BA 190 Strategic Marketing Management

Fort Bonifacio Global City

A Case Study

Jaffy Bratt Rosales Mandawe

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I.

Introduction

Fort Bonifacio is the home of the Philippine Army in an underdeveloped stretch of land in the are of Taguig in Metro Manila. In March 1992, the Aquino administration signed a Republic Act mandating the conversion of this military reservations into alternative productive uses. The proximity of Fort Bonifacio to the business hub of Manila makes it an ideal development site for a state-of-the-art business center. Since the countrys governing boy has to do some other things in other priorities, the concept of privitization takes place. Bidding was held on January 6, 1995 where top corporations were present. The final bidder who won in the bidding was the Metro Pacific Corporation (MPC). They acquire the property for Php 39.2 billion pesos or at about Php33,000 per square meter over their tough competitor, the Ayala land who bid for the property for Php9,000. The latter has been known in the industry as the developer of the Makati business configurations. After winning the bidding, intensive plans for the immediate development has to be finalized. The aim of developing the property into something productive made them to strategize and will view the property in the future as the dream city or the city of the future through the injection of the state-of-the-art facilities for the global business enterprise. Although MPC has a lot of business in many other industries, they consider this property as their crown jewel. When making big businesses, of course, it entails a lot of money. Aside from the mere acquisition of the property, the development itself dictates that a large amount of investment is needed. Since MPC is a multinational corporation, it created their subsidiary project facilitator, the Bonifacio Land Corporation. This is a 13-company consortium headed by the mother company, the MPC. However, not until the 1997 Asian financial crisis, the company experienced major setbacks. The full swing started the following year after the acquisition. The creation of Big Delta or the Global Citys main hub for business enterprise entails lots of money. The Global City has created the Big Delta and other facilities like the NBC Tent, the Bonifactio Global Citys open field, the Fort, and other residential and businesses. The facilties were massive to the extent that it rose up the short-term debts of the developer. The only hope for capital gain is the revenue the Global City can generate.

II.

Point of View

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The researcher took ING Barings (managerial consultant) point of view. The researcher took advantage of this point of view in order not to create any bias. The bias itself will be emphasized if the point of view is internal and as the concept of intellectual services, managerial consultants or even strategic consultancy is highly appreciated.

III.

Problem of the Case

The main problem of the case evolved from the simple consideration of the external factors such us the unstability of the financial performance of the economy especially during the late 1990s to the extent of considering the company internal deliberations. The internal factors mainly happened to be the payment of debts in the short-term. The cost initially outweighs the benefits and to write off these costs only give problem to the developer.

IV.

Objectives

To be able to indentify factors (SWOT-driven) in which the company can utilize to promote sustainable development; To be able to know the effective utilization of these factors (SWOT-driven) through the help of strategic marketing; And, to be able to help solve the companys problem through the utilization of the concepts of Strategic Marketing.

V.

SWOT Analysis

Strengths:

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Strategic Location. Main hub for business enterprises and other related business since it is known as the city within a city through its strategic location. Convenience. Considering 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 major cities and the seat of government. Accessibility. Since the property is bounded by different major urbanized cities, transportation by air, land and sea is not anymore a quandary. This dictates future investments thereby increasing revenues. Attractiveness. Wrapping up all these, since businesses operate in busy lifestyle, the property is very attractive because it paves way to businesses in their market penetrating activities considering that the property is highly volatile to market exposure.

Weaknesses:

Privatization. In simplier terms, when a property is privatized, the only regulation of the intervening and governing body has limitations. The main threat here is not about the property itself but the businesses in play. High Cost due to urbanization. This only means that the property accompanies high cost since it is strategically located. The venturing business will be affected in any way and is reflective to the services they offer and/or to the facilitative support they have. Decentralization. Directive approach towards management system can also trigger the propertys weakness. Directive approach illustrates individualism in terms of managerial efforts for growth. This equates to the concept of decentralization. Multiplicity. This pertains to the internal competition the property can offer. Multiplicity in this sense is the competition arising from two or more businesses covering the same industry. This is a threat since this is an internal consideration that the property needs so much attention for repositioning the business structure and configuration.

Opportunities: B.A. 190 Case Presentation Jaffy Bratt Rosales Mandawe

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Large-Scale Investments. The very big opportunity the property can offer is the large market it will serve. This sums up all the above-mentioned internal strengths. Working towards Globalization. When the businesses found competitive advantage in the marketplace, when they embrace globalization, the property will be embracing it as well. This links to global exposure. Referrals. When the services of the property are exemplary and/or excellent, invitation to bid for certain partition of the property will be positively be identified. Geometric Exponential Progression and Geographic Acquisition. This is the concept of of internal growth and expansion. When a certain property performs well, expansion is at reach to efficiently deliver the services.

Threats:

Volatility on Security. When the property is volatile, threats such as terrorism and other security related incidents are of suspicious probability. Geographic Disturbances. This pertains to uncontrollable phenomena in the environmental aspects or nature of the property. Geographic Competition. As stated above, internal competition brought up the propertys weakness. In this case, geographic competition trigger the propertys development. Environmental Issues. Since diversified businesses are in the propertys internal consideration, external weakness or the threat in simpliest form is also attributable to the business environmental issues which is covered by the propertys administration.

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VI.

Alternative Courses of Action

Alternative 1.

On Sale This alternative dictates the company will sell some of their assets in order to write off their debts in the short-term. The concept will be beneficial especially if the company is protecting core businesses while disposing the inactives. This will also relates to the proper inventory management concepts where a certain company can use to exercise effectiveness and efficiency. When the company will sell some of their assets, it is just like reforming the existing asset into useful and income-generating asset.

Alternative 2.

Transfer Instead of selling some of their properties or assets, this alternative teaches us to write off immediate problem the company is facing. It is impractical to sell asset (idle or generating) when the affected property is creating the big risk of the company. There is a probability that the affected property can not suffice the risk if you will be selling already existing assets. Therefore, the transfer of the affected property to some interested party can be taken as an alternative.

Alternative 3.

Seek Help. As what the phrase clearly illustrates, this alternative is both beneficial and essential if the preceding alternatives fail. The concept of this alternative is to seek potential help whether in the government of private sector. This also pertains to a long-term agreement between the one who seeks help and the one who lends help. The tendency for this alternative towards failure is minimal since help in this regard does not only limit to single entity but bundle of entities who happen to have bundle interest with the property and the businesses inside it.

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VII.

Recommendation

After scrutinizing the above alternatives, the researchers (as if were managerial consultants) believe in the third alternative. This is because major setbacks of the first two alternatives are too obvious. First, when you will be selling something, it does not necessarily reflects that it will guarantee the solution because the sold item, property or whatsoever (idle or generating) has liberally economic uses. Secondly, the cost of the planning state alone, if you happen to transfer the ownership of the property to an interested party will not just waste a lot of money but most of all, time. Therefore, seeking help is a good thing to consider with an effort to make the property useful in a sense. For example, government assistance is helpful with a promise of successful operation to outweigh and recover costs. Clear illustration using this alternative was when the U.S. Government saved AIG amidst the US financial crisis.

B.A. 190 Case Presentation Jaffy Bratt Rosales Mandawe