Strategic Management: Fastrack Logistics

• Main Author: Banan, Joweehlyn M.
• Format: text
• Language: English
• Published: Animo Repository 2005
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/4538
• Institution: De La Salle University

This paper deals with a start-up trucking company, Fastrack Logistics, which had just formalized the business operations recently after a series of problems in almost every aspect of the company. The company is owned by two young professionals who are pursuing MBA in De La Salle University. Since they are based in Manila, the daily operation is headed by the operations manager who reports the details of operations to the owners on a weekly basis. Fastrack Logistics is mainly operating in Cebu City and generates revenue around the 44 ports in Cebu. Cebus economic condition is promising especially in the trucking industry characterized by an estimated annual increase in port activities of around 9% vis-a -vis truckers increase of barely 5% to 6% annually. The analysis using Porters Five Forces Model reveals that there is not one force that dominates or pulls the market. All the five forces are either moderate or relatively weak which signifies that the company can continue to play fairly well in the industry. The industry condition is the anchor of the companys planned expansion in the next three years. It intends to purchase nine new trucks in the next three years specifically boom trucks and 10-wheelers which are currently not part of the companys portfolio and are the highest contributions of lost sales/opportunity losses. The acquisitions will be done on an 18-month period with financing rates that range from 13% for government supported loans (RA 9178)to 18% for financing arrangements done directly with a motor sales company. On a best case scenario, this interest rate can be negotiated to 16% while a worst case scenario would raise the rate to as high as 20% for the same18-month financing term. The expansion program will also call for the company to look for other sources of revenue like Del Monte Phils. which assures the business of a fixed and steady income. Aside from expansion program, the company also plans to tighten controls in the operations, establish employee performance evaluation, improve overall customer service level, and introduce employee benefits and perks to counter the existing high delivers turn over rate. Aside from that, supplier and customer relationship will also be reinforced while maintaining high quality level of service and reduced truck down time. The financial projections done on three different scenarios (normal, best, and worst) reveals that the company will still be in the earning range even if the desired number of trips per month will not be achieved. With this, the planned purchase of new trucks will be justified.