Bonifacio Global City Case Study

I.

Point of View

 The researcher researcher took ING Barings (managerial (managerial consultant) point of view. view.

II.   

Objectives  To  To be able to indentify factors (!"T#driven) (!"T#driven) in which the company can utili$e to promote sustainable development%  To  To be able to know the e&ective utili$ation of these factors (!"T# (!"T# driven) through the help of strategic strategic marketing% marketing% 'nd 'nd to be able able to help help solve solve the company companys s probl problem em throug through h the utili$ation of the concepts of trategic *arketing. *arketing.

III.

Problem of of th the Ca Case

 The main problem of the case evolved from the simple consideration of  the e+ternal e+ternal factors such us the instability of the ,nancial performance of the economy especially during the late -/s to the e+tent of considering the company internal deliberations. The internal factors mainly happened to be the payme payment nt of debts debts in the short short#te #term rm.. The cost cost initia initiall lly y outwei outweighs ghs the bene,ts and to write o& these costs only give problem to the developer. developer.

IV.

Areas of of Co Consideration

a. Compan Company y Backgro Backgrond nd 0ort Bonifacio is the home of the 1hilippine 'rmy in an a n underdeveloped stretc stretch h of land land in the area of Taguig aguig in *etr *etro o *anila *anila.. In *arch *arch - -2 2 the '3uino administration signed a 4epublic 'ct mandating the conversion of  this military reservations into alternative productive uses. The pro+imity of  0ort Bonifacio to the business hub of *anila makes it an ideal development site for a state#of#the#art business center. ince the countrys governing boy has to do some other things in other priorities the concept of priviti$ation takes place. Bidding Biddin g was held on 5anuary 5anuary 6 - -7 7 where where top corpor corporati ations ons were were pres presen ent. t. The The ,nal ,nal bidd bidder er who who won won in the the bidd biddin ing g was was the the *etr *etro o 1aci, aci,c c 8orporation (*18). They ac3uire the property for 1hp 9.2 billion pesos or at about 1hp99/// per s3uare meter over their tough competitor the 'yala land who bid for the property for 1hp///. The latter has been known in the industry as the developer of the *akati business con,gurations.

's the winning bidder *18 was granted a 77 percent share of the 0ort Bonifacio :evelopment 8orporation (0B:8) the body tasked to develop the former military base. The other ;7 percent share remained as government property under the Bases 8onversion and :evelopment 'uthority (B8:'). 'fter winning the bidding intensive plans for the immediate development has to be ,nali$ed. The aim of developing the property into something productive made them to strategi$e and will view the property in the future as the dream city or the city of the future through the inowever not until the -? 'sian ,nancial crisis the company e+perienced ma
b. Persons and Companies Involved in the Case  The companies involved were *etro 1aci,c 8orporation Bonifacio =and 8orporation 0irst 1aci,c 'yala =and Inc. and 1hilippine tock +change. ING Barings was hired for consultancy. 1ersons also mentioned were the president and 8" 4icardo 1ascua 1 building committee chair Ismael 8ru$ and *anuel C. 1angilinan *18 chairman.

V.

!"O# Analysis

!trengths$ 

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Strategic Location. *ain hub for business enterprises and other related business since it is known as the city within a city through its strategic location. Convenience. 8onsidering the ambience and the readiness of the property towards convenient workplace enables us to identify that the itself is set to be convenient provided that it is near other ma
"eaknesses$    

:iDculty on obtaining ,nancing to cover its current obligation :ebts structure was mainly short#term arnings from investors are not enough to cover all its ,nancial obligation =ack of suDcient fund for the pro
Opportnities$ 

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Large-Scale Investments.  The very big opportunity the property can o&er is the large market it will serve. This sums up all the above# mentioned internal strengths. Working towards Globalization. !hen the businesses found competitive advantage in the marketplace when they embrace globali$ation the property will be embracing it as well. This links to global e+posure. Referrals. !hen the services of the property are e+emplary andEor e+cellent invitation to bid for certain partition of the property will be positively be identi,ed. Geometric !"onential #rogression and Geogra"$ic Ac%&isition.  This is the concept of of internal growth and e+pansion. !hen a certain

property performs well e+pansion is at reach to eDciently deliver the services.

#hreats$ 

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'olatility on Sec&rity. !hen the property is volatile threats such as terrorism and other security related incidents are of suspicious probability. Geogra"$ic (ist&rbances. This pertains to uncontrollable phenomena in the environmental aspects or nature of the property. Geogra"$ic Com"etition. 's stated above internal competition brought up the propertys weakness. In this case geographic competition trigger the propertys development. nvironmental Iss&es. ince diversi,ed businesses are in the propertys internal consideration e+ternal weakness or the threat in simpliest form is also attributable to the business environmental issues which is covered by the propertys administration.

VI.

Alternative Corses of Action

'lternative -. )*n Sale+   This alternative dictates the company will sell some of their shares in order to write o& their debts in the short#term since the income in developing the BG8 will o&er long term pro,t that cannot be used to pay their current short term debts. The concept will be bene,cial especially if the company is protecting core businesses while disposing the inactive.

'lternative 2. ),ridge Loan+   bridge loan can cover the short term debts and cost of  operation that *18 is facing. hort term ,nancing though carry a risk on higher interest rates that the *18 cannot a&ord anymore.

'lternative 9. )erger+. *erging can be bene,cial to *18 but not to 'yala =ands at the moment since *18 incurred more short term loans and the 'yala =ands wanted to own the area for concreting its hold in real estate business and maybe the latter will not o&er merger but purchase on share.

VII.

Conclsion

'fter scrutini$ing the above alternatives the researcher will o&er the ,rst alternative. The money that will be getting in selling some of the shares can be utili$e to pay the e+isting debts and can be used to develop what *18 has already started.

VIII. %ecommendation *18 should handle better portfolio management to improve business on remaining shares. The priority will be payment of the current short term debts and development of what are already started since for sure it will incur pro,t even if its long term.