Henry Sy & John Gokongwei Case Analysis

CASE ANALYSIS (Henry Sy and John Gokongwei)

Presented To: Prof. Michael Sanchez

Prepared By: Gellie Gonzales Emilyn Mando Ailyn Linatoc Nadine April Villa Rommel Quijano

I.

INTRODUCTION

II.

KEY PERSONS INVOLVED

 HENRY SY -

Retailing

tycoon,

owner

of

successful

SM

Shoemart

chain

of

department stores.  Henry Sy Jr. – eldest son of Henry, based in Hong Kong and handles his father’s foreign investments. He likewise functions as management consultant of hotel projects in China which are being set up together with Novotel, a French hotel chain.  Teresita Sy – eldest daughter of Henry, handles finance and Banco de Oro operations.  Hans Sy – in charge of operations and engineering of Shoemart.  Herbert Sy – takes care of SM ACA and the supermarket.  Harley Sy – oversees merchandising of all department stores.  Elizabeth Sy – takes care of the pastries and food divisions.  JOHN ROBINSON GOKONGWEI -

Banker-industrialist, owner of Robinson Commercial, Inc. outlets.  Robina Gokongwei – eldest daughter of John.  Lance Gokongwei – son of John, who has degrees in finance and science (summa cum laude), who was been assigned to the Philippine Commercial International Bank as assistant treasurer and at

Robinson’s

Galleria,

a

two-billion-peso

complex

hotel,

department store, flats, shops, cinemas, restaurants and offices.

III. ANALYSIS  Strengths: 

To the entrepreneurial Chinese, every peril, every threat is as good as an opportunity. Filipino Chinese look beyond the political risks that surround the country.



Far from ignoring the dangers, they look into them. Their “positive vision is long-range vision” coupled with an enduring faith in the creativity and resilience of the entire Filipino national community.



The key to business success lies in Henry Sy’s “interest in people” philosophy, especially in retailing where consumers are a varied and finicky lot. What keeps Henry Sy going on, doing one megaproject after another – besides the undeniable prospect of huge returns? He said community service overwhelms the competitive instincts.



The compelling reason for commercial centers is much like a public service offering of convenience for shoppers. For the love and need of people, indeed, cannot compensate for the wealth one acquires. Similarly, Henry Sy’s shopping cities provide employment to many.



One thing John Gokongwei is though: He is competitive. That’s why he takes his relaxation diligently. No competitive sport for fun or fame; no “barkada” to “kill” time with, when little enough of it is left for family and solitude; no hobby other than reading to distract his attention from the pure enjoyment of whiling away the moments alone and not having to do anything other than do nothing.



Henry Sy leads a very limited social life. It is perhaps because of this that he is a non-smoker and just occasionally has a sip of brandy or simply because he values his health like John Gokongwei.



Henry Sy’s no “off-season” philosophy must have been routed in the early retail days when he realized that when everybody else is “off from work” – that is the time they go shopping.

 Weaknesses: 

The challenge of going public is particularly tough for John Gokongwei, whose estimated ₱4 billion asset business include retail holdings, sugar mills, hotels, grocery stores, and textile mills, and whose 22-year-old son, Lance, is just out of university.

 Opportunities: 

Henry Sy had always been proud that his Shoemart outlets which dot the Metropolis and other key cities in the Philippines had been gradually upgraded into ever larger commercial complexes through retail cash flow and from the deposits of concessionaries eager to piggyback on his reputation for sound business dealings and good services.



John Gokongwei had also claimed to have avoided major borrowings for his projects. Instead, he has relied on huge sums of cash generated by his two main holding companies, Universal Robina Corporation and Commonwealth Food Corporation, the support of relatives and associates who have been silent partners from the start, and on profits from stockmarket dealings.



Henry Sy purchased a closed-end investment company from the Ayala Group and renamed it the SM Fund, Inc. While hard work and a sharp eye for the bottom line had serve Henry Sy well, so apparently had his development partnership with the Zobel family, primary owners of the property-based Ayala Corporation.



Similarly, in August, 1988, Gokongwei filed an application with the Securities and Exchange Commission to offer publicly 40% of Robinson Land Corporation, his group’s primary real estate development arm. Shares are expected to be placed overseas, largely among institutional investors.



John Gokongwei learned everything on the effects of vacation in a health center at the

his two-week

Pritikin Longevity Centre in Los

Angeles. He listened to three hours of lectures everyday by experts who talked about food and how it is ingested by the body. He is also learning that he can take off from work for as long as a month. He’s learning that travelling for business and pleasure is both possible and enjoyable. 

Perhaps Henry Sy considers his many travels to the United States and Europe in the 1950s to 1970s as his “vacation”. It was, for him, an absorption time that sharpened his entrepreneurial skills.

IV.

PROBLEM IDENTIFICATION

 Both tycoons are building multi-storey commercial centers that cause them a competition for the land in Manila.  The race between Henry Sy and John Gokongwei to cash in on the Philippine’s consumer boom was coined as Manila’s “store wars”, ringing the metropolis with vast concrete shopping malls.  Both of them are taking the concept of shopping center as community center to the extreme with their new plans.  Both developments will include hotels, apartments, shops and cinemas.  Both groups have also tried to boost access to financing trough buying local banks. V.

LIST OF ALTERNATIVE SOLUTIONS:

 They should combine their business into a partnership  Advantages: 1. They will avoid competition on their business. 2. They will gain more profit.

 Disadvantages: 1. Profit of both companies will be divided among them. 2. Decision-making will be difficult for both owners.  Spreading shopping plazas, and copying the idea throughout the archipelago  Advantages: 1. Customers can easily choose where to buy things according to their needs.  Disadvantages: 1. It will provoke further changes in how and where Filipinos does their shopping. 2. Customers will be divided into two groups so the profits of these two companies will be separated. VI.

CONCLUSION/RECOMMENDATION: