Corporate strategy for 88M Food Industries, Inc.

• Main Author: Gotua, Wendy
• Format: text
• Language: English
• Published: Animo Repository 1999
• Subjects: Business Administration, Management, and Operations
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/2164
• Institution: De La Salle University

The major eating patterns of Filipino consumers have changed dramatically over the past decades. Historically, spent much of their time in the pursuit and preparation of foods which required a number of preparatory steps to make them ready for consumption. Today, with the overall economic and social changes, a new set of priorities and preferences evolved and time became more of a luxury. Convenience and minimum time requirements are now critical considerations for eating. Todays average Filipino familys meal is usually comprised of processed food which require little or no preparation. Convenience is now one of the important attributes of food products. Filipino are more willing to pay more to buy convenient food. 88 M Food Industries, Inc. satisfies the modern consumers need for food that is convenient which require little or no preparation. It caters to the middle income and above. The company answers this need through the manufacturing of processed meat. 88 M belongs to the food processing industry. Using the five forces framework by Michael Porter, there were several conclusions which were derived. One is that this industry has a high threat of entry because entrants need to come in at large scale, there is absence of switching cost and low capital requirement. Buyers of the industry have a low bargaining power because they purchase small volumes relative to seller sales and the products buyers purchases from the industry does not represent a significant fraction of the buyers purchases. But the industrys channels have a high bargaining power because the products these channels purchases from the industry are standard, it faces no switching cost and channels pose a threat of backward integration. There is high intensity of rivalry among competitors in this industry because there are numerous competitors, high threat of substitute for the industrys product, as such this could result to non-use or lower usage rate. Finally, there is low bargaining power of suppliers because the food processing industry is an important customer of the supplier, the products are not differentiated and it has no built-up switching cost. In scanning the environment, there are certain opportunities and threats which the industry will be facing. The opportunities that it should take advantage of are: the increase in consumer demand for food, shift in urban consumption behaviour and export potential. On the other hand, there are certain threats which the industry should watch out for. These are: increased globalization and liberalization, declining growth in population, increase in demand for more healthy food, increasing concern for the environment, and increasing competition. 88 M Food Industries, being a small company, aims to increase its market share by 250% and its ROI to 20% by the year 2003. Its long term vision is to exceed world class standards in providing people with healthy and quality meals that will life easier. It has adapted differentiation as a generic strategy and its specific strategies are: (1) increase value-added of products (2) expand product line to have a range of 10 to 15 products types (3) compete in the class A, B, C market and (4) continue serving present geographic area. These strategies were formulated in order to address the threats and opportunities they will be facing. 88 M is no far from reaching its goals because its strategies can be supported by its capabilities such s their ability to offer new and unique products, excess capacity, competitive product packaging, reputation among its customers of offering high quality products, its ability to meet current obligations with ease and its capacity to raise additional investments.