Strategy Ranked Number 3: Forward Integration

Forward Integration occurs when the company joins with or creates businesses
whose role in the production of its goods occurs after its own; the products move
forward after the company has finished its share of the manufacture. This commonly
includes the distribution, sale or transportation of the goods. In many cases, forward
integration is actually a form of diversification from the company’s usual business. This
strategy aims to empower a business by having a merger or consolidation with
companies that may help to increase the selling power of their product or service and
also to increase the range of market where the product or service will be sold.

Table 7.__:

BUSINESS STRATEGIES

BPI, as one of the largest banking company nationwide, needs a lot of

PRODUCT AND SERVICE

improvement in their market for them to attain their goal as the Number 1 bank.
One of the strategies needed of the said bank is to have a Forward Integration
Strategy, wherein they will enter into a merger or consolidation with other
companies that will make their services continuously making profit. Currently,
BPI is into housing and car loans and other kind of services and apparently, we
know that the said bank is already affiliated with Ayala Corporation which also
has the Ayala Land under it. On the other hand, BPI should also seek for car
manufacturing companies to merge or consolidate with them for the
empowerment of their car loan service. In addition, my team also want the said
bank to buy some Small-Medium Enterprises (SMEs) since they are also
committed into a loan service they called as “Ka-Negosyo Loan”. Having such
strategy in their business will also increase the demand of customers on them.
Especially when, in case of, having mergers with Farm Enterprises, Malls,
Supermarkets, Pawnshops and many more.
 ISSUES IN EXTERNAL ANALYSIS
 O5: Incorporate more marketing strategies for more exposure
 T2: Tighter competition in the industry
EVALUATION FROM MATRICES
 O2: BPI may cover a larger variety of market
- Having mergers and consolidation will greatly increase the radius
of the market they are providing service. With this strategy, they
will be able to intensify their service power towards the customer
they are rendering to. In that case, it will hard for other banks to
increase their target market if they will focus on growing in their
own.
- By using other companies or industries to sell expressly or
impliedly their products together with your service will help your
company to expose to everyone all the service the company is
rendering. Together with other affiliates will make your financial
performance greater than other banks. It will be easy for you to
gather and attract more clients/customers to go for their service.
- With this strategy, there will be a tougher competition among big
banks in the country; especially that BDO is using SM Malls to
influence the public to choose their service over the other banks.
Many banks will begin to imitate the strategy and make their own
way to diversify as well. However, BPI should not be threatened
since it’s not just the strategy that matters most but the capacity to
implement it well has a greater impact.

1) Growing and Building by diversifying the market through other companies

that will help to spread the market:
A) Real Estate Companies
B) Car Manufacturing/Merchandising Companies
C) Schools
D) Supermarkets/Malls/Sari-sari Stores
E) Pawnshops
F) Farm Enterprises
G) Others
2) Buying or contracting different companies that will sell their service impliedly
in order to enable the Company not to be taken down by new entrants and
old competitors in the industry.
3) Mergers and Consolidations will greatly affect their performance financially
and their lifestyle at work as well.

ORGANIZATIONAL STRATEGIES
ORGANIZATIONAL Since BPI as a bank industry is focused on offering different kind of service that is
ALIGNMENT able for them to earn profit, my team was thinking “why not they make
investments on companies that will help them to advertise and sell their services
to the market”. With that kind of strategy they may be able to increase the range
of their target market since, in fact, they offer loans in housing, car and for SMEs
“why not make the most out of it”, knowing that they could earn income having an
implied sale on these services with the help of other companies that will also be
benefited in such case of merger and consolidation.

 S1: It’s capable of expanding their management

ISSUES IN INTERNAL ANALYSIS

- Having said that BPI has the capacity to expand his management, then
it will be easy for them to handle their investments if they will push
through different kinds of acquisitions of companies that will help to sell
the service they’re providing as well as the management of each and
every transaction they will earn having such contracts with other
companies.
 S5: Has large and better variety of services compared to most banks
- Since BPI has the ability to serve as many kind of customers as they
can as compare to other banks, they can pursue to this kind of strategy
knowing that in this merger and consolidation will enhance or empower
all different kinds of service they could possibly provide.
 W4: Competitors may easily imitate their style or outgrow them
- In such criteria, if the bank will continue to operate with the provided
strategy of our group, it will decrease the risk of competitors imitating or
outgrowing them. Although, it is not an assurance that there is a zero
possibility of them being unbeatable, it will be harder for other banks to
break their lead.