already on process and lined
up to open first quarter of next year), growth and success will be inevitable for Mang
Inasal.
98
Training
According to Mang Inasal's Newsletter, improvements in Mang Inasals services are
99
expected as staff and crew get trained and certified in the new training center that is now
operational at the former commissary in Tramo, Metro Manila. The reconstruction of the
commissary into a training center started in March 2010 and includes a mock-up of a
typical Mang Inasal store. President Ferdinand Sia said the training center is part of the
companys thrust in improving operations, services and food quality. Existing stores will
be required to have their store employees, cashiers, dealers and dining crew trained and
certified. This is a certification program for all who work with Mang Inasal, said the
President. The certification program for employees will soon become a requirement prior
to the opening of any new Mang Inasal store.
IX.
100
MEETS
EXPECTATION
ALERT
BELOW
EXPECTATION
15%-39%
14%
20%-49%
19%
30%
5%-29%
19%
25%
10%-24%
9%
OPERATIONS
REDUCE UTILITY
COSTS
(VARIABLE
COST)
15%
10%-14%
9%
LEARNING
AND
GROWTH
SEARCH FOR
EFFICIENT
EMPLOYEES TO
BOOST
PERFORMANCE
5%-3%
2%
FINANCE
CUSTOMER
GROWTH IN NET
INCOME
40%
IMPROVE
CAPITALIZATION 50%
ATTRACT
UPPER-CLASS
BUSINEESSMEN
ATTRACT
FOREIGNERS
6%
101
b. Contingency Planning
Downside Potential Events
Key Concerns
Mass Production of chicken and
other meats by injecting
numerous antibiotics and
stimulants
Action Plan
Enhance the Research and Development
team. Hire a part-time health inspector
(To be aware and updated of current
health issues)
Action Plan
Offer Leases
102
X.
1.
2.
References
Fred, David. Strategic Management. 7th edition. 2009.
Securities and Exchang Commission Audited Financial Statements for Mang
Inasal, Chic-Boy and Bacolod Chicken Inasal
3.
4.
http://www.manginasal.com
5.
http://www.scribd.com/doc/64568286/MANG-INASAL
6.
http://www.manginasal.com/images/MI_NewsLetterDesign_2010a.pdf
7.
http://www.philstar.com/Article.aspx?
articleId=764743&publicationSubCategoryId=108
8.
www.thepoultrysite/articles/364/poultry-genetics-for-pastured-production
9.
http://business.globe.com.ph/sme/news/mang-inasal-opens-300th-branch
10.
http://franchisephilippines.org/8-best-philippine-franchises/
11.
http://www.nzte.govt.nz/explore-export-markets/market-research-byindustry/Food-and-beverage/Pages/Food-and-beverage-market-in-thePhilippines.aspx
12.
http://www2.pse.com.ph/html/ListedCompanies/pdf/2011/JFC_17A_Dec2010.pdf
13.
http://www2.pse.com.ph/html/ListedCompanies/pdf/2011/AGI_17A_Apr2011.pdf
14.
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15.
http://www.philstar.com/Article.aspx?
articleId=763242&publicationSubCategoryId=70
16.
http://www.youtube.com/watch?v=aPuqUl-64zs
103
17.
http://business.inquirer.net/money/topstories/view/20101019-298456/Jollibee-tobuy-70-stake-in-Mang-Inasal-for-P3B
18.
http://chic-boy.com.ph/menu_cm.html
19.
http://rackell24lumberio.blogspot.com/2010/05/chic-boy.html
20.
www.annalyn.net/2010/05/31/chic-boy-balamban-liempo-goes-to
21.
www.newsinfo.inquuirer.net/109857/%E2%80%98look-there%E2%80%99scaterpillar-on-my-veggies%E2%90%99
22.
http://www.reyesbarbecue.net
23.
http://www.mymeryl.com/2009/04/reyes-barbecue-restaurant-review.html
24.
http://www.adobomagazine.com/global/module.php?
LM=news.level1&id=1320818761405
25.
http://www.businessweekmindanao.com/2011/11/04/whats-cooking-with-manginasals-11-11-11/
26.
http://www.ats-sea.agr.gc.ca/ase/5991-eng.htm
27.
http://www.mb.com.ph/articles/263972/the-expansion-mang-inasal
28.
http://business.inquirer.net/money/topstories/view/20100814-286799/Union-ofbatchoy-and-inasal-creates-a-business-boom
29.
http://passingparadigms.blog.com/tag/customer-service-2/
30.
http://eatallyoucanallyoucaneat.blogspot.com/2012/01/mang-inasal-lumpiangsardinas-ginataang.html
31.
http://planetphilippines.com/people/the-man-behind-mang-inasal/
32.
http://a1pinoy.blogspot.com/2011_07_01_archive.html
33.
http://www.nzte.govt.nz/explore-export-markets/market-research-by-
104
industry/Food-and-beverage/Pages/Food-and-beverage-market-in-thePhilippines.aspx
34.
http://manilareviews.com/2010/07/food-service-industryphilippines.html#ixzz1pASjlzfg
35.
http://www.census.gov.ph/data/sectordata/aspbi09_secthftx.html
36.
http://manilareviews.com/2010/07/food-service-industryphilippines.html#ixzz1pASjlzfg
37.
http://www.census.gov.ph/data/sectordata/aspbi09_secthftx.html
38.
http://killavianflu.com/stat.htm
39.
http://www.dti.gov.ph/uploads/DownloadableForms/Total%20Approved%20Foreign
%20Direct%20Investments%201996-2009.pdf
40.
http://pinoybusiness.org/2010/09/22/growing-franchising-industry/
41.
http://emievil.hubpages.com/hub/The-Advantages-and-Disadvantages-ofFranchising
42.
http://www.nzte.govt.nz/explore-export-markets/market-research-byindustry/Food-and-beverage/Documents/FB%20market%20profile%20in%20the
%20Philippines%20January%202012.pdf
43.
http://www.obesity.org.ph/?p=article2-wellness
44.
http://en.mercopress.com/2011/01/27/two-billion-internet-users-worldwide-and-mobilephone-users-increases
45.
http://www.ats-sea.agr.gc.ca/ase/5991-eng.htm
105
XI.
Appendix
a. Financial Statements
Appendix 1:Mang Inasal Income Statement
Appendix 2 Mang Inasal Balance Sheets
Appendix 3: Competitors Income Statements
Appendix 4: Competitors Balance Sheets
Appendix 5: Mang Inasal Financial Ratios
Appendix 6: Competitors Financial Ratios
Appendix 1
Appendix 2
106
Appendix 3
Appendix
107
108
Appendix 5
Appendix 6
109