CHAPTER 2

Review of Current Situation

This chapter contains data on why the business problem exists and how

the restaurant may respond to the problem. This section discusses macro-

environmental factors affecting the restaurant industry, which can either be a

threat or an enabling factor for the proposed business. Internal assessment of

the company and the strategies that may be formulated using SWOT (Strengths,

Weaknesses, Opportunities, and Threats) and KSF (Key Success Factors)

Approach are included in this section. It aims to provide answers to the following

questions:

1. What are the market trends and industry problems that can affect the

proposed business?

2. What are the major government programs and policies affecting the

proposed business?

3. What are the macro-environmental factors that can affect the beverage-

serving industry under the foodservice sector (or pub, bars, liquor-serving

cafes, and lounges foodservice industry)?

4. What is the corporate profile of the proposed business?

5. What strategies can be formulated using SWOT Analysis & KSF

Approach?
Industry Profile

Growth and Performance History

The growing concept of socializing at cafes and bars among urban youth

is expected to drive the market during the forecast period. As of 2014, According

to the United Nations, over 54% of the world population lived in urban areas. The

growth in the influx of people to urban areas and a substantially large white-

collared demographic led to an increase in the number of foodservice outlets.

Diverse tastes and preferences for dissimilar types of beverages and food have

further led to the occurrence of specialty bars and café shops. (Business Wire,

2017)

Over the past years, the Cafes, Bars, and other drinking establishments in

the Philippines have grown. As 2014-2017 of the Annual Survey of Philippine

Business and Industry Final Results, there is an increase in the number of such

establishments, this increase will be elaborated in the following paragraphs.

According to World Bank, Philippines’ Gross National Product (GNP) was

reported at 841.6 billion PPP dollars in 2014, 900.7 billion PPP dollars in 2015,

970.2 billion PPP dollars in 2016, and 1.053 trillion PPP dollars in 2017.

Food Service Activities sector in the Philippines for all establishment are

categorized into industry sub-classes: restaurants, cafeterias, fast-food chains,

refreshment stands/kiosks/counters, bars/cocktail lounges/pubs and beverage

serving shops, and other mobile food service activities. The proposed business

falls under the “bars/cocktail lounges/pubs and beverage serving shops”

subclass.
 In 2014, Annual Survey of Philippine Business and Industry (ASPBI)

stated that the Philippines had a total of 28,059 establishments engaged in

accommodation and food service activities. Restaurants and mobile food service

activities ranked first having the highest total number of establishments with

21,443 or 76.4 percent of the total number of establishments. Short term

accommodation activities ranked 2nd, with a total of 3,262 (11.6%)

establishments. Lastly, Beverage serving activities (both coffee and alcoholic

drinks included) ranked 3rd with a share of 9.2 percent or 2,572 establishments.

In 2015, the Annual Survey of Philippine Business and Industry (ASPBI)

showed that a total of 27,028 establishments in the formal sector of the economy

fell under the Accommodation & Food Service Activities category. Restaurants

bagged the first place in terms of having the largest number of establishments,

getting 6,652; Fast-food chains ranked second having 4,477 establishments,

followed by other sectors such as refreshment stands, kiosks, and counters with

3,772 establishments. Cafeterias (considered as lunchrooms, canteen, and

coffee businesses) with 3,748, while pure Bars and cocktail lounges with 1,445

establishments.

In 2016, the Annual Survey of Philippine Business and Industry (ASPBI)

showed that a total of 30,889 establishments in the formal sector of the economy

fell under the Accommodation & Food Service Activities category. Industry-wise,

accounting for 23.4% of the total number of establishments, restaurants led the

sector with 7,218 establishments; followed by cafeterias with 4,725

establishments (15.3%) and fast-food chains with 4,411 establishments (14.3%).

The remaining industries with more than a thousand in a number of

establishments were the following: refreshments stands, kiosk and counters with

4,209 establishments, hotels and motels with 2,767 establishments, and other

restaurants and mobile food service activities with 1,679 establishments, bars

and cocktail lounges with 1,548 establishments, and resort hotels with 1,112

establishments.

Relative to the employment data of the industry, in 2014, a total of

416,942 was determined relative to the number of employed persons. As to

employment generation, restaurants and mobile service activities employed 90.8

thousand employees (21.8%), beverage serving activities had 26.8 thousand

employees (6.4%), and other sectors had employed a total number of 1.0

thousand (0.2%) of the total employed persons as of the year 2014. In 2015, total

employment made by the sector reached 433,260 workers. 425,094 (98.1%)

represents the number of paid employees and the remaining 8,165 (1.9%)

percent represents working owners and unpaid workers. In 2016, the total

employment generated by the whole foodservice sector was 495,973.

Employment data gained from ASPBI did not specify the specific employment

data for bars/cocktail lounges/pubs and beverage serving industry subclass

under the foodservice sector, but for 2015 and 2016 employment data the

subclass falls under the cafeteria: 2015: 27.1 Thousand, and 2016: 33.9

Thousand. (Annual Survey of the Philippine Business and Industry, 2014-2017)

 Figure 2.0 Economic experts and policymakers compare a country's labor

productivity from period to period as a measure of output efficiency. An upward

trend in labor productivity implies a rising cost of living. A country's labor

productivity is a function of technological innovation, labor resources, and capital

investment. (Investing Answers, 2018)

As of 2014, Labor productivity (value added per total employment) for

accommodation and food service activities stood at PHP333.0 thousand per

worker. Beverage serving activities are at PHP215.3 thousand. As of 2015, Labor

productivity (value added per total employment), for Accommodation and Food

Service Activities sector stood at PHP392.5 thousand per worker. Other

beverage serving activities, yielded with PHP592.2 thousand per worker. As of

2016, Labor productivity, (value added per total employment; increased

employment or to more effective work by those who are employed) for

Accommodation and Food Service Activities sector stood at PHP367.5 thousand

per worker. Wherein, other beverage serving activities have labor productivity of

PHP569.7 thousand per worker. (See Annex A) This figure 2.0 shows that the

beverage serving industry subclass has a positive contribution to the labor

productivity of foodservice industry in the Philippines wherein it means that

higher labor productivity, more persons are employed in such business, thus also

an implication that businesses are flourishing and are increasing in number.

 Figure 2.0

Industry Sub-class Year Labor Productivity

Beverage Serving 2014 215,300 pesos
2015 592,200 pesos
Activities (pub, bars, 2016 569,700 pesos
café, and other)
Figure 2.1 In 2016, expenditure on food per capita for the Philippines was

925.1 US dollars. There is an increase relative to Expenditure on food per capita

of Philippines from 641 US dollars in 2010 to 925.1 US dollars in 2016 growing at

an average annual rate of 6.47 %. Thus, implying an increase in terms of

consumer spending on food. It may not be covering the entire consumer

spending on food and beverage, but still, it covers the industry where the

proposed business is under, thus implying a still profitable operation of the

business if the consumers continue to spend on food and other items relative to

the industry.

Figure 2.1

Source: 2016 Philippines - Expenditure on food per capita (Knoema Corporation)

 Figure 2.2 & 2.3 The GDP growth rate of the Philippines as of 2016 is 6.9

percent, 6.7 percent in 2017, and remained the figures as per the latest update of

Asian Development Bank as of the current year, 2018. This indicates that there is

a positive GDP all throughout from 2016-2018. Which is a good indication for

businesses that want to enter the market. Positive GDP means that the country's

economic health is in good condition. It may have decreased from 6.9 to 6.7, but

still, the GDP is positive (see figure 2.2). Also, according to the 2017 Asian

Development Bank, Service Sector ranked as the 1 st and major contributor to the

GDP growth as of the year 2017 (see figure 2.3).

Figure 2.2

Figure 2.3

GDP 2017 (in PH Peso) Rank

Service 1,316,267 PHP Million 1
Agriculture 163,797 PHP Million 4
Construction 232,897 PHP Million 3
Manufacturing 430,229 PHP Million 2
Public 96,479 PHP Million 6

Administratio

n
Mining 17,207 PHP Million 8
Transport 146,883 PHP Million 5
Utilities 82,731 PHP Million 7
Source: Asian Development Bank

Figure 2.4 GDP in the Philippines averaged 77.31 USD Billion from 1960

until 2017, reaching an all-time high of 313.60 USD Billion in 2017. The GDP

value of the Philippines represents 0.51 percent of the world economy. Relative

to the proposed business, such a constant increase in Philippine GDP implies a

positive impact because increase indicates a healthy economy of the country.

And a healthy economy enables budding businesses to prosper. Positive and

increasing GDP creates more opportunities for new entrants of the market.

Figure 2.4
 Figure 2.5 GDP From Services in the Philippines decreased to 1,316,287

million pesos in the third quarter of 2018 from 1,380,883 PHP million in the

second quarter of 2018. GDP From Services in the Philippines averaged

961,387.92 million pesos from 2008 until 2018, reaching an all-time high of

1,378,389 million pesos in the second quarter of 2018 and a record low of

675,416.60 million pesos in the first quarter of 2008.

Figure 2.5 shows an increase every year of the GDP from Services in the

Philippines. Every year, 1st quarter indicates the highest GDP but later on

decreases on the 2nd. On the other hand, looking at the bars yearly, obviously

there is a constant increase from 2016-2018, thus a good indication to the overall

Service Sector, through which the proposed business falls. Even the Service

sector is too general; it is still considered a proof that the proposed business has

a high chance of prospering relative to its (Service Sector) GDP.

 Figure 2.5

Market Trends

Cafés and bars are food service outlets that serve alcoholic beverages,

non-alcoholic beverages, and breakfast and snack food items. They include

coffee houses, teahouses, bars, pubs, and other cafés. The global foodservice

market is expected to grow steadily during the forecast period. This is because of

the changing consumer demographics, growing demand for food customizations,

and an increasing desire to lead a healthier lifestyle. (PR Newswire, 2017)

 The beverage serving industry in the Philippines including bars, pubs, and

cocktail lounges, are now emerging in the country as the demand for places

catering both quality beverages and food becomes a trend. In the bars/cocktail

lounges/pubs and beverage serving subclass of the foodservice industry, owners

of cafés and bars continue to flourish because of their ability to innovate and

serve new approach being in the industry wherein a lot of rivals are present.

(Philippine Daily Inquirer, 2017)

Table 2.0 Key Players in the Philippine Foodservice Sector, Industry

Sub-class: Bars/Cocktail Lounges, Pubs, and other Beverage Serving

BRAND INDUSTRY NUMBER OF OUTLETS

LOCAL/FOREIGN
Frank and Dean Bar/Café 1

Satchmi Café 2

Toby’s Estate Café 14

Cowboy Grill Pub 4

Queens at Bollywood Pub 1

Supremo Grill Pub 1

After All Bar & Grill Pub 1

Handle Bar Pub 1

OnBoard Game + Gastro Pub Pub 2

Filling Station Bar Café Bar/Café 1

Café Escudero Café 1

Coffee Project Café 11

White Camp Specialty Coffee and Café/Restaurant 1

Kitchen
Sugar Fix Coffee Cakes and Pastries Café 1

Café Amadeo Café 1

EDJA Coffee World Café 1

Half Saints Café/Pub 1

Mom and Tina’s Bakery Café Café 3

Café 80s Pub/Café 1

Packo’s Restaurant and Bar RestoBar 1

Livestock RestoBar 2

There are two (2) main café retail hybrid outlets in the Philippines, namely,

Fank and Dean, and Satchmi. They both cater non-alcoholic and alcoholic drinks,

and quality snacks and food, and they both offer a live band or sets of artists,

specifically acoustic in the genre, to play for the café to entertain their customers.

Cowboy Grill on the other hand, also serves high-quality food and alcoholic

beverages but does not cater to coffee, but still fall under the sector of food

beverage. There are three (3) pubs mentioned in the key players of the said

sector, namely, Supremo Grill, After All, Bar and Grill, and Handle Bar. They all

cater to alcoholic drinks and quality food, and also provide live bands, they fall

under the pub sector. The three pubs are indirect competitors of the proposed

business as they provide the same service but they target different audiences.

Yes, they target millennials and working, based on some observations made by

the researcher herself, but the type of millennials and the working class it targets

are different relatives on their behavior. Also, indirect competitors include: Café

Escudero, Coffee Project, White Camp Specialty Coffee and Kitchen, Sugar Fix

Coffee Cakes and Pastries, Café Amadeo, EDJA Coffee World, Half Saints, Mom
and Tina’s Bakery Café, Café 80s, Packo’s Restaurant and Bar, and Livestock as

they cater to coffee drinks and alcoholic beverages that are specifically located in

Sgt. Esguerra, Quezon City.

The proposed business will also cater to rock music but more of a slow

rock and quieter genre. The filling station bar café is also an indirect competitor

for the proposed business, as it caters high-quality food but does not really cater

coffee and other alcoholic beverages. The theme of the café (filling station)

mainly adopts the idea of a cafeteria or a lunchroom. As of 2018, these are the

total branches existing in the Philippines that fall under the Bars/Cocktail

Lounges, Pubs, and other Beverage Serving Industry. Regarding the numbers of

establishments of the prominent names under the industry, there is a significant

relation of how the industry is booming in the country. Last 3 years, some of the

mentioned names are not yet established in the country, thus implying that the

said industry has a chance to flourish in our country even more if approached

with a new idea of catering such business. Trends under this industry include

catering to high-quality food, innovations, and twists of how food is served, and a

hybrid of services offered to customers.

Industry Problems

Some of the industry problems that Bars/Cocktail Lounges, Pubs, and

other Beverage Serving face is the lack of skilled workers for the business, rules,

and regulations regarding operating hours relative to anti-noise management

under the Duterte administration, and the increase of the price of commodities

especially, fuel. The three (3) mentioned things are the major contributors to
problems in the said industry. Bars and Cafés are in need of skilled workers that

can handle the extremities of work required to serve the customers, skills on

serving beverages and skills on communicating to customers are included. Also,

laws regarding noise management are directly affecting the industry as they

hinder the businesses to fully function. As they cater live bands to provide hybrid

services, they are affected by such laws, because of the need to put up sound

proofs or even be limited by the time of required operation. Lastly, increase in the

price of commodities affects the industry, as the businesses will be sourcing its

supplies from wholesalers of alcoholic beverages and coffees, business owners

will have the need to use trucks for delivery, which in turn will affect their cost due

to the high price of fuels.

Major Government Programs and Policies Affecting the Industry

1. Food and Drug Administration (FDA) Act of 2009 (R.A. No. 9711) – the

law that governs the inspection, registration, licensing and monitoring of

establishments and health products.

- The program is an enabling factor as it allows the business to

integrate its public image through elevation of food product safety.

Also, beverages that are labeled with the approval of the FDA

usually attract consumers as it implies safety.

2. Labor Code of the Philippines (Presidential Decree No. 442) – is the law

that governs employment practices and labor relations in the Philippines.

 - The code serves as an opportunity to the business, as it promotes

welfare to employees, thus incorporating overall business image

socially and legally.

3. Consumer Act of the Philippines (Republic Act No. 7394) – The law that

protects the interest of the consumers in the Philippines, promotes their

general welfare and establishes standards of conduct for business and

industry.

- This serves as both a threat and an enabling factor. The act

enables the company to protect the welfare of its consumers. On

the other, it becomes a threat if the act will be abused or misused

by the consumers themselves, thus affecting the business

negatively.

4. The Local Government Code of the Philippines (Republic Act No. 7160) –

is the law governing local taxation in the Philippines, including the taxation

on real properties.

- The law serves as an opportunity for the business, as it allows

them to contribute to the economic growth of the country through

responsible paying of taxes.

5. Intellectual Property Code of the Philippines (R.A. 8293) – is the law that

governs the registration of patents, trademarks and copyright, and the

enforcement of intellectual property rights in the Philippines.

- It allows the business to protect itself from any malicious acts

relative to intellectual property rights, thus an enabling factor.

6. Civil Law of the Philippines (R.A. No. 386) – the civil code of the

Philippines includes the laws on obligations and contracts. It also governs

special contracts such as contract of agency and partnership.

- The law is an opportunity, as it allows the business to establish

partnership amongst suppliers and other stakeholders for the

expansion of its scope. It also establishes a good relationship

among suppliers of coffees and other beverages.

7. Food Safety Act (Republic Act No. 10611) - an act to strengthen the food

safety regulatory system in the country to protect consumer health and

facilitate market access of local foods and food products, and for other

purposes.

- The act is an enabling factor as it allows the business to practice

food safety, thus integrating its values and public image.

8. Ecological Solid Waste Management Act of 2000 - RA 9003 describes

solid waste management as a discipline associated with the control of

generation, storage, collection, transfer and transport, processing, and

disposal of solid wastes.

- This act enables the business, as it allows them to become more

responsible socially and environmentally.

9. Anti-Noise Law / Public disturbance noise (Under R.A. No. 386– any

noise, sound or signal which unreasonably disturbs the comfort, peace, or

repose of another person or persons.

 - This threatens the business under such industry as it hinders

them to fully cater the services they offer like live bands playing

inside the bars/cafés. Thus, more of a threat than an enabling

factor.

10. Presidential Decree No. 1619 – penalizing the use/possession or the

unauthorized sale to minors of volatile substances for the purpose of

inducing intoxication or in any manner changing, distorting or disturbing

the auditory, visual, or mental process.

- It is also an enabling factor as it contributes to the business'

ability to fulfill its corporate social responsibility to protect minors

from such harm. Also, their target markets are millennials and

the working class, which are mainly 23 years old and above.

Additionally, laws about anti-overpricing, city ordinance on

curfew, city ordinance on health and sanitation, and non-

employment of minors also affect the industry, as businesses

are limited to such mentioned regulations.

PESTLE Analysis

PESTLE Analysis
Political/Legal Economic Socio-cultural
- City Ordinance - Price Increase - Changing
- Employment Laws (Inflation) demands and
/ Policies tastes
- Preference for
healthier food
- People that like
going out to eat or

Technological
- Improved tools for operation
- Internet (Faster Connection;
Mobile Marketing; IBP)
Political/Legal
to drink.
Environmental
- Environmental rules and
regulations (sanitation laws)
- Climate/Weather (seasonality of
coffee from the Philippines;
safety of delivery)

1. City Ordinances (Specifically in Quezon City)

 It is an enabling factor as it allows businesses to enter the

industry with security but on the other hand, limits them due

to complex procedures before fully entering the industry.

Also, Quezon City's ordinances include noise pollution

management and penalty on illegal dumping of wastes in

any public or private places including vacant lots and

waterways. Noise pollution is a threat to the industry as they

cater to services like live bands and other instruments that

may cause disturbance to nearby establishments.

2. Employment Laws / Policies

 It is an enabling factor as it allows the business to promote

the welfare of business employees thus, integrating values

that will improve the public image of businesses under the

industry. BUT laws such as non-employment of minors is

mainly a threat to the industry because as they aim to hire

bands from universities, it will limit their motive as some of

 the members will be minors, which in turn, they cannot hire

such.

Economic

1. Inflation

 It limits the industry in terms of operating costs, as prices go

up. On the other hand, it allows them to offer their service at

a high price. Such an increase in price will affect the price of

fuels, through which businesses under the industry will be

affected due to trucks they will use for getting supplies from

suppliers. Thus, adding cost to the business.

Socio-cultural

1. Changing Demands and tastes

 It is both enabling and limiting to the industry. As consumer

demands and tastes tend to change, businesses under such

industry will be able to come up with innovations in order to

keep up with such change, thus, giving more productivity to

the overall beverage industry. On the other hand, it may also

be a threat because if the changes of demand and taste will

be rampant, it will push the industry to innovate more, and

businesses that will be unable to adapt, would be impacted

negatively.

2. Preference for healthier food

  The factor may be enabling, as it will give ideas to the said

industry to become more careful when it comes to offering

their food in a healthier manner, BUT it is more of a threat as

the industry mainly focuses on catering beverages that are

not really healthy like alcoholic beverages.

Technological

1. Improved tools for operations

 It is an enabling factor as it allows businesses to have

efficient and effective operations through new technologies

invented. Faster machinery to operate beverages and other

machines that will help the overall productivity of the

industry.

2. Internet (faster connection)

 It is an enabling factor to the overall beverage industry, as it

will help the owners to market their business online, thus

larger audience for the business. Thus, larger profits, leading

to an increase in productivity of the beverage serving and

pub industry.

Environmental

1. Environmental Rules and Regulations

 Presence of rules and regulations relative to environmental

protection is an enabling factor because it allows businesses

to promote social and environmental responsibility, thus

 improving overall business public image and beverage

serving industry.

2. Climate/Weather/Seasonality

 The factor limits businesses under the beverage industry as

it delays supplies from places affected by the typhoon and

other natural disasters, which the business gets its raw

materials and ingredients. Weather also affects consumers;

others may prefer to stay at home than going out and go to

bars and cafés.

Porter’s Five Forces Model

 - Requires high cost of
capital
- Restrictive
government policies
- Accessible
distribution channels

Threat
Threat of
of New
New
Entrants
Entrants
High
High Cost
Cost of
of Capital
Capital
DTI business
DTI business registration
registration
Accessible
Accessible distribution
distribution channels
channels

- Does not offer

undifferentiated Bargaining
Bargaining Power
Power of
of Rivalry Among
Rivalry Among Bargaining
products Suppliers
Suppliers Existing
Existing Buyers - Power
Bargaining Price of
Power of
sensitive
Competitors Buyers
Supermarket
Supermarket Competitors - Low switching cost
- A lot of alternatives Mall
Mall -- Frank and Dean
Dean
Millennials (23-38 years
Millennials (23-38 years old)
old)
Market Frank and Workiing Class
-
Workiing Class High number of
- Industry Market
Direct
Direct sellers
sellers -- Satchmi
Satchmi
Others
Others
participants do not substitute products
face switching cost
- Industry growth
is high
- Rivals are
several

Threat
Threat of
of Substitute
Substitute
Product/Service
Product/Service
Fast-food
Fast-food chains
chains
Non-hybrid cafes
Non-hybrid cafes
Non-hybrid
Non-hybrid bars
bars
Other restaurants
Other restaurants

- Buyers have low

switching cost
- High number of
substitute products

Porter’s Five Forces Model Analysis

Bargaining Power of Suppliers

The bargaining power of suppliers is moderately low because they do not really

have the ability to integrate forward and threaten the industry, as they are not

really able to increase their prices because of the presence of several suppliers

for the proposed business. Making the prospect suppliers become competitive

and make their products cheaper. Also, it is easy for the business to switch from

one supplier to another as it has little or no switching cost at all. On the other

hand, suppliers for ingredients such as fish suppliers have the ability to integrate

forward because even if they are high in numbers, the presence of different

buyers of the supplies is there. Considering these factors, the suppliers'

bargaining power is moderately low.

 Coffee suppliers (existing manufacturers, direct suppliers, and farmers)

 Alcoholic drinks suppliers (suppliers are numerous for such special kinds

of drinks in the Philippines, also they are still building their brand name)

 Ingredients (fish, and other ingredients)

Bargaining Power of Buyers

Buyers are no doubt high in numbers, the target market of such industry are

millennials and working classes which are all available in the said city which is in

Quezon City. Despite a large number of buyers, the power of buyers is still

considered strong as they can switch suppliers at a low cost or even no cost at

all. Also, buyers are price sensitive, thus a threatening factor in the business.

They have the ability to choose other bar cafés. On the other hand, having said

that buyers are numerous, it is an indication that different types of buyers are

present thus still favorable for businesses under the industry.

  Students, working professionals, millennials (23-38 years old)

The Threat of New Entrants

Entering the industry is moderately difficult because of the high cost of capital for

starting-up the business, and strict government policies such as limitations when

it comes to establishing liquor-related businesses, but the access to distribution

channels such as wholesalers, retailers, distributors, and even the internet,

makes it less difficult.

 Department of Trade (DTI) registration/Liquor Laws

 Business permit

 Liquor Permit

 Presence of distributors of supplies and

 The emergence of mobile marketing.

The Threat of Substitute Products or Services

The threat of substitute products or services is strong because the buyers face

low switching cost and the presence of alternative businesses that cater to the

same or almost the same. Making it easier for them to switch to alternatives.

 Presence of other café bars, pubs, and other beverage serving

businesses that also offer quality food and beverages at nearly equal in

price. Also, the presence of foodservice related business is considered, as

substitutes mean alternatives for the proposed business not only under

the beverage serving industry.

Rivalry Among Existing Competitors

Rivalry among existing competitors is considered moderately intense due to

numerous numbers of competitors, wherein they are roughly equal in size and

power, and rivals are highly committed to the business and have aspirations for

leadership. BUT the number of hybrid bar cafés is not that high in number. Thus,

reducing the intensity.

 Existence of several bars and cafés catering the same service (see the

brief background for possible competitors)

 On the other hand, hybrid café bars with a unique theme are not currently

available in the area. Thus, making the rivalry less intense.

Conclusion: Therefore, with these, the researcher may conclude that given the

bargaining power of suppliers is moderately low, bargaining power of buyers is

strong; threat of new entrants is moderately difficult, threat of substitute

products/services is strong, and rivalry among existing competitors is moderately

intense, despite the intensity, the proposed business has still the ability to be

profitable relative to its attractiveness to the industry because of its ability to

source its supplies from suppliers at a lower price due to existence of several

suppliers for the business. Also, by applying the so-called generic strategies,

such as "differentiation-focused strategy", wherein the business will provide

products/services that are unique from its existing rivals and other potential

substitutes. By applying these, the intensity in Porter's model can be opposed

and will yield to a more desirable result, which is to increase the possibility that

such business will flourish.

Corporate Profile
Business structure

The chosen business structure for Pinoy Blues Bar&Grill Café was

Sole Proprietorship. Sole Proprietorship, according to Investopedia, is also

known as a sole trader or a proprietorship. It is an unincorporated

business with a single owner who pays personal income tax on profits

earned from the business. A sole proprietorship is the simplest business to

set up or take apart, with little government regulation, making the said

business structure popular among individual self-contractors, consultants

or small business owners.

Company Profile

As the bars and cafés continue to emerge here in the Philippines,

Andrea G. De Guzman, an Assumption College graduate Major in

Corporate Management student decided to put up a business under the

beverage serving industry, with her knowledge and experiences on

business operations and terminologies, and background to some laws

relative to the industry of bars and café. She then came up with the idea of

Pinoy Blues Bar&Grill Café. The name Pinoy Blues came from the song of

the band, Juan dela Cruz band. A famous band during the 90s which they

mainly play Filipino slow rock music. The theme of the business will be a

place catering locally grown coffee, and alcoholic/non-alcoholic beverages

from provinces of the Philippines, and Filipino grilled dishes, thus Pinoy

Blues. The environment of the place will be a student and working class-

friendly, as it will have comfortable interior designs and furniture suitable

for studying and bonding with friends. In the morning the coffee shop will

be opened perfectly suited for studying customers and working classes

who aims to have a get-together or formal meetings. Expect that it will not

be a disturbance because the place will be having a band to play in the

after in the bar section located on the 2 nd floor of the café.

The owner of the business Andrea G. De Guzman never thought

that she would venture into beverage-serving business because of the

conservative environment she graduated from, which is in Assumption

College. But since there is an increasing demand for such business, and

the motive of the business is good and will also be beneficial to the

majority, a bar cafe-retail hybrid store will be put up in our country.

As the beverage-serving industry continues to dominate our

country, Pinoy Blues Bar&Grill Café constantly looks for more ways to

further continue making the bar&grill cafe accessible and inclusive for

everyone, not just to millennials and working class but also to other

generations and classes as well. Soon, Pinoy Blues hopes to grow further

to become the leading go-to brand for café bars, serving the hottest and

brewing beverages and local indie artists as well here in the Philippines.

Mission
 To provide entertainment to audiences through local Filipino music,

and to feed them with the best locally made coffees and other beverages

here in the Philippines.

Vision

To be the leading hybrid café and bar store here in the Philippines

catering pure Filipino beverages and dishes.

Philosophy

Pinoy Blues Bar&Grill Café gyrates around the idea of bar, grill, and

café fusion as a result of careful searching of the owner regarding trends

in the beverage industry. The business is highly committed to protecting

the rights of individuals that will become part of the business and to others

that will be involved. Employed personnel will be given proper benefits,

payment, and treatment; laws affecting the business will be strictly

followed, members of the bands hired are pure of legal age; and

consumers' rights and concerns will be protected through quality control of

the people who will lead the business.

Company History

As the beverage-serving industry started to boom, Andrea G. De Guzman,

currently taking Corporate Management as her major, decided to put this café

bar idea into action. In 2018, restaurant bars, pubs, cafés, and fusion of bar and

cafés are now being built in several places, gaining the majority’s attention

especially the millennials. The trend influenced the owner to put the idea into

reality but with a twist. As a typical bar and cafés serve different coffees and
other beverages and mainly serve foreign food, the owner decided to make it

pure Filipino. The owner came from the Province of Pangasinan, where grilled

foods are prominent. Also, the owner is a music-lover and influenced by different

genres of music, making her knowledgeable about the dishes and music types

that millennials usually eat and hear. As a business student, the lady came up

with the idea of providing customers with an environment where it will be a

student and working-class friendly place, and also suitable for people who just

want entertainment through music while eating good food. As the emergence of

different bands from different universities continues to boom, a lot of budding

artists are now being prominent. And as part of the business, it will be catering to

local indie artists. The main goal of the business would be to give entertainment

and comfort to customers through delicious grilled Filipino dishes, Filipino bands,

and locally made beverages.

Organizational Chart
 Manager/Owner (2)

Main Chef (2)

Assistant Chefs (2)

Cashier (2)

COFFEE SHOP BAR

Baristas (2) – will be the one who will make the coffee Bartenders (1) – they will be Guards
the one (2)
who – will
theymix
willthe
be the one who
will secure
beverages both alcoholic and non-alcoholic. They the shop. to
are expected
beverages for the customers in the café area. be friendly and entertaining to customers.

Waiters (2) Waiters (1) & SOUND ENGINEER (1)

Cleaners (3) – they will be the one who

will clean the tables and arrange chairs after the
Figure 2.6 departure of every customer.

Figure 2.6 shows the different employees of Pinoy Blues bar & grill café, both in

café and bar section of the shop.

Manager/Owner

- Owner of the Bar & Grill Café. Leads the overall operations of the

business. She will also be responsible for the marketing of the business.

Main Chef
 - Head of the kitchen. He/she will be the one to cook dishes. Receive info

from a cashier.

Assistant Chef

- Will assist the Main Chef. Will serve as a substitute when the main chef is

absent.

Cashier

- Will be responsible for receiving payments from the customers and

receive their order. He / She will serve as a messenger for the order of

customers to the head chef and bartenders.

Cleaners

- Will clean the tables and arrange chairs for an organized place. Clean the

overall shop.

Waiters

- They will be the one who will serve the order of the customers. They must

be polite and hospitable. Also, they fulfill and hear customer requests.

Sound Engineer

- Will check the sound system that the band will use. Variants

SWOT/TOWS Analysis

STRENGTHS WEAKNESSES
1. Cheaper prices than 1. Not yet recognized.
potential rivals 2. Current idea for the
2. Funds are available business (Filipino-
(support from family themed, others may not
and friends) want it)
 3. Unique and 3. Limited variants of
quality/excellent alcoholic flavors
service 4. Limited sizes of
4. Customized drinks glasses/cups
5. Healthy way of
Cooking
6. A glass of wine is
available (others only
have a bottle of
wine)
7. Newness of the idea
of hybrid café and
bar
8. Tourism District of
Quezon City (see
brief background)
9. Improved
tools/equipment
10. Secured contract
with suppliers
(certified FDA
approved)
11. Flexible yet realistic
mission and
objectives
12. Skilled Chefs,
Baristas, and
Bartenders
13. Efficient waiters,
cleaners, cashiers,
and sound engineer.
14. Trained guards and
team player
owner/manager.
15. Differentiated-focus
strategy
OPPORTUNITIES SO WO
1. Emergence of new 1. Skilled employees 1. Since the café bar is not
technologies and will utilize these yet recognized, it will
equipment improved tools and integrate IBP, wherein
2. Internet – mobile machinery to have several platforms will be
marketing; Integrated efficient and effective used like mobile
Brand Promotion operations. In return, marketing, social media
3. Location - Nearby it will provide quality reach, and digital
 schools and other
establishments
4. Growing audience of
Local Scenes
5. Large number of
millennials (23-38
years old) and the
working class in the
area (QC Hall
Records: PSA)
6. Presence of several
suppliers.
7. Price
Increase/Inflation
8. Bands that need to
be recognized.
9. Tourist consumers
(having said that Sgt.
Esguerra is a tourism
district of QC)
10. Target Market likes to
go to bars and cafés
with friends to drink
and eat (based on
survey questionnaire)
11. Availability of CoD,
online delivery, and
phone call deliveries
from suppliers
THREATS ST
1. City Ordinance
2. Price
increase/Inflation
3. Emergence of
different foodservice
businesses
and excellent service
with proper treatment
to customers, and
providing them with
entertainment using
bands that are
budding in the
industry, and that
does not require
expensive payment
yet with great talents.
(S11-13, S2-6, O1,
O4, O8)
2. Suppliers are
selected based on
their safety and
certification from the
FDA and their
capacity to deliver
supplies when
needed. (S9,
O6,O11)
3. Also, the proposed
business will target
tourists, not limited to
its target market:
Millennials and
Working Class. Since
the area is a tourism
district. (S7, S14, O5,
O9, O10)
WT
1. Counteract and
compete with
emerging
foodservice
businesses through
the presence of
skilled employees
and unique service.
(S2-8, T2T3)
2. The price increase
will lead the business
to increase the price
marketing, are among
others. (W1, O2, O10)
2. Since the current idea
may not be effective for
some customers and
may divert their attention
to other same existing
businesses, it will use
the opportunity of being
updated to trends and
news that will help the
business to cope up and
integrate those things for
the betterment of the
business. Also, there is a
large number of the
working class in the area
who likes to drink and
eat with friends, thus
more possible people
will patronize the
product/service. (W2,
O2, O4, O5, O10)
3. Despite the limited
flavors for beverages,
through skilled baristas,
and bartenders, drinks
will be improved and be
matched to customer’s
preference. (W3-3, O9,
O12, O15)
1. Partner with different
existing foodservice
related business. Like,
manufacturers of
beverages, direct
suppliers of coffee
beans, and band/artist
managers. (T2T3,
W1W2W3)
 of its offerings. It
may be bad for other
consumers, but it is
still favorable for the
business. It may lose
some price-sensitive
consumers, but
through a proper
increase in price with
a proper increase in
the quality of
products it offers, it
will still cater
excellently. (S1S2,
T2)

Key Success Factors (KSF) Approach

Key Success Factors

(SPOT MAFiA)

STRATEGIC FOCUS (Leadership, Management,

Planning)
1. Cost Advantage
1.1 Select reliable suppliers
 1.2 Choose suppliers that offer supplies at a lower price
1.3 Maintain a positive relationship with suppliers
2. Asset Management
2.1 Buy only things that will be needed for the operation
2.2 Allocate each asset and learn how to maximize their use
2.3 Tracking of supplies, cash inflow and outflow, and real-time situation
3. Strategic Planning
3.1 Plan solutions and innovations for current and future problems/trends that
may arise
3.2 Plan alternative or back-up suppliers in case of conflicts between the
current supplier/s
3.3 Plan techniques to maintain a competitive advantage
PEOPLE (Personnel, Staff, Learning,
Development)
1. Efficient and Effective Employees
1.1 Maintain rules and regulations
1.2 Hire skilled and experienced employees
1.3 Instill hospitable and positive attitude/s to employees
2. Develop the Skills and Learning of Employees
2.1 Hold training for employees
2.2 Actual monitoring of employee performance
2.3 Provide needed instruments and uniform for comfort and ease of work
OPERATIONS/TECHNOLOGY (Processes, Work)
1. Efficient Operation/s
1.1 Manage inventories
1.2 Incorporate latest/new technologies, tools, or equipment
1.3 Select reliable and quality supplier/s of tools.
MARKETING (Customer Relations, Sales,
Responsiveness)
1. Gain & Maintain Positive Relationship and Loyalty from Customers
1.1 Social Media marketing strategy
1.2 Maintain and spread positive public image (Word-of-mouth)
1.3 Print Media marketing strategy
FINANCES/ASSETS (Assets, Facilities,
Equipment)
1. Effectively Allocate Assets and Financial Resources
1.1 Follow a budget or financial plan
1.2 Go to a financial planner
1.3 Decrease spending
1.4 Avoid having debts
1.5 Prioritize needed materials and avoid unnecessary things