Chapter 4 REVISED (1)

Andok’s Litson Manok Corporation 4-BLM Leader: Edzil Cabatay Members: Darien Anthony Nañadiego John Lester E. Navarro Mikko Santiago

Chapter 4 External Analysis This chapter will discuss the External Factor Evaluation (EFE) matrix method, it is a strategic-management tool often used for assessment of current business conditions. The EFE matrix is a good tool to visualize and prioritize the opportunities and threats that a business is facing. External factors assessed in the EFE matrix are the ones that are subjected to the will of economic, socio culture, environmental, political/legal and demographic forces. A. General Environment A1. Economic Forces Consumers tend to spend more as the economy look more favorable. Some of them do not only base their decisions on the economic outlook of the country; they also make decisions based on what the condition of the foreign markets. Companies must always consider the economic standing of their target market. Consumers’ income, savings, debt and credit availability are all deciding factors in whether they will be able to buy or not. The economy of the Philippines is the 4th largest economy in South East Asia and the 35th largest economy in the world by purchasing power parity according to the World Bank in 2009. For the first quarter of 2010, the economy grew by 7.3% which was higher than the 3.6% forecast. At the end of the second quarter of 2010, GDP growth again exceeded expectations by coming in at 7.9%. According to IMF, the Philippines will be the second-fastest growing economy among the ASEAN 5 in 2010 with a forecasted growth rate of 7% after Thailand's 7.5%. The good outlook of the economy for this year is a good sign for Andok’s overall sales, for this may signify higher purchasing capabilities for consumers. Key Economic Findings 1. Income Distribution 2. 3.

Debt availability Credit Availability

Source https://en.wikipedia.org/wiki/Income_inequality_in_the_Philipp ines http://dwhp.com/images/debt_e.pdf http://www.federalreserve.gov/publications/otherreports/files/sbfreport2012.pdf

4.

Savings Availability

http://www.tradingeconomics.com/philippines/personalsavings

A.1.1. Income Distribution

Table A.1.1.

The different GDP per sector includes agriculture, industry and service. Service sector shares the biggest part having 55.1%, followed by the industry with 29.9% and then the agricultural division contributing 14.9%.Summing this up, the total GDP economic growth totaled 6.5%. Litson Manok Market is under of the Food Industry. Food industry plays a big part in our society

A.1.2. Debt Availability The current debt of the Philippines in World Bank is $53,140,000,000which is lower from the previous years. Most Filipinos are still in debt; debt son banks, companies, etc; and even on loan sharks and individuals. Purchasing decisions of

consumers are affected for a portion amount of money must be allocated for paying debts A.1.3 Credit Availability Retail banking in the Philippines continues to grow, with consumer loans accounting for only about 10% of total bank lending and less than 5%of GDP. The consumptiondriven nature of the economy produces strong demand for consumer loans, with personal expenditure making up 77% of GDP (Fitch Ratings 2006). In return, banks have recently focused insistently on retail lending, which is experiencing growth rates of more than 10% per annum. An important determinant of consumer spending is access to credit by consumers through various lending institutions. Higher availability of cred its means higher number of possible sources of finances for consumers’ purchases A.1.4. Savings Availability The Philippines has a relatively developed financial system and a highly monetarized economy, with a ratio of savings in banks/GDP of 75percent.Interviews revealed a widespread belief that Filipinos are consumption-oriented, with little desire or capacity to save according to Consultative Group to Assist the Poor (CGAP).

In contrast, Filipinos are

thought by many using credit for daily needs. However, evidences suggest that poor and low-income Filipinos do save, or at least have the capacity todo so. Informal savings mechanisms, like ROSCAs (called paluwagan ordajong) or stashing money into alcancia bamboo poles or piggy bank at home, seem to be widespread throughout the country. Self-help or solidarity groups that conduct savings and credit activities are also common. Market research by financial institutions provides further evidence that low-income clients do save.

A survey by a microenterprise

bank in the out skirts of Manila, for example, revealed that 75 percent of respondents had savings in commercial banks. Moreover, the majority of their interaction with banks occurred in the context of saving rather than taking loans. In contrast,a recent survey in smaller cities of the Philippines finds that nearly two-thirds of people in urban areas

keep their savings at home. Only 9.7 percent save in rural banks, 2.2 percent in commercial/thrift banks, and 9.4 percent in cooperatives. The bottom line of all these facts, Filipinos do save. This implies good purchase capabilities for Filipinos

Analysis of the Economic Forces The robust economic growth of the country affects businesses in high

the market. Local companies are too seizing a wider market to prosp

Monitoring

selecting a new target market and expanding the range of their produ

strategic position. Expansion of the company in a wider market gives opportunity to the

having new target market that will help the company in attaining the g

Forecasting

company in the global market will uphold a successful business in de

O1. Build strategic acquisition/alliances to manufactures and inside b

O2. Will create big opportunities in conquering the global market. T1. New entrants in the market growth of other litson manok food bu

Assessment

eds.

T2. Other litson manok business are slowly penetrating the same ma

A2. Social, Cultural, Demographic and Natural Environment Forces Social, Cultural, Demographic and Natural Environment Forces have a major impact upon virtually products, services, markets and costumers. Small, large, for profit and non-profit organizations in all industries are being staggered and challenge by the opportunities and threats arising from changes in social, cultural, demographic and environmental activities. Key Social, Cultural, Demographic and Natural

Source

Environment Forces 1. Population

Research

2.

Age Structure

Research

3.

Urbanization

Research

4.

Filipino as People

Research

5.

Filipino as Partners

Research

6.

Eating Habits and Hospitality

Research

A.2.1 Population The Philippine, where several Andok’s stores are located, has 99,900,177. Approximately, 40,000,000 are the target consumers of Andok’s. These people are those whose age range from 15-64, from the working class to upper class, and live in areas where Andok’s can be possibly found. Population growth rate is 1.931%.

A.2.2. Age structure Andok’s buyers tend to cover the widest age range having 60.6% of the whole population. These are the buyers whose ages are 15-64 years old. These are the consumers who have the capacity to decide and to buy Andok’s products, thus they are the most frequent buyers. The population of ages 0-14 years old, making 35.2% which is second from the widest, is significant for they have a moderate to high impact on the decision making of the buyers, especially those who are in families. The portion which 65 years old and above covers, 4.1%, has so little effect for factors such as capacity to buy A.2.3. Urbnanization

65% of Philippines’ total population is considered urban population with3% annual rate of change as estimated for the years 2005 to 2010. This signifies a good opportunity for the expansion of lits on manok market. Income opportunities are concentrated in urban areas, thus high number of sales can be expected here. Consumers are capable of buying such products with their good income. These make urban areas suitable for more litson manok outlets A.2.4. Filipinos as People Filipinos place great importance on faith and education, influenced by its history of Spanish colonization and American occupation. Majority of Filipinos are Roman Catholics, with the Church playing a significant role in the people’s social and cultural lives. Only Mindanao, the southern island cluster in the country, embraced Islam, which was introduced to the region by Arab traders in the past. Feasts and gatherings are very common on different groups. Food is one of the main requirements of Filipino gatherings. Adult literacy rate in the Philippines is among the highest in the world, at about 95%. Proceeding to graduate school is popular among middle- and upper-class Filipinos, especially those involved in business. A typical school year begins in June and ends in March. The official language used in both public and private schools is English, but Filipino (mainly based in Tagalog) is widely spoken. A.2.5. Filipinos as Partners Filipinos give high importance to establishing good personal relations with their business contacts. They are trusting and friendly, and value affable but professional business relationships. Nowadays, franchising of different businesses is very rampant in the country, and most of them are food stalls. A.2.6. Eating Habits & Hospitality Naturally, Filipinos are hospitable and generous as a nation, whether you are a local visitor or a foreigner to a certain place, Filipinos will accommodate it with full hospitality and will make sure that the visitors do really feel how great it is to be a Filipino. Many Filipinos also love to eat. Food and diet is important in their social life. The eating

schedules of Filipinos are usually five times per day as they include snacks on their everyday meal. However, people would like to prefer foods that can easily be prepared or eaten, and also in today’s fast-phased generation, people would likely consume products that can be easily bought such as fast food and grilled products. Analysis of the Social, Cultural, Demographic and Natural Environment Forces Monitoring

If people insist, or if there's an abundance of food such as at a weddi Significant increase on the poultry production exists because of the

Forecasting

Philippines imports chicken from other countries because of huge de O1. Building costumer relationship loyalties maintain the target marke O2. 60% of family expenditures go to food, generally speaking, it

Assessment

Is a necessity for everyone. This is an opportunity for food industry T1. Filipinos becoming more health conscious T2. Filipinos can grill their own food rather than buying it.

A3. Political, Governmental and Legal Forces The production, processing, distribution, retail, packaging and labelling of food stuffs are governed by a mass of laws, regulations, codes of practice and guidance. The Bureau of Food and Drugs is concerned with the whole food industry – from farming, food production and distribution, to retail and catering. It addresses food safety issues at every stage of the chain, providing information and guidance on best practice and legal requirements Key Political, Governmental and Legal Forces 1. Philippines – Regulations and 2. 3.

Standards Regulatory issues Registration on BFAD

Source http://www.bps.dti.gov.ph/ http://prc.gov.ph/prb/default.aspx http://www.fda.gov.ph/industrycorner/downloadables/222-food-

4.

Republic Act No. 10667

registration-requirements http://www.gov.ph/2015/07/21/repub lic-act-no-10667/

A.3.1. Philippines - Regulations & Standards The regulation of food in the Republic of the Philippines is enshrined in the 1987 Philippine Constitution. Statutory laws are also in place providing legal basis for the creation of a regulatory agency, the Bureau of Food and Drugs (BFAD), mandated to ensure the safety, efficacy and good quality of all food products being made available to the general public - "it is the policy of the state to ensure safe and good quality food, drug and cosmetics and regulate the production, sale and traffic of the same to protect the health of the consumer". The most important of these laws is the Republic Act (RA) 3720 "Foods, Drugs, Medical Devices and Cosmetics Act". Regulation is achieved through inspection and licensing of food establishments, registration and market monitoring of products, approval of product label prior to marketing, and approval and monitoring of promotions and advertisements. International standards and guidelines such as those recommended by the WHO, USP or BP, FAO and Codex Aliment Arius are used as a basis in the formulation and implementation of rules and regulations governing the manufacture, importation, exportation, distribution, or sale of food. In 2009 a new law was signed strengthening the regulatory capacity of the BFAD to ensure the safety, quality and efficacy of medicines and other health products in the Philippines. Republic Act No. 9711, otherwise known as the Food & Drug Administration Act of 2009, also renames the BFAD as the Food & Drug Administration (FDA) with improved administrative and technical capacity in the regulation of food, drugs, cosmetics and device establishments and products.

A.3.2. Regulatory Issues To prevent the occurrence of unfair trade practices, the government has implemented a series of policies to govern the retail trade sector. Some of these policies include: The Price Act of 1991 (RA 7581) which protects consumers from price manipulation such as hoarding, profiteering, and

cartels; the Consumer Act of the Philippines (RA 7394) which penalizes certain acts such as deceptive, unfair, and unconscionable sales practices in both goods and credit transactions. It is the Department of Trade and Industry (DTI) which is tasked to implement these policies through their consumer protection program. A.3.3. Registration on BFAD Establishments involved in the manufacture, packaging, re-packaging, importation, exportation, distribution, and retailing of processed foods, drugs, medical devices, in vitro diagnostic reagents, cosmetics, and household hazardous substance products must secure a License to Operate from BFAD. A local company in the Philippines must secure a License to Operate (LTO) from BFAD before applying for product registration. All issuances and guidelines, checklists of requirements, and forms pertaining to licensing of establishments and product registration may be downloaded from the BFAD Website: http://www.bfad.gov.ph.Fees are listed in Administrative Order No. 50s. 2001: Revised 2001Schedule of Fees and Charges for the Corresponding Services Rendered by the Bureau of Food and Drugs A.3.4. Republic Act No. 10667 AN ACT PROVIDING FOR NATIONAL COMPETITION POLICY PROHIBITNG ANTICOMPETITIVE AGREEMENTS, ABUSE OF DOMINANT POSITION AND ANTICOMPETITIVE MERGERS AD ACQUISITIONS, ESTABLISHING THE PHILIPPINE COMPETITION COMMISSION AND APPROPRIATING FUNDS THEREOF. The market competition serves the interest of consumers by allowing them to exercise their right of choice over goods and services offered in the market. This is to attain more equitable distribution of opportunities, income and wealth. There will be no combination in of restraint trade and unfair competition will not be allowed by the government. It aims to sustain the increase in the amount of goods and services produced by the nation for the benefit of the people. Thus, the State shall enhance economic efficiency, control the production distribution, trade, or industry, and penalize all forms of anti-competitive agreements. The act is presented to the business or enterprise alone and shall not

apply to the combinations of workers or employees. It is in the agreements or arrangements designed in the employment.

Analysis of the Political, Governmental and Legal Forces The Republic Act covers the strong competition between businesses Monitoring

Forecasting

competition will sustain the company growth in highlighting its strateg

target market. Andoks Also, the law penalizes those companies that a The competition law helps the company in identifying the major comp

company O1. For the past years served by the company Andoks, the governme opportunities in serving the products to a new market.

O2. Company will pursue its strategy with the right documentation se Assessment

strategy will be implemented with the help of the government. T1. Health trends changing costumer demands because it is affecting carcinogen ad bird flu.

T2. There will be a slower process in implementation of strategies for government and all strategies will be marked up accordingly.

A4. Technological Forces Roasting is a dry-heat method of cooking whereby meat or poultry is cooked on a spit over a fire or in a pan in an oven. Roasting began in prehistoric time when the first human stuck a piece of meat on a stick and held it over a fire. Spit-roasting fowl and game was common in ancient societies. Roasting, perhaps because it requires prodigious amounts of fuel and large pieces of meat, has always been considered the most prestigious form of cooking. Technology brings significant benefits on the consumers and the food industry by eliminating boundaries in quality, quantity and reducing costs. The food industry continues to develop by applying latest technologies that produce us healthier, fresher and more varied food. Nowadays, the food industry

offers a huge variety of foods, at a better quality and lower price compared in the past. Thus, satisfy a wider range of consumers. Advanced technologies are used in all the parts of food production. The first step is benefit on evaluating and improving the quality of the raw ingredients used. Next, they're used in the preparation stage such as shipping and handling of materials. The last stage of processing food will make use of methods like conservation and separation, possible adding new ingredients to produce the final product. The packaging process is now cheaper and more refined, with the existence of new materials that can be used to wrap or seal items. New machines are also used to create the packaging and automate this process to take full advantage of efficiency and diminish costs. Food quality and safety have both improved because new technologies allow the companies to easily follow the international standards and regulations regarding the contents of products. They strive to improve the processing of food, by using less harmful chemical substances. Currently, the food industry has been focusing and discovering of new ways to produce healthy, ecological food, by using natural ingredients. Key Technological Forces 1. Latest Technology used on Litson Manok 2. Convenience for customers in delivering 3. 4.

goods and services. Right mobility platform for businesses Essential for nearly for every strategic

Source Research Research Research Research

decision

A.4.1. Latest Technology Used on Litson Manok Market Rotisserie is a way of roasting where meat is skewered on a spit - along solid rod used to hold food while it is being cooked over a fire or roasted in an oven. The rotation cooks the meat evenly in its own juices and allows easy way for continuous basting if desired. It is a mechanical device used for rotisserie cooking, or to a restaurant specializing in spit-roasted meat and chicken. Gross expenditure on R&D in Philippines for Food and Nutrition Development (Budget Appropriation from the Congress)

Republic of the Philippines Republic Act No. 9970 GENERAL APPROPRIATION ACT Fiscal Year 2010 FOOD AND NUTRITION RESEARCH INSTITUTE A. PROGRAMS I. General Administration and Support a. General Administration and Support Services

P 21,081,000

b. Sub-Total, General Administration and Support

21,081,000

--------------- --------------- --------------II. Operations a. Research and Development Services on Food and Nutrition 40,942,000 b. Technical Services on Food and Nutrition 38,058,000 TOTAL NEW APPROPRIATIONS

P 100,081,000

=============== =============== =============== Special Provision(s) I. General Administration and Support a. General Administration and Support Services b. General management and supervision

P 21,081,000 18,467,000

A.4.2. Convenience for customers in delivering goods and services. In the business industry, most fast food chains are already conquering most of the market. The demand for convenience by the customers is what the business does in enriching their brand image amongst its competitors. Outsourcing the call enter delivery pave way for a lot opportunities to a business in delivering goods and offering convenience to its target market. Sterling Global, a service customer contact company, has been performing a very good service to its account namely the Jollibee Food Corporation (JFC). It was established in 2003 owned by Sterling Paper Group of Companies. They handle popular local companies in the Philippines like Jollibee and Chowking. Other companies also outsourced their call center services like MCDonalds that was originally held by an Indian call center company. Call center companies deliver services by contacting restaurant branches that is under their account. Other business handles its own call center services. However, there is a limitation in servicing a certain places. Other places are not reachable by the delivery system of the company. A.4.3. Right mobility platform for businesses Choosing the right mobility platform in increasing the company’s’ brand image Companies are now creating their image based on what is trending. They are engage in connecting them to the wide market by using the mobile app what most people use. The reason that enterprise mobility platforms have become so popular is twofold. First, there’s the simple fact that basically every company needs its own application to stay relevant and competitive and then the fact that this app needs to be unique to that business’ specific needs and market. Applications are now in demand because of the fast growing of smart phones used by the consumers. There is a way on how you will bring your products to the customer without putting up an establishment near them. Choosing the mobility platform can make or break your business. Be smart upfront by demoing a platform before paying for it. The good sense of software leads you to have a better future. The connection of the company and the customer will let the company find its potential target market.

Analysis of the Technological Forces

The call center industry has been a partner of most establishments in

center services is to add up convenience in the customers’ part in ord Monitoring

restaurant. Andoks are to maximize on what is common to all establis

how to step up in delivering products and services to its customer. Th

communication of Andoks and different customers will be at ease. All

forwarded to the nearest outlet who’ll be serving the customer. Andoks Company already has its own mobility platform. The compan Forecasting

displaying and servicing the customer through its application. There i

because there is a slow innovation done by the company servicing lim O1. Andoks has the appropriate technology, manpower and skills to be the nation’s representative livestock product.

O2. Andoks is building a supple chain with the shortest distance betw Assessment

nation and customer farms. T1. The micro, small, medium and large enterprises will be benefited heights to become more globally competitive.

T2. There is just a weak point in choosing the platform because there servicing limited customer.

A5. Competitive Forces Competition is very high in litson manok market because of high rivalry coming from low differentiation on the products and services being offered. Even “pop- ups” chicken stores also take their place in the market. These are individuals who have the machine, supplies, and financial capability that allows them to operate a litson manok store. Price challenge is a vital issue for the industry participants because of the standardized products that often have nearly the same features. Existing companies offer prices that have little differences. This adds up to the stiff competition. Andok’s Litson Corporation ANDOK'S offers its patrons the best quality litson manok (roasted

chicken)and dokito frito (fried chicken). ANDOK'S now has approximately 150 SKUs (Stock-keeping unit) offered in the market, and is likely to grow in order to meet the demands of its valued customers. ANDOK'S main business thrust has always been to provide high quality products at affordable prices. Key Competitive Forces 1. Globally Competitive 2. Service Quality 3. Established Name 4. Customer Loyalty

Source Research Research Research Research

A.5.1. Sr. Pedro (Competitor 1) Sr. Pedro is founded by Mr. Pedro Molina, a native Filipino entered in the world of business. In Manila alone, there are over 60 Sr. Pedro outlets which makes. Pedro more competitive and competent. Sr. Pedro is considered one of the leading fast casual restaurants in the country with branches abroad and continues improving. As such, Sr. Pedro focuses on inviting dynamic, responsible and quality oriented people to join their company. They provide good working environment and opportunity for personal, professional, and career development. Sr. Pedro believes that the company should provide their customers the right people for the right job. Their employees are equipped with the necessary tools and knowledge to perform at peak levels A.5.2. Mang Bok’s Manok (Competitor 2) Mang Bok’s focuses on quality, cleanliness, and their very unique way of packaging. The roasted products can be taken home in specially designed styro-foam packages that are very hygienic and easy to carry. Its mission is to provide customer with high quality thru value for money and to improve on existing product lines thru continuing product research and development. It aims to stay ahead of competition by making the Mang Bok’s Manok name synonymous to high quality and value. The management decided to further expand the business thru franchising and aims to establish more outlets nationwide. A.5.3. Table: Critical Success Factor

1. Branches

It is to show the number of branches each business has in the wide market to see the effectiveness of its expansion. Andoks rating is 4 because the branches of Andok are in continuously increasing because of open franchising of different businessman. Mang Bok’s Manok rating is 4 because the branches of Mang Bok’s target where there are many people around the place and expand it as a fast food chain. An Lechon Manok ni Sr. Pedro rating is 2 because the business has a big number in the marketplace where many people go to.

2. Service

CSF and importance weight determines the quality of service the consumers are experiencing. Andoks services’ are very interactive and convenient in a way that they have “to-go” format and dine-in. Mang Bok’s Manok is quite lining up in a fast food chain in delivering services fast for the customers. Ang Manok ni Sr. Pedro has similarities in its competitors but here, there is a lack of service in meeting the customers need. Andoks, and MAng Bok’s Manok has the same rating of 4 while Ang Manok ni Sr. Pedro got 3.

3. Quality of products

CSF and importance weight is to determine the competitive advantage of the products in the similar product line offered by different businesses. Andoks

rating is 3, it has been proven through years the quality of products served by the company. Mang Bok’s Manok rating is 4, they serves not only roasted chicken but also different product line to meet the satisfaction of customers. Ang Lechon Manok ni Sr. Pedro rating is 3, they serves high quality of products but there is a lack 4. Variety of products

in presenting it. CSF and importance weight is to determine the variety of products offered. There are other products that Andoks is offering such as Dokito, Barbecue, Porkcharap, BBQ Liempo, Litson Bangus and Liempo. MAng Bok’s Manok only has 4 products to offer with their customers like Mang Bok’s Litson Manok, Special Chicharon with Laman, Manok and Liempo. Lastly, Ang Lechon Manok ni Sr. Pedro has three products, Sr. Pedro Lechon Manok, Liempo and Atsara

.

Andoks has the rating of 4 while the Mang Bok’s Manok and Ang Lechon Manok ni 5. Price of Product

Sr. Pedro also have the same rating of 1. It is to show how affordable the products are in the businesses. Here are the list prices of the products of different companies. Andoks rating is 4, Mang Bok’s Manok is 3, Ang Manok ni Sr.

6. Market Positioning

Pedro is 1. CSF and importance weight determines how effective the strategy of a business in

positioning the establishment. Andoks are now present to different municipalities in Metro Manila and provinces.. They also present in Metro Manila and selected provinces. Mang Bok’s Manok are commonly found near supermarkets and retail stores. Sr. Pedro can be found near the market place. Andoks, Mang Bok’s Manok and Ang Manok ni Sr. Pedro has the same rating of 3.

Figure: Competitor Profiling

CSF1 Branches

High

CSF2 Service

High

CSF3 Quality of Products CSF4 Variety of Products CSF5 Price of Product CSF6 Market positioning

High

High

High

High

Low

Low

Low

Low

Low

Low

Group Map Figure: Group Map

Mang Bok's Manok

Sr. Pedro

Column1

Andok's 0 0.5 1 1.5 2 2.5 3 3.5 4

Analysis of the Competitive Forces The rivalry among its competitors has been intensifying because of th Monitoring

of starting and growing businesses in the country become more aggr consumers in the market. All of the business offers almost the same variety of foods especially

Forecasting

products in which almost the same to their competitors. In terms of ha

only one who has it. Not all of them have a franchise stores. Some of

them have a kiosk to sell their products. O1. Enhancement of current products and services to stay in the com Assessment

O2. Lower the price of the product T1. There is an intense competition in the food industry specially in p

T2.Substitute products that other competitors have and yet in the sam

B. Industry Analysis Porter’s Five Forces Model is a very important tool to analyze the industrial parameters and to develop business strategy. Here five different factors would be discussed to highlight the attractiveness and productivity of a market. Now we will discuss it for Andoks. B.1 Porters Analysis

The leading roasting chicken industry in the Philippines is composed of 3 different companies. The whole industry comprises of more than 51 per cent of its stakes in various core businesses. The following are the different players in the roasting chicken industry.

Table No. 1 Competitors of Andok’s Company Chooks-to-go Baliwag Litson Manok Ang Lechon Manok ni Sr. Pedro Others

Industry Roasting Chicken Roasting Chicken Roasting Chicken Roasting Chicken

Among the four competitors in the industry, the three leading companies are to be controlled by the whole market having most of the shares in the roasted chicken industry. Chooks-to-Go has been performing well for the present year as they launched into full operation in 2002 as poultry integrator. The small size offering by the company can easily absorb the shares of its supplying company Bounty Fresh Chicken.

B.1.1. Rivalry among Competing Firms There is intensified competition in the market. The rivalry among its competitors has been intensifying because of the increasing number of competitors. Most of starting

and growing businesses in the country become more aggressive in grasping the demand of the consumers in the market. The threat of rivalry among competing firms is HIGH. There are similarities in the product, presentation and of the outlets that captures the different consumer behavior. The company and its competitors offer the same variety of products. They have almost the same product line and their specialty is roasted chicken. They also have the same in promotions and specialty services like to-go when purchasing the product in their establishments. There are also similarities in the kiosk used by the companies with their outlets. They also sell other food products in which almost the same to their competitors. In terms of having a dine-in restaurant, Andok’s is the only one who has it.

B.1.2. Potential Entry of New Competitors The company needs to build barriers for potential entry of new competitors. Andoks builds strong customer loyalty by offering products and services that is favorable to its potential market. However, Andok’s has a problem in determining its target market because of different consumer behavior. The store offers different variants of product line and the consumers’ preference differentiate their purchase through its competitors. The threat of potential entry of new competitors is HIGH. New competitors in the industry offers cheaper price than other companies. Most consumers always prefer cheaper price and this will determine an increase in sales because of the consumer behavior towards the prices of the product. Most customers prefer buying products in their trusted brands even though there is a similarity with the price. Because of different consumer behavior, there is also the selection of customers to what is trending in the market however there is also the selection of their own preferences.

B.1.3. Potential Development of Substitute

Establishments are to conquer the wide through their brand image. The starting capital for this food industry is very affordable that the entry of new competitor is at ease in being visible to the market. Companies and small enterprises captures the taste of customers that’s why there is a tough competition in the market. Even how big the business is taking into pride, the product that is favorable by the customer is the result of the success in the sales of the business. The threat of potential development of substitutes is MEDIUM. The availability of substitute products hurts Andok's ability to raise prices, because customers can easily switch to another product or service. “Substitute Products (Andok's)" will have a longterm negative impact on this entity, which subtracts from the entity's value."Substitute Products (Andok's)" is a difficult qualitative factor to overcome, so the investment will have to spend a lot of time trying to overcome this issue.

B.1.4. Bargaining Power of Suppliers A weak supply chain can delay the arrival of products to Andok's customers. Unnecessary delays can hurt Andok's over the long run, because customers will cancel orders. "Weak Supply Chain (Andok's)" has a significant impact. The threat of bargaining power of suppliers is MEDIUM. Suppliers of Andok’s are locally based that is very limited in supply such food industry in the Philippines. There are only chosen suppliers for the food industry and these suppliers are trusted brands of the consumers. The supplier of Andok’s Litson Manok is Magnolia by San Miguel Purefoods Corporation while Chooks-to-go has a supplier of their raw materials by Bounty Fresh Agro-Ventures. These are the trusted brand in the country.

B.1.5. Bargaining Power of Consumers

Consumer buying behavior towards the product and its loyalty. In the market, the business has no power to control the buying behavior and sustain the consumer’s loyalty. There is a minimal chance of having customer loyalty because of the factors occurred in an establishment. The threat of bargaining power of consumers is LOW. The presence of powerful buyers reduces the profit potential in the roasting chicken industry. Buyers increase competition within the roasting chicken industry by forcing down prices, bargaining for improved quality or more services, and playing competitors against each other. The result is diminished industry profitability.

Analysis of the Industry under Porters Analysis Monitoring

Consumers can change their tastes very quickly. Andok's depends on knowing which goods and services consumers want. The online market is essential for displaying information and selling products. A weak online presence can result in lost opportunities for Andok's. "Online Presence (Andok's)" has a

Forecasting

significant impact. "Online Presence (Andok's)"will have a longterm negative impact on this entity, which subtracts from the entity's value. O1. New products can help Andok's to expand their business and diversity their customer base. O2. The online market offers Andok's the ability to greatly expand their business. Andok's can market to a much wider audience for relatively little expense. "Online Market (Andok's)" is an easily defendable qualitative factor, so

competing institutions will have a difficult time overcoming it. O3. New services help Andok's to better meet their customer’s needs. These services can expand Andok's business and diversify their customer base. Assessment

O4. Greater innovation can help Andok's to produce unique products and services that meet customer’s needs. T1. Intense completion can lower Andok's profits because competitors can entice consumers away with superior products. T2. The availability of substitute products hurts Andok's ability to raise prices, because customers can easily switch to another product or service.

B.2. Market Analysis ANDOK’S is primarily engaged in the business of selling litson manok (roasted chicken). Over time, ANDOK'S had evolved and added a new concept to its main business of offering roasted chicken, and that is the concept of specialty grocery store offering a host of products, including beer, an assortment of beverages, rice, sugar, and other grocery products. ANDOK'S offers its patrons the best quality litson manok (roasted chicken) and dokito frito (fried chicken). In addition, ANDOK'S also offers wide variety of choices namely litson liempo (roasted pork belly), bangus (milk fish), pork barbeque, porkcharap (fried pork chop), lechon kawali (deep fried pork belly), kawali royale, crispy pata (deep fried pork leg), pork sinigang, beef steak rice, beef rice, chicken leg quarter, pork sisig, chopsuey, all-day breakfast meals such as beef tapa egg rice, bangus fish egg rice, corned beef egg rice, tocino egg rice, and longganisa egg rice and desserts such as banana con yelo, mais con yelo and leche flan. It also offers soft-served ice cream and

frozen drinks. ANDOK'S now has approximately 150 SKUs (Stock-keeping unit) offered in the market, and is likely to grow in order to meet the demands of its valued customers. ANDOK'S main business thrust has always been to provide high quality products at affordable prices.

B.2.1. What are the main features of the market? The whole market is segment with the use of demographic, psychographic and behavioral segmentation. Andok’s will position itself as one of the leading brands in the roasted chicken present in the international industry, home-grown in the Philippines. Andok’s distribution channel sets up many branches by capital in the entire country. Andok’s has a weak supply chain that causes delay of the arrival of products to its customers.

B.2.2. Who are the customers? The customers of Andok’s are they loyal customers. Those people who are studying, working and married with kids, socially and family-oriented with the age bracket of 14-19, 20-25, 26-40. Those who eats out daily, loves to socialize and eat with friends and family and eats on restaurants during special occasions.

B.2.3. What are their buying habits? The buying habits of Andok’s customers are brand loyalty and eating delicious Filipino dishes with affordable price. Persons who have no time to cook or busy tend to buy for convenience. Andok’s also have delivery menu and promos. B.2.4. What are their products?

All foods served by Andok’s have become an all-time favorite Filipino dishes. An icon in the food industry, Andok’s is proudly a Filipino owned company that has captured the hearts of every Filipinos through its sumptuous foods and is now competing side to side with other international fast food chains in the country. Andok’s main products are: LitsonManok (roasted chicken), LitsonLiempo (roasted pork belly), LitsonBangus (roasted milk fish), Dokito Frito (Fried Chicken), and Porkcharap (Fried Porkchop). From its main products, Andok’s also serves a wide variety of delicious foods namely: Barbeque Liempo, Pork Barbeque, Chicken Barbecue, LitsonKawali, Crispy Pata, Chopsuey, Sisig, Pork Sinigang, Kawali Royale, and Bicol Express. It also serves all-day breakfast meals such as Fried Bangus, Tocino, Corned Beef, Langgonisa, Tapa, and Hotdog. It also has merienda meals like: Siopao, Choco Pao, Spaghetti, Pancit Canton, Mais Con Yelo, and Leche Flan. For people who are on the go, it also has rice toppings: Bistsix Rice, Pork Sarciado Rice, Adobo Rice, Chopsuey Rice, and Dokito Pops.

Market Analysis Monitoring

Andok’s will be putting up more braches here in the country.

Forecasting

Achieving the highest average growth of the Philippines, the country has a good future especially when there is the connection of the ASEAN Economic Community in doing business and opening opportunity in the country.

O1. Andok’s should have more promos to increase their profit and customers. Assessment T1. The competition in roasting chicken industry. T2. The new competitors with delicious products and cheaper price.

C. Summary of External Analysis 1. Summary of Porter’s Five Forces Porters five forces 1. Competition 2. Potential of New entrants 3. Bargaining power of Buyers 4. Bargaining power of Suppliers 5. Potential Substitute

Rate High Strong Weak Moderate Moderate

Interpretation: Among the four competitors in the industry, the three leading companies are to be controlled by the whole market having most of the shares in the roasted chicken industry. Chooks-to-Go has been performing well for the present year as they launched into full operation in 2002 as poultry integrator. The small size offering by the company can easily absorb the shares of its supplying company Bounty Fresh Chicken. 2. Profile of Competitors A. Ang Lechon Manok ni Sr. Pedro

Ang Lechon Manok ni Sr. Pedro roasted chicken quickly charmed the taste buds of Filipinos and from its first outlet, it now has more than 300 outlets nationwide. Ang Lechon Manok ni Sr. Pedro operates under Anakciano, Inc., of which Peter is the president. Anakciano, Inc. has its commercial farms as well as contract farms to provide the birds needed to supply its business. The competitive advantage of Sr. Pedro is their price in the market. Their product is cheaper than Andoks and the only thing that the company lacks is the improvement in brand awareness that makes it a good competition between Andoks Litson Manok. B. Mang Bok’s Manok Mang Bok’s focuses on quality, cleanliness, and their very unique way ofpackaging. The roasted products can be taken home in specially designed styro-foam packages that are very hygienic and easy to carry.Its mission is to provide customer with high quality thru value for money andto improve on existing product lines thru continuing product research anddevelopment. It aims to stay ahead of competition by making the Mang Bok’s Manokname synonymous to high quality and value. The management decided to furtherexpand the business thru franchising and aims to establish more outlets nationwide.

3. List of all opportunities and Threats Identified from the General Environment and Industry Analysis Category A.1 Economic Forces

Opportunity Factor O1. Build strategic acquisition/alliances to manufactures and inside business ventures to improve value chain O2. The company will have a big opportunity in conquering the global market.

A.2 Social, Cultural, Demographic and

O1. Building costumer relationship loyalty

Natural Environment Forces

maintain the target market and enhance it through word of mouth. O2. 60% of family expenditures go to food, generally speaking, for it is a necessity for everyone. This is an

A.3. Political, Governmental and Legal

opportunity for food industry O1. For the past years served by the

Forces

company Andoks, the government is now on its high potential in giving opportunities in serving the products to a new market. O2. Company will pursue its strategy with the right documentation sent to the government and the aligned strategy will be implemented with the help of the

A.4 Technological Forces

government. O1. The number of online users has been increasing and most of the numbers are getting information in the internet. O2. Innovation In the use of mobile and dealing with andoks because customers are now moving toward mobile and

A.5 Competitive Forces

technology usage O1. Enhancement of current products and services to stay in the competition with others.

B.1 Porter’s Analysis

O2. Lower the price of the product O1. New products can help Andok's to expand their business and diversity their customer base. O2. The online market offers Andok's the ability to greatly expand their

business. Andok's can market to a much wider audience for relatively little expense. "Online Market (Andok's)" is an easily defendable qualitative factor, so competing institutions will have a difficult time overcoming it. O3. New services help Andok's to better meet their customer’s needs. These services can expand Andok's business and diversify their customer base. O4. Greater innovation can help Andok's to produce unique products B.2 Market Analysis

and services that meet customer’s needs. O1. Andok’s should have more promos to increase their profit and customers.

Category A.1 Economic Forces

Threat Factor T1.New entrants in the market growth of other litson manok food business in the

A.2 Social, Cultural, Demographic and

market as lembest and papa eds. T1. Filipinos becoming more health

Natural Environment Forces

conscious

A.3. Political, Governmental and Legal

T2. Abrupt Innovation T1. Health trends changing costumer

Forces

demands because it is affecting the health relation of excessive carcinogen ad bird flu. T2. There will be a slower process in implementation of strategies for it’ll have a case-to-case basis by the government and all strategies will be marked up

A.4 Technological Forces

accordingly. T1. The micro, small, medium and large enterprises will be benefited in endorsing its products, reaching more heights to become more globally competitive. T2. There is just a weak point in choosing the platform because there is a slow innovation done by the company servicing

A.5 Competitive Forces

limited customer. T1. There is an intense competition in the food industry specially in product developing T2.Substitute products that other competitors have and yet in the same

B.1 Porter’s Analysis

product line. T1. Intense completion can lower Andok's profits because competitors can entice consumers away with superior products. T2. The availability of substitute products hurts Andok's ability to raise prices, because customers can easily switch to

B.2 Market Analysis

another product or service. T1. The competition in roasting chicken industry. T2. The new competitors with delicious products and cheaper price.

4. Summary of Key opportunities and Threats

# 1

Opportunities Build strategic acquisition/alliances

Basis Economic

Dimension Stability

Rate +7

to manufactures and inside

forces

Positioning

60% of family expenditures go to

Social, Cultural,

Industry

food, generally speaking, it

Demographic

Positioning

Is a necessity for everyone. This is

and Natural

an opportunity for food industry

Environment

For the past years served by the

resources Political,

Industry

company Andoks, the government

Government

Positioning

is now on its high potential in giving

ang Legal

opportunities in serving the

Forces

products to a new market. The number of online users has

Technological

Stability

been increasing and most of the

Forces

Positioning

the internet. Lower the price of the product

Competitive

Industry

-1

Intense completion can

Forces Porter’s

Positioning Stability

-1

lower Andok's profits because

Analysis

Positioning

away with superior products. The online market

Porter’s

Industry

offers Andok's the ability to greatly

Analysis

Positioning

business ventures to improve value chain 2

3

4

-1

+7

+6

numbers are getting information in 5 6

competitors can entice consumers 7

expand their business. Andok's can market to a much wider audience for relatively little expense. "Online Market (Andok's)" is an easily defendable qualitative factor, so competing institutions will have a difficult time overcoming it.

-1

8

Andok’s should have more promos

Market Analysis

to increase their profit and

Industry

+7

Positioning

customers.

# 1

Threats New entrants in the market growth

Basis Economic

Dimension Stability

of other litson manok food business

Forces

Positioning

eds. There will be a slower process in

Social, Cultural,

Industry

implementation of strategies for it’ll

Demographic

Positioning

have a case-to-case basis by the

and Natural

government and all strategies will

Environment

be marked up accordingly. Health trends changing costumer

Forces Political,

Stability

demands because it is affecting the

Government

Positioning

health relation of excessive

and Legal

carcinogen ad bird flu There is just a weak point in

Forces Technological

Industry

choosing the platform because

Forces

Positioning

customer. Substitute products that other

Competitive

Industry

competitors have and yet in the

Forces

Positioning

same product line. The availability of substitute

Porter’s

Stability

products hurts Andok's ability to

Analysis

Positioning

Market Analysis

Industry

Rate +2

in the market as lembest and papa 2

3

4

-6

+3

-6

there is a slow innovation done by the company servicing limited 5

6

-5

-6

raise prices, because customers can easily switch to another product 7

or service. The new competitors with delicious

-6

8

products and cheaper price. The competition in roasting chicken industry.

Market Analysis

Positioning Stability

+2

Positioning

The company responded so much on the environmental issues that Andoks is in line in the point of adapting the consumers. The company is driven by such promotions, and marketing resources that the company sustained the growth of its market and sales. Even though Andoks has been offering lower price than other company, Andoks still sustained its growth.