D.M. Consunji, Inc.: strategy proposal

• Main Author: Maisog, Renato B.
• Format: text
• Language: English
• Published: Animo Repository 1997
• Subjects: Business Administration, Management, and Operations
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/2187
• Institution: De La Salle University

This study focused on D.M. Consunji, Inc., a subsidiary of DMCI Holdings, Inc.. Its current business is in construction contracting, where the company offers services to construct infrastructures mainly in the area of buildings and civil works. Established in 1954, DMCI has now become the largest construction company in terms of revenue in the Philippines, having completed over 450 diverse projects. For the years 1993, 1994 & 1995, DMCI was the top grosser in revenue, among the leading contractor in the Philippines. Its long-term objectives are to be a world class construction company and a market leader in its targeted market segments. Externally, the company is facing the prospects of an expanding construction market as well as fierce competition. There were 583 more contractors registered in 1994, a 9% increase to 6, 997 from 6, 414 in 1993. Accounting for more than 5% of the industry gross domestic products (GDP), the construction industry is the major beneficiary of the rapid industrialization in the Philippines. Statistics from the Construction Industry Authority of the Philippines (CIAP) reveal that construction activities have grown by an average of 6.05% from 1991 to 1993. CIAP expects this growth to continue with the industry growing by an average of 7.44% during the next four years. While private investments are expected to grow by 5.78%, government spending is projected to grow by a higher annual rate of 9.52%. Internally, it is faced with an increase of gross profit margins, for the past three years with its position as a market share leader (from 14% in 1993 to 17% and 19% in 1994-95). Its GP rate of 19% is above the industry standard that is just below 16%. The company has a capacity to construct 60 high-rise building at one time. At present, DMCI is busy with approximately 40 high-rise construction projects. It uses its own pool of equipment for all of its projects. DMCI is reputed to have the largest equipment pool of all the Philippine construction companies, valued at market value of P 899 million. Shown by the table below, most of DMCIs equipment is of younger age than that of the industry average under class AAA category. We are looking for a corporate strategy that can further improve the companys performance in the next two years. The external environment of the industry and the internal conditions of the company determine the strategy. From the analysis of these two factors namely industry analysis and company analysis we will come up with SWOT profile of the company that will be used as a basis for strategy.