HALINA MOUNTAIN RESORT (A)

(Case Study)

Plamo, Marie Claire A. / BS Accountancy / March 19, 2016

I. SUMMARY
Victor Herrera, chairman of the board of Blue Heights Realty and Development Corporation, desired
to launch his companys first big project, a mineral hot spring resort at Bucal, Calamba, Laguna named
Halina Mountain Resort (A). He wanted to make it as something he could leave for his family. Blue
Heights Realty and Development Corporation was organized in October 1976 attached in owning,
improving and managing real estate; it is a considered a stable company with authorized capital stock
of one million pesos (P1,000,0000) and paid-up capital of nine hundred thousand pesos (P900,000).
The proposed resort was planned to establish to their 2.2 hectare land in Bucal, Calamba, Laguna. The
land was composed of 1.5 hectare Victor inherited from his father in 1974 and the other seven hundred
thousand (700,000) hectare which he purchased from his commission from commodities trading. Upon
the proposal of the project, Victor asked his son Victor Jr. to make a survey and gathered enough data
and information about the vicinity and its rival resort. Also, he made an application with the Ministry
of Tourism requesting the approval for the establishment of the resort stating his reasons for going into
the resort trade. And lastly, he made an application for a P1.3 Million with Far East Bank and Trust
Company however, there is no assurance if it would recognize the merit of his proposal, with a
complete paper requirement, Herrera strongly believed that his project is viable and attractive and their
reports are unbiased. The only problem would be the approval of his loan application with the Far East
Bank and Trust Company.

II. STATEMENT OF THE PROBLEM

How will Blue Heights Realty and Development Corporation be able to have enough
budgets to establish the Halina Mountain Resort?

III. OBJECTIVES
1. Short-range Objectives:
To establish a resort that will give customers satisfaction by means of good
services and complete facilities and amenities.
2. Long-range Objectives:
To be able to establish a first class and well-known mountain resort.

IV. DATA ANALYSIS

COMPETITION
There are more than twenty (20) resorts that surround the place where
Halina Mountain Resort project will be established and most of the resort of
Calamba offered more or less the same facilities and charged the same price.

THE CREEK

A creek from Los Baos going down to Manila Bay which is not good on the
sight of the customer and would leave them worries as it may cause the land
to be soft.

CAPITAL
Budget is another problem for they cant assure that the bank will grant their
loan and even if the bank will grant their loan of P1.3 Million which is their
estimated cost there is no assurance that it will meet their actual cost in
establishing the project.

V. AREAS OF CONSIDERATION (SWOT ANALYSIS)

STRENGTH

Company owned business

Facility innovation skills
Better service quality relative to rivals
The first resort to be reached in Laguna coming from Metro Manila and having a good
location if this project will be realized and is the first resort in the area that has a
restaurant .

WEAKNESSES

Halina Mountain Resort doesnt have enough capital and no safety measures stated
and key personnels are mainly from the Herrera family.

OPPORTUNITIES

Mt. Makiling is endowed with natures beauty where Halina is located at the foot of it
and making it ideal for all types of nature tripping.
Popularity is gain through customers who will share their experience to other through
videos and pictures that will act as an advertisement for the resort.
Further development of Laguna by the local government helps Halina gain customers.

THREAT

Natural disasters like typhoon, earthquakes and others.

Other competitors in the area that were patronize by the people or may have lower
prices.
The resort is near the creek that makes land to be soft.

VI. ALTERNATIVE COURSES OF ACTION

1. Blue Heights Realty and Development Corporation would pledge to the Far East Bank
and Trust Company to make an agreement that the land will stand as a collateral for
the loan that will serve as the capital for the projected resort.
Advantages:
The bank will allow them to loan the money in exchange of the land.
Disadvantage:
There will be no assurance that the money they loaned will meet the actual
cost of the resort.
2. Mr. Herrera could borrow the capital from his friends and relatives to sustain the
realization of the project.
Advantage:
They could borrow the entire amount that they need and the project would
push through.
Disadvantage:
The possibility of discounts and VIP treatment from those relatives and
friends out of gratitude in the near future that would impact to lesser income
for the resort.
3. Mr. Herrera could propose the project to another businessman that can be his potential
partner for the resort that could help him finance and established the proposed project.
Advantage:
A future potential business partnerships would be achieved that would help
them finance the realization of the resort.
Disadvantage:
This will no longer be a family owned business because of the involvement of
other person or businessman with said resort.

V. DECISION MAKING

I therefore conclude that the best solution to the main problem is that Blue Heights Realty and
Development Corporation should pledge to the Far East Bank and Trust Company to have an
agreement to make land as collateral for the loan that will serve as their capital.

VI. ACTION PLAN

Conduct a meeting within the corporation.

Plan the estimated budget.
Hire an expert group that will help evaluate the proposal.
Send a loan application to the Far East Bank and Trust Company.
Set a general meeting between Blue Heights Realty and Development Corporation
and to the Far East Bank and Trust Company