Ateneo Graduate School of Business

A Strategic Management Paper

for Ginebra San Miguel, Inc.

Submitted to Professor Hilda Teodoro

Submitted by:
Ma Mackylyn Fernandez Ragusta
June, 2017

I. Internal Factor Evaluation (IFE)

 A. McKinsey 7S Framework

STRATEGY

GSMI operates liquor bottling facilities in Mandaue City, Cebu; Sta. Barbara,
Pangasinan; and Cabuyao, Laguna. The company distributes its product to consumers
through territorial distributorship by a network of dealers and sales offices.

It also utilizes third party services in the warehousing and delivery of its products.
The company mainly operates in Philippines and exports its products all over Asia. GSMI
is headquartered in Manila, Philippines.

GSMI aims to both provide a wide variety of products that caters to every occasion
and to be a trusted brand worldwide. It takes pride in its heritage as the producer of liquor

1
The, B. (n.d.). The McKinsey 7-S Framework: Ensuring That All Parts of Your Organization Work in
Harmony. Retrieved October 31, 2016, from https://www.mindtools.com/pages/article/newSTR_91.htm
products that has been part of the Filipino culture for over 175 years.

STRUCTURE

GSMI is a duly registered corporation that is currently led by the following:

Chairman & CEO: Eduardo M. Cojuangco JR

Vice-Chairman: Ramon S. Ang

President: Bernard D. Marquez
Board Members: Leo S. Alvez
Francisco S. Alejo III
Mario K. Surio
Minita V. Chico-Nazario (Independent Director)
Francisco H. Villaruz JR

SYSTEM
Like other distillery companies, GSMI uses the same brewery process the only
difference is that GSMI’s top competitor, Emperador Distillers Inc. (EDI) buy plants in order
to boost production capacity.

STYLE

The style of leadership exercised in GSMI is characterized by a top-down way of

management. The vision or direction towards which the company works is established by
the upper management, led by the Chief Executive Officer (CEO). At this level, most
decisions are made, objectives are set, and proposals are finalized. Conclusions reached
by top management, in turn, trickle down to middle management, to officers, and to the
rest of the employees. Processes, therefore, are communicated as clearly as possible
throughout the organizational hierarchy to avoid confusion and ambiguity.

Decision-making is strategically centralized. As such, a Manual on Corporate

Governance is set in place for GSMI’s Board of Directors and all of Management to adhere
to. In fact, a Compliance Officer—who is essentially equivalent to a Vice President (VP)—
is appointed to oversee the Management’s compliance with the Manual in order to
maintain the company’s efficiency of operation without compromising on the well-being of
the GSMI workforce. Policies on Conflict of Interest; Health, Safety and Employee Welfare;
Related-Party Transactions; Securities Dealing; and Whistleblowing, are also in place for
the GSMI workforce’s wherewithal.

STAFF

To be included in GSMI’s workforce is to be inducted as a new kabarangay, where

a career in the Fast-Moving Consumer Goods (FMCG) and Manufacturing/Production
industries awaits. GSMI currently has job openings in the fields of Finance, Administrative
Work, Digital Marketing, Brand, and Sales. Most of the positions are Mandaluyong-based,
those intending to work in Sales must be amenable to possible relocation and constant
nationwide travel.

SKILLS
GSMI prefers experienced applicants in the fields of Fast-Moving Consumer
Goods (FMCG) and Manufacturing/Production industries with a background primarily in
business or marketing, ranging from 1 year to 5 years worth of work experience.

SHARED VALUES

GSMI espouses, although informally, its popularly marketed adage “Never say
die”. While this mindset is trumpeted mainly by its Philippine Basketball Association (PBA)
team, the Barangay Ginebra San Miguel Gin Kings, GSMI allows the idea to permeate
through its employees across all its branches for aligned solidarity, a sense of identity,
and overall motivation.

Formally, however, GSMI promotes seven (7) core company values and ensures
that its entire workforce abides by them faithfully—Social responsibility, Integrity, Passion
for Success, Respect for our People, Innovativeness, Teamwork, and Consumer-focused.

Social Responsibility

GSMI seeks to serve its shareholders and the community within which it operates.
It is committed to bring in good returns and to uphold education, environmental protection,
and social development.

Integrity

Such goals are in line with GSMI’s dedication to high ethical and moral standards.
All dealings that involve employees, customers, business partners, and other stakeholders
must be conducted with uncompromising honesty, fairness, and professionalism.

Passion for Success

This is equivalent to Japan’s “Kaizen” and India’s “Jugaad”. GSMI employees are
taught to tirelessly strive for continuous improvement and excellence in their products,
processes, and services. The standard for doing one’s work must always be one’s best
effort.

Respect for our People

Trust, openness, and mutual respect for people regardless of rank or title is highly
encouraged in GSMI. Moreover, this respect for GSMI employees includes a high regard
for work-life balance, where opportunities for both professional and personal growth are
not hampered.

Innovativeness

GSMI not only endeavors to adapt to change, but to also lead by it. It embraces creativity
in designing their products, processes, and systems in order to remain relevant to the
market. GSMI upholds innovative change as their competitive edge, as it continuously
works towards shaping and influencing consumers’ behavior and needs.

Teamwork

GSMI acknowledges cooperation as a key element for growth and success.

Individual contributions must be aligned with shared aspirations and common goals. GSMI
believes that only by working as one effective team can they achieve more as a company.

Consumer-focused

Finally, utmost concern for the customer’s needs and expectations is greatly
espoused in GSMI. It is through this attitude that superior products and services can be
delivered to them.

B. IFE Matrix
Note: weight score: 0.0 (not important) to 1.0 (very important)
Rating score: 4= major strength, 3= minor strength, 2= minor weakness, and 1= major weakness

A total weighted score of 3.30 puts GSMI in an above-average (i.e. above 2.5)
standing in terms of its strengths and weaknesses assessment. In other words, GSMI
has a strong internal position as an organization.