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EXECUTIVE SUMMARY

Keylargo Car Accessories Center is under the Hexagon Group of Companies which started as a
hardware & construction business. The founder, Mr. Simplicio Gamboa Sr., wanted to further
diversify his business thus Keylargo Car Accessories Center was established in 1984.
Keylargo Car Accessories Center is a company who manufactures and distributes different car
accessories, car parts and car care products in the Philippines. Some of their notable products
include California Scents fresheners, Sony Xplod subwoofers and speakers, seats and car
covers. In line with their mission, Keylargo is one of the leading providers of quality car
accessories, parts and car care products in the Philippines. Because of the growing demand on
car related products and services, Keylargo has gained competition in its industry. This study
was conducted to analyze the external and internal factors that affect the companys
performance to identify its strengths and weaknesses in the industry. The findings are used to
formulate specific strategies that will minimize the effects of the threats in the business and will
maximize the opportunities available to the company.
A study of the external analysis of Keylargo revealed that there are a number of opportunities
that the company can seize. The increasing number of car owners, registered motor vehicles,
income per capita of the Filipinos and the growing economy especially in the motor vehicle
repair are opportunities that the company can seize and benefit from. Threats were also
identified like the ASEAN Free Trade Agreement, 12% Value Added Tax, online marketplaces
and electronic immobilizers which can adversely affect the business.
The internal analysis showcased Keylargos strengths and weaknesses. Keylargo caters to
different shops, produce products made from different countries, its financial stability, numerous
distribution channels, reduction of costs and having competitive strategic planning are the
commendable strengths of the company. On the other hand, the companys long decision
making process, rebate and reimbursement from hardware and groceries, changing market
segment, few best selling products and high marketing expenses are the Keylargos
weaknesses.
By using the strategy formulation matrices - Threats-Opportunities-Weaknesses-Strengths,
Strategic Position and Action Evaluation Matrix, Boston Consulting Group Matrix, InternalExternal Matrix, Grand Strategy Matrix, and Quantitative Strategic Planning Matrix strategies
formulated arrived at intensive strategies. The intensive strategies of Keylargo include market
1

development, market penetration and product development. Also, it is recommended for


Keylargo to employ integration strategies like forward, backward and horizontal integration.
Over all, the strategy that is suitable for Keylargo is market development.

LOGO ANALYSIS

The logo of Keylargo is very simple. It is a text of the company name styled with a straight line
on top with a globe on the left. The logo was designed in such manner because simplicity never
goes out of style and for the consumers to easily recognize the brand. The straight line
incorporated on top of the logo means consistency and stability. Consistency and stability that
the company will continually provide products and services that are of good quality to cater the
needs of the consumers. The globe on the left represents that Keylargo is a company that can
compete internationally. The color Blue is used because it signifies strength, dependability, trust
and efficiency. Predominantly, the color preference of both the male and female is the color
Blue.

KEYLARGO CAR ACCESSORIES CENTER


I.

Introduction

Keylargo Car Accessories Center is an automotive distributor in the Philippines. It started under
the Hexagon Group of Companies, being owned and operated by SGS Holdings, Inc. It is a
company registered with the Securities and Exchange Commission.
The information regarding the companys profile data, competitive advantage, competitors,
nature, history, organizational structure, mission statement, corporate values, product and
industry description, specialization and corporate social responsibility programs are discussed
further.
A. Company Profile Data
Corporate Information
Keylargo Car Accessories Center was established on January 9, 1996. It was founded by Mario
Gamboa. It was under the Hexagon Group of Companies, owned and operated by SGS
Holdings, Inc. It is also registered with the SEC as SGS Holdings, Inc. doing business under the
name and style of Hexagon Group of Companies.
History
The Hexagon Group of Companies started as a single entity in Bacolod City in 1947 engaged in
hardware & construction business.
Mr. Simplicio Gamboa, Sr. founded Bacolod Victory Hardware, which is now known as SGS
Hardware Corporation.
Hexagon Steel Corporation was started in 1974 as the first business venture in Metro Manila,
with its main lines included industrial steel products and construction materials.
The businesses further diversified into other fields including pump; water systems; industrial
electrical control ; equipment; car parts ; accessories; grain and feed ingredients; chemical and
refrigerant gas; dental supplies; equipment; pharmaceutical and veterinary products; finance
and leasing; commodities and stock investments and IT solutions.
In 1984, Keylargo International Pte. Ltd. was established in Singapore to start the South East
Asian business expansion.

HGC started acting as the management organization of the whole group of companies by the
early 90s. Autonomy of the business units was fully granted by the mid-90s.
Currently, HGC has twenty two (22) members/Unit Companies that it oversees which were
engaged in different lines. A part of HGC is Keylargo Car Accessories under KPI Manufacturing,
Inc.
Current President/CEO
Mario Gamboa is the Chief Executive Officer of the Keylargo Car Accessories Center. He is a
graduate of De La Salle University. He is a holder of a Bachelor of Science in Computer Science
in 1985.
Mission
Keylargo Car Accessories wants to be the company that is:
In pursuit of excellence, Keylargo Car Accessories Center commits to be a leading provider of
quality car accessories and related products for the satisfaction of our customers; best return to
our stockholders; well-being of our employees and the community we serve.
Corporate Values
Keylargo Car Accessories Center gives importance to the following:

Integrity Using the moral principles and ethics as foundation in words and actions
Excellence Achieving goals with the highest quality and distinction
Teamwork Working in unity and harmony to achieve a common goal
Commitment Putting the mission statement into actual practice
Concern Giving utmost importance to customers, employees, stockholders and the

social community
Growth Working toward continuous development

Organizational Structure
The organizational structure of Keylargo Car Accessories Center consists of 12 positions and
the President/Chief Executive Officer as the one on top of the structure. The President/Chief
Executive Officer of the company is Mr. Mario Gamboa. Mr. Gamboa oversees and controls all
of the other departments under him. Aside from being the President and Chief Executive Officer,
Mr. Gamboa is also the Research and Development Head. The Chief Operations Officer and
5

Chief Financial Officer both reports to Mr. Gamboa. The Chief Operations Officer is Ms. Julie
Gamboa who oversees the Sales, Marketing and Services departments. Under Ms. Gamboa
are the Sales Manager Mr. Don Gargaciran who is responsible for monitoring the sales of the
companys products, Marketing Manager Mr. Francis Esaguirre who is responsible for coming
up with different schemes and advertisements for the promotion of the products and Services
Manager Mr. Jonatahan Aguilar who oversees the different personnel needed for the company.
On the other hand, the Chief Financial Officer is Mr. Jaime Molino who is in charge of the
Financial/Accounting, Information Communication Technology, Human Resource, Warehouse
and Logistics departments. The Financial/Accounting and Human Resource department is
managed by Ms. Ruth Suarez. Ms. Suarez is accountable to all the financial related dealings of
the company and she records all the, including but not limited to the, expenses, profits,
reimbursements and disbarments made by the company. The one in charge of the Information
and Communications Technology department is Mr. Edwin Aguilar. The Accounting, Credit and
Collections Manager is Ms. Ana dela Cruz. Lastly, the Warehouse and Logistics manager is Mr.
Agustin Ambrosio. The Warehouse and Logistics Manager is in charge of the storing of the
companys products, how it gets shipped to the Philippines, the process of how the products is
delivered from the warehouse to the distribution channels.
Figure 1. Keylargo Organizational Structure
President / Chief Executive Officer

Executive Assistant

Chief Operations
Officer

Sales

Marketing

Research and
Development

Chief Financial Officer

Financial /
Accounting

Information
Communications
Technology

Services

Human Resource

Warehouse and
Logistics

Product and Industry Description


Keylargo Car Accessories Center is an importer and distributor of a wide range of car
accessories and car audio in Manila, Philippines.
It carries car audio and electronics such as stereos, amplifiers, speakers, security alarms; car
care products such as wax and car shampoo; car enhancements such as tint, roof railings etc.
It also provides custom wheels, grilles, headlights, chrome accessories, air intakes, and exhaust
systems.
Specialization
The companys specialization is to provide proud drivers with top-tier aftermarket accessories
and premium auto parts that can boost the power of any vehicle you own, and add a distinctive
touch to its appearance.
Corporate Social Responsibility Programs
SGS Foundation expanding college scholarship program to 100 scholars, 30 of them from
Bacolod City and Negros Occidental.
The scholarship covers semestral tuition and miscellaneous fees, and the grantee is entitled to
a semestral allowance of up to P3,500, provided that the school fees and allowance do not
exceed P15,000.
It also organizes medical missions and outreach programs geared towards the social
development of the underprivileged.
B. Paper Design and Methodology
The creation of this strategic management paper needed numerous facts and information which
were acquired mainly through public and private sources. Information about the company were
obtained from an inside resource person.
Listed below are the websites of the government agencies which were accessed to get relevant
information needed as references for this study:

National Statics Coordination Board (www.nscb.gov.ph)


Department of Trade and Industry (www.dti.gov.ph)
Bureau of Customs (www.customs.gov.ph)
7

Philippine Chinese Embassy (www.ph.china-embassy.org)


Philippine Japanese Embassy (www.ph.emb-japan.go.jp)
Philippine American Embassy (www.manila.usembassy.gov)

Strategic management evaluation tools were also used to formulate strategies for the Keylargo
Car Accessories. These include:

II.

Porters Five Forces Model


Competitive Profile Matrix (CPM)
External Factor Evaluation (EFE)
Internal Factor Evaluation (IFE)
The Threats-Opportunities-Weaknesses-Strengths (TOWS) Matrix
The Strategic Position and Action Evaluation (SPACE) Matrix
The Boston Consulting Group (BCG) Matrix
The Internal-External (IE) Matrix
The Grand Strategy Matrix
The Quantitative Strategic Planning (QSPM) Matrix

Vision and Mission Statements

The Vision and Mission Statements are the important for a company because it defines the
companys goals and objectives. A vision statement answers the question, What do we want to
8

become? On the other hand, mission statements are statements which have a purpose of
distinguishing one company from other business firms.
A. Statements of the Current Vision and Mission
A companys mission statement answers the question, What is our business? It identifies the
scope of a firms operations in its products and terms.
Keylargo Car Accessories wants to be the company that is:
In pursuit of excellence, Keylargo Car Accessories commits to be a leading provider of quality
car accessories and related products for the satisfaction of our customers; best return to our
stockholders; well-being of our employees and the community we serve.
B. Critiquing of the Vision Mission Statements
To further critique the companys vision and mission statements, the nine components were
used. The nine components include the customers, products or services, markets, technology,
concern for survival, growth and profitability, philosophy, self-concept, concern for public image,
and concern for employees.
Table1. Mission Statement Nine Components Critique of Keylargo Car Accessories
COMPONENT
Customers
Products or Services
Markets
Technology
Concern for Survival, Growth and Profitability
Philosophy
Self-Concept
Concern for Public Image
Concern for Employees

COMMENT
YES
YES
YES
NO
YES
YES
YES
YES
YES

The Mission Statement of the Keylargo Car Accessories has been assessed through the nine
components of the following:
1. Customers
Keylargo Car Accessories has included its customers in its mission statement. The
construction of Keylargo Car Accessories mission is addressed to its customers, on
a third persona. It was concerned with the customers satisfaction through its
products and services.
2. Products/Services
9

Keylargo Car Accessories has introduced itself to be the leading provider of quality
products or services to its customers being one of the portfolio companies of the
Hexagon Group of Companies to provide quality car accessories to its consumers.
3. Markets
It was shown in the mission statement that the company commits itself to be a
provider of car accessories to the current market.
4. Technology
The company has not provided in its mission any technological feature with regard to
its products and services.
5. Concern for Survival/Growth
The company is committed to growth and financial soundness. It is prepared to give
back to its customers, stockholders, employees and the community that the
company serves.
6. Philosophy
Keylargo Car Accessories is under pursuit of excellence in its mission. The company
is set to provide only products or services at its best, quality and for the well-being of
the people it serves.
7. Self-Concept
The company obligates itself to be a leading provider of the quality products and
services it offers. The advantage above others is that the company is handled to give
varied products and services unlike the other companies.
8. Concern for Public Image
Keylargo Car Accessories is responsive to its customers needs up for its
satisfaction.
9. Concern for Employees
The employees are a valuable asset to the company. It puts in mind the well-being of
its employees in pursuing their goals.
C. Recommendation of Revised VM Statements
Upon criticizing and analyzing the mission statement of the company, this is the proposed
mission statement that we recommend:
In pursuit of excellence, Keylargo Car Accessories commits to be a leading provider of top-tier
aftermarket accessories and premium autoparts to its customers. Being a company equipped to
offer products in a wide range according to the satisfaction of our clienteles, stockholders,
employees and the community that we serve.
D. Recommendation on the Effective Cascading of the VM Statements
In drafting the Keylargo Car Accessories Mission Statement, the company should have first
indicated its company name. Second, the company should have also shown the kind of
10

products they provide. It must also share its goal to the population which also served them.
Lastly, it should also put in mind the changing market of todays industries.

III.

External Analysis

The external analysis is the process of scanning and evaluating an organizations various
external environmental sectors to determine positive and negative trends that could impact the
organizational performance. The external analysis is used to formulate companys strategic
decisions which are influenced by a number of factors. The external environment is being
observed to effectively and competently carry out company strategies.
The external analysis includes the General Environment, Industry Analysis and Competitive
Analysis. The General Environment comprises the Social, Cultural and Demographic
Environment, Technological Environment, Economic Environment and Political, Government
and Legal Environment. The Industry Analysis refers to the Threat of New Entrants, Rivalry
Among Competitors, Threat of Substitues, Bargaining Power of Suppliers and the Bargaining
Power of Buyers. Competitive Analysis includes the profile of the competitors and the
Competitive Profile Matrix (CPM).
11

As a whole, the companys external factors are assessed through its key opportunities and
threats. An External Factor Evaluation (EFE) Matrix is formulated to arrive at a company
recommended strategies for Keylargo Car Accessories.
A. General Environment
The analysis of the general environment deals with the different general factors that can affect
the business that is outside the control of the firm. In the analysis of the general environment,
the social, cultural and demographic environment, technological environment, economic
environment, political, government and legal environment are discussed. These variables are
used to study what changes in the overall general environment can impact the firms business.
The general environment analysis is broader in scope compared to an industry analysis
because an industry analysis is more specific and is limited to where the industry of the
company belongs to.
1. Social, Cultural and Demographic Environment
By doing an analysis of the social, cultural and demographic environment, a firm can assess
their opportunities and threats because of the changes in the peoples preference and
behaviour. These changes are shaping the way people live, work, produce and consume and
because of these changes, new trends are developed, different types of consumers arise and
need for different products increases.
a. Number of Registered Motor Vehicles
In a statistical report released by the Land Transportation Office, as of 2013 there are a total of
7,690,038 registered cars in the Philippines and 2,757,859 of it are registered in the National
Capital Region.
Table 2. Land Transportation Office List of Registered Vehicles in the Philippines
Motor Vehicle Type
Cars
Utility Vehicle
Service Utility Vehicle

Mode of Registration
New
Renewal
Sub-Total
New
Renewal
Sub-Total
New
Renewal
Sub-Total

2013
73,651
794,497
868,148
113,872
1,680,700
1,794,572
46,535
299,861
346,396
12

Truck
Buses
Motorcycle / Tricycle
Trailer
Sub-Total

New
Renewal
Sub-Total
New
Renewal
Sub-Total
New
Renewal
Sub-Total
New
Renewal
Sub-Total
New
Renewal

Total
Source: Land Transportation Office Website

23,702
334,743
358,445
2,946
28,719
31,665
1,140,329
1,110,338
4,250,667
4,765
35,380
40,145
1,405,800
6,284,238
7,690,038

The number of registered vehicles in the Philippines is a good sign for the business because
there are millions of Filipinos who are possible consumers of the business products that can be
used for cars, sports utility vehicles, utility vehicles, motorcycles, trucks, trailers and buses. In
the National Capital Region alone 2,757,859 are the number of registered vehicles. The data is
helpful for the business because some of the companys products like the car cleaners, air
fresheners and speakers will be needed by car owners.
b. Number of Special Interest Groups
Special interest groups are groups of people who share the same interest, love and concern to
a certain object or certain type of activity.
The identified special interest group where the firm can benefit from is a car club. According to
Wikipedia, a car club is a community formed by car enthusiasts who share common interest and
love for motor vehicles. A car club can be formed depending on the commonality of the type of
vehicle that they possess, the brand that they patronize or what kind of driving they are
interested in. The type of vehicle can range from Sports Utility Vehicles, pick-up trucks, vans,
trucks, cars, sports cars vintage cars. On the other hand, the different kinds of driving can be
off-road, drift, circuit and drag. Traditionally, car clubs charge membership fees in exchange for
publications and different events sponsored by the club. Traditional car clubs also host
gatherings for current members, non-members and prospective members (who are also car
enthusiasts) are invited to talk about cars, show-off their vehicles, discuss the latest trends in
cars, buy and sell car parts and accessories, where to get the best services for car

13

maintenance, and generally give advice to each other on how to maintain their cars parts to
achieve optimum performance. Because of the advent of computers and the internet, there has
been growth in the number of online car communities. Online car communities are emerging
because it is free and open for all. In online car communities, there are numerous forums where
old and new members can converse with each other and give advice on car tuning, repair
information, provide trusted suppliers and refer mechanics and car dealers.
In the Philippines there are numerous car clubs and online forums where car enthusiasts share
their love for cars. Based on our research, there are sixteen car clubs listed in carsmanila.com.
On the other hand, based on an online forum discussion in pinoyexhange.com, there are other
emerging car clubs for specific types of cars like the Toyota Fortuner and Hyundai. There are
numerous established and emerging car clubs around the Philippines that are not specifically
listed and identified because as of writing, a car club directory is still in the works. Some of the
well known online communities for car lovers are northautoclub.com, kotse.com, tsikot.com and
Top Gear Philippines.
The number of interest groups in the Philippines can affect the business in terms of its number
of consumers and the reach of its products. Special interest groups somehow guarantees that
there are prospective buyers and the products of the firm have a market. Keylargo can
participate in their gatherings to advertise their products.
c. Per Capita Income
The per capita income of a population is computed by computing all the sources of income of a
person and then dividing it by the total population. For easier understanding, per capita income
means the income of each person.
Based on a study entitled Family Income and Expenditure Survey conducted by the National
Statistics Office in 2012, the average monthly income raked in by the richest respondents is
P60,000 while the poorest respondents earn P6,000 monthly. When translated to annual
income, the rich earn P715,000 and the poor P69,000. In the National Capital Region, families
earn an annual income of P380,000 on average.
Another study by the National Statistical Coordination Board classified the income of Filipinos
based on high income, middle income and low income families. A member of the high income
group earn P199,927 monthly, members of the middle income group earn P36,934 monthly and
the low income group earn P9,061 per month.
14

Figure 2. Income of Filipinos


250,000.00
200,000.00
150,000.00
100,000.00
50,000.00
0.00

199,927.00

9,061.00
36,934.00

Source: National Statistical Coordination Board Website


Knowing the per capita income of the people in a country or city helps the firm determine if there
are possible consumers for their product and if the people will be able to afford the products that
they are offering. Identifying the per capita income of the consumers can help determine the
niche market of the company and gauge how much they can sell their products and where to
intelligently place the products that people can afford in the certain area.
d. Lifestyles and Traffic Congestion
Aside from the hospitality of the Filipinos, another thing that is noticeable in the Philippines is
the heavy and horrible traffic that the country has most especially in the National Capital
Region. Because of the horrible traffic, a lot of Filipinos would rather be stuck in the confines of
their own vehicles rather than be stuck in traffic while in public transport. The traffic congestion
is caused by the lack of disciplined drivers, weak imposition of traffic rules and regulations,
weak road management and lack of public transportation solutions. To ease their way through
traffic, Filipinos buy motorcycles to squeeze their way out of traffic. According to a consumer
finance survey conducted by the Bangko Sentral ng Pilipinas, more than 54.9% of Filipinos own
motorcycles.
A study conducted by Nielsen Philippines showed that many Filipinos in the coming two years
are able to buy new cars because of their growing income and the growth of the middle income
sector. Buying cars are more affordable now because of the different payment schemes
15

presented to the buyers and promos which make car payments more manageable. The
Philippines is a third world country but the spending capacity of the Filipinos is rising. Because
of the capacity for higher spending by the Filipinos, the automotive industry is enjoying increase
in sales. The availability of affordable models of cars in the Philippine market paved the way to
the increase of sales in cars. According to the same study, 87% of Filipinos believe that cars are
tools for travel to get from one place to another. Many Filipinos also believe that cars are a
status symbol to display how successful they have been. Even luxury car brands here in the
Philippines have experienced an increase in sales even if their cars are worth millions of Pesos.
More Filipinos buying cars equate to more consumers who are likely to buy products of the firm.
Because some Filipinos view cars as a status symbol, it is more likely that they would take extra
care when it comes to their cars and spend more to make their car look and feel presentable
and clean towards other people. The downside of the traffic congestion experienced in the
National Capital Region is people are more likely to buy motorcycles to squeeze through traffic.
The increasing numbers of motorcycles decreases the potential customers to buy products of
the firm which are designed and made for cars.
e. Household Final Consumption Expenditure
The definition of Household Final Consumption Expenditure as defined by Trading Economics
is:
Household final consumption expenditure is the market value of all goods and
services, including durable products (such as cars, washing machines, and home
computers), purchased by households. It excludes purchases of dwellings but
includes imputed rent for owner-occupied dwellings. It also includes payments
and fees to governments to obtain permits and licenses. Here, household
consumption expenditure includes the expenditures of nonprofit institutions
serving households, even when reported separately by the country. This item
also includes any statistical discrepancy in the use of resources relative to the
supply of resources.
As displayed by the data in Table 2, transport is the seventh expenditure of Filipinos out
of the twelve listed in the table. Despite the increase in car purchases last 2014;
transport expenses of Filipinos still come at seventh place. Even though it is listed at
seventh place, the expenditure on transport grew at a rate of 11.5%. The annual growth
16

is good for the business because it shows that more and more Filipinos are buying
different modes of transportation for their own private use. More Filipino car owners
mean more potential customers for the business. Keylargo can use this data to introduce
more products and reintroduce current products to car owners.
Table 3. Household Final Consumption Expenditure
ITEMS
HOUSEHOLD FINAL
CONSUMPTION
EXPENDITURE

2013

At Current Prices (In Million Pesos)


2014
Growth Rate (%)

8,464,883

Food and Non-alcoholic


3,605,777
beverage
Alcoholic beverages,
110,059
Tobacco
Clothing and Footwear
116,635
Housing, water,
electricity, gas and other
1,062,100
fuels
Furnishings, household
equipment and routine
326,101
household and
maintenance
Health
218,729
Transport
894,369
Communication
264,281
Recreation and culture
154,391
Education
334,586
Restaurants and culture
318,553
Miscellaneous goods
1,059,301
and services
f. Carnapping in the Philippines

9,159,243

8.2

3,868,950

7.3

127,588

15.0

127,205

9.1

1,149,574

8.2

350,603

7.5

250,472
997,368
275,399
166,089
367,081
345,623

14.5
11.5
4.2
7.6
9.7
8.5

1,134,290

7.1

According to Republic Act No. 6539, "Carnapping is the taking, with intent to gain, of a motor
vehicle belonging to another without the latter's consent, or by means of violence against or
intimidation of persons, or by using force upon things. On a press release by the Philippine
National Police Highway Patrol Group in 2012, carnapping incidents in April 2012 went down
compared to the recorded cases in April 2011 by 68.3%. The report also indicated the manner in
which the car was stolen. Vehicles were stolen while parking, forcibly taken and failed to return.
Figure 3. Reported Carnapping Cases in the Philippines

17

500

460

450
400
327

350
300
250

2011

200

2012

150

123

100
39

50
0
April

January-April

Source: Philippine National Police Website


Only 39 carnapping cases were recorded in April 2012 compared to April 2011s 123 cases. A
total of 327 carnapping incidents were recorded during the first four months of 2012, dropping
28.9% from the 460 cases recorded during the same 4-month period in 2011.
79% of the carnapped vehicles were stolen while parking, 18% were forcibly taken and 3% was
failed to return. This data is for the month of April 2012 only.
Figure 4. Manner of Carnapping
90%
80%

79%

70%
60%
50%
40%
30%
18%

20%
10%

3%

0%
Stolen While Parking

Forcibly Taken

Failed to Return

18

Among all of these recorded cases, 87% are recorded to come from the National Capital Region
and only 13% were recorded in Calabarzon. Manila and Quezon City topped the carnaping
prone areas followed by Paraaque and Makati.
The carnapping incidents in the Philippines, especially in the National Capital Region show that
car owners need more protection against carnappers. One of the ways to protect a car form
carnappers is the installation of security alarms. The protection against carnappers can be
provided by the firm because one of its products is security alarms for cars.
g. Regulation
The Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) is widely recognized
by government and private sector groups as the lead organization in the Philippine automotive
industry. According to CAMPIs website, their main objective is to promote the interests of the
automotive industry with the end in view of developing a viable domestic industry. Their
objective is carried out thru its active participation, among others, in the formulation of
government policies, programs, regulations and standards for the automotive industry. CAMPI
advocates on the enhancement of industry competitiveness, skills enhancement, environment
protection, consumer protection and corporate social responsibilities.
Another regulatory agency when it comes to the importation of products is the Bureau of
Customs. The Bureau of Customs has the duty to regulate all of the products that come in and
out of the Philippines. The Bureau of Customs is also in charge of determining the import taxes
and duties that have to be paid before the product is released from the port. The Bureau is also
the one who permits and holds products if they find it illegal in the Philippines.
2. Technological Environment
In the analysis of the technological environment, the focus is on the different technological
advancement that can dramatically affect the organizations products, services, markets,
suppliers and distributors.
Automobile manufacturers today produce car parts faster and more efficient compared to
decades ago because of the rapid prototyping technology. Rapid prototyping technology is a
process where the car part is designed using a computer software especially made for this
purpose. After designing it, the design can easily be converted into something tangible through
a 3-D printer. Using this technology saves manufacturers lots of time in the designing and
19

constructing of the parts. Before, designing and constructing takes weeks but because of rapid
prototyping, it can only take days or sometimes even hours. Another benefit of using this
technology is the software can identify if there are flaws to the design before it hits the
production line saving time and money. 3-D printing is a process of making an actual life-size
and usable object from a digital file. For a 3-D object to be created, it goes through an additive
process. An additive process is where an object is created by laying down successive layers of
material until the entire object is created.
Aside from using rapid prototyping technology, many manufacturers have turned to robotics to
increase their efficiency. Many production lines have sought the technology of cobots
(collaborative robots) to aid in production. Humans use cobots as their assistants in performing
tasks such as moving heavy loads up and around the factory. Again, using cobots saves times,
boosts production, increases safety for humans in performing tasks and lessens the burden of
human workers. Cobots are preferred and replacing human workers because they have the
capacity to work for 24 hours a day without even getting tired, they dont need to eat, they do
not get sick, they do not go to the bathroom basically they are more efficient in a manufacturing
line compared to humans.
On the technological advancement when it comes to car security, electronic immobilizers are
being integrated to a cars build for protection against car theft. As discussed by the website
askmen.com a car immobilizer is described as:
For a growing number of modern vehicles, car keys and fobs play a more
effective role in protecting their cars thanks to integrated electronic immobilizers.
Specifically, keys and fobs are planted with built-in transponders or microchips
that send signals to the ignition and fuel-pump systems of the vehicle. When an
attempt is made to use the car without these signals, the car will refuse to start.
Based on the high-tech nature of these systems, car thieves often avoid makes
and models that were made after the introduction of electronic immobilizers.
The introduction of the internet quickly changed the world and how everyone connect and
communicate with one another. The internet paved the way for people to transact business with
one another in a faster and more efficient manner. Because of the internet age, many
businesses are able sell their products online without the extra cost of renting a space to feature
their product. Products sold online can range from food, clothes, shoes, furniture, gadgets, and
little trinkets up to cars. Almost everything under the sun can be sold through the internet and
20

almost anything you can think of can be found and purchased online. Online buying and selling
has become a norm today that e-marketplaces are sprouting everywhere. In the Philippines, the
most popular e-marketplace is olx.com.ph which is similar to Americas eBay and have an
assortment of products for sale classified into phones, computers, appliances, clothes, shoes,
watches even motorcycles, cars and real estate are available in OLX.
Another online marketplace specifically designed for the online buying and selling of cars
is carmudi.com.ph. In the website, cars, motorcycles and trucks are the only things that
they sell. The main products that the website buys and sells are motor vehicles.
Figure 5. OLX website

21

Figure 6. Carmudi Website

The first two technological advancements mentioned are very advanced compared to
what the current technologies the company possesses. The cobots and rapid prototyping
are too advanced and expensive for the business to afford and to be used on the current
manufacturing of products. Using cobots are designed for large scale manufacturing of
products and compared to the current manufacturing process of the firm; acquiring
cobots would be more of a liability rather than an asset. Rapid prototyping and cobots
are of great help to some businesses but not to the present state of the firm; it is not
ready for it. The locally manufactured product of the firm is the seat covers which are
sown using basic industrial scale manufacturing sewing machines. The integration of car
immobilizers in new car models are a threat to the business because car owners would
not feel the need to buy security alarms. Electronic immobilizers being installed in new
car models reduces the chance of a car owner to avail of protection for his cars security.
The car owner would not feel the need to install security alarms in his car anymore
because of this added technology of protection to his car. Because of this technology the
firm might lose business in the area of selling security alarms.
22

The internet being used as a platform for online marketplaces is one of the advancements that
the firm can manipulate in order to gain market share, reach its consumers more, introduce and
showcase new products and provide another area of distribution for the firm rather than the
present hardware stores and groceries. Using online marketplaces can enable the firm to
connect with their consumers rather than the usual set-up where the consumer goes to a
physical shop, buy and then leave. Opening and managing an online shop by the firm can
enable them to sell their products to new and loyal customers inside and outside the Philippines
who do not have the firms products available within their area.
3. Economic Environment
Economic forces are factors which have direct impact on the potential attractiveness of various
strategies of the firm.
a. Gross Domestic Product trends
The gross domestic product is used as a gauge to find out if the economy of a country is healthy
and is also used to measure the standard of living in the country. The gross domestic product is
computed by adding the entire consumer spending in the nations economy, the total
government spending, total businesses spending on capital in the country and the total net
exports of the country. The total net export is computed by subtracting the total imports to the
total exports.
The Gross Domestic Product in the Philippines expanded 6.90 percent in the fourth quarter of
2014 over the same quarter of the previous year. GDP Annual Growth Rate in Philippines
averaged 5.09 percent from 2001 until 2014.
Figure 7. GDP Annual Growth Rate

23

9
8
7
6
5
4
3
2
1
0

6.4 6.3

2012-2012

7.3 7.2

2012-2013

7.7 7.9

2013-2013

6.3

2013-2014

5.6

6.9

6.4

2014-2014

5.3

2014-2015

Source: Trading Economics Website


The Philippine economy reached a growth of 6.9 percent for the last quarter of 2014. The
growth during the last quarter of 2014 was the strongest growth spurt in the economy mainly
because of the increase in exports, household and government spending.
In the Philippines 57% of the total GDP is from the services sector. Within services the most
important sectors are trade and repair of motor vehicles and household goods, real estate,
renting and business activities, transport, storage and communication, financial services, public
administration, defense and social security. When it comes to industry, it accounts for 31% of
the Gross Domestic Product. Manufacturing and construction are the most important industries
that contribute to the Gross Domestic Product. Lastly, the remaning12% GDP is contributed by
the agricultural industry.
Figure 8. Services in GDP

24

18%
16%
14%
12%
10%
8%
6%
4%
2%
0%

11%
8%

10%
7%
4%

17%

Source: Trading Economics Website


* The remaining 10% in services was not provided for in the data obtained thus labeled as
Other.
A total of 17% was contributed by trade, repair of motor vehicles and household goods, 11% for
real estate, renting and business activities, 8% in transport, storage and communication, 7% for
financial services and 4% or public administration, defense and social security.
Figure 9. Industry in GDP

25

25%

22%

20%
15%
10%

10%
5%

5%
0%
Manufacturing

Construction

Others

*The remaining 4% was labeled as Others because there was no specific data about the
specifics of the remaining 10%,
Manufacturing accounted for 22% of the GDP and construction accounted for 5%. In totality, the
data presented above only shows 27% the remaining 4% was not provided for in the data thus it
was not stated.
The growth of the Gross Domestic Product indicates that the top contributor in services is the
trade and repair of motor vehicles and household goods. The growth means that the economy
in the Philippines is growing and t o take advantage of this growth, Keylargo can use this as an
opportunity to introduce their products to auto-repair shops and freelance mechanics. This also
means that many car owners are availing the services of car mechanics to repair their cars.
b. Tax Rates
Taxes are paid by individuals living in a country as a compulsory contribution to the nation for
the government to function and provide services to its people. Taxes are the source of revenue
of the government thus the lifeblood of the government and it is a necessary evil. In the
Philippines, one of the taxes to be paid is import taxes and duties. Import duties and taxes are
paid by a natural person or a juridical entity when importing and exporting goods to and from
outside the Philippines. In the Philippines, aside from the import duties a sales tax such as
Value Added Tax is also added to imported goods. Import duty and taxes payable are computed
in complete shipping value which includes the cost, insurance and freight manner.
Duty Rates
26

The average duty rate in the Philippines is 10.5%. Some duties are rated as 0% and some even
reaching up to 65%. Laptops and other electronic products may be imported to the Philippines
free of charge under certain conditions as provided by the law.
Excise Taxes
As defined by the Bureau of Internal Revenue, excise tax is a tax on the production, sale or
consumption of a commodity in a country. Excise taxes are charged on goods manufactured or
produced in the Philippines for domestic sale or consumption or for any other disposition and on
goods imported. Excise taxes have two types, namely specific and ad valorem. A specific tax is
an excise tax in which the tax is computed based on the weight of the goods or any unit of
measurement. On the other hand, an ad valorem tax refers is computed based on the selling
price or the specific value of the goods.

Specific Tax =No. of unitsother measurements SpecificTax Rate

Ad ValoremTax=No . of unitsother measurements Selling price of any specific value per unit Ad ValoremTa
Computations of Taxes

Total DutiesTaxes=Customs Duty+ Value Added Tax+ Import Processing Fee+ Excise Tax(if applicable)
Customs Duty=Customs Value ( Dutiable Value ) Foreign Exhange Rate Rate of Duty
Dutiable Value=Cost of Goods+ Freight + Insurance+Other ChargesCosts
Value Added Tax=12 of Total Landed Cost (TLC)

Total Landed Cost =Dutiable Value+ Bank Charges +Customs Duty+ Brokerage Fee+ ArrastreCharge +Wharfag
Customs Documentary Stamp=P 265.00( Amount)
Table 4. Dutiable Values
DV of Shipment
Up to P250,000

IPF/entry
P250.00
27

Over P250,000 to P500,000


Over P500,000 to P750,000
Over P750,000

P500.00
P750.00
P1000.00

Computation for Motor Vehicles

Total Car Value=Book Value+ Accessories (if any )

DepreciationValue=Total Car ValueDepreciation(based on year modealcc)


Cost =Depreciation Value 80(less :20 wholesale allowance)

Dutiable Vale ( $ ) =Cost + Insurance+ Freight


Customs Duty=Dutiable Value ( $ ) Rate of Exchange Rate of Duty
Landed Cost AVT Base=Customs Duty+ DutiableValue Php+ Miscellaneous Expenses
Ad ValoremTax=Landed Cost AVT Base Rate of Ad ValoremTax

Value Added Tax Base= Ad Valorem Tax+ Landed Cost


Value Added Tax=Value Added Ta x Base 12 ( Rate of VAT )

Total Duties of Taxes=Customs Duty + Ad ValoremTax+VAT + IPF


c. ASEAN integration policies
The Association of Southeast Asian Nation integration aims to connect the different countries in
the Southeast Asian Nation through its different integration policies. The aim of the integration is
to bridge the gap between the member countries and to bring the countries closer. These
policies aim to provide support the development in the member countries including economic
developments.

28

One of the policies created for the ASEAN integration is the ASEAN Free Trade Agreement or
AFTA. The AFTA is an agreement regarding the trade of products and goods between the
member countries and the different tariffs applicable on the products. Included in the AFTA is the
Common Effective Preferential Tariff Scheme or CEPT wherein it aims to lessen the tariffs of
products traded in Southeast Asia. The following are the some of the 11 industries enumerated
in the Priority Integrated Sector, automotives, air travel, electronics, rubber-based products, eASEAN, textiles and apparels are the industries that can affect the business. CEPT aims to
lower the tariff rates to 0%-5% and to eventually remove the tariff rates.
The effect of the Asian Free Trade Agreement to the business is both positive and negative.
Lowering the tariff rates and eventually eliminating of it to some products around the South East
Asian region would be a threat to the business because it will create more competitors. Other
businesses in South East Asia who have similar products can penetrate the Philippine market
easily because of the AFTA. On the other hand, automotive and textiles are included in the PIS
indicating that products like car and fabrics will have lower tariff rates. Low tariff rates of
automotives means a higher chance of people affording to buy cars and it would pose as an
opportunity for the firm to gain more consumers. The production and manufacturing costs of the
locally made seat covers would also be lowered because of the minimal tariff rates of textiles.
4. Political, Governmental and Legal Forces
These forces are those which create regulations for small and large organizations alike that can
create opportunities and can quickly turn into threats. Government regulations, tax rates and
economic relations with other countries are discussed in this chapter.
a. Government Regulations
In Republic Act No. 426, entitled An Act to Regulate Imports for Other Purposes there is an
import quota that the government has set. A person who wants to import must apply for a quota
allocation to be able to import products to the Philippines. A quota allocation is the value of
imports that is allowed to an importer; imports may be any product. An import license was not
mentioned in Republic Act No. 426 but only a quota allocation. The said act was repealed by
Republic Act No. 650 which is An Act To Regulate Imports and For Other Purposes. The
Republic Act No. 650 provides for an import license that must be issued and acquired before a
commodity may be imported in the Philippines. Certain exemptions are provided in the Republic
Act but will not be further discussed because it does not concern the business.
29

An import license is a license issued by the Philippine government to give authorization for
license holders to import goods and articles in Philippine territory. Issuance of import license by
the government is a good way of regulating all the products that goes in to its territory and
safeguarding legitimate importers prdocuts from smugglers. The regulation of the government is
good for the business because it cuts down the incidence of smuggled goods of the same
product as the business might have and are sold to the public in a lower price. Less smugglers
means more profit for the business.
b. Tax Laws
Because of the fast-paced and ever changing environment of the country, laws have to keep up
with the present need of the people. Thus, Republic Act. No. 9337 was enacted to amendment
some laws that are not relevant to todays world anymore. According to Republic Act. No. 9337,
the former VAT of 10% to imported goods will be increased to 12%.
SEC. 5. Section 107 of the same Code, as amended, is hereby further amended
to read as follows:
"SEC. 107. Value-Added Tax on Importation of Goods. "(A) In General. - There shall be levied, assessed and collected on every
importation of goods a value-added tax equivalent to ten percent (10%) based on
the total value used by the Bureau of Customs in determining tariff and customs
duties, plus customs duties, excise taxes, if any, and other charges, such tax to
be paid by the importer prior to the release of such goods from customs custody:
Provided, That where the customs duties are determined on the basis of the
quantity or volume of the goods, the value-added tax shall be based on the
landed cost plus excise taxes, if any: Provided, further, That the President, upon
the recommendation of the Secretary of Finance, shall, effective January 1,
2006, raise the rate of value-added tax to twelve percent (12%), after any of the
following conditions has been satisfied:
"(i) Value-added tax collection as a percentage of Gross Domestic Product (GDP)
of the previous year exceeds two and four-fifth percent (2 4/5%); or

30

"(ii) National government deficit as a percentage of GDP of the previous year


exceeds one and one-half percent (1 1/2%).
The imposition of a 12% Value Added Tax puts the business at a disadvantage because the
amendment caused the tax rate to go up by 2% which will result in added expense of the firm.
The firm buys products and raw materials in quantities resulting to a higher VAT to be paid by
the firm. The increase of 2% of the Value Added Tax also means that the prices of the product
will also increase.
Another amendment is about the tax credits that can be applied to purchasing or importation of
goods. Input tax is the tax charged when a company that is registered for Value Added Tax buys
goods from another supplier. An output tax is when a company sells its goods and charges its
customers with VAT. When the input tax is greater than the output tax, then the company can
claim credit from the government. In the amended law, certain tax credits are given to
purchased or imported goods that are for sale, to be converted in to products or products that
are needed in the course of the business.
SEC 8. Section 110 of the same Code, as amended, is hereby further amended to read as
follows:
"SEC. 110. Tax Credits. "(A) Creditable Input Tax. "(1) Any input tax evidenced by a VAT invoice or official receipt issued in
accordance with Section 113 hereof on the following transactions shall be
creditable against the output tax:
"(a) Purchase or importation of goods:
"(i) For sale; or
"(ii) For conversion into or intended to form part of a finished product for sale
including packaging materials; or
"(iii) For use as supplies in the course of business; or

31

"(iv) For use as materials supplied in the sale of service; or


"(v) For use in trade or business for which deduction for depreciation or
amortization is allowed under this Code.
c. Economic relations with other countries
China
The economic relationship between China goes way back up to the 7 th century. Economic ties
were enjoyed between Filipinos and Chinese even during the olden times. Trade investments
between China and the Philippines provide a solid evidence of the economic friendly
relationship of the two countries. The bilateral agreements between the two countries have
grown to a staggering 41.77% in 2000. During that time, the Philippines were selling more
products to China rather than buying products from China. The economic relationship between
China and the Philippines has grown stronger especially during the presidency of former
President Gloria Macapagal-Arroyo. The improving relationship was proven further by the visit
of Chinese President Hu Jintao and Wen Jiabao and former President Gloria Macapagal-Arroyo
visiting China. Based on the data in the Chinese Embassy website, China is the Philippines 3rd
top trading partner in 2006, moving up from 9th place in 2002. China is the Philippines 4th
largest export market and 5th largest supplier of imports in 2006. Exports of Philippine products
to China have increased more than three-fold.

China and the Philippines have good economic and trade relations between each other because
of the influence of Chinese businesses in the Philippines. Most of the major companies in the
Philippines are owned and managed by Filipino-Chinese nationals. Many products sold here in
the Philippines are manufactured and imported from China. But the recent territorial disputes
have strained political and economic relationship of the two countries. Despite of these disputes,
many products from the Philippines and China and vise versa are still traded.

United States

32

The relationship of the Philippines and the United States goes way back during the Spanish Era.
At one point the Philippines was owned by the United States because of the Treaty of Paris.
Because of this history, it can be inferred that the relationship between the two countries is close
to a hundred years. A number of economic agreements have been established between the two
countries. One of them is a memorandum concerning the stopping of illegal transshipments of
textiles and apparels. The Philippines is also one of the top trading partners of the United
States. In 2012, $24 billion totaled to the goods and services that have been exchanged
between the Philippines and the United States. Based on data provided by the American
Embassy website The Philippines is currently our 37th largest goods trading partner with $17.7
billion in total (two ways) goods trade during 2013. Goods exports totaled $8.4 billion; Goods
imports totaled $9.3 billion. Trade in services with the Philippines (exports and imports) totaled
$6.2 billion in 2012 (latest data available). Services exports were $2.5 billion; Services imports
were $3.7 billion. The U.S. services trade deficit with the Philippines was $1.2 billion in 2012.
The recent visit of President Obama to the Philippines and President Aquinos visit to the U.S. a
few years back shows the harmonious relationship between the Philippines and The United
States of America. Trade between the countries is also growing strong as seen with the
emergence of supermarkets which mostly sells American products, one example is S&R
membership shopping.
Japan
Japan and the Philippines a few decades ago did not have a harmonious relationship because
of World War II. The Japanese people caused so much havoc and destruction in the Philippines
during the war causing thousands of lives and damaged the economy of the Philippines. The
relationship between the two countries was improved during the end of the Vietnam War in 1975
and the first ever ASEAN Summit in 1976. The economic relationship between Japan and the
Philippines improved with the ratification of the ASEAN-Japan Comprehensive Economic
Partnership and the Japan-Philippines Economic Partnership Agreement. The ASEAN-Japan
Comprehensive Economic Partnership (AJCEP) provides more support from the Japanese in
the ASEAN region because of the decrease of American influence. The AJCEP will provide for
more economic opportunities and free trade agreements between Japan and the Philippines.
The recently ratified Japan-Philippines Economic Partnership will open new industries within the
Philippines. Both agreements will enable the Philippines to have free trade with Japan where we
can exchange goods and services. The agreements will open opportunities for the Philippines to
33

earn revenue because Japan is the second largest trading partner of the Philippines. According
to the Japanese Embassy website, Japanese investors are the biggest source of investment in
the Philippines.
B. Industry Analysis
An industry analysis is based on Michael Porters Five Forces which analyses the threat of new
entrants, bargaining power of suppliers, rivalry among competitors, bargaining power of buyers
and threat of substitutes. A Porters analysis is made to analyze the level of competitiveness
within the industry and also the profitability of the business to which industry it belongs.
Figure 10. Porters Five Forces

Threat of
new
entrants

Bargaining
power of
suppliers

Rivalry
among
existing
competitors

Bargaining
power of
buyers

Threat of
substitute
products

1. Threat of New Entrants


The threat of new entrants in the industry is high because of the increase in consumption,
income and purchasing of the Filipinos. Overall the industry of car care products and
accessories are growing and is becoming lucrative. The growing number of car owners means
that there will be an increase in the need of car care products and accessories and this increase
will be an enticing factor for people who want to open up a business in the same industry.
Growth of the GDP in general means that the purchasing and consumption of the Filipino
people are increasing annually. The industry of repair and service of motor vehicles was among
the top contributors in the increase of the GDP. Among the Household Final Consumption
34

Expense of Filipinos, the top 7 was the expense in transport. The per capita income of Filipinos
is also increasing thats why more Filipinos are able to afford cars. The ASEAN AFTA also plays
a role in the threat of new entrants in the industry because of their policy on 0%-5% of tariff
rates among products in the South East Asia. Another agreement that may be a threat is the
JPEPA where in there will be a free trade of goods and services between Japan and the
Philippines. The market for car accessories and parts are not saturated in terms of major
players and high quality products. Establishing a business here in the Philippines is very much
encouraged by the Philippine government because it gives the government additional revenue
and helps boost the economy of the Philippines.
2. Rivalry Among Competitors
The rivalry among competitors is low because there is only one identified competitor who offers
the same products in competition to the firms products. The rivalry is low because Keylargo has
more products offered in the market compared to Miles & Levels. The pricing is also different
because the firms products are priced from a wide range; cheap to expensive. Some products
of Keylargo are cheaper than the other firm and some are more expensive. The product
offerings are different too and only a number is similar to each other. The preference of the
consumer is another factor in rivalry. Consumers might prefer cheaper rather than expensive
products. Additionally, some products that the consumer need might not be offered by the
competitor.
3. Threat of Substitutes
Threat of substitutes is moderate because of the emergence of other imported car care products
and accessories in the market. The known places to find imported brand new and surplus car
accessories are from shops in Banaue, Quezon City and Evangelista, Makati. The hundreds of
shops in both Banaue and Evangelista is a haven of different imported car accessories.
Newcomers in the market are the Daiso, Saizen, Japan Home Centre and American Bazaar
shops opening in malls. These shops import Japanese, Korean and American products to the
Philippines and they sell a range of goods from cookware, to bathroom accessories, office
supplies, foods and drinks, party ware and car accessories and car care products.
4. Bargaining Power of Suppliers
The bargaining power of suppliers is high because the firms products are branded and are
exclusively distributed by the firm in the Philippines. The suppliers have a great control on the
35

pricing of the products because they are the only ones who manufacture the products. Each
product or a group of products is exclusively outsourced from one company only. The increase
in the production cost of the products will greatly affect the retail price of the products in the
Philippine market because the increase in production cost is directly proportionate to the
increase of the net cost of the product.
5. Bargaining Power of Buyers
The bargaining power of the buyers is low because even though there are substitutes in the
market because the firms products are of higher quality and are established brands already.
The consumers are paying for the premium quality of the product. The products have few
competitors when it comes to product in the same market niche.
6. Summary of Porters 5 Forces of Competition
Over-all Keylargo is in an advantageous position because they have been in the industry for 19
years and there is an increase in the number of cars and car owners in the Philippines. There
are about 7,000,000 registered cars all over the Philippines. The products that the firm offers
are of trusted quality and are established brands overseas. The products are of better quality
compared to the substitute products in the market because the firms products are for long term
usage. The prices of the product are reasonable and give the consumers moneys worth.
C. Competitive Analysis
1. Profile of Competitor
According to their website, Miles and Levels Philippines Incorporated is established in 1988,
Miles & Levels Philippines Inc.. is a young and dynamic organization that specializes in the
marketing and distribution of consumer and industrial products. Miles and Levels Philippines
Inc. is composed of highly skilled and innovative local professionals dedicated to covering the
following industries: export, construction, risk mitigation and retail. With the goal of uplifting the
lives of Filipino consumers in mind, Miles & Levels has put together an impressive lineup of
multinational brands and strategically partnering it with a committed distribution pipeline that
extends through Luzon, Visayas and Mindanao. Included in the M&L portfolio of internationally
tested products are brands such as Henkel, HannsGuard, Sun-Gard Window Films, Auto-Gard
Car Care Products, Komy (Japan) Convex Mirrors, Neltex uPVC Pipes and Hannstape.

36

With close to 25 years of thriving operations, management gives credit to quality products and
effective marketing efforts combined with excellent customer service as the key foundations to
M&Ls success and accomplishments. The company states that:
We Deliver The Yes Factor, Do More with Less and Love The Change. We Are
Passionate & Determined. We Embrace The Fun and The Little Weirdness. We
Build Open and Honest Relationships with Communication. We Are Humble and
Strive to Build Our Family Spirit. We Never Stop Learning.
Vision
Positive, never ending and always driven with the passion and determination in embracing the
change. Go More towards helping our environment and our country by continuously growing our
business enabling us to better give back.
Mission
Go Hard is taking the pedal to the metal, pushing ones limits to their performance.
Each of us have our own Go Hard, this is a call to action, to rise up to our own challenges and
to surpass ourselves. Go hard and Deliver YES!
2. Competitive Profile Matrix
A Competitive Profile Matrix is a tool used to compare the strengths and weaknesses of a firm
from their competitors. The critical success factors are listed down to determine what factors
would be of comparison to determine the strengths and weaknesses of the firm and its
competitors. To determine this, each critical success factor is given a weight based on its
importance to the firm. The lowest weight which is .00 means that the success factor is of low
importance and a weight of 1.00 indicates high importance. A rating is then given after to the
critical success factor as an indication on how the firm reacts to the critical success factor. The
rating is based from a scale of 1-4; 1 meaning a major weakness and 4 meaning a major
strength.
A Competitive Profile Matrix was used to compare the strengths and weaknesses of Keylargo
and Miles & Levels based on the weight and rating given on the critical success factors. The
most important critical success factors determined with a weight of 0.15 are the market share of
the firm and product quality. Market share was chosen because it is a very good indicator
37

whether the product is sufficient to serve its use to the consumer. The product quality came in at
second because a product would be patronized because of its quality and it will increase the
market share of a firm thus building its reputation as a trusted brand. Successful new
introductions, product design, variety of products, effective social media management and
strong online presence were all given a 0.08 weight because they work hand-in-hand together
to create profit increase and brand patronage for the company.
In the analysis, Keylargo and its competitor Miles & Levels have close scores on some of the
critical success factors. In spite of the close scores between the two, Keylargo garnered a score
of 2.97 which is 0.54 higher than the 2.43 score of Miles & Levels. Keylargo was mostly at an
advantage except for strong online presence and effective social media management. The
online presence of Miles & Levels has more impact and their website is more appealing
compared to Keylargos. Miles & Levels is at an advantage when it comes to social media
because they are present in Facebook.

Table 5. Competitive Profile Matrix


Keylargo

Miles & Levels

Critical
Success

Weight

Rating

Score

Rating

Score

Factors
Market Share
Product

0.15

0.45

0.30

0.15

0.45

0.30

0.12

0.48

0.24

0.08

0.16

0.16

0.09

0.27

0.27

0.08

0.24

0.16

0.08

0.32

0.16

Quality
Brand
Reputation
Successful
new
introductions
Variety of
distribution
channels
Product
design
Variety of
Products

38

Effective
Social Media

0.08

0.08

0.24

0.08

0.16

0.24

company

0.09

0.36

0.36

support
Total

Management
Strong online
presence
Parent

2.97

2.43

Market Share a 0.15 weight is given to market share because of its importance in determining
whether the firm has an advantage and can gain advantage from its competitors. The market
share can also determine whether the products offered by the firm are profitable or not. A rating
of 3 was given because Keylargo has bigger market share because of the brands that they have
in the market are more well-known and are likely bought by consumers.
Product Quality the second factor given importance with a 0.15 is product quality because
consumers pay attention to the quality of the product to ensure that the purchase is tantamount
to their moneys worth. 3 was the given rating to product quality of Keylargo because some of its
products remain competitive but still have room for improvement to cope with the changing
needs of the people today.
Brand Reputation this critical success factor was given a weight of 0.12 because when
consumers purchase a product, they look at the brand to gauge whether the product is good
enough or not. Brands have reputations whether their products are of good quality or not. 4 was
the given rating for Keylargos brand reputation because they have been in the business for 19
years and their products are proven and tested.
Variety of Distribution Channels 0.09 was given because it is important to have a wide network
of product distribution to reach more consumers. A rating of 3 is given because the company
can still utilize the use of online marketplaces to reach more consumers aside from the usual
hardware stores.
Parent Company Support the support of the parent company, especially to one like Keylargo
which is part of a group of companies controlled by a parent company, is crucial for the business
to survive and flourish. The parent company of Keylargo which is Hexagon is very supportive as
the back bone of one of its sub-companies.
39

Successful New Introductions was given a 0.08 because new product introductions means
that the company if evolving and paying attention to the present and ever changing needs of the
consumers. Successful new introductions of products would mean there is a possible new
market that can be tapped by the company.
Product Design product design is important because the product must be appealing, useful,
and easy-to-carry to attract consumers in buying the product. 3 was given because Keylargos
products are well presented and are easily identifiable by the consumers.
Variety of Products was given a 0.08 weight because variety of products is important for the
business to cater to the growing needs of the consumers and to stay relevant. A rating of 4 was
given because of the numerous products offerings of Keylargo of different car parts, accessories
and car care products.
Effective Social Media Management and Strong Online Presence in todays world, almost
everything can be found online. People tend to rely to the internet to find what they need and
where to buy it. It is given a weight of 0.08 because having a strong online presence and social
media is an important tool that can be utilized by the company to its advantage.
D. Summary and Conclusions
1. Summary of Key External Factors
The external factors that can affect the business were mostly advantageous to the business.
Based on the External Factor Evaluation Matrix, the most important critical success factor
identified was the growing GDP trend of the Philippines. It was given a rating of 0.12 because
the growing GDP trend signals that the economy of the Philippines is healthy, improving and
growing which means that the business would benefit from it because one of the greatest
contributors in the growing GDP trend is the repair of motor vehicles. Keylargos response to
this opportunity is above average because of the firms product offering which can be used to
aid motor vehicle repairs. A 0.11 rating was given to the 12% Value Added Tax imposed upon
goods which are imported and are intended to be sold in the Philippines. The firms response is
rated as above average because the burden of the Value Added Tax was shifted to the
consumers.
2. External Factor Evaluation Matrix
The EFE Matrix is where in the opportunities and the threats in the external forces are listed
down and each is given a weight based on their effect to the companys business. The rating of
40

1-4 is placed based on how the current strategies of the company are reacting on the
opportunities and threats.
Table 6. External Factor Evaluation Matrix
Critical Success Factors
Opportunities

Weight

Rate

Score

0.06

0.12

0.08

0.16

0.06

0.12

0.12

0.36

0.09

0.27

0.06

0.12

0.10

0.30

0.08

0.24

0.10

0.20

Number of
Social

interest group in
the Philippines

Technological

Online
marketplaces
Rise of

Social

carnapping
Cases

Economic

Growing GDP
Trend
Transport as 7th

Social

place in the
HFCE
Number of

Social

Registered Motor
Vehicle in the
Philippines
Per Capita

Social

Income
Keylargo has

Competitive

more products in
the market than
competitor
Threats

Economic

ASEAN

41

Intergration
AFTA
Political

Technological

Technological
Total

12% Value
Added Tax
Online
marketplaces
Electronic
immobilizers

0.11

0.33

0.08

0.08

0.06

0.06

2.36

Number of interest group in the Philippines is identified as an opportunity because car clubs
are growing because of the increase in the number of car enthusiasts and the number of people
who can afford cars. It was given a weight of 0.06 because not all of the members of the car
clubs and enthusiasts would be guaranteed to buy the products.
Online marketplaces online marketplaces is rated with 0.08 because of the advent of the
internet age. It is an opportunity because it can be utilized to reach a wider number of
consumers.
Rise of carnapping cases it is given a 0.06 weight because it might be an opportunity for the
company to sell their security alarms but its increase is not a good indication of the public safety
of the people.
Growing GDP trend was given the highest weight because it is an over-all indication of the
economy of the Philippines. It puts the company at an advantage because the biggest sector to
contribute to the growing GDP is the repair of motor vehicles.
Transport as 7th place in the HFCE it is given a weight of 0.09 because it is identified as an
opportunity because more Filipinos are having allocations for their transportation expenses.
Number of registered motor vehicle in the Philippines the number is seen as an opportunity
because it means that there are an increase in the number of possible consumers and
patronage of the product. But it is given a weight of 0.06 because the increasing number might
provide new consumers but it may also discourage people to buy new cars.

42

Per capita income is identified as an opportunity because of the increase in income of the
people and thus their capacity to buy a car also increases. The increasing capacity in car buying
means that there would be more car owners in the Philippines which belong to the target market
of the company. It is given a 0.10 weight because the income also identifies the buying capacity
of the consumer to purchase the firms products.
Keylargo has more products in the market than competitor it is given a 0.08 weight because
Keylargo has more market share because of the number of products that they offer compared to
those of the competitors. The number of products also gives an advantage to the brands
reputation and the consumers awareness of the brand.
ASEAN integration a 0.10 weight is given because it is posed as a threat because of the Asian
Free Trade Agreement wherein tariff rates between the products for trade in the Southeast
Asian region will be lowered to 0%-5%.
12% value added tax is given a 0.11 weight because the value added tax increases the retail
price of the products even though the burden is passed on to the consumer.
Online marketplaces is given a weight of 0.08 because of the threat that they pose to the
business. Many shoppers prefer browsing and purchasing products online because it gives
them the freedom to window shop without any constraints. Online marketplaces also provide
shoppers the luxury of staying home, cashless transactions and products are delivered to their
doorstep.
Electronic immobilizers is given a weight of 0.06 because newer car models are being
equipped with this new technology. It is given a lower weight compared to the others because it
is still a new technology and earlier model cars are not equipped with it yet which means that
some still need security alarms installed in their cars.

IV.

Internal Analysis

Internal Analysis is a review of the business strengths and weaknesses. It involves analysing
the companys competencies. The companys competencies are evaluated through its
management, marketing, finance and accounting, production or operation, research and
development and management information systems functions.

43

The internal analysis serves as basis for a business objectives and strategies from the internal
strengths and weaknesses. Through internal analysis, it showcases a firms competencies that
cannot be easily matched or imitated by other firms. It also involves taking advantage of its
distinctive competencies.
Keylargo Car Accessories internal analysis was made through the information it has from its
management, marketing, finance and accounting, production or operation, research and
development and management information systems.
Resource Based View
The resource based view theory asserts that resources are actually what helps a firm exploit
opportunities and neutralize threats. For a resource to be valuable, it must be either rare, hard
to imitate, and not easily substitutable. The more a resource is rare, non-imitable and nonsubstitutable, the stronger a firms competitive advantage will be and the longer it will last.
Physical Resources
Keylargo Car Accessories is financially stable to support the business. With its financial
capability, the company can invest in different areas that it could to gain profit. It has its own
plant and equipment where money is not a problem for the company to sustain. Keylargo Car
Accessories choose to invest in equipment and machines as its own to incur less cost on its
part.
Keylargo Car Accessories is strategically located all over the Philippines. This is considered as
one of the strengths of Keylargo Car Accessories. It extends to different cities in the Philippines
such as Cebu, Bohol, Davao, Leyte, Iloilo, Bacolod and Isabela.
Human Resources
The personnel and employees of Keylargo Car Accessories are hired on the usual basis. But
the way Keylargo Car Accessories open positions for possible employees is different. First, the
company assess the positions that it will need in its operations. The possible candidates will be
conducting tests and interviews. They value the health and well being of the possible candidates
through conducting medical tests. Upon the evaluation of the human resource, the company will
hire the person and Keylargo Car Accessories will deploy the employee according to his
knowledge and capabilities.

44

Organizational Resources
The company is protecting its patents on all of its products. These include patents on rain
visors, gutters and design of California Scents. The trade name, brands and labels helps the
supplier to continue distributing products and sell through Keylargo Car Accessories.
Integrating Strategy and Culture
Organizational culture is the values and behaviours that contribute to the unique social and
psychological environment of an organization. It includes an organizations expectations,
experiences, philosophy, and values that hold it together. It is expressed in its self-image, inner
workings, interactions with the outside world and future expectations. These are based on
shared attitudes, beliefs, customs and written and unwritten rules.
Keylargo Car Accessories has a relaxed working atmosphere. Although the company has
employed working policies, Keylargo Car Accessories has a friendly atmosphere as well. The
employees and managers have time to know each other personally. They hold Christmas
parties and celebrated anniversaries with the upper management, Hexagon Group of
Companies.
The company is strict in employing policies through its own Code of Discipline. The company is
also conservative in implementing the uniform policy on weekdays. However, the employees
can wear proper civilian attire on Saturdays. Keylargo Car Accessories only hire when needed.
The company also recognizes the employees by giving recognitions on awards night. Other way
of employee recognition of the company is promoting those best performing employees.
A. Management
Management is the organization and coordination of the activities of a business in order to
achieve defined objectives. It is the process of reaching organizational goals by working with
and through people and other organizational resources.
Portfolio companies are the companies in which a private equity firm invests. All of the
companies currently backed by a private equity firm can be spoken of as the firms portfolio.
Keylargo Car Accessories Center is a portfolio company of Hexagon Group of Companies. It is
an importer and distributor of wide range car accessories and car audio in Manila, Philippines. It
carries car audio and electronics such as stereos, amplifiers, speakers, security alarms, car
care products such as wax and car shampoo, car enhancements such as tint, roof railings, etc.
45

The other portfolio companies of Hexagon Group of Companies are the SGS Hardware
Corporation, Keylargo Steel Industries, International Distribution, Keylargo Commodities
Trading, Keylargo Industrial Sales, Hexagon Mechanelec Systems, Inc. Hexagon Chemical
Corporation & Sun Biotech Corporation, Hexagon Healthcare Corporation, IT Group, Inc. and
Sun Properties Development Corporation. SGS Hardware Corp. Is a dealer of Hardware and
Construction Supplies in Bacolod City. Keylargo Steel Industries is a dealer and distributor of
steel bars and pipes. The International Distribution is a Singapore based international trading
company that trades throughout the South East Asian Region. Keylargo Commodities Trading is
an importer and distributor of Feed Ingredients and Agri-Aqua Cultural Products in Bacolod and
Manila, Philippines. Its products include Soya, Cracked Corn, Copra Cake, Skim Milk, Fish
Meal, Corn, Fermented Soya Bean Meal etc. Keylargo Industrial Sales is an importer and
distributor of Industrial Pumps, Refrigerant Gas, in Manila, Philippines. Hexagon Mechanelec
Systems, Inc. is an importer and distributor of Industrial Electrical Controls & Mechanical
Equipment. It distributes nationwide products from renowned brands such as Schneider, Omron
and Western Electric. Hexagon Chemical Corporation is an importer and distributor of
Pharmaceutical, Veterinary Raw Materials and Food Ingredients. It offers a wide range of
products to suit the needs of local pharmaceutical and veterinary laboratories nationwide. Sun
Biotech Corporation was founded in 2004 with its banner product; Sunbio-888. The company
started with a commitment to develop new innovative animal nutritional products that provide
optimum performance. Intercast Dental Corp is a member of the Hexagon Group. Intercast is a
distributor and retailer of dental products and services to dental offices, laboratories and dental
colleges/schools. IT Group Inc.s traces its roots to the Management Information System
Department formed to serve the IT requirements of a Philippine-based conglomerate with
diversified interest in trading, distribution and manufacturing. Sun Properties Development
Corporation is a real estate developer and the management arm of HFICs properties.
Figure 11. Hexagon Group of Companies

46

Sun
Properties
Development
Corp.

Keylargo
Car
Accessories
Center

SGS
Hardware
Corporation

Keylargo
Steel
Industries

IT Group,
Inc.

HEXAGON
GROUP OF
COMPANIES

Hexagon
Healthcare
Corporation

Hexagon Chemical
Corporation & Sun
Biotech
Corporation
Hexagon
Mechanelec
Systems,
Inc.

Intl
Distribution

Keylargo
Commodities
Trading
Keylargo
Industrial
Sales

A firm intends authority, responsibility to flow with its formal organizational chart. It depicts the
different managerial functions and subdivisions as linked with decision making power. A
company would not be possible without its organizational chart.

47

Figure 12. Organizational Structure

President
Chief Executive Officer
Mario Gamboa

Executive Assistant
Dominador Lacson, Jr.

Chief Operating
Officer
Julie Gamboa

Sales
Manager
Don
Gargaciran

Marketing
Manager
Francis
Esaguirre

Chief Financial Officer


Jaime Molino

Services
Manager
Jonathan
Aguilar

Financial
Accounting
Manager
Ruth Suarez

Human
Resource
Manager
Ruth Suarez

Information and
Communications
Technology Head
Edwin Aguilar

Accounting
and Credit
and
Collections
Manager
Ana dela
Cruz

Warehouse
and Logistics
Manager
Agustin
Ambrosio

Source: Keylargo Car Accessories company profile


Keylargo Car Accessories Center adapts a three-level organizational chart. Tasks and authority
are granted by the Chief Executive Officer, down to its Executive Assistant and to the Chief
Operating and Chief Financial Officers. The company has different subdivisions such as Sales,
Marketing and Services under the Chief Operating Officer. On the other hand, subdivisions such
as Financial and Accounting, Human Resource, Information Communications Technology,
Accounting and Credit and Collections, and Warehouse and Logistics are under the Chief
Financial Officer.
There are five basic management functions that make up the management process.
Management consists of the interlocking functions of creating corporate policy and planning,
organizing, motivating, staffing and controlling an organization's resources in order to achieve
the objectives of that policy.
Planning
48

Planning refers to all managerial activities in order to prepare for the future. It includes
forecasting, establishing objectives, devising strategies, developing policies and setting goals.
According to Henri Fayol, it requires an active participation of the entire organization in order to
draw up a good plan of action. It must be linked to and coordinated on different levels with
respect to time and implementation. The organizations available resources and flexibility of
personnel are the things an organization needs to consider in this activity.
Managers of Keylargo Car Accessories Center gather in a meeting frequently. Meetings are held
not just within the company but also to its respective departments. Keylargo Car Accessories
Center plans yearly and after every three years. The annual planning involves the firms plan for
a year. On the other hand, Keylargo Car Accessories do strategic planning for five years. They
hire a professional management company named Guthrie Jensen Consultants to Management.
Guthrie Jensen is the leading management training and consultancy firm in the Philippines and
one of the largest in Southeast Asia. The organization conducts various training programs and
seminars in Asia, Europe and North America. The Guthrie Jensen Management Consulting
Group facilitates the strategic plan for five years. It usually happens in seven sessions, starting
from August and ending in January. The consulting group advises if the company is viable to
continue. It also gives them the strengths, weaknesses, opportunities and threats of Keylargo
Car Accessories.
Organizing
The organizing activity includes all managerial activities that result in a structure of task and
authority relationships. It includes activities such as assigning work and granting authority. An
organization can function well if it is well-organized. Sufficient capital, staff and raw materials are
important to build a good working structure. The organizational structure and the division of
functions and tasks are important in this management activity.
After the strategic planning is done, Keylargo Car Accessories starts to organize what is needed
for the business. Through the organizational structure of the company, it aims to address the
needs of every department until it reaches the Chief Executive. Since Keylargo Car Accessories
Center is a portfolio company of Hexagon Group of Companies, the company first starts to
organize from the lower management rank until it reaches the upper management and the
Hexagon Group of Companies decide for Keylargo Car Accessories Center.

49

The company is financially capable to support its raw materials and production costs. It has the
capability to accommodate its staff and give the products it offers. The staff and employees are
organized through the job qualifications and specifications related to the companys product line
and services.
Motivating
Motivating involves the efforts directed towards shaping human behaviour. Motivating involves
the leadership, communication, work groups, behaviour motivation, job enrichment, job
satisfaction and employee morale and managerial morale.
The Keylargo Car Accessories applies the reward system. The firm values loyalty, performance
evaluation and employees corporate culture appreciation. The Hexagon Group of Companies
anniversary, an awards night is held to give recognition to different employees and managers of
its portfolio companies including the Keylargo Car Accessories Center. It is usually held every
second Saturday of April. The firm is able to give certificates and cash to reward the employees.
From the usual course of line, Keylargo Car Accessories Center employees are given cash
incentives and bonus coming from the upper management of Hexagon Group of Companies
based on the performance evaluation of each to motivate them.
Staffing
The staffing activities refer to personnel or human resource management of the firm. It includes
the wage and salary administration, employee benefits and how they hire the people for the
business. It is the recruiting, selecting, training and developing employees to achieve the
companys goals.
Staffing is based from Keylargo Car Accessories Centers needs. If the people requirement is
established from Keylargo Car Accessories, it will be passed to the upper management,
Hexagon Group of Companies. Job descriptions and job specifications will be made by the
Human Resource Manager of the Hexagon Group of Companies.
Under the Human Resource Department of Hexagon Group of Companies, it selects the
possible candidates who are qualified to work for the company. Once that there is a qualified
candidate, the human resource manager will conduct a preliminary interview. Tests will also be
administered after being interviewed. The candidate will be endorsed to the unit which is the
Keylargo Car Accessories.
50

The company will conduct a background investigation on the person. He will also undergo
medical tests. Once the person has undergone the tests, the contract signing will follow. The
Hexagon Group of Companies human resource manager is tasked to assign the candidate to
train before they are deployed to Keylargo Car Accessories Center. Also, the company extends
its human resource through referrals from its employees and subscriptions from Job Street.
The employees salaries and wages are dependent on the companys salary scale per position.
The company also provides transportation or gas allowances to employees which their line of
work needs so, especially those in field positions. The mandatory benefits such as vacation and
sick leave are granted also to the employees of Keylargo Car Accessories.
Controlling
Controlling refers to all managerial activities directed toward ensuring that actual results are
consistent with planned results. It includes quality, financial, inventory, expense control, analysis
of variances, rewards and sanctions.
The Keylargo Car Accessories Center has a code of discipline. This code of discipline is to
employ company policy. It is also aligned with the companys mission and vision. The Code of
Disciplines objective of Keylargo Car Accessories is to provide employees with guidelines and
procedure for the administration of employee discipline for purposes of fairness, justice and due
process, in the imposition of corrective actions. It covers all employees within and/or outside
company premises while performing official duties. The references of the Code of the Discipline
include the Labor Code, Republic Act No. 7877 on Anti-Sexual Harassment Act of 1995,
Republic Act No. 9165 on Comprehensive Dangerous Drug Act of 2002 and DOLE Department
Order 53-03 and the Data Privacy Act of 2012.
Keylargo Car Accessories Center monitors the employees attendance through its daily time
record. The company also have a uniform policy that the employee needs to comply. Once an
employee have conflicts with its punctuality and decorum inside the office, Keylargo Car
Accessories Centers human resource development assesses and evaluates the employee and
give necessary sanctions to that certain personnel.
The procedures of an employee who have violated the Code of Discipline are the conducting of
initial investigation, issuance of citation form, preventive suspension, temporary assignment,
investigation/citation, until the decision/referral is made.

51

Figure 13. Procedures in case of Violation of the Code of Discipline

Initial
Investigation

Issuance of
Citation Form

Preventive
Suspension or
Temporary
Assignment

Investigation or
Citation

Decision or
Referral

Source:Keylargo Car Accessories Code of Discipline


Initial Investigation is when an employee, regardless of rank or position level, who is observed
by his immediate superior or reported to the latter by a concerned employee, a member of the
security force, or an outsider (e.g. customer, supplier, contractor, service provider, visitor, etc.) to
have committed any violation of the company rules or this Code of Discipline, shall be initially
investigated by his immediate superior and cited accordingly upon a finding of probable cause
within seven (7) calendar days. If no probable cause to cite exists, the immediate superior shall
accordingly advise the concerned parties that there is no basis to cite.
A citation form shall be issued or sent to the employees last known address on record by
personal delivery by at least two (2) servers or if not possible, by registered mail or courier
service, within the prescribed period in reference to the nature and gravity of the offense
committed, indicating or attaching documents detailing therein the following:
1) alleged infraction committed;
2) the acts/ omissions constituting the offense and attending circumstances;
3) manner of commission;
4)

the place and time;

5) date of commission;
6) the period within which he should submit a written explanation with a notation that failure
to submit a written explanation shall constitute a waiver of his right to be heard and to
challenge the allegation and complaint against him, and
7) all other pertinent data or evidence.
If the continued employment of an employee undergoing investigation, poses a serious or
imminent threat to the life or property of the Company or his co-employees, the said employee
may be placed under preventive suspension in accordance with the provision of the law. During
the period that the employee is under preventive suspension, the employee shall not receive
52

any pay, provided however, that he shall be entitled to payment of full back wages should he be
cleared of the charges against him. No preventive suspension shall last longer than thirty (30)
calendar days. No notice of preventive suspension shall be issued without permission of the
Head of Human Resources and Administration (HRA) and approved by the concerned
Department Head.
In case of a temporary assignment, to prevent or avoid a situation wherein an employee subject
of an initial investigation or who has been cited and whose case is being heard, may:
1) gain access for the purpose of destroying, modifying or hiding documents or other
evidences relating to the case for which he/she is being investigated/cited, or,
2) unduly influence or intimidate co-employees, or contracted personnel from giving
testimony in his/her favor or against him/her,
The assignment shall be temporary and shall in no case go beyond final resolution of his/her
case. The assignment shall be covered by a written memo, stating the tasks/functions that the
employee will perform and duration.
During the period of his temporary assignment, the functions, tasks and responsibilities shall be
assumed by his Immediate Superior or duly appointed officer-in-charge, whose appointment
will be in writing, stating the tasks/functions that the employee will perform and duration.
Within five (5) calendar days from receipt of the employees response to the CF, or any
extension thereof within which to reply, a formal investigation shall be conducted. The
Immediate Superior shall advise the employee in writing through a Notice of Meeting, of the
date, time, and venue of the investigation, and his right to have a counsel/lawyer of his own
choice during the proceedings, which he is to acknowledge and sign. The Immediate Superior
shall conduct the investigation and make the corresponding recommendation.
The Immediate Superiors findings and recommendation will then be referred to Human
Resources for review and concurrence prior to submission to the concerned Next Level
Superior/Department/Division Head for approval. However, if the penalty for the offense is
termination, the recommendation of Immediate Superior shall require the validation/approval of
Human Resources. Any dispute between the Business Unit Head and Human Resources shall
be referred to the Office of the Chairman for resolution.
In deciding the case, the following factors are to be considered:
1. Whether the citation for the alleged violation is supported by the findings;
2. Intent relative to the offense;
3. Employees record of conduct and behavior (i.e. 201 file, testimonies) on progression of
penalty; and

53

4. Similar cases, if any. Determine, for example, whether other similar instances have
occurred and been condoned previously.
B. Marketing
Marketing is the process of defining, anticipating, creating and fulfilling customers needs and
wants for products and services. The seven basic functions of marketing are customer analysis,
selling products or services, product and service planning, pricing, distribution, marketing
research and opportunity analysis. Understanding these basic functions of marketing helps
identify marketing strengths and weaknesses of the firm.
Marketing mix is used to describe the different kinds of choices organizations have to make in
the whole process of bringing a product or service to market. The 4Ps is one way of defining the
marketing mix, and was first expressed in 1960 by E J McCarthy. The 4Ps are Product (or
Service), Price, Place and Promotion.
Figure 14. 4Ps of Keylargo Car Accessories
Price
P 75 - 10,000 price range of car accessories

Product
car audio and electronics
stereos, amplifiers, speakers, security
alarms,wax and car shampoo, car matting
car enhancements - tint, roof railings,

Marketing Mix
Place
Main Office: 221, Gregorio Araneta Avenue,
Tatalon, Metro Manila, Quezon City, 1113
1077 Cielito Homes Subd. 177 Caloocan
City Metro Manila

Promotion
Print ads, displays, car shows, website,
electronic mail, promos

Product
Keylargo Car Accessories Center is an importer and distributor of a wide range of car
accessories and car audio in Manila, Philippines. It carries car audio and electronics such as
stereos, amplifiers, speakers, security alarms; car care products such as wax and car shampoo;
car enhancements such as tint, roof railings etc. They also provide custom wheels, grilles,
headlights, chrome accessories, air intakes, and exhaust systems. Other products are shown in
the appendices.
Table 7. Products of Keylargo Car Accessories
54

Source: Keylargo Car Accessories website


Price
Keylargo Car Accessories Center offers its customers various car accessories targeting ones
needs to protect ones automobile. However, competitors also provide the same car accessories
to their customers. Car Accessories companies only differ in prices it proposes. For Keylargo
Car Accessories, the product prices vary depending on the type of accessory and technology
each accessory it possesses. The whole price list is in the appendices.
Place
Choosing a strategically located area will enable a company to develop and grow in the current
market the company is in. The location affects the companys advantages. It also allows the
company to formulate corresponding strategies to overcome the weaknesses of the companys
location. The vicinity map of Keylargo Car Accessories is as follows.
Figure 15. Vicinity Map of Keylargo Car Accessories

55

Source: Google Maps


Keylargo Car Accessories is located at 1077 Cielito Homes Subd. 177 Caloocan City, Metro
Manila. The place is located within Metro Manila which the company can deliver Keylargo Car
Accessories products to various parts of Luzon. It is strategically located in Caloocan which it
can manufacture the products, produce and distribute to its respective distribution channels.
Promotion
Keylargo Car Accessories Center promotes its products through print ads, displays, car shows,
website and via electronic mail. Print ads promotions are through flyers, magazines and sign
boards. The products are also shown through gondola displays. Other ways to promote its
products are through car shows and exhibits. The company joins in road shows and motor
shows. The lowest amount that Keylargo Car Accessories has spent in joining in car shows was
around 600,000 pesos car with the products of the company featured. Keylargo Car Accessories
also sponsor in car shows. Promos are also being considered. They have product bundling. For
example, tint on a rainy season, a customer chooses to buy 10 rolls will be given additional 2
rolls for free. This is because the number of car tints being sold on this kind of season is very
low. Keylargo Car Accessories Center has a website through which it can advertise its products.
Also, the company is also sending electronic mail messages to its customers in case there are
new products to be sold.
Customer Analysis
56

Customer Analysis is the examination and evaluation of consumer needs, desires and wants. It
involves the initiation of customer surveys, development of customer profiles and determination
of optimal market segmentation strategies.
Keylargo Car Accessories Center gives customer feedback twice a year. The feedback identifies
the respective marketing agenda on complaints and customer survey. Through the customer
survey, it identifies if the marketing objectives are being met. If the marketing objectives are not
met, the company will initiate a corrective preventive action report. After consolidating and
collating the customer feedback, a management review will be held every six months. The
customer feedback is essential because it gives the company an idea of whether there is a low
customer survey or if there is a complaint on their products.
Selling Products/Services
To sell products or services includes marketing activities on advertising, sales promotion,
publicity, personal selling, sales force management, customer relations and dealer relations. It
pursues market penetration strategy.
The market size of Keylargo Car Accessories Center is composed of car manufacturers and car
dealers. To advertise and promote its products, Keylargo Car Accessories have ways to keep
the consumers aware of and be moved to buy its products.
The company is frequently handling flyers to advertise its products. For about 5 million pesos,
Keylargo Car Accessories choose to spend its budget for its promotional activities. Keylargo Car
Accessories also promote its products in malls through gondola displays. The company also
spends money for gondola displays in malls per space it occupies. Also, they promote through
print ads and in magazines especially those magazines leading in the automotive industry.
Aside from the usual paper ads and promotions, Keylargo Car Accessories also promote the
products through an e-mail messaging blast to customers.
There is competition in the car accessories industry. As of the moment, new players are coming
making their or own house brands or carrying China brands. With respect to demand and
supply, the spending power of the middle class market consumers is increasing.
Product and Service Planning

57

The product and service planning refers to activities important to a companys product
development or diversification. It includes test marketing, product and brand positioning,
warranties, packaging and activities providing for customer service.
Keylargo Car Accessories has a strategic and annual plan. If the marketing has met the
objectives, it initiates the procedures through the customer feedback. An action plan is
formulated which includes the target, projections, percentage of customers and support
department to meet the objectives.
Pricing
The consumers, government, suppliers, distributors and competitors affect the pricing decisions
of a firm.
Keylargo Car Accessories pricing decisions is not delegated to any employee by the Chief
Operating Officer. The Chief Operating Officer has the duty to price. It has the expertise in field
markets. Also, the pricing is kept with utmost confidentiality with regards to the costs. Pricing is
made by the Chief Operating Officer.
Distribution
Distribution includes warehousing, distribution channels, coverage, locations, inventory levels
and locations, transportation carriers and retailing and wholesaling. It also involves how a firm
sells its products.
Products are being distributed through after-markets, car accessories and individual car
accessories stores. It extends to the household section in supermarkets and groceries and
kiosks. Also, the company is open with direct marketing through bus companies, taxi operators
and restaurants.
Currently, total brand new cars are increasing every year by more than 10%. In the Philippines,
Ace Hardware and Handyman keep on opening new outlets. Also, the second hand car market
is active.
The distribution of Keylargo Car Accessories is being evaluated through a credit investigation.
The company is able to pay for a credit investigation to be done.
Marketing Research

58

Marketing research is the systematic gathering, recording, and analyzing of data about
problems relating to the marketing of goods and services. It can uncover the critical strengths
and weaknesses. Through market research, researchers employ numerous scales, instruments,
procedures, concepts and techniques to gather information.
Keylargo Car Accessories is a member of a suppliers association of car manufacturers. It is a
member of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI, Inc.) The
CAMPI, Inc. is an organization to protect the interests of the automotive industry in the
Philippines. It is an organization recognized by the government and private sector groups in the
Philippine automotive industry.
With the aid of the CAMPI, Inc., the marketing research is being held by the Keylargo Car
Accessories. Through the updates and news released by CAMPI, Inc., the company knows the
development of the transportation industry in the country. Through this, Keylargo Car
Accessories is not incurring costs and expenses to conduct a marketing research.
Opportunity Analysis
Opportunity analysis or the cost/benefit analysis involves assessing the costs, benefits and risks
associated with marketing decisions. It is used to evaluate the companys ways to be socially
responsible.
The opportunity analysis of the Keylargo Car Accessories is included in the strategic plan.
Currently, the opportunity that Keylargo Car Accessories is realizing is the ASEAN Free Trade
Area (AFTA). The Philippines, being an ASEAN country and included in the AFTA, has an
impact on Keylargo Car Accessories. An opportunity of the company is the potential product of
Keylargo Car Accessories for the AFTA is California Scents.
C. Finance/Accounting
Financial and accounting analysis is used to know the firms competitive position and overall
attractiveness to investors. It determines an organizations financial strengths and weaknesses.
The functions of finance or accounting comprise three decisions: the investment decision, the
financing decision and the dividend decision.
Keylargo Car Accessories Center covers the three financial decisions the investment,
financing and dividend decision. The finance unit of Keylargo Car Accessories is being
managed by the Treasury Fund Management Unit of the Hexagon Group of Companies. The
59

Trust Fund Management Unit is assigned to decide on how to invest the funds with the other
portfolio companies under Hexagon Group of Companies including the Keylargo Car
Accessories.
The Trust Fund Management Unit is in charge with the financing decision through cash
collections and cash payables. If there are excess funds, it is the Trust Fund Management Unit
that keeps the fund for pending decision for the company.
Also, the dividend decision is also considered. Board meetings are held for the dividend
decisions of the company. The managers choose to decide whether they would declare the
dividends of the company.
Financial Ratio Analysis
Financial ratio analysis is the most widely used method for determining an organizations
strengths and weaknesses in the investment, financing and dividend areas. Financial ratios are
used to signal the strengths or weaknesses in management, marketing, production, research
and development, and management information system activities.
Liquidity Ratios
Liquidity ratios measure a firms ability to pay off its short-term obligations. Having higher value
of liquidity ratios, the company has a larger margin of safety that it can possess to cover the
short-term debts. The ratios under liquidity ratios are the current ratio and the quick ratio.
Current Ratio
The current ratio measures the firms ability to meet its short-term obligations with its short-term
assets. With a high current ratio, there is a higher ability of a firm to meet its short-term
obligations. The formula for the current ratio is as follows:

Current Assets
Current Liabilities
Table 8. Current Ratio

Current Assets

2012

2013

2014

308,388,356.28

344,322,508.67

333,953,167.58

60

Current Liabilities

107,088,432,20

104,712,073018

40,226,242.73

2.88:1

3.29:1

8.30:1

As for Keylargo Car Accessories, the companys current ratio has increased for the years 2012
2014. This means that the company is still able to turn its products into cash within the three
year span. The year 2014 has the highest current ratio while the lowest current ratio is the year
2012. In the year 2014, Keylargo Car Accessories is much more able to turn cash to meet its
short-term abilities.
Quick Ratio
The quick ratio measures the firms ability to meet its short-term obligations without the
inventories. A high quick ratio means that the company has the financial strength while a low
quick ratio means that the company has a financial weakness. The formula for the quick ratio is
as follows:

Current AssetsInventories
Current Liabilities
Table 9. Quick Ratio
2012

2013

2014

Current Assets -

308,388,356.28-

344,322,508.67-

333,953,167.58-

Inventories

104,580432.20

115,926,828.11

116,873,564.60

Current Liabilities

107,088,432,20

104,712,073018

40,226,242.73

1.90

2.18

5.40

The Keylargo Car Accessories quick ratio for the year 2012 has been increasing until the year
2014. It means that the company is even more able to meet its short-term obligations with its
most liquid assets for the year 2014. Keylargo Car Accessories has the financial strength each
year to meet its short-term obligations without the inventories for the year 2014.
Leverage Ratios
61

Leverage ratios measure the extent to which a firm has been financed by debt. It is used to
compute the financial leverage of the firm to get an idea of the companys ways to finance and
meet its financial obligations. Leverage ratios are used to measure a companys operating costs
and how will it affect the operating costs from the company and the industry. The leverage ratios
are debt to total assets and debt to equity ratios.
Debt to Total Assets Ratio
The debt to total assets ratio is the percentage of total funds that are provided by its creditors.
The formula for the debts to total assets ratio is:

Total Debts
Total Assets
Table 10. Debt to Total Assets Ratio
2012
Total Debts

Total Assets

2013

2014

104,712,073.18

40,226,242.73

324,450,091.60

361,093,612.19

354,397,345.46

0.33

0.30

0.11

107,088,432.20

Keylargo Car Accessories Centers debt to total assets ratio is higher in the year 2012 and lower
in the year 2014. Having a low debt to total assets ratio shows that, in the year 2014, there is a
low degree of leverage. Therefore, there is low financial risk on the part of Keylargo Car
Accessories Center.
Debt to Equity Ratio
The debt to equity ratio is the percentage of the total funds of a firm provided by creditors versus
the owners. The formula for the debt to equity ratio is:

Total Debts
Total Shareholder ' s Equity

62

Table 11. Debt to Equity Ratio


2012

2013

2014

Total Debts

107,088,432.20

104,712,073.18

40,226,242.73

Shareholders Equity

217,361,659.40

256,381,539.01

314,171,102.72

0.49

0.41

0.13

In the year 2014, the company has showed a low debt to equity ratio. The debt to equity ratio is
used to show the proportion of equity and debt that the company is using to finance its assets.
By this, the Keylargo Car Accessories could potentially generate more earnings in the past
years 2012 and 2013 than it would have without its debts in the year 2014.
Activity Ratios
Activity ratios measure how effectively a firm is using its resources. These are the ratios that can
measure a firms ability to convert different accounts within its balance sheets into cash or sales.
The activity ratios are used to measure the relative efficiency of a firm based on its use of its
assets, leverage or other such balance sheets items. It is important in determining whether a
companys management is doing a good enough job of generating revenues, cash and others
from its resources. The activity ratios are inventory turnover, fixed asset turnover and total asset
turnover.
Inventory Turnover
The inventory turnover determines whether the firm holds excessive stocks of inventories and
whether a firm is slowly selling its inventories compared to the industry average. It is a measure
of the number of times the inventory sold or used in a time period as such a year. A low turnover
implies poor sales and excess inventory while a high ratio implies either strong sales or
ineffective buying. The formula for the inventory turnover is:

Sales
Inventory of Finished Goods
Table 12. Inventory Turnover

63

2012

2013

2014

Sales

368,745,112.00

401,794,000.00

481,972,000.00

Inventories

104,580,004.28

115,926,418.12

116,873,564.60

3.53

3.47

4.12

Keylargo Car Accessories Centers inventory turnover decreased from the year 2012 to 2013
and increased from 2013 to 2014. The inventory turnover of the company is high in the year
2014. It shows that the companys inventory turnover ratio shows a high sales and increasing
inventories until the year 2014.
Fixed Asset Turnover
Fixed asset turnover ratio measures sales productivity and plant and equipment utilization. It is
a financial ratio of net sales to fixed assets. It measures a companys ability to generate net
sales from fixed-asset investments, specifically property, plant and equipment and the net of
depreciation. A higher fixed-asset turnover ratio shows that the company has been more
effective in using the investment in fixed assets to generate revenues. The formula for the fixed
asset ratio is:

Sales
Assets
Table 13. Fixed Asset Turnover
2012

2013

2014

Sales

368,745,112.00

401,794,000.00

481,972,000.00

Fixed Assets

10,599,168.58

11,155,275.47

13,711,051.25

34.79

36.02

35.15

The fixed asset turnover of Keylargo Car Accessories Center is increasing from the year 2012
up to year 2014. It shows that the company is more effective in using its assets in the year 2014
and a little has been increased from the year 2013.
Total Asset Turnover
64

The total asset turnover determines whether a firm is generating a sufficient volume of business
for the size of its asset investment. It is used to measure the ability of the company to use its
assets to efficiently generate sales. The ratio considers all assets, current and fixed. The lower
the total asset turnover ratio, the company is more sluggish when it comes to its sales. The
formula for the total asset turnover is:

Sales
Total Assets
Table 14. Total Asset Turnover
2012

2013

2014

Sales

368,745,112.00

401,794,000.00

481,972,000.00

Total Assets

324,450,091.60

361,093,612.19

354,397,345.46

1.14

1.11

1.40

Within the years 2012 and 2013, the total asset turnover ratio decreased. However, in the year
2014, the total asset turnover ratio increased from the year 2013. This means that Keylargo Car
Accessories Center is able to generate more sales with its invested assets.
Profitability Ratios
Profitability ratios measure managements overall effectiveness as shown by the returns
generated on sales and investment.
Gross Profit Margin
Gross profit margin ratio measures the total margin of a company which is available to operating
expenses and yields a profit. It is used to assess a firms financial health by revealing the
proportion of money left over from revenues after accounting the cost of goods sold. The
formula for gross profit margin is as follows:

SalesCost of Goods Sold


Sales
Table 15. Gross Profit Margin
65

2012

2013

2014

Sales

368,745,112.00

401,794,000.00

481,972,000.00

Cost of Goods Sold

206,383,202.00

235,534,000.00

286,209,000.00

Sales

368,745,112.00

401,794,000.00

481,972,000.00

44%

42%

41%

The gross profit margin of Keylargo Car Accessories has been decreasing since 2012 to 2014.
From 44% in the year 2012, the company decreased to 41%. At the end of each day, Keylargo
Car Accessories sells and earns 41% of their products in the year 2014 unlike in the year 2013
which is 42%.
Operating Profit Margin
The operating profit margin measures the profitability of the firm without concern for taxes and
interest. It shows how much cash is thrown off after most of the expenses are met. It identifies
whether the company has good cost control or that sales are increasing faster than the costs.
The formula for the operating profit margin is the following:

Earnings before InterestsTaxes


Sales
Table 16. Operating Profit Margin
2012

2013

2014

EBITDA

77,786,393.00

81,402,000.00

105,276,411.72

Sales

368,745,112.00

401,794,000.00

481,972,000.00

21%

20%

22%

Keylargo Car Accessories Centers operating profit margin ratio shows that the company is
profitable from 21% in the year 2012 until it gained 22% in the year 2014. The company has
less money that was thrown off after the expenses are met in the year 2013 with 20% operating
profit margin ratio. Keylargo Car Accessories Center has high operating profit margin in 2014,

66

with 22% which means that it has good cost control and that its sales are increasing faster than
it occur costs.
Net Profit Margin
The net profit margin ratio shows the after-tax profits per peso of sales. It shows how good a
company is at converting revenue into profits available for shareholders. The formula for the net
profit margin is:

Net Income
Sales
Table 17. Net Profit Margin
2012

2013

2014

Net Income

39,068,893.00

39,019,879.61

57,789,563.71

Sales

368,745,112.00

401,794,000.00

481,972,000.00

11%

10%

12%

For the years 2012 to 2014, Keylargo Car Accessories net profit margin in the year 2013 is
much higher than in the year 2014. It means that in the year 2013, Keylargo Car Accessories is
less profitable than in the year 2014 for it has better control over its costs compared to its
competitors. Since it has a low profit margin in the year 2013, there should be some adjustment
in the pricing strategy and there should be impact on margins.
Return on Assets
Return on assets is the after-tax profits per peso of assets. This is also called as the return on
investment. It tells what earnings were generated from the invested capital or assets. Return on
Assets formula is the following:

Net Income
Total Assets
Table 18. Return on Assets

67

2012

2013

2014

Net Income

39,068,893.00

39,019,879.61

57,789,563.71

Total Assets

324,450,091.60

361,093,612.19

354,397,345.46

12%

11%

16%

Keylargo Car Accessories Center shows an increasing return on assets ratio. Even though it
decreased in the year 2013 from 12% to 11%, it gradually increased in the year 2014 which is
16%. With a high return on assets ratio number, Keylargo Car Accessories is earning more
money on less investment.
Return on Equity

Net Income
'
Shareholder s Equity
Table 19. Return on Equity
2012

2013

2014

Net Income

39,068,893.00

39,019,879.61

57,789,563.71

Shareholders Equity

217,361,659.40

256,381,539.01

314,171,102.72

18%

15%

18%

Return on Equity is used to evaluate a companys stock. The return on equity is much higher in
year 2014 than the year 2013. It shows that Keylargo Car Accessories is profitable. It shows that
the company generates profit more with the money the shareholders have invested in.
D. Production/Operation
The production or operations function of a business consists of all those activities that transform
inputs into goods and services. It deals with inputs, transformations, and outputs that vary
across industries and markets. Production or operation is how raw materials, labor, capital,
machines and facilities are transformed and converted into finished goods and services. Roger
Schroeder suggested the five functions or decision areas: process, capacity, inventory,
workforce, and quality.
68

Process
All materials and supplies of Keylargo Car Accessories are being imported from various
countries such as Japan, China, Indonesia and Thailand. Alternative products are readily
available in the Philippines in event of shortage. The facilities, equipment, machinery and offices
are in good condition. These facilities are maintained regularly applying the preventive
maintenance program.
The products that are being manufactured by Keylargo Car Accessories Center are covers such
as seat cover and car covers. Also, the company manufactures car matting. In making the
covers and matting, the company choose to make it themselves with the aid of its personnel.
Since covers and matting are being manufactured, these care covers and seat covers are
personally sewn, making it a true product of Keylargo Car Accessories.
Capacity
Keylargo Car Accessories is capable of manufacturing its very own products. It is never an issue
of the company. The reason behind its capacity to produce its products is that the company
hired a subcontractor. If ever the machines do not work well, the subcontractor will delegate the
task to Keylargos personnel.
Inventory
Inventory-control policies and procedures are effective within the firm. Quality-control
procedures and policies are also effective. The company has huge inventories of its products.
Keylargo Car Accessories is maintaining its stock level within eight months inventory. Money is
not put to waste in terms of the companys inventory levels. Keylargo Car Accessories choose to
maintain the inventory within eight months to avoid the situation like the pork congestion. The
inventory anticipates the future conflict that Keylargo Car Accessories may get into the way.
Workforce
Keylargo Car Accessories has a regular workforce. The workforce is being hired by the
Hexagon Group of Companies. Some members of the workforce are not given permanent
positions, being temporary members of the workforce. These members are hired through
agencies. Temporary positions that help the company in its production or operations are the
promodisers, advertisers and the like.

69

Quality
The quality of products is being maintained by Keylargo Car Accessories. Quality is the utmost
and important in the industry. The company has quality control. Keylargo Car Accessories
quality control is aligned with ISO Procedures. Right now, the firm is aligned with the ISO
Procedures and the company is planning to have it certified by 2015. The facilities, resources,
and markets of Keylargo Car Accessories are strategically located. The company have
technological competencies. Keylargo Car Accessories employed technical persons to inform
technical problems that require such expertise.
E. Research and Development
Research and Development of a company should be examined for specific strengths and
weaknesses. Firms pursuing a product development strategy need to have a strong R&D
orientation. It involves research for potential development of products of a company. These are
investigative activities that a business chooses to conduct with the intention of making a
discovery that can either lead to the development of new products or procedures. It is also to
improve of existing products or procedures.
The Research and Development of Keylargo Car Accessories is being outsourced from China. It
is cost-effective on its part because costs are less if they come from China. The MIS and
computer systems are adequate. It is a customized system developed by IT Group, Inc., a
member of Hexagon Group of Companies. Also, another system being used is an enterprise
resource program, Net Suite, a cloud based Enterprise Resource Planning (ERP) which is now
being used by the leading companies in the world.
The communication of R&D and other organizational units in Keylargo Car Accessories
communicate effectively since it comes from the Marketing that looks what the market needs.
Through the R&D, the sources it got from Marketing and other departments, the R&D develops
it.
Aside from the outsourced R&D of Keylargo Car Accessories, the company is relying on CAMPI,
Inc. trends. The latest trends on automotive industry give them the idea to improve or develop
new products of Keylargo Car Accessories. With the ideas as well of the Chief Executive Officer
of Keylargo Car Accessories, there is an advantage of travelling which makes them see other
trends in the industry. The application of the ideas gathered from CAMPI and the Chief
Executive Officer is being tried over the company. There are no costs as to which the R&D for
70

this matter is incurred. This R&D is continuing because it is dependent on market needs. What
the market needs, Keylargo Car Accessories choose to accessorize it especially those what is
the latest trend of the industry.
F. Management Information System
Management Information System is the organized approach to the study of the informational
needs of an organizations management at every level. It is where data are being processed,
integrated and stored in a centralized database. It is constantly updated and made available to
all who have the authority to access it, in a form that suits their purpose.
In Keylargo Car Accessories, all managers use the information system to make decisions. There
is no CIO or Director of Information System in Keylargo Car Accessories. However, the ICT
Manager reports directly to the CIO of the Hexagon Group of Companies, the management arm
of Keylargo Car Accessories.
The data within the firm is updated regularly. Also, managers from all functional areas contribute
to the information system of Keylargo Car Accessories. There are effective passwords for entry
within the companys information system. All systems used are security enabled system using
Computer Automated Public Turing test to tell Computers and Humans Apart (CAPTCHA).
Keylargo Car Accessories Management Information System is familiar with other firms
information system. The Hexagon Group of Companies CIO Officer who happened to be a
Chief Executive of IBM before and also headed the SGV &Cos CPA of the IT Department
during its prime; it is capable enough to be familiar with the information system not only of the
rival firms but also other businesses in the country. The information system of the company is
user-friendly. Users of the information system of Keylargo Car Accessories understand the
competitive advantages that its information provides. The company also provides computer
training workshops for the users. Lastly, the firms system is being improved regularly as well.
G. Summary and Conclusion
As a whole, the internal factors of Keylargo Car Accessories were analyzed. It showed the key
internal factors through its strengths and weaknesses. An internal factor evaluation matrix was
formulated to show the scores of each companys factors.
1. Summary of Key Internal Factors

71

Keylargo Car Accessories is commendable for its management. The organizational structure of
the company is simple and is not that complicated. As for its Marketing, there is a growing
market size which helps the company gain profit from. Also, there is also the existence of
upcoming players in the market that could compete with them. For the years 2012-2014, the
company has a good financial condition. This means that the company has more opportunity to
maintain or improve for the years to come. The production and operations get the companys
products from various countries. Keylargo Car Accessories has good facilities and equipment to
support the products it sells. The products are also under quality-control procedures. The
research and development department of Keylargo Car Accessories is being outsourced from
China which is very cost-effective. It has information system from Hexagon Group of Companies
and Net Suite. Keylargo Car Accessories managers use the information system in decisionmaking. It is also being updated and secured with a password.
2. Internal Factor Evaluation (IFE) Matrix
The Internal Factor Evaluation (IFE) Matrix is a strategic management tool which audits or
evaluates major strengths and weaknesses of a company. It provides a basis for identifying and
evaluating relationships among these areas. It is also a tool used in strategy formulation.

Table 20. Keylargo Car Accessories Internal Factor Evaluation Matrix


Strengths

Weight

Caters to different shops

Rating

Score

0.05

0.10

0.12

0.60

Financially stable

0.12

0.60

Numerous distribution channels

0.07

0.21

Cost Reduction

0.08

0.24

Has competitive strategic planning

0.10

0.40

0.07

0.21

Products

mainly

made

in

different

countries

Weaknesses
Long decision making process

72

Rebate and reimburse in Ace Hardware

0.05

0.10

Changing market segment

0.12

0.24

Few best selling products

0.12

0.48

High marketing expense

0.10

0.30

and other hardware and car accessories


shops

TOTAL

1.00

3.48

Internal Factors Matrix showcased Keylargo Car Accessories strengths that can help them
penetrate in the market. Since they are in the field of car accessories, they have products which
come from various countries which can help them gain profit. Since there are also products that
come from China, it helps them to save costs in the company.
Weaknesses as of the moment can be overcome in the future. Keylargo Car Accessories is not
the only company which provides car accessories in the market. In the current market, there are
new players that might get in the way. Also, car accessories are often being advertised in the
market makes it costly. The changing market segment is what the company is facing as its
major weakness for offering products to DIY shops gives these shops a percentage of the profit
from the products they sell. Also, groceries and supermarkets give little of its space to these
products with pay in order for it to be sold.
The key factors are highest for the strengths are the companys financial stability and its
products mainly made from other countries. These key internal factors for the strengths have
0.12 as weight and 5 as rating resulting to 0.60 as score. The company is that financially stable
enough to provide the products to the market. With its financial stability, the company can get
products from other countries and enter it into the Philippine market. Also, Keylargo Car
Accessories sells products imported from various countries which is the companys major
strength. These products coming from other countries are with top quality which is one of the
competitive advantages of the company.
On the other hand, the lowest among the key internal factor strengths is that the company
caters to different shops. It has a weight of 0.05, a rating of 2 and a score of 0.10. The company
is open for showing and selling its products with numerous shops. It may be a good factor.

73

However, selling products with hardware shops might be too costly for these shops have a
share of the companys profits.
The highest among the companys key internal factor weaknesses is the companys few best
selling products. This internal factor has a 0.12 weight, 4 rating and 0.48 score. It shows that the
company may have numerous products but only a few are best selling. By this, only the best
selling products are known in the market. The lowest internal factor weakness is the rebate and
reimbursement of the company in hardware shops. It has a 0.05 weight, 2 rating and 0.10 score.
The rebate and reimbursement of the company in hardware shops is low because it does affect
the companys profits but since the company is financially stable. The company is available to
fund these hardware shops without ease.

V.

Strategy Formulation

Strategy formulation is the process of developing a companys strategies. The strategies being
formulated are assessed through the different strategic management matrices. The matrices
include Threats-Opportunities-Weaknesses-Strengths (TOWS) Matrix, Strategic Position and
Action Evaluation (SPACE) Matrix, Boston Consulting Group (BCG) Matrix, Internal-External
(IE) Matrix, Grand Strategy Matrix and the Quantitative Strategic Planning Matrix (QSPM).
A. The Threats-Opportunities-Weaknesses-Strengths (TOWS) Matrix
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The Threats-Opportunities Weaknesses-Strengths (TOWS) Matrix is an important matching


tool that helps managers to develop four types of strategies: Strengths Opportunities (SO)
Strategies, Weaknesses Opportunities (WO) Strategies, Strengths Threats (ST) Strategies and
Weaknesses Threats (WT) Strategies. It matches the key external and internal factors of the
company.
Table 21. TOWS Matrix of Keylargo Car Accessories
Strengths
1. Caters to different shops
2. Products mainly made in
different countries
3. Financially stable
4. Numerous distribution
channels
5. Cost Reduction
6. Has competitive strategic
planning
Opportunities

SO Strategies

1. Number

of

interest group in

1. Produce more products


concerning automotive

the Philippines
2. Online

security (S2, O3)


2. Extend online shopping (S1,

marketplaces
3. Rise
of

O2)
3. Invest more on products

carnapping
Cases
4. Growing

(S3, O4)

Weaknesses
1. Long decision making
process
2. Rebate and reimburse in
Ace Hardware and other
hardware and car
accessories shops
3. Changing market segment
4. Few best selling products
5. High marketing expense
WO Strategies
1. Advertise other products
online (W4, O2)
2. Effectively plan a product
that concerns automotive
security (W1, O3)
3. Extend to new markets (W3,
O1)

GDP

Trend
5. Transport as 7th
place

in

HFCE
6. Number

the
of

Registered
Motor Vehicle in
the Philippines
7. Per
Capita
Income
8. Keylargo

has

more products in
75

the market than


competitor
Threats

ST Strategies

1. ASEAN
Intergration
AFTA
2. 12%

Value

Added Tax
3. Online
marketplaces
4. Electronic
immobilizers

WT Strategies

1. Potential entry of California

1. Free promotional activities

Scents to AFTA (S2, T1)


2. Competitively plan to online

online (W5, T3)


2. Extend more promos online

marketing (S6, T3)


3. Produce more products

(W4, T3)
3. Extend to international

integrated with technology

market (W3, T1)

(S2, T4)
4. Competitively plan for the
entry to AFTA (S6, T1)

Keylargo Car Accessories has potential in extending into new markets when both the
opportunities and threats together with the strengths and weaknesses combine. The company
has competitive strategies that it can to be able to maintain in the industry. Keylargo Car
Accessories can use the SO strategies by exploiting its internal strengths and take advantage of
the external opportunities. The company can also improve its internal weaknesses by taking
advantage of the external opportunities through the WO strategies. Since the company has
competitive strategic planning for five years, it can consider in the plan for online marketing. It
can also plan the potential entry of Keylargo Car Accessories to the ASEAN Free Trade. A firm
can use its strengths to avoid or reduce the impact of external threats. It can extend to new
potential markets. Keylargo can effectively plan a product that concerns the automotive security.
Also, it can advertise products online.
The company can also reduce the impact of its weaknesses and threats through the WT
strategies. Since there is the innovation of technology, Keylargo Car Accessories can extend
into the online world. It can extend to promoting its products or extending promos online.
B. The Strategic Position and Action Evaluation (SPACE) Matrix
The Strategic Position and Action Evaluation (SPACE) matrix is another important matching
tool. Its four quadrant framework indicates whether aggressive, conservative, defensive or
competitive strategies are most appropriate for a given organization.
Table 22. SPACE Scores of Keylargo Car Accessories
FINANCIAL POSITION
1. Liquidity
2. Leverage
3. Inventory

RATING
6.0
2.0
76

4. Working Capital
5. Return on Investment

4.0
5.0
4.0

INDUSTRY POSITION
1. Growth potential
2. Profitability
3. Financial Stability
4. Resource Utilization
5. Capacity Utilization

6.0
5.0
7.0
5.0
4.0

STABILITY POSITION
1. Technological Changes
2. Demand Variability
3. Price Range
4. Competitive Pressure
5. Risk involving business

-3.0
-4.0
-2.0
-3.0
-3.0

COMPETITIVE POSITION
1. Market Share
2. Product Quality
3. Brand Reputation
4. Variety of Products
5. Online Presence

-3.0
-2.0
-2.0
-1.0
-3.0

Conclusion
SP Average is -15 / 5 = -3.00
CP Average is -11 / 5 = -2.20
Directional Vector Coordinates: x-axis: 4.20 +

IP Average is 27 / 5= 5.40
FP Average is 21 / 5 = 4.20
y-axis: 4.20 + (-3.00) = 1.20

(-2.20) = 2.00
CONCLUSION: Aggressive
Figure 16. SPACE Matrix of Keylargo Car Accessories

77

Keylargo Car Accessories is under the aggressive quadrant. A firm with an aggressive quadrant
is in an excellent position to use its internal strengths to take advantage of the external
opportunities, to overcome the internal weaknesses and to avoid the external threats. The
company is feasible to face market penetration and development, product development,
forward, backward or horizontal integration or diversification. Keylargo Car Accessories is a
financially strong firm that has achieved its advantages in a growing industry. The dominating
factor in the industry of Keylargo Car Accessories is its financial strength, making it as an
aggressive profile company.
C. The Boston Consulting Group (BCG) Matrix
The Boston Consulting Group Matrix is a valuable tool for helping companies to understand its
potential. It displays the various business units on a graph of the market growth rate vs. market
share relative to competitors. It aims to identify high-growth prospects by categorizing the
companys products according to growth rate and market share.
Figure 17. BCG Matrix of Keylargo Car Accessories

78

Market Share: 30%


Market Growth: 20%
Cash Cow
The Keylargo Car Accessories is a cash cow. Keylargo Car Accessories that it makes a lot of its
products. It has high market share but low growth prospects. Most products, especially
California Scents, do not need enough effort to be produced in the market. It only requires little
investment and generates cash that can be used to invest in other businesses. By this, it is
noted that Keylargo Car Accessories can provide required to return, pay the costs and service
debts in relation to the business.
D. The Internal-External (IE) Matrix
The Internal-External (IE) Matrix is a matrix that is based upon the internal and external factors
of the organization. It is an important strategic tool which comes under the portfolio
management considered much similar to BCG Matrix. It is used to plot the organization divisions
in nine cell diagram, each cell have some meaning associated with suggest strategies. The
Internal-External Matrix is used to analyze the current position of the divisions and suggest the
strategies for the future for better results.
Table 23. IE Matrix Scores
79

EFE Total Weighted Score


IFE Total Weighted Score

2.25
3.48
Quadrant I: Grow & Build

Figure 18. Internal External (IE) Matrix of Keylargo Car Accessories


EFE TOTAL

IFE TOTAL WEIGHTED SCORES

WEIGHTED SCORES
4.0
3.0

3.0
I

2.0
II

1.0
III

V
VIII

VI
IX

Keylargo Car Accessories

2.0
1.0

IV
VII

Keylargo Car Accessories is under Quadrant I which is the Grow & Build quadrant. Companies
within this quadrant are prescribed to intensive or integrative strategies. The Intensive strategies
such as market penetration, market development and product development are appropriate for
a Grow & Build company. Keylargo Car Accessories can also invest into integrative strategies
like the forward, backward or horizontal integration.
E. The Grand Strategy Matrix
The Grand Strategy Matrix is a very useful instrument for creating different and alternative
strategies for an organization. The Grand Strategy Matrix has four quadrants. Each quadrant
contains different and the entire firms along with their respective divisions must fall in one of the
quadrant. The matrix has two dimensions which are the competitive position and market growth.
The GS matrix has four strategy quadrants namely:
Quadrant I is the best strategic position. It depicts rapid market growth and strong competitive
position of a certain company.
Quadrant II has a growing market however needs to re-evaluate its competitive strategies;
Quadrant III market growth moves slowly and has a weak competitive position. Diversification
and defensive strategies should be pursued and prioritized;
Quadrant IV has strong competitive position but has a slow growth in industry. Diversification
and joint ventures are the best way to improve a firms growth.
Figure 19. Grand Strategy Matrix of Keylargo Car Acessories

Rapid Market
Growth
Quadrant II

Quadrant IV

Quadrant I

Keylargo Car Accessories

Quadrant IV

Strong
80
Competitive
Position

Char

Weak
Competitive
Position

Slow Market
Growth

The figure shown presents the grand strategy matrix of Keylargo Car Accessories. The firm is
said to be under Quadrant I meaning the company is an excellent strategic position. Strategies
focusing on markets and products under Quadrant I are suitable. Keylargo Car Accessories
should utilize its strengths well and improve on its weaknesses in order to seize the
opportunities, achieve the continuing market growth and sustain its strong competitive position.
Quadrant I strategies include market development, market penetration, product penetration,
forward integration, backward integration, horizontal integration and related diversification.
F. The Quantitative Strategic Planning (QSPM) Matrix
The Quantitative Strategic Planning Matrix is a strategic tool which is used to evaluate
alternative set of strategies. It incorporates the earlier stage details in an organize way to
calculate the score of multiple strategies in order to find the best match strategy for the
organization. This QSPM method falls within so-called stage 3 of the strategy formulation
analytical framework.
The top 3 strategies is based on the matrices summary results being compared against the
stated opportunities and threats, and strengths and weaknesses from the external and the
internal analysis, respectively. WT means weight which is copied from the EFE and IFE
Matrices. The AS means attractiveness scores. The attractiveness scores range from 1=not
attractive, 2 = somewhat attractive, 3 = reasonably attractive and 4 = highly attractive. N/A or
not applicable can be applied as long as it is applicable to all three strategies being analyzed.
Lastly, TAS means total attractiveness scores. This is derived through multiplying the
attractiveness scores and the weight.
Figure 20. The Quantitative Strategic Planning (QSPM) Matrix of Keylargo Car Accessories
KEY FACTORS

WT
Market

INTENSIVE STRATEGIES
Market
Product
81

Penetration
AS
TAS

Opportunities
1. Number of interest
group in the
Philippines
2. Online
marketplaces
3. Rise of carnapping
Cases
4. Growing GDP
Trend
5. Transport as 7th
place in the HFCE
6. Number of
Registered Motor
Vehicle in the
Philippines
7. Per Capita Income
8. Keylargo has more
products in the
market than
competitor
Threats
1. ASEAN
Intergration AFTA
2. 12% Value Added
Tax
3. Online
marketplaces
4. Electronic
immobilizers
TOTAL
Strengths
1. Caters to different
shops
2. Products

Development
AS
TAS

Development
AS
TAS

0.06

0.18

0.18

0.12

0.08

0.08

0.08

0.08

0.06

0.12

0.12

0.12

0.12

0.36

0.24

0.12

0.09

0.27

0.27

0.27

0.06

0.18

0.18

0.18

0.10

0.20

0.20

0.20

0.08

0.24

0.24

0.24

0.10

0.20

0.30

0.20

0.11

0.11

0.11

0.11

0.08

0.08

0.24

0.24

0.06

0.18

0.12

0.12

1.00

2.20

2.28

2.18

0.05

0.15

0.15

0.10

0.12

0.36

0.36

0.36

0.12
0.07

3
2

0.36
0.14

2
1

0.36
0.07

3
2

0.24
0.14

mainly

made in different
countries
3. Financially stable
4. Numerous

82

distribution
channels
5. Cost Reduction
6. Has
competitive
strategic planning
Weaknesses
1. Long
decision
making process
2. Rebate
and

0.08

0.16

0.16

0.08

0.10

0.20

0.10

0.10

0.07

0.14

0.14

0.21

0.05

0.05

0.15

0.10

0.12

0.24

0.36

0.36

0.12

0.36

0.24

0.24

0.10

0.20

0.30

0.20

reimburse in Ace
Hardware
other
and

and

hardware
car

accessories shops
3. Changing market
segment
4. Few best selling
products
5. High
marketing
expense
TOTAL

1.00

2.36

2.39

2.13

The QSP Matrix of Keylargo Car Accessories is shown above. The most attractive strategy for
Keylargo Car Accessories external factors is Market Development. It has a 2.28 total
attractiveness score. This is because of different marketing efforts taken into by the company.
However, product development was the least intensive strategy. It has a 2.18 total
attractiveness score. The reason behind this is because the company is known for its quality
products it can provide. Therefore, there is less developments that the company should employ.
The highest among the internal factors of Keylargo Car Accessories is Market Development.
The total attractiveness score of the Market Development is 2.39. On the other hand, the lowest
among the internal factors of Keylargo Car Accessories is Product Development. It has a 2.13
total attractiveness score. It means that internally, the company should be able to redress the
issues with market development. It should come from the internal management first before the
company can exploit the external management.

83

VI.

Strategic Objective and the Recommended Strategies

After carefully analyzing and studying the company strengths, weaknesses, opportunities and
threats, the matrices were being made. Through the matrices, the company arrived at
suggested strategies. The strategies were being formulated according to its strategic and
financial objectives, business and organizational recommended strategies and financial
projections of Keylargo Car Accessories.
A. Strategic and Financial Objectives
Keylargo Car Accessories is a growing and developing car accessories in the automotive
market. It has the goal to provide its customers products with top quality to the automotive
industry. The following objectives are set to meet the goals of the company:
1. Keylargo Car Accessories should increase its sales by 5% every year using the
aggressive strategies due to the industrys growth. The company should increase its
market share by 2-3% every year in order for it to be more profitable.
2. Keylargo Car Accessories must develop its current products and produce more products.
It must develop products concerning automotive security. Ones security is more taken
into consideration of a consumer. By this, more customers will consider buying the
companys automotive security products and it will reflect in its sales and profit.
3. The company should prepare itself for the ASEAN Integration AFTA. By this, the
company has a potential entry in the free trade. It will make Keylargo Car Accessories
known in the international market.

84

4. Since the world is coping with the technological advancement, Keylargo Car Accessories
should also step up in the electronic world. It should improve its company website. Also,
it should consider online advertisement and promotion through social media for efficient
and cost-free marketing expenses.
5. Keylargo Car Accessories should continue selling its products to different distribution
channels. The company, with the help of these distribution channels, will be able to
achieve its financial strategies.
After studying the matrices presented in the paper preceding the recommendations, there are
three main strategies that would help the company to grow and develop from its current
standing. The following are the recommended strategies of Keylargo Car Accessories:
1. Market Development
Keylargo should expand their distribution channels through offering exclusive partnership with
local repair shops and interest groups to supply car care products, parts, accessories. Doing
this strategy would secure that the products of the business will have a distribution channel and
no inventory would be stalled which can equate to a higher market share, continued patronage
and a reputation as a reliable supplier of good quality car care products, parts and accessories.
2. Market Penetration
The company should advertise and promote its products on-line. It should be able to enter more
of its products in the growing market. The company should improve on their online presence
and be more active in social media because of the growing number of people who are using the
internet as a means to connect with other people and as an online marketplace. The company
should make a Facebook, Instagram and Twitter page wherein they can upload pictures and
information about their products to use it as a tool to market their products through
advertisements and promotions. Utilizing social media to increase their online presence is a
good strategy to further increase their market share because it reaches a wider audience.
Additionally, utilization of social media is cheaper compared to printing out flyers and hiring
personnel to distribute the flyers.
3. Product Development
Keylargo should repackage some of their products to attract to the newer and younger
generation of car owners. Some products lose its touch because they are unattractive and
unappealing based on the preference of the consumer. Products fade into obscurity because
they are unable to cope with the changing times, the behavior and preference of the consumer.
85

B. Recommended Business and Organizational Strategies


Keylargo Car Accessories is one of the companies of Hexagon Group of Companies. It works
under a parent company. It has its own departments. However, 2-3 departments are being
headed by a Chief Officer and 5 departments are being headed by another Chief Officer.
It is highly recommended that the company employ the services of another Chief Officer or to
promote another employee to such position. It will aid the company with the other departments
that both of the current Chief Officers are holding. It must continue to follow its Code of
Discipline to regulate and observe its employees. It must efficiently shell out money to help the
research and development that is competitive in the industry. With these strategies, the people
and system of Keylargo Car Accessories will create a better company which would follow its
mission statement and employ good corporate values among its customers and employees.
C. Financial Projections and Overall Evaluation of the Strategies Proposed
In the long run, it is recommended that the financial standing of Keylargo Car Accessories be
increased. The sales of the company in the years 2012-2014 have been projected in three years
until the year 2017.
Table 24. Projected Sales
YEAR
2012
2013
2014
2015
2016
2017

PROJECTED SALES
368,745,112.00
401,794,000.00
481,972,000.00
506,070,600.00
531,374,130.00
557,972,837.00

The financial was projected that Keylargo Car Accessories should increase its sales for about
5% each year. Since the automotive industry is growing and developing each year, Keylargo
Car Accessories should be able to improve its sales by increasing and maximizing opportunities.
With increasing sales, the company will be able to fund its expenses and open improvements
needed for the company.

86

VII.

Action Plans and Departmental Programs


Measured in months

Tasks
Reconstruct marketing plan

10

11

12

Improvement of company website


Employ or promote a Chief Officer
Further implementation of Code of
Discipline
Invest in R&D of the company
Develop products
Online advertisements through social
networking sites
Expansion of distribution channels
Expansion in international market
Increase sales and market share
Plan for ASEAN Integration AFTA
To further show the plan of action and time table of the recommended strategy, a Gantt chart is
used to show the duration of each task under each recommended strategy. A Gantt chart is a
project management tool showing activities, tasks or events displayed against time. Each
activity is represented by a bar, the position and the length of the bar reflects the start date,
duration and end date of the activity. This tool allows you to show the various activities, when
each activity begins and ends, how long each activity is scheduled to last, where activities
overlap with other activities and by how much and the start and end date of the whole project.
Figure 21. Action Plan and Departmental Programs Gantt Chart
The tasks enumerated are measured in months. The first task, to reconstruct the marketing
plan, is measured in a month. To spearhead the corresponding tasks, the marketing plan
reconstruction is important. The improvement of the company website should be done in one
87

month. By this, the company will enable to improve the layout of the website and protect the
website with anti-virus so that most people will be aware of the companys products and nature.
Many will access the website which will enable the company to attract customers in the industry.
Employing or promoting an employee to become a Chief Officer is done after the website has
been improved. It lasts in two months to further open the position not only in its advertisements
in newspapers but also in its newly improved website. Upon employment of a Chief Officer into
position, the Code of Discipline must be given strict implementation. It lasts up to three months.
The company should also invest in its R&D for four months. By this, the company will be able to
develop more products running in three months. These products will be further advertised and
promoted in the website. It shall also be advertised and promoted in social networking sites for
two months. Keylargo should expand its distribution channels in three months to see the
developed products in the market. The possible entry in the international market should start
after expanding in local distribution channels. It runs for four months. Simultaneously, it should
also increase sales and market share after having products developed. Lastly, it should plan for
the ASEAN Integration AFTA and its possible entry in the ASEAN market. The planning starts
together with the investing into the R&D of the company and lasts up to six months.
The recommended strategies must be given a designated department or person responsible for
each task. The delegation of tasks to the department responsible is as follows.
Table 25. Tasks and Department Responsible
TASKS
Reconstruct marketing plan
Improvement of company website
Employ or promote a Chief Officer
Further implementation of Code of

DEPARTMENT RESPONSIBLE
Marketing
Information Communications and Technology
Human Resource
Human Resource

Discipline
5. Invest in R&D of the company
6. Develop products
7. Online advertisements through social

Operations
Operations
Information Communications and Technology

networking sites
8. Expansion of distribution channels
9. Expansion in international market
10. Increase sales and market share
11. Plan for ASEAN Integration AFTA

Marketing
Marketing
Marketing
Top Management Chief Executive Officer,

1.
2.
3.
4.

Chief Operating Officer, and Chief Financial


Officer
88

Keylargo Car Accessories is divided into departments. Four departments have a specific task to
accomplish in the long run. The Marketing Department should focus on tasks such as the
reconstruction of marketing plan, expansion of distribution channels and in the international
market and the objective to increase sales and current market share. Any task connected with
the technology, the Information Communications and Technology is responsible. It includes the
improvement of the website and the advertisement of Keylargo Car Accessories products. The
Human Resource Department is in charge with the employment of another Chief Officer and
observe the strict implementation of the Code of Discipline. Since the R&D is outsourced, the
Operations Department is the one responsible for the investment of an R&D. The development
of products is also put into consideration by the Operations Department. Lastly, the strategic
planning of the top managers, Chief Executive Officer, Chief Operating Officer and Chief
Financial Officer responsible for the plan of Keylargo Car Accessories for ASEAN Integration
AFTA.

89

VIII.

Strategy Evaluation, Monitoring and Control

The Balanced Scorecard is a performance measurement system tool used to consider the
financial, customer, businesses and learning measures. The balanced scorecard translates the
organizations strategy into four perspectives with a balance between the internal and external
measures, objective and subjective measures and the performance results and drivers of future
results.
The Balanced Scorecard includes the four perspectives:
Financial perspective is the measurement of the financial strategies being employed.
Customer perspective includes measures concerning the customers of the firm.
Business Process perspective includes measures such as the cost and quality, the production
and company operations.
Learning and growth perspective pertains to the measures concerning the employee
performance, satisfaction and retention.
To further give an evaluation of Keylargo Car Accessories recommended strategies, a balanced
scorecard is formulated.
Figure 22. Balanced Scorecard Diagram of Keylargo Car Accessories
Financial
Profitable Growth

Customer
Increase Target Market

STRATEGY

Bu
Pro

Learning & Growth


Improved Employee
Performance

The strategy evaluation of Keylargo Car Accessories revolves around the four perspectives,
Financial, Business Processes, Customer and Learning and Growth. The Financial Perspective
90

arrived at is the profitable growth. Keylargo Car Accessories Business Processes perspective is
towards the companys product development. The Customer perspective of the company is the
increase in target market. Lastly, the Learning & Growth perspective of Keylargo Car
Accessories is to employ improved employee performance.
Each perspective of the Balanced Scorecard is measured through the objectives, measures,
targets and initiatives. The major objectives comprise those to be achieved by the company.
The measures are the parameters that will be used to measure the progress of each objective.
The targets should be specific target values for the measures. The initiatives are the action
programs that are needed to meet the objectives.

Table 26. Balanced Scorecard Objectives Measures Targets Initiatives of Keylargo Car
Accessories
Financial

To

Objectives
show
a

profitable growth

Measures
As shown in the

Targets
Aimed to have

Initiatives
Company should

companys sales

5% sales and 2-

first

and

3% market share

marketing

increase

and

market

share

reconstruct
plan

achieve

financial
Customer

form

increase 10% of

engage itself in

customer

the target market

expansion

customers

feedback

who

automobile

parts
To

and

the

Aimed

and reviews

accessories
open

into

of

distribution

It also may be

channels,

measured

international

by

online market

online blogs and

market

To advertise in

websites.

online market.

the

Processes

objectives.
Company should

Through

use

Business

to

To reach more

and

social

networking sites
To improve the

Through

quality

recognized

of

the

the

Target
improve

to

Keylargo

Car

quality Accessories

products it chose

standard quality of the products

must

to offer

procedure of the

research

to 3-5% of its

employ
and
91

To repackage the companys


products

current quality

operations

development
plans to improve
the quality of its

Learning and
Growth

To maintain its
employees

The

objective

by might

be

It is targeted to

products.
The firm should

see

give

90%

continuously

measured

giving

companys

performance

bonus

incentives.

incentives.

To give further

Also,

employee

objective may be

incentives

measured

improve

training

and

related
experience

through
to

by employee

competent

and
the

seminars for the

from its current

employees.

employee

should

standing.

bonuses

companys given
training

employee

seminars for the

performance

employees.

and

performance

the

improve

trainings

It

increase
and
to

employee
performance.

and

The objectives, measures, targets and initiatives of Keylargo Car Accessories are based on its
financial, business processes, customer and learning & growth perspectives.
The financial perspective is aimed to have a profitable growth. It shows that the company should
increase in 5% of its sales and 2-3% of its market share. It is the companys task to reconstruct
the marketing plan to employ the financial perspective objective.
The customer perspective is aimed to have an increased target market. The target market
increased should be measured through customer feedback and reviews. A prospective 10%
increase in the target market shall be employed if the company would expand its markets.
Business processes perspective of Keylargo Car Accessories includes the improvement of the
products quality and repackaging of the companys products. It will be recognized through the
companys standard quality product operating systems. About 3-5% improvement of the current
quality should be developed from the products. This perspective should be initiated through
research and development in the products it chooses to offer.

92

The Learning & Growth perspective is improved employee performance. It should be initiated
through the companys giving of competitive seminars, trainings and giving of satisfactory
employee benefits and incentives. By this, a 100% employee performance is expected.

93