Term paper on Caltex (Philippines) Inc.

• Main Author: Atun, Leyvi T.
• Format: text
• Language: English
• Published: Animo Repository 1999
• Subjects: Petroleum industry and trade > Philippines; Caltex (Philippines) Inc
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/3963
• Institution: De La Salle University

The petroleum industry has always been one of the most controversial industries in the Philippines because petroleum products are regarded as political and socially sensitive commodity. The public still reacts vehemently to oil price increases as evidenced by the rallies held by transport and labor groups. Although the industry has been fully deregulated since July, 1998, oil companies cannot just increase their prices as needed to cover costs because of expected public outcry. Caltex (Philippines) Inc. or CPI, being one of the three large oil companies in the country, is not spared from intrigues and controversy. The government has always been insistent on transparency of operations especially when it comes to pricing of products. Although in a deregulated industry, CPI supposedly can automatically price its products at market, the government still asks for justification of price increases from time to time. This paper does not only cover the operations of CPI but also shows how the industry as a whole fares. This paper has an industry overview and includes present strategies of the major oil companies. Further analysis of the industry is presented in its economic characteristics, opportunities and threats. The Five Forces Model is used to present the existing rivalry among competing oil companies, competitive force of potential entry, pressures from substitute products, power of suppliers and power of buyers. For the company analysis portion, a company value chain is constructed and CPI's strengths and weaknesses are enumerated. Financial ratios are used to analyze the financial capability of the firm. To be able to propose strategies that can help the company improve its profitability/performance this 1999 until 2001, the financial and strategic objectives, generic strategy and present strategies of CPI are analyzed. The proponent also included in this paper implementation steps of the proposed strategies. Lastly, financial projections are shown at the last part of the paper in support of the proposed strategies.