A. BACKGROUND OF THE CASE San Miguel Corporation (SMC) was originally founded in 1890 as a singleproduct brewery in the Philippines. The Company has since then transformed itself from a beverage, food and packaging business into fuel and oil, energy, power, infrastructure, telecommunications and banking industries. The Company's extensive product portfolio includes beer; liquor; non-alcoholic beverages; poultry; animal feeds; flour, fresh and processed meats; dairy products; coffee; various packaging products; and full range of refined petroleum products. SMC has strategic partnerships with international companies, among them are Kirin Holdings Company, Limited for beer; Hormel Foods International Corporation for processed meats; Nihon Yamamura Glass Company, Ltd. for packaging products; Padma Fund L.P. for toll roads; and Super Coffee Corporation Pte Ltd for coffee. The Company's subsidiaries include San Miguel Brewery, Inc.; Ginebra San Miguel, Inc.; San Miguel Pure Foods Company, Inc.; and Petron Corporation. In the early 1980’s the San Miguel Corporation (SMC) and A. Soriano Corporation (ANSCOR) Group of Companies, under the leadership of Andres Soriano, Jr. addressed a long felt need for an effective formal planning system for the two companies. According to Soriano, the companies had developed their budgeting and long-ranged planning systems several years earlier but, despite the many advantages these gave them they still were not satisfied with their ability to respond to the rapid changes in the environment around them. They therefore, search for a process that would enable them to upgrade their planning capability. In November 1982, Dr. Lorange addressed a joint dinner-meeting of SMC and ANSCOR Group and shares his insights on the implementation of the strategic planning of the two companies.
B. STATEMENT OF THE PROBLEM San Miguel Corporation and ANSCOR Group of Companies headed by Andres Soriano Jr. were concerned about the issues regarding their company. I have encountered thee problems. First is the company’s satisfaction in their ability to adopt or respond to changing environmental conditions. How will they respond to the rapid changes in the environmental conditions? Second, during their implementation phase, the planning process was much time consuming which would really involve more work. And lastly, I have noticed that there were some Business Family and Business Elements who were asking for “handholding” to guide the process.
C. OBJECTIVES For solving the issues I have come up with objectives that would guide me through this study. For the first problem, the objective is to increase the organizations flexibility in responding to environmental changes and to adapt to new environmental opportunities and realities. For the second problem, the objective is to examine loopholes in the planning process in order to know what causes the time too consuming and to develop a strategy for an efficient planning process. For the last problem, the objective is to determine the effects of having no planning manual or “hand-holding” and to decide on the need for developing a planning manual for the planning process.
D. SWOT ANALYSIS D.1 STRENGHTS The company has already established its business for many years. They already engaged in a wide range of businesses which make their company and products known to people. They also have a strong commitment between the top management and employees. D.2 WEAKNESSES They are not flexible enough to adapt to environment changes and they are also weak with regards to the carrying out of their plans and implementation of its task. D.3 OPPORTUNITIES They always have the opportunity to explore to new business area. They can create more effective new planning and processes and propose Team-building workshops that develop a good impact to employees. D.4 THREATS Company’s failure of implementing their strategic plans can be a threat to them. Their competitors as well as the possible potential entrants in the business can also be one.
E. ALTERNATIVE COURSES OF ACTION 1.
Constitute a more active team of managers that is separate from the members of the board in the planning process, develop new strategies based on the past, expand their research to cope up with the future and provide planning manuals to all Business Family and Business Elements. Advantages: - Innovation or upgrade of products will commence following the trend in the environment. - The performance of efficiency and effectiveness of the personnel will be determined. - Plans are materialized and initiated at a small time frame. Disadvantages: - The provisions of manuals to all managers can be costly. - Conflict of perception between managers and bosses may arise. - Inefficiency and ineffectiveness caused by the old strategies may be carried out over to the new strategies. 2. Create a decision team, formulate new strategies and resist giving plan manuals. Advantages: - New strategies may lead to enhanced performance adapting the changes in the environment. - Formation of a decision team would lead to a better decision making and plan implementation. Disadvantages: - Hand-holding will not be lessened without plan manuals. - Reformation of strategies may be time consuming and costly. - Time frame in making decision can be lengthened. 3. No allocation of human resources or cross fertilization and independence in family and element teams’ management decisions. Advantages: - There will be no complex in the strategic planning process. - Will develop independence of work among employees. Disadvantages: - No effective and efficient communication with regards to the strategic planning process. - Loopholes will not be solved. - Inability to adapt to environmental changes due to independence.
F. RECOMMENDATION I would therefore recommend choosing alternative 1 which both companies must constitute more active team of managers in the planning
process to develop new effective strategies and expand their research to cope up in the future. In this alternative, there will be great advantages on the side of the company and to the employees. More active managers in the companies, more effective ideas will be made and realized, and top management will be more open for the new plans and strategies. Expanding researches also broaden the plans and strategies that will enhance their vitality for adapting the future changes and problems. Though setting up the new ideas and planning processes were time consuming but cooperation of the members will shorten the time and produced better plans for the company’s good operations and to achieve the zenith of its success.
Eastern Samar State University Maypangdan, Borongan City
CASE STUDY (San Miguel Corporation and A. Soriano Corporation)
Submitted by: Melcah Janah P. Buhi BSAccountancy 4 Submitted to: Ms. Katherine Camenforte INSTRUCTOR
