Strategies for Polytron Phils.

• Main Author: Salomon, Aristotle R.
• Format: text
• Language: English
• Published: Animo Repository 2000
• Subjects: Electric household appliance industry > Philippines; Polytron Phils
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/3974
• Institution: De La Salle University

Polytron Philippines Co., Inc., since its establishment in 1995, has survived without a formalized set of visions and objectives. The management of the firm believes in managing the company through common sense. This belief helped the company survive by putting marketing (which includes sales operation and administration) in the center of its operations. This paper, first and foremost would like to propose to change this approach to a more universal line of attack. Instead of marketing goals, the company should put forward corporate objectives as the core of all activities. The corporate objective is based on the CEO's vision and uses S.M.A.R.T. (Specific, Measurable, Attainable, Result-oriented, Time bound) as its framework. In the absence of a formal vision, it is therefore safe to pattern their vision after its mother company's vision: to be come the leading appliance company in the Philippines focused only in providing quality products and reliable after sales services. Using this as its basis, the company is looking forward to become P200 million-company, in terms of profit, by the year 2004. After establishing the corporate objective, this paper has determined the competitive advantage and strategies needed to attain the said corporate objective. Polytron's present competitive advantage is on the verge of total erosion. The company still believes in the selling process in which the firm will come up with a product and then train salesperson to sell it. Yet, to ensure survival in the future, the company should be able to develop products that satisfy the needs of people. The company should also make sure that its salespeople are customer-oriented and responsive. The strategies needed to attain the corporate object are based on the external factors (which are the threats/opportunities in the industry and the societal expectations) and internal factors (which are the strengths/weaknesses of the company and the personal values of the CEO). The political instability of the country and the passing of the Retail Trade Liberalization Bill threaten the appliance industry. The political instability of the country increases the intensity of rivalry in the industry since it will further slow down the recent industry growth. While the passing of the bill will increase the threat of potential entrants by changing access to distribution channels from high to low barrier to entry. However, the booming of the OT industry and projected economic expansion as promised by the the new economy are the main opportunities of the industry. The integration of IT application to the appliances would further increase the product differentiation as barrier to entry. While economic expansion will lessen the intensity of rivalry since it will stimulate the industry growth. The company has two financial strengths from its value chain. First is the very high current ratio. It is not that the company has a very immense current asset to liquidate rather it has very little current liabilities. Raw materials are being paid in advance. The second is the low operating expense. This gives the company better profit as compared to other players in the industry. Third, is the very efficient and effective sales operations and administration. This establishes a very strong link between Polytron's value chain with its dealers'. Lastly is the most reliable service operation. Polytron Phils. is the only appliance company in the industry that offers 24-hours service response. Brand management is the lone weakness of the company. Lack of market research and weak ad services are the sources of this weakness. The following strategies are formed to meet the fulfillment of the said company objective: - Expand geographic scope through service centers. This will take advantage of the opportunity of economic expansion brought about by the new economy and using the strength in sales operation. - Expand product line and its sources. Same as the first strategy, this also takes advantage of the future economic expansion. While this uses the financial strength (which is the liquidity of the company) to attack other suppliers who can give better cost for the company. - Enhance the uniqueness of the product. This strategy will take advantage of the opportunity brought about by the integration of IT application to appliances. This strategy will also turn the existing weakness in brand management into future strength. Thus Polytron Phils. is expected to shift to a much stronger location in the strategy map in the future.