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Industry-Describe the industry or industries where the company operates.
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Industry definition-define the need of the industrySan Miguel Corporation is the largest publicly listed food, beverage andpackaging company in the Philippines.It has been in the industry since 1890being founded by Don Enrique Maria Baretto.Since then,the SMC ensure that itsstrategy, organizational structure and processes, and external relationships wereadequate to confront the expected threats and to capitalize on the opportunitiesfacing it domestically and internationally.2.Overview of the industry2.1.market size and growthSan Miguel Corporation has a sizable international presence. The company hasover 100 facilities in the Philippines, Southeast Asia, China, and Australia. Itsmajor operating facilities include five breweries, four glass plants, two metalclosure and lithography plants, two plastic case plants, and a coconut oil mill.San Miguel is one of the Philippines' biggest private employers, with over 25,900employees.The company reported a net income of $171 million in 2005. As of the first half of 2006, the company's net income had grown 15 percent from a year earlier toP4.36 billion2.2.industry profitabilityThe company reported a net income of $171 million in 2005. As of the first half of 2006, the company's net income had grown 15 percent from a year earlier toP4.36 billion2.3.major players
The major players are Asia Brewery Inc.; Asahi Breweries, Ltd.; TsingtaoBrewery Company Limited; Foster's Group Limited.2.4.trends and prospects
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The concept of global markets was developed.
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Asian beer markets were similar to the Philippine beer market, in that therewas one major player, followed by a few players.
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There was the perception that anything imported was probably of betterquality than the local brand.
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The expected payback period for a brewery is about 5-15 years depending onthe market.II
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Mission/Vision/Objectives of the CompanyVisionSMC’s fundamental and historical philosophy — Proft with HonorThe following are SMC’s objectives:
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To be constantly aware of the aspirations of the people and of the nation, andto ensure that San Miguel continues to make a major contribution towardsthe achievement of these aspirations.
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To manufacture, distribute and sell throughout the Philippines foodproducts, beverages, packaging products and animal feeds, being ready at alltimes to add, modify or discontinue products in accordance with changes inthe market.
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To diversify into fields which will ensure optimum utilization of managementresources and a substantial contribution to corporate profits.
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To seek and develop export markets for new products as well as for thosealready being produced by the Corporation.
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To generate a return on funds employed sufficient to ensure an adequate rateof growth for the Corporation, and to provide satisfactory returns tostockholders.
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To provide an environment which is conducive to the development of theindividual and which encourages employees to realize their full capabilities
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To adopt a flexible and objective attitude towards change and to pursue anactive policy of innovation.MissionSan Miguel Foundation, Inc. is committed to the empowerment of San Miguelhost communities and various stakeholders by harnessing corporate socialresponsibility among the various San Miguel businesses in pursuing mutuallybeneficial programs that lead to self-reliance and sustainability.III
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Strengths and Weaknesses of the CompanyStrengths:
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It is the known leader in the beer business in the Philippines.
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SMC is an ISO 9000 accredited company(Worldwide Quality Standards)
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It has over 100 facilities in the Philippines, Southeast Asia, China, andAustralia. Its major operating facilities include five breweries, four glassplants, two metal closure and lithography plants, two plastic case plants, anda coconut oil mill. San Miguel is one of the Philippines' biggest privateemployers, with over 25,900 employees.
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The company is strict with the quality of its products.Weaknesses:
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Competition was very tough outside, especially from Japan and Taiwan.
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SMC would have to meet the standards for a multinational corporation.
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Management bench is not deep.
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Most managers would resist overseas assignments.
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The international operations would divert attention of SMC
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The company is not prepared to increase international operations.External Environment:1.EconomicAsia has an emerging economy. Asia is widely known provide its cheap labor.When China and Taiwan were admitted into the WTO in 2002.Beer couldnow be compled and expented to the two countries.The South Korea mostly brewed from rice.Only the Hite’s Max Prime brand ontains 100% barley malt.San miguel beer could into Korean market withits rice made of harvest.2.Political,Legal and RegulatoryAlthough foreign beers are popular within the country, the Thai governmentseeks to shelter its domestic breweries through the imposition of importduties; in addition, all imported beers must bear an import sticker on theirbottle caps. As a result, Thai brewers have struck partnership deals withwestern brewers, such as San Miguel Beer.3.Socio-CulturalThe similar of the cultures around the Asia affect the sales of SMC.4.TechnologicalThe rapid technological advancement will affect the price of beer.5.Natural or Physical EnvironmentCorporations that go beyond regulatory compliance are rated favorably bymost government offices. They are recognized for taking proactive measuresin preventing negative environmental, health and safety impacts. Recyclingand recovery are key factors which cut waste disposal costs. Reducing gasemissions that contribute to global climate change also lower costs. Pollutionprevention is a discipline practiced in SMC plants which eliminates thegeneration of waste at the source.SMC has pioneered a number of so-called trend-setting practices in itsenvironment program. It was the fi rst Filipino company that published anEnvironmental Update in 1996, a report which was well received by the localbusiness community and its stakeholders, as well as by business andenvironment groups abroad. The uniqueness of SMC’s environment programis its dual focus on both the external and internal environment. TheCorporation not only takes care of the natural environment, but also of itsown people and domain.6.Structural Analysis using the Five-Forces Model
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Threat of New EntrantsThe beer industry in the Philippines is almost monopoly by San MiguelCorporation. There is a low competition in the market.
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Intensity of Rivalry among Existing CompetitorsThe competitors of San Miguel Corporation in the Philippines are low.
Its main rival is Asia Brewery Inc.The SMC is the leader in the beerindustry in the Philippines.
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Bargaining Power of the BuyersSan Miguel has a significantly high bargaining power to its customersdue to the monopoly in the Philippines.Now in the modern life, there isheavy pressure from life and work.As a result, the role of the San Miguelbeer generally provide one way to slow the pressure.
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Bargaining power of SuppliersThe suppliers of the company hold a major role.Without its presence, thecompany could not produce its products, and basically, could not offeranything to customers.The suppliers of San Miguel to each country arebeing standardized, thus, it could not purchase its supplies locally, unlessit has been approved and has passed the company’s standards.
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Threat of Substitute Products and Servicewith the local and multinational companies offering products andcampaigning for a fallow lifestyle to consumers.They can chat with eachother during drink the beer and eat something like peanuts, pork, andchicken.IV
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Opportunities and ThreatsOpportunities:
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Competition is intensifying in all of SMC’s business lines and each has to beable to make it on its own
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No foreign brands had any significant presence,but several were known to beincreasingly interested in the Philippines market.
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Asian beer markets were similar to the Philippine beer market.
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Expanding in other Asian countries is a good idea.They are near thePhilippines and SMC’s business managers are familiar with businessconditions of the region.Threats:
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There was one major player,followed by a few players.
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International beer operations had competitors.
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Asia Brewery is selling cheaper beer.It continues to build breweries even if the existing breweries do not operate to full capacity.
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SMC workers is increasingly getting younger, more aggressive and lessreverent toward the company as an institution.

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Other foreign investors were interested in putting their money in Asia. Theymay invest ahead of SMC.V
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Conclusion
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San Miguel Corporation is very particular with its brand.They are notconscious on developing a new product to compete with the other beverages.
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The beer industry, and San Miguel Corporation being the biggest marketshareholder in the Asia.VI
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Recommendations-Company point of viewTo create an International Division in the SMC.This office will attend to theneeds and problems only of the businesses outside the Philippines.The Managerof this Division will report to the President.If he has problems or needs with aparticular country, the time to find a solution will be shorter because he will onlyrefer it to the President.To strengthen its business activities in the Philippines but try to build upbusinesses in other Asian countries with good prospects.To maintain constant communication with its workers in order to avoid strikesand work stoppages.