Corporate strategy for Unitread Systems Incorporated

• Main Author: Gonzales, Mark A.
• Format: text
• Language: English
• Published: Animo Repository 1998
• Subjects: Business Administration, Management, and Operations
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/2163
• Institution: De La Salle University

With the escalating pressures from competitors adjoined with new rules in technology, USI should start fortifying its position through the embarkment in strategic planning. This move will enable the company to protect itself from the environmental threats, and convert its internal weaknesses to strengths. It will even give them the competence to take advantage of the opportunities lingering around its environment. The future of todays organizations depend on how well they respond on to the environment changes. The macro-environmental analysis consists of four complementary activities. These include scanning, monitoring forecasting and assessing. The Philippines as well as its neighboring countries are sharing the financial contagion in the region. From a 5.8% growth rate in 1997, the company is expected to slowdown to 1.2% by the end of 1988. However, this is just transitory. It is foreseen by 1999 that this will accelerate to 4.2% on the back of healthy export growth, robust consumption and rebound in investments, as confidence in the new administrations build up. This promising growth is anticipated to last until the end of the millennium. The construction sector is the leading industry in terms of growth rate. This sector increased to 16.3% in 1997, higher than the preceding year of 10.9%. The property development will still be the promising leader in terms of growth focusing on Grade A, low and middle income housing, and the retail commercial. The new administration of President Estrada has vowed not only to continue, but to reinforce as well, the reforms initiated by his predecessor. Modernization of agriculture is prioritized by entailing massive investment in irrigation, infrastructure, and research & development. The composition of President Estradas cabinet, which is mostly well respected businessmen, reinforces the confidence of the market friendly pursuit for reforms. The apprehensions over cronyism have been diminished in the face of stronger democratic institutions through the fiscal role of the reform minded senate, church, and because of the need to boost investor confidence for the much needed financing of the reform programs. The environment where USI is evolving serves the distinct need of a multi billion recapping market. This industry addresses the need for a medium that will enable land vehicles to have a good grip on the road. It is primarily dominated by small to medium firms. Today, there are over 100 odd & legitimate recappers all over the Philippines, which make it a very fragmented industry. Others are called odd recappers or service centers, or commonly known as back yard operators because of the crude methods, machines and inferior materials they employ in their services. They are usually active in the countryside or in the suburbs, where stringent standards are poorly enforced. Their behavior adversely affects the legitimate service centers, these are the firms that employ high technology in service, inspection procedures and processing rendering their service, because of the tainting image they induce to the industry. The size of recapping market can best be understood by analyzing the vehicle population in the Philippines. It is populated with trucks followed by for hire vehicles, which includes taxis, then buses, and trailers. These vehicles are more inclined to cost reduction programs sue to the nature of their business. Tires constitute their second largest expenditure next to fuel. Considering the need of these fleets, the market is approximately between P7 to P8 billion pesos. Competition differs from one environment to another. Majority of the recappers are operating within the Metro Manila region, where most of the businesses are situated. Bus and truck operators are the primary customers of the recapping firms. Obviously, this is because of the nature of their business and needs. The main material for recapping is the camel back. This is thread adhered on the surface of a worn out tire. To maximize the profit potential of any recapping firm, integrating backward will address this opportunity. Almost 50% of recappers, especially those that are operating in Metro Manila have been enjoying this position. Recappers employ two types of technology. These are the hot and cold processes. There is nothing divergent between the two in terms of quality, but they exist due to economic s in plant operations.