Arrow Plastic Industries Corporation

• Main Author: Chua, Sally A.
• Format: text
• Language: English
• Published: Animo Repository 2006
• Subjects: Plastics industry and trade > Philippines; Arrow Plastic Industries Corporation
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/3637
• Institution: De La Salle University

Arrow Plastic Industries Corporation is a producer of packaging materials (Synthetic Bags & Cloth) duly registered as an exporter with the Board of Investment (BOI). The current strategy of the company already enables it to operate profitably. The over-all operations strategy of the company is heavily dependent on its owner. The decision-making and the initiative for changes and improvements are done at the management level. Moreover, the Chinese (Confucian) values of Guanxi (relationships) and Xinyong (trust) are very much evident in the way Arrow Plastic is being run by the head of the Family, Mr. Chua Yi Tsong. The demand for packaging materials is highly dependent on the performance of the user industries such as food and beverages, drugs and pharmaceuticals, garments, electronics, gifts, toys and house wares, cement, export, and also the agricultural and mining sectors. The major challenge of the Packaging Industry is essentially that it needs to create a dent in the Southeast Asian market. Most of the players in the industry employ an overall cost leadership position strategy, with the exception of two giants Asia Brewery and San Miguel, which uses focused differentiation. This is due to the fact that most buyers are price sensitive. The industry has numerous and equally balanced competitors, which is a threat to the industry because of the high competition and rivalry among firms. On the other hand, threat of entry is low (an opportunity to the industry) as a result of the existence of the following barriers to entry: economies of scale, product differentiation, capital requirements, cost disadvantages independent of scale, and government policy. Furthermore, both the low bargaining power of suppliers and low threat of substitute products or services have likewise contributed to opportunities to the industry due to low differentiation of outputs, low switching costs of suppliers and firms, low presence of substitute inputs and low supplier concentration for the supplier bargaining power determinants and low buyer propensity to substitute. Finally, another threat identified would be due to the high bargaining power of buyers due to the following bargaining leverage high buyer volume, high switching costs, and high buyer information and price sensitivity in the form of high product differences.