A corporate strategic plan for Mariwasa Siam Ceramics, Inc.

• Main Author: Tibay, Isabelita C.
• Format: text
• Language: English
• Published: Animo Repository 2001
• Subjects: Ceramic industry > Philippines; Mariwasa Siam Ceramics; Inc.
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/3924
• Institution: De La Salle University

The Philippines' building materials industry (BMI) faces different issues in the 2000s as the industry moves from a protected, traditional industry toward a global industry, several key issues and or threats emerge for manufacturers, one is how they should position themselves to compete outside the Philippines. Another is how they should deal with the increasing presence of foreign products and firms in the domestic market in the wake of the AFTA agreements. While such threats in the industry are real and pressing hard the local manufacturers, opportunities should be explored and or exploited. The Philippines' participation in AFTA and WTO offers huge new global market opportunities through the following foreign entry modes: exporting, joint venture, direct investment, and licensing. MARIWASA SIAM CERAMICS, INC. is the biggest subsidiary of Mariwasa, the market leader in ceramic tiles. This company was established through the merger of Mariwasa Manufacturing, Inc. and Thailand's Siam Group of Companies. The Mariwasa group, in general, has the following and capabilities (or strengths): Highly recognized brand name and brand image, wide product lines and faster new product introductions to the market per year, state-of-the-art production technology, market share leadership with no close competitor (Mariwasa has the largest market share in the ceramic tile market which accounts to 50-60% for the past 30 years), and with clear strategic direction. On the other hand, Mariwasa's weaknesses include the following: high production costs due to high dependence on imported raw materials and fuel costs high inventory costs, and low efficiency in the procurement of needed inputs. In the light of the threats, opportunities, weaknesses and strengths as discussed above, the following strategies are proposed for MSCI in order to achieve its objectives of attaining a ROI of 10.0% at the end of year 2005 and 50%-60% increase every year for the succeeding two years attaining ROE of 18.0% at the end of year 2005 and 25.0% at the end of year 2007, after its tenth year of operation. (1.) Expand domestically in Mindanao through a financial recapitalization with stockholders to add new capacity (2.) Focus on continued improvement in production efficiencies and cut down overall costs by consolidation and rationalization of capacities (3) Increase export sales in selected target markets. Better profitability ratios are expected for MSCI from year 2002 and beyond. An ROI of 9.48% can be attained by the end of year 2005 and about 23% at the end of year 2007. A 18.15% return on shareholder's equity is realizable at the end of year 2005 and a 26.0% ROE can be attained at the end of year 2007, after the 10th year of the company's operation. With these figures, the objectives are met as expected. MSCI in general has the capability to compete with the domestic competitors in ceramic floor tile manufacturing by making use of the strategies above. However, in order to compete in the ASEAN market, improvements should be on key result areas in production, marketing, inbound logistics and R & D. Moreover, a human resource performance and reward system should be reviewed and changed in order to motivate people in continuously improved performance, loyalty and satisfaction. Transparency and empowerment in the workforce is also called for.