A strategic management paper for InfoStructure

• Main Author: Baylon, Dioscoro P.
• Format: text
• Language: English
• Published: Animo Repository 2002
• Subjects: Computer service industry > Philippines; Computer industry > Philippines; Information services industry > Philippines; Business Administration, Management, and Operations
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/2777
• Institution: De La Salle University

InfoStructure operates within the information technology (IT) service industry. This industry encompasses a huge array of products and services, among them: (a) hardware products and maintenance services, (b) software products and maintenance services, (c) processing and internet services. Currently, the company operates under the software products and maintenance services. There are immediate plans to expand into the processing and internet services. Analysis of the changes in the macro-environment that comprise of the social, economic, ecological, technological and politio-legal environments has been made. These changes in the macro-environment are deemed as possible threats to opportunities for the company. The possible threats that the industry should protect itself from are: (1) the passage of E-commerce Act (2) creation of IT parks in different areas (3) RP-ASEAN signing of IT pact (4) signing of H1-B law of the United States and the development of more IT professionals and (5) slowdown in our economic growth and peso weakening. The opportunities that may be exploited by the industry are: (1) increase in IT graduate and enrollees (2) expansion of e-commerce business in Asia and growth of software industry (3) government initiative to make itself IT-ready and capable and (4) emergence of new industries. An analysis of the company using the Value Chain has revealed the following stregths: (1)Capability to invest in high advanced technology (2) proprietary concepts and architectural design (3) proprietary software engineering techniques (4) InfoPartnering (5) use of internet and other web-based tools and (6) strategic location of business office. The same analysis showed the following weaknesses: (1) limiting business architecture (2) lack of formalized business planning and (3) prolonged development of future products. Financial analyses, using the Strategic Profit model shows the following strengths: (1) improved productive asset management displayed by the company, with management running the business with P0.1725 million less investment in productive assets (2) return on equity, ameasure of how much profit is generated for every P1 of shareholder's equity, has shown improvement (3) a P0.75 increase in return of investment translates into P0.736M more net income being earned on a P10,180.70M asset base and (4) the combined effect of an increase in profit margin and decrease in asset turnover resulted in a 25.62 increase in ROA. The same analyses has also shown the following weaknesses: (1) there was a decline in the effectiveness in managing current assets. Days sales tied up in current assets increased form 140 to 205 days (2) the overall increase of 71 days net sakes with current obligations, resulting to the company's practice of increasing the time it takes to pay their supplier indicative of the company's inability to pay obligations as they become due. The strategies were formulated based on the threats and opportunities the industry is facigng, matched with the company's internal strengths and weaknesses, the personal values of the decision-makers and societal expectatons. (1) Fast-track development of BOS/e platform and its components (2) devwelopment of direct alliance with Microsoft and other related companies to secure BOs/etechnology on, for instance, Microsift's DNA and Network platform (3) expand operations by setting-up partnerships in ASEAN, China, Taiwan and Australia (4) expand operations by tapping big companies like multinationals and conglomeartes (5) seek potential joint venture partners and (6) spin-off a new company to handle eEnterprise as an Application Service Provider. By performing the necessary tasks to implement the proposed strategies, InfoStructure will be able to fulfill its vision of becoming one of the most admired IT company in Asia.