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Planning: La Favorita Corporation 1

Adrin Silva, Esteban Acosta & Santiago Mancheno

Principles of Management
Planning: La Favorita Corporation
La Favorita Corporation is one of the most successful companies not just in Ecuador
but also in South America. The primary objective of this corporation is the organization and
management of groceries shops and supermarkets where the costumer can find almost
every national or international good (Monteverde, Garca & Chiriboga, 2008). In 1934, this
corporation was born in Quito and the following years it experienced a constant growth
because of two main operational changes: Centralization of storehouses where goods are
delivered to each supermarket and the creation of their own brand products in 2002
(Monteverde et all., 2008). Nowadays, this corporation is one of the biggest companies in
the country.
As we mentioned before, La Favorita works within the supermarket industry
offering the costumers all kinds of products. To accomplish this goal, the corporations has
different auto service lines for different costumers segments. Supermaxi offers more than
16 000 items to satisfy daily needs, Megamaxi is the first hypermarket in the country
offering all kind of products for home, AKI supermarket satisfying needs for a low-income
segment, SUKASA and Todohogar for home appliances, Bebemundo offering clothes and
items just for newborns, Mr. Books as a complete library, TVentas as the first company to
sell products in a TV program, Jugueton as the biggest toy industry in South America and

Planning: La Favorita Corporation 2

Kywi as the biggest home and construction company in the country (Corporacin Favorita,
In Ecuador, the industry of supermarkets is divided in two mayor groups:
Supermaxi (La Favorita Corporation) and Mi Comisariato (El Rosado Corporation). For the
main north-central cities of the country, La Favorita has the customer preference however,
in the coastal cities like Guayaquil, El Rosado has the customer preference. On the other
hand, the new growth of mini markets and hypermarkets targeting low income customers
and marginal sectors constantly expand the competitors area for La Favorita corporation.
Planning is a key element of executing an idea or project. It implies defining the
objectives of the proposed project, establishing the strategy required in order to achieve
these objectives, and developing plans for the activities of the organizational work. This
element is very important considering that it gives the idea a direction making the people
involved to stay focused and avoid distractions in order to maximize time and minimize
wastes of resources (Robbins & Coulter, 2009).
Big corporations such as La Favorita usually follow the following pattern for
developing and implementing plans or projects. First they start with the identification of the
problem, they evaluate the main causes and break them into small parts to analyze them
profoundly. Depending on the gravity of the problem it might require a deep study that may
include surveys to everyone involved, statistics and data that could help to identify a
solution faster. For example with corporation La Favorita one of the problems detected was
that in areas considered less urbanized people usually tend to choose for cheapest prices

Planning: La Favorita Corporation 3

provided by chains such as Santa Maria markets rather than buying at Supermaxi or
Megamaxi. This problem was detected because the stores installed in these areas were not
growing as the plan expected so the corporation proceeded with surveys to costumers that
pointed out to this issue.
On the other side, when ideas surge from innovation instead as solutions to
problems, the procedure requires some studies from the market where it is going to be
implemented, the cost required and the expected profit. Once the information from these
studies is obtained the cost and profit are compared to see if the project is going to be a
viable option and then they proceed to the implementation. For example a project
implemented by La Favorita was the creation of ENERMAX S.A. This company manages
the hydroelectric plant Calope which is currently providing La Favorita and all their
subsidiaries with renewable and efficient energy (Ecuador Ecolgico).
La Favorita corporation is always looking to be the best as mentioned in their
Vision Being the more efficient and profitable commercial chain in America, offering the
best customer service (Ekos, 2012). The example of the survey made by La Favorita and
the ENERMAX S.A. project show some important aspects of planning. The mentioned
project is a great investment and has brought to the corporation savings since they generate
all the energy they use also it considerably improved their reputation with the customers
since they become a great example of a clean energy corporation obtaining the Renewable
energy certificate in 2013 (Corporacin Favorita, 2012). This project can be classified as a
strategic plan of development considering it was a long-term project that helped La
Favorita achieved its first place in the corporation rankings. They first defined their

Planning: La Favorita Corporation 4

objective which was implementing a renewable source of energy that can supply enough
power for the operations performed by the corporation and their subsidiaries, then
establishing the strategy, performing studies and feasibility studies for the proposed
Hydroelectric plant, and then they executed the plan that eventually granted them the
Renewable Energy Certificate in 2013.

Planning: La Favorita Corporation 5

Corporacin Favorita. (2014, January 1). La Corporacin Favorita [Video File]. Recovered
Corporacin Favorita. (2012). Reconocimiento a la excelencia empresarial. Corporacin
Favorita: Reconocimientos Exclusivos. Recovered from:;jsessionid=0960037CDA15F7A272DECB7EACB41104
Ecuador Ecolgico. (s.f.). Enermax S.A. Ecuador Ecolgico. Recovered from:
Ekos Negocios. (2012). Una dcada de excelencia empresarial. Revista Ekos Negocios. pp.
124 125.
Monteverde, E., Garca, J. & Chiriboga, J. (2008). Determinacin de la Estructura de
Financiamiento Optima para Empresas Ecuatorianas: Caso Corporacin Favorita
C.A (Undergraduate Thesis). Escuela Superior Politcnica del Litoral, Ecuador.
Robbins, S. & Coulter, M. (10ma Ed.). (2009). Administracin. Mxico D.F: Editorial
Prentice Hall.