A.

BACKGROUND OF THE CASE

San Miguel Corporation (SMC) was originally founded in 1890 as a single-

product brewery in the Philippines. The Company has since then transformed
itself from a beverage, food and packaging business into fuel and oil, energy,
power, infrastructure, telecommunications and banking industries. The
Company's extensive product portfolio includes beer; liquor; non-alcoholic
beverages; poultry; animal feeds; flour, fresh and processed meats; dairy
products; coffee; various packaging products; and full range of refined petroleum
products. SMC has strategic partnerships with international companies, among
them are Kirin Holdings Company, Limited for beer; Hormel Foods International
Corporation for processed meats; Nihon Yamamura Glass Company, Ltd. for
packaging products; Padma Fund L.P. for toll roads; and Super Coffee
Corporation Pte Ltd for coffee. The Company's subsidiaries include San Miguel
Brewery, Inc.; Ginebra San Miguel, Inc.; San Miguel Pure Foods Company, Inc.;
and Petron Corporation.

In the early 1980s the San Miguel Corporation (SMC) and A. Soriano
Corporation (ANSCOR) Group of Companies, under the leadership of Andres
Soriano, Jr. addressed a long felt need for an effective formal planning system for
the two companies. According to Soriano, the companies had developed their
budgeting and long-ranged planning systems several years earlier but, despite
the many advantages these gave them they still were not satisfied with their
ability to respond to the rapid changes in the environment around them. They
therefore, search for a process that would enable them to upgrade their planning
capability. In November 1982, Dr. Lorange addressed a joint dinner-meeting of
SMC and ANSCOR Group and shares his insights on the implementation of the
strategic planning of the two companies.

B. STATEMENT OF THE PROBLEM

San Miguel Corporation and ANSCOR Group of Companies headed by

Andres Soriano Jr. were concerned about the issues regarding their company. I
have encountered thee problems. First is the companys satisfaction in their
ability to adopt or respond to changing environmental conditions. How will they
respond to the rapid changes in the environmental conditions? Second, during
their implementation phase, the planning process was much time consuming
which would really involve more work. And lastly, I have noticed that there were
some Business Family and Business Elements who were asking for hand-
holding to guide the process.
C. OBJECTIVES

For solving the issues I have come up with objectives that would guide me
through this study. For the first problem, the objective is to increase the
organizations flexibility in responding to environmental changes and to adapt to
new environmental opportunities and realities. For the second problem, the
objective is to examine loopholes in the planning process in order to know what
causes the time too consuming and to develop a strategy for an efficient planning
process. For the last problem, the objective is to determine the effects of having
no planning manual or hand-holding and to decide on the need for developing a
planning manual for the planning process.

D. SWOT ANALYSIS

D.1 STRENGHTS

The company has already established its business for many years.
They already engaged in a wide range of businesses which make their
company and products known to people. They also have a strong
commitment between the top management and employees.

D.2 WEAKNESSES

They are not flexible enough to adapt to environment changes and

they are also weak with regards to the carrying out of their plans and
implementation of its task.

D.3 OPPORTUNITIES

They always have the opportunity to explore to new business area.

They can create more effective new planning and processes and propose
Team-building workshops that develop a good impact to employees.

D.4 THREATS

Companys failure of implementing their strategic plans can be a threat

to them. Their competitors as well as the possible potential entrants in the
business can also be one.
E. ALTERNATIVE COURSES OF ACTION

1. Constitute a more active team of managers that is separate from the

members of the board in the planning process, develop new strategies based
on the past, expand their research to cope up with the future and provide
planning manuals to all Business Family and Business Elements.
Advantages:
- Innovation or upgrade of products will commence following the
trend in the environment.
- The performance of efficiency and effectiveness of the personnel
will be determined.
- Plans are materialized and initiated at a small time frame.
Disadvantages:
- The provisions of manuals to all managers can be costly.
- Conflict of perception between managers and bosses may arise.
- Inefficiency and ineffectiveness caused by the old strategies may
be carried out over to the new strategies.
2. Create a decision team, formulate new strategies and resist giving plan
manuals.
Advantages:
- New strategies may lead to enhanced performance adapting the
changes in the environment.
- Formation of a decision team would lead to a better decision
making and plan implementation.
Disadvantages:
- Hand-holding will not be lessened without plan manuals.
- Reformation of strategies may be time consuming and costly.
- Time frame in making decision can be lengthened.
3. No allocation of human resources or cross fertilization and independence
in family and element teams management decisions.
Advantages:
- There will be no complex in the strategic planning process.
- Will develop independence of work among employees.
Disadvantages:
- No effective and efficient communication with regards to the
strategic planning process.
- Loopholes will not be solved.
- Inability to adapt to environmental changes due to independence.

F. RECOMMENDATION

I would therefore recommend choosing alternative 1 which both

companies must constitute more active team of managers in the planning
process to develop new effective strategies and expand their research to cope up
in the future. In this alternative, there will be great advantages on the side of the
company and to the employees. More active managers in the companies, more
effective ideas will be made and realized, and top management will be more
open for the new plans and strategies. Expanding researches also broaden the
plans and strategies that will enhance their vitality for adapting the future
changes and problems. Though setting up the new ideas and planning processes
were time consuming but cooperation of the members will shorten the time and
produced better plans for the companys good operations and to achieve the
zenith of its success.

Eastern Samar State University

Maypangdan, Borongan City
 CASE STUDY
(San Miguel Corporation and A. Soriano Corporation)

Submitted by:

Melcah Janah P. Buhi

BSAccountancy 4

Submitted to:

Ms. Katherine Camenforte

INSTRUCTOR