COVER PAGE

EXECUTIVE SUMMARY

One of the most important crops in the Philippines is pineapple. Demand for
pineapple products is increasing because Filipino consumers are becoming more health
conscious and opportunities for pineapple exportation in the global market is constantly
growing as well. Majority of pineapple production is concentrated in Mindanao and a huge
percentage of production nationwide is operated by giant companies such as DOLE and
Del Monte, making it difficult for the smaller ones to establish a competitive position.

DAVECO Agrarian Reform Beneficiaries Cooperative, also known as DAVECO-

ARB, is one of the entities which is engaged in selling pineapple products. The “Pineapple
Food Processing” project was presented on March 7, 2008 to the Department of Labor
and Employment in Region XI and was formally launched on April 18, 2008. The
proponents have identified five (5) main strategic issues based on the data gathered and
interviews with the management. These are as follows: limited market reach, relatively
low market share, fluctuating profits, unpopularity of the products and lack of local
patronage.

To solve these issues, current and long-term strategies were presented in this
paper together with the specific strategies, actions to be taken, period of implementation
and success indicators. Potential problems that may arise in the strategy implementation
were identified such as conflicting problems in the workplace, inability or resistance to
change of employees, additional expenses and lack of resources, inability to reach
consensus, ineffective leadership and insufficient attention and evaluation. Suggested
solutions to counter these drawbacks were also shown.

Through the strategies provided, this paper basically aims to aid DAVECO-ARB
not only for the maximization of its wealth but also, through proper implementation, for
the realization of its vision which is to be the best Agrarian Reform Beneficiaries
Cooperative and its mission which is to provide excellent services, produce high quality
products and foster economic growth to better serve its stakeholders.
 ABOUT THE COMPANY

Company Background

DAVECO Agrarian Reform Beneficiaries Cooperative, also known as DAVECO, is

a cooperative that was initiated by the Department of Agrarian Reform through the
Comprehensive Agrarian Reform Program (CARP). The said program covered a land
property that was devoted for pineapple plantation managed by Davao Agricultural
Ventures Corporation (DAVCO). To be able to award the property to DAVCO interested
employees, the Department of Agrarian Reform suggested that the DAVCO Union form
a cooperative. Finally, on November 27, 1995, the then DAVCO Employees Cooperative
(DAVECO) was organized and started off with thirty-seven members and an initial
working capital of Php500.00. The cooperative was officially registered with the
Cooperative Development Authority (CDA) on December 25, 1995 through CDA Reg. No.
4085.

To generate revenue, the cooperative decided to lease the land that was covered
through CARP for Php5,000.00 per hectare per year. In addition, DAVECO also engaged
in money lending business activities which caters its own members. After three years, the
cooperative grew from thirty-seven to one hundred and ninety-six members with a total
land holding of two hundred sixty hectares.

In 2007, with the abundance of pineapples in the locality, DAVECO officers and
members saw an opportunity to venture into a new market. Through regular meetings
and consultation workshops, the officers were able to come up with a “Pineapple Food
Processing” project. TESDA hosted a training for Food Processing which was attended
by DAVECO officers and members to prepare for the said project. On March 7, 2008, the
cooperative presented the “Pineapple Food Processing” project to the Department of
Labor and Employment in Region XI and was able to receive financial assistance for the
purchase of tools to be used for processing. With all preparations in place, the DAVECO
Food Processing was formally launched on April 18, 2008.
 Currently, the cooperative is faring well with its lending and land leaseback
activities, and is commonly known for its pineapple processed food products such as
pineapple juices, jams, vinegars, and wines.

Vision and Mission

The proponents of this study suggest the following vision and mission statements
for the cooperative.

Vision: “To be the best Agrarian Reform Beneficiaries Cooperative in Davao City.”

Mission. “DAVECO is one of the fast-growing cooperatives in Davao City. At DAVECO,

we believe that customer satisfaction is essential in achieving business success and
eventual stability. Thus, we aspire to become one of the leading cooperatives by providing
excellent services and producing high quality pineapple products. We aim to continually
improve our processes and expand our connections to foster economic growth in our
business environment; to better serve our stakeholders – our external customers, our
members, and the community in which we operate.”
 EXTERNAL ASSESSMENT

Environmental Analysis using External Factor Evaluation (EFE) Matrix

Opportunities

1. Increase in demand of health-conscious products

Consumers nowadays are already mindful of what they eat. In a statement

released by Kantar Worldpanel, which tracks the shopping behavior of 3000
Filipino homes in urban and rural areas, revealed that consumers are now slowly
becoming more health conscious and prefers to buy products which has greater
nutritional value than those who do not have. This poses an opportunity for the
company considering that their products are natural and organic.

2. Increasing demand of pineapple exports in the global market

It is undeniably clear that for the coming years, the demand for
processed/preserved or raw pineapple products will increase. In an article released
by the government, it stated that market opportunity for global demand for
Processed Philippine Fruits and Vegetables has an average growth of 7% from
2006-2010 with preserved fruits having 53% and juices/concentrates with 24% of
total exports. This placed the company in a position to consider exporting their
products.
3. Disposable income among citizens due to tax exemption

Starting this year, most provisions in the Tax Reform for Acceleration and
Inclusion (TRAIN) Law will become effective. Those with income of Php 250,000
and below are no longer subject to income tax. This gives consumers a higher
excess income because of the lesser tax implications.

4. Boost of tourism in Davao City

For the past years since President Rodrigo Duterte took the seat in
Malacañang, tourism boosts in the city as they wanted to visit the home of Digong.
Davao is not only known for its festivals but also for the products that the city offers.
As part of OTOP, the entity's products are included in those that are bought by
tourists which numbers are expected to increase in the coming months.

5. Increase in distribution channel

The opening of retail stores and other distribution channels gives DAVECO
the chance to show their products on a larger audience. Aside from their usual set-
up of delivering their products at schools, they can also expand by entering into
partnerships with outlets such as convenience stores, malls among others to widen
product recognition.

6. Trade Fairs

Exhibits and Trade Fairs gives the company a chance to present and show
their products. This contributes to the exposure of their name among those who
visits their stalls. The business is an active participant of such being under the
Department of Trade and Industry (DTI). Aside from city-wide trade fairs, the
agency conducts the Sikat Pinoy National Trade Fair annually to promote various
products from different localities.

7. Increase in forums and seminars regarding recent updates in the industry

In this dynamic business world, knowledge about the industry is essential

hence the need for consistent updates on this particular industry. This includes
expos conducted by either private or government agencies.
Threats

1. Existence of well-known competitors

It is undeniably clear that large corporations hold most of the market share
in the industry. This goes without saying that as of now, DAVECO can't compete
with larger brands in a larger scope. Del Monte and Dole have already become a
household name and if consumers were going to choose between the known brand
versus the lesser known brand, most would obviously choose what they were
already grown used to. For the larger companies, smaller businesses are of little
threat because they have already established their position in the market.

2. Implementation of more strict regulatory requirements

Because of the increasing entrants in the food industry, the government saw
a need to implement stricter rules when it comes to supplying products that enter
the body. The DTI is strictly implementing businesses such as DAVECO to have
an equipment/machine that counts some nutritional content that their products are
required to have. There are regulations that is needed to be complied with before
being able to penetrate the market. In addition, if the company considers to export
their products or raw pineapples in the future, then an even stricter rules will be
applied. These rules will challenge the company and needs to be considered.

3. Saturated market

Another threat for the company is what we call saturated market.

Consumers tend to focus only on brands that is already well-known and
established in the market. This is considered as a threat because consumers
already have a bias mindset when it comes to choosing products displayed in a
single rack. Some would always prefer what they were used to than that potential
small business.

4. Increase in taxes due to the new tax reform law

The effectivity of the TRAIN Law does not only give an advantage among
the taxpayers but also disadvantages. Because the government increased the
 exemptions of a certain group of income earners, they will now channel the loss to
other means of obtaining taxes. It's like exchanging your money from your right
pocket to your left. It also touched some taxes that are needed to be paid by
business that can affect business licenses. And because revocation of business
licenses will be deemed illegal in the eyes of law, businesses are compelled to
comply.

5. Adverse weather conditions

This threat is something that is uncontrollable but will continue to be a threat

to the company. Because it can't absolutely be eliminated, its effects can somehow
be mitigated.
Industry Analysis using Porter’s Five Forces Model

The following paragraphs will discuss the analysis of the industry of DAVECO
Agrarian Reform Beneficiaries Cooperative using the five forces of competition and such
analysis will greatly affect the possible strategies that will be formulated for the
cooperative.

Potential Entry of New Competitors

One factor of intensifying the competition in a industry is the threat of the new
entrants. When the pool of new entrants becomes larger, there will be more changes of
strong competition. In an analysis of the food & beverage industry, it was found out that
the food processing industry is directly linked to the agricultural industry. In relation to
this, the food processing industry in the Philippines is fairing very well. Thus, it will be no
surprise that businesses may start to venture on agricultural food processing. The
potential new competitors of DAVECO are Biao Joaquin Dairy Farmers Cooperative,
Magsaysay Coconut Farmers Cooperative, Federation of Davao Dairy Farmer’s
Cooperative and Davao Tropical Fruits. To secure the cooperative’s place in the market,
they may opt to improve nutritional value on their products, add modern features to their
products (bottled pineapple juice, instead of tetra packs) or increase promotional
campaigns especially through social media.

Potential Development of Substitute Products

Consumer needs are complex and a firm, may it be small or large, cannot satisfy
all sorts of needs alone. Such needs enable wide range of choices for the consumers
giving competitors a sufficient room for product developments that can replace existing
goods in an instant. DAVECO products have a lot of substitute products and most of them
were in the same industry longer than DAVECO. Competition increases when the relative
price of the company’s substitute products decreases and customers cost of switching
declines. The following substitute products, but not limited, pose a threat to the
cooperatives’ products:

▪ Coconut/Cane vinegar of Silver Swan, Marca Piña and Datu Puti

 ▪ Suka Pinakurat

▪ Variety of jams such as guava, mango, durian, strawberry and guyabano by

Rosario’s and MINCO

▪ Coconut/Bignay wine of Malagos Fruit Wine

▪ Tetra pack juice of Zest-O and Sunkist offering different fruit flavors

Bargaining Power of Suppliers

Supplier’s products play a significant role as an input to a firm’s main products.

The cooperative’s relationship with its sole supplier of raw materials, which are
pineapples, exhibits a relatively fair bargaining power. Such relationship is quite
advantageous with regards in assuring the quality and reasonable pricing of raw materials
which is at a standard price agreed by both parties. In addition, deliveries are also less
likely to be delayed as the processing plant is located within the supplier’s compound.

Bargaining Power of Consumers

Consumers are the determinants of a firm’s success. Bargaining power of

consumers pertains to the pressures created by the consumers that can greatly affect
firms to provide higher quality products, better customer service and lower prices For
DAVECO, buyers have a high bargaining power. They can easily shift from one firm to
another with low switching costs. Also, they have high access to product information
which gives them an easy choice between DAVECO products and competitors’. Thus,
the cooperative must ensure customer satisfaction to further flourish in their industry.

Rivalry among Competing Firms

The intensity of competition among existing firms is one of the major factors of
profitability of a company. Rivalry among competing firms for DAVECO is moderately high
because there are lots of competitors to the cooperative wherein the former’s products
are not so different with the latter. However, DAVECO offers unique characteristics of
their products. Their products are a taste of home for Davaoeños and can be a reminder
for tourists of what Davao is. Also, their products are fresh, organic and healthy which are
offered at low price compared to other competitors.
 INTERNAL ASSESSMENT

Company Analysis using Internal Factor Evaluation (IFE) Matrix

The key internal factors in evaluating the IFE matrix are the strengths and
weaknesses of DAVECO Agrarian Reform Beneficiaries Cooperative.

Strenghts

1. Produces natural organic products

The major raw materials of DAVECO’s products are pineapples which have
great benefits such as it helps in improving oral and high health, boosts immunity
and improves blood circulation, helps prevent arthritis, cancer and heart diseases,
and etc. Because it’s organic, nutrients which are common from other competitors
are richer and other nutrients are present which can’t be found from a competitor’s
products.

2. Owns processing/manufacturing facility

Keeping the manufacturing process of products in-house deals plenty of

benefits for the company. First, it allows flexibility for the company, hence, it’s
easier for them to relay other ideas and apply it to their products directly. Also, they
would know how their products are being done unlike outsourcing where a firm
 doesn’t have an assurance whether the processes are being followed as
instructed.

3. Offers low-priced, consumer friendly products

Since the company’s competitors offers low-priced consumer friendly

products, it is of great importance for the company to do such thing so that they
could easily get a name in the industry and brand out to more people, especially
to low and middle-income earners.

4. Belongs to One Town, One Product (OTOP) Philippines

DAVECO is part of OTOP Philippines wherein it is a program by the

government for Micro and Small and Medium-scale enterprises to drive inclusive
local economic growth. It empowers the Calinan community to support and
promote their products rooted in its local culture.

5. Social responsibility

As a cooperative, DAVECO wants only the best for their stakeholders

especially to their members. In exchange for the commitment provided by the
latter, the company provides jobs for their members as a source of livelihood and
income, thus, creating a stronger relationship with them.

6. Produces unique products

In relation to being part of the OTOP program, offering unique products

creates competitive advantage for the company as their products can be
considered as “pride-of-place” and can be a small reminder of what Calinan is like.

7. Have fixed suppliers

The company have good working relationship with its suppliers which will
solve not only the delivery cost savings but also reduce availability problems,
delays and quality issues of raw materials that will greatly improve the flow of
operations leading to a better service for the consumers.
 8. Owns a larger portion of land

Having a larger portion of land means the cooperative has one less burden
whenever the Board of Directors would like to extend their market reach in the
future through expanding their operations or venturing to other businesses like
creating a new product line with different main raw material.

Weaknesses

1. No facility to detect nutritional content

The cooperative does not own a facility for checking nutritional contents of
their products. This is a great disadvantage for them because whenever they will
introduce or change the formula of their products, they need to outsource other
firms for the determination of the new nutritional contents and if it doesn’t meet the
criteria provided by the government, they have to formulate and repeat the process
again causing them to spend thousands just for this process.

2. Difficult to obtain approval for new strategic choices

Board of Directors of the cooperative infrequently meet only in a year. Also,

they have a centralized system where decisions should be made and approved by
the Board so when new creative ideas are formed, such ideas are only discussed
thoroughly on those seldom meetings and it’s not an assurance whether those
ideas will be transformed into strategies and be implemented.

3. Poor marketing strategies

They do not exert that much effort to promote their products even though
their products have the potential to place a great position in the industry when
promoted properly. They are contented with selling their products to limited buyers
in a specific area when it could sell better if introduced into a wider market.

4. Limited distribution

The company distributes their products to resellers mainly in Calinan and

some malls found in downtown area of Davao City. It could have been better if they
 focus also on distributing their products to other convenience stores near
elementary schools or maybe directly distribute to the canteens of such schools.

5. Narrow-ranged products

This is a weakness of the company as it hinders them to offer a variety of

products. They do not also fully utilize the potential of its main raw materials which
is pineapple. Moreover, their product line is also secluded in producing products
with pineapple as its main ingredient.

6. Location of the business

The location of the company, where distribution and manufacturing facility

are in one place, is far from the Calinan proper so when resellers no longer have
stocks of their products, it would take time to restock it again which could negatively
affect the relationship between them and the resellers and could also indirectly
affect buyer’s loyalty.

7. No loyal customer base

Since they do not promote their products that much, it is not known to many
specifically to areas far from the cooperative. They only depend on contracted
establishments to purchase and resell their products.
 STRATEGIC ISSUES

1. Limited Market Reach

The company is currently supplying its products in selected local stores. This
limits their market reach in a way that its mode of distribution channel cannot answer
to a wider audience. Some consumers haven't even heard about the products
because it is not visible in stores where a larger group of people commonly goes to,
where it's supposed to be. A narrow market coupled with minimal to no marketing
strategies implemented prevents it from further customer demand and ultimately
leads to low market share.

2. Relatively Low Market Share

Relative to its competitors, the company is obviously lagging behind those

belonging to the food industry particularly in the production of pineapple products and
raw pineapples. Currently, the company is not focused on really competing with large
companies like Dole and Del Monte in terms of a lot of aspects that they employ like
product distribution, product differentiation, promotion and product recognition among
others. Considering the size of their business and the kinds of products they offer, it
is understandable that their intention is not to compete with bigger names but only for
the sustenance of its stakeholders. However, it is also important to note that in every
business venture, growth must always be considered. Obtaining a higher market
share in the coming years is not necessarily on a larger scope but the company can
start in its share in local markets where they are currently distributing their products.
This suggests an opportunity for the company to get a hold of its current market and
not just settle on their existing market position.

3. Fluctuating Profits

One commonly used method of measuring how successful a venture is is

through its profits and the return it gives to shareholders. The company's set-up is
quite distinct compared to other businesses in this industry because of its cooperative
standing. It means that some decisions undertaken by the company are passed on
to the General Assembly which generally takes time and their processes are very
 political. This affects the timely aspect of decision making. Now what the shareholders
want is the return on their investment which tells us that they need to have
consistently increasing profits. Currently, the company is experiencing inconsistent
profits that affects dividend distribution to its shareholders. One reason that can be
attributed to it is their decision to stop one of its segments or the production of one of
its products. Here we can see that profits are generally influenced by decisions.

4. Unpopular products

Before starting this paper, some of the members of the group have no
knowledge of their existence and market presence. After the company visit, where
they distributed a free taste of their products, it actually taste distinct compared to
what we've tasted on other brands. This thought made us agree that it has greater
market potential and their products should reach the homes of the customers. They
don't need to spend too much on marketing in terms of promotion but efforts should
be taken well enough to put their products on the minds of the buyers. The
unpopularity or less knowledge of their products causes its minimal local patronage.

5. Lack of local patronage

How are the customers able to patronize the product when they haven't even
heard of it? This is the next issue after weighing the product's unpopularity. This is
also related to the market share discussed above where the company must first
secure its hold on their existing local market as a step for growth. As part of the city's
OTOP, it must be that their products is already known to the market. However ironic
it is, those which are not from the local districts know more about their products than
those who actually are from here. "Mahalin ang sariling atin" should also be
emphasized, if not in the whole country, then in the Davao region- its home.
Long-term Objectives

The following objectives are anchored on the strategic issues identified, and are
established with reference to the company’s mission statement and to set the direction
for the further improvement and success of the entity:

1. To establish market position

2. To maximize shareholders’ wealth

3. To maintain involvement in social responsibility

 STRATEGY FORMULATION

Strength, Weaknesses, Opportunities, Threats (SWOT) Matrix

Strengths Weaknesses

1. Natural organic products 1. No facility to check nutritional

2. Own processing facilities content
3. Low-priced, consumer 2. Difficult to obtain approval for
friendly products new strategic choices
4. OTOP (One Town One 3. Poor marketing strategies
Product) 4. Narrow-ranged products
5. Social Responsibility 5. Location of the place
6. Owns a large portion of land (distribution)
7. Unique products 6. No loyal customer base
8. Fixed supplier 7. Low employee
empowerment

Opportunities Threats

1. Shift of market to a healthier 1. Existence of well-known

diet – increase in demand of competitors
organic products. 2. Implementation of more strict
2. Stable demand of pineapple regulatory requirements
exports in the global market 3. Saturated market
3. Disposable income among 4. Increase in prices due to the
citizens due to tax exemption new tax reform law
4. Boost of tourism in Davao 5. Adverse weather conditions
City
5. Increase in distribution
channels
6. Trade Fairs
7. Increase in number of forums
and seminars regarding
recent updates in the industry
 SO Strategies WO Strategies

1. Expand operations by engaging in 1. Diversify product line (W4,

pineapple exportation (S6, O2) 01)
2. Intensify product promotion or 2. Integrate new trends in the
advertisement to reach a wider market to current product line
market (S1, S3, O1) (W4, O1)
3. Engage employees in
seminars and forums (W7,
O7)

ST Strategies WT Strategies

1. Establish cost reduction policies to 1. Encourage customer loyalty

meet price expectations (S3, T4) despite price increase
2. Further establish brand image in through improved customer
Davao City (S4, T1) relation and quality (W6, T4)
2. Seek sponsorship for regular
nutritional content check
(W1, T2)

SO Strategies

1. Market Development

By matching the identified strength of owning a large portion of land and the
opportunity of a stable demand of pineapple exports in the global market, it would
be an advantage to pursue a market development strategy. However, instead of
introducing the existing products such as pineapple jams, this strategy suggests
that DAVECO engage in pineapple fruit plantation and export. By utilizing a portion
of land for pineapple plantation, the company would be able to expand its operation
and add a new profit center within the organization.
 2. Market Penetration

Nowadays, people are becoming more conscious of their diet thereby

increasing demand for more natural and healthier food products. DAVECO can
take advantage of this opportunity by emphasizing their strengths of quality,
healthy, and low-priced pineapple food products. This strategy suggests intensive
product promotion or advertisement aimed to introduce existing products and
reach a wider market.

WO Strategies

1. Diversify product line

Currently, DAVECO only offers four products – pineapple jam, pineapple

juice, wine, and vinegar. Compared to other companies engaged in food
processing, the entity’s current product line is narrow-ranged. This strategy aims
to address such identified weakness. Through diversifying the current product line,
the company would be able to offer more products to a market with increasing
demand for healthier food products. Seminars, trainings, and other research and
development activities would be necessary to come up with a new pineapple
product.

2. Integrate new trends in the market to current product line

This strategy suggests innovation to be applied to the existing product line

of the company. For instance, since establishments nowadays prefer bottled
products, whether plastic or glass, more than tetra-packed products, DAVECO
may change the packaging of their pineapple juice. Through such action, the
company would be able to gain new distribution channels and introduce the
product to new geographic markets.

3. Engage employees in seminars and forums

A company’s employees are said to be its greatest asset. As such, it is

important that employees are given opportunities during strategy-formulating
activities to express what they think would be a good option for the company.
 Through engaging their employees in forums and seminars regarding recent
updates in the industry, DAVECO would be able to increase employee
empowerment within the organization. As a result, the company’s employees
would be able to acquire new knowledge and skills that would be able to help
DAVECO in addressing its current issues and in improving its future operations.

ST Strategies

The following are the strategies formulated in order for DAVECO to use its
strengths in avoiding or reducing the threats that it faces:

1. Establish cost reduction policies to meet price expectations

How a company prices its products affects not only its sales, but also its
position and ability to compete in the market. DAVECO has established its
products at a low price that consumers, even a student with no income, can afford.

However, due to the new tax reform law, prices of products with sugar and
artificial sweeteners have increased by Php 6.00 per liter (https://pcoo.gov.ph/wp-
content/uploads/2018/01/A-Guide-To-TRAIN-RA10963.pdf).DAVECO's Zlurpppd!
pineapple juice contains sugar as one of its raw materials. In accordance with the
new taxation law, DAVECO increased its products' prices. This change could taint
the company's established "consumer-friendly" price.

To address this threat, the business should establish cost reduction policies
to meet consumer's price expectation.

2. Further establish brand image in Davao City

Competition inevitably exists in the market. Its presence reduces sales as

companies attempt to gain a larger market share. In the food and beverage
processing industry, the Philippines is fairing very well. DAVECO has to keep up
and secure its place in the country's market.

On one side, DAVECO's products are promoted by OTOP (One Town One
Product). It is a program of the government that focuses on the promotion of
 products of specific towns. It also gives emphasis to the branding of these products
and how well these can be presented to the consumers.

Through continuous engagement in marketing efforts like OTOP and

through decreasing the scope of its competitive aspect, DAVECO should consider
further establishing brand image in Davao City.

WT Strategies

Below are the defensive strategies to reduce DAVECO's internal weaknesses and
avoid the threats that it faces:

1. Encourage customer loyalty despite price increase through improved customer

relation and quality

Having no loyal customer base, DAVECO should engage in efforts in

building and developing partnerships with its consumers. The business must
manage its relationships bringing the possible maximum value to its buyers. This
can be achieved when DAVECO identifies its customer demand and
communicates those information throughout the organization. Because when
value is received by a consumer from the company, they would always come back
and continue buying its products. Most especially, consumers would be willing to
spend for the company's products even when the prices go up.

2. Seek sponsorship for regular nutritional content check

With the implementation of more strict regulatory requirements of the Food

and Drug Administration of the Philippines, DAVECO has to check its products'
nutritional content regularly. This could be made possible if the business owns a
food/beverage testing lab equipment or any equipment with the same function.
However, acquiring such would entail a huge amount of cost. Also, this would
undergo the long process of investment analysis and votation from the members
of the cooperative thus taking a long time. It is, therefore, practical for DAVECO to
seek sponsorship from different establishments to acquire such testing equipment
in order to meet strict regulatory requirements.
Quantitative Strategic Planning Matrix (QSPM)
Key External Factors Market Penetration
Opportunities Weight AS TAS
Increase in demand of health-conscious products 0.12 4 0.48
Incerasing demand in pineapple exports in the global market 0.12 3 0.36
Disposable income among citizens due to tax exempt
exemptions 0.11 2 0.22
Boost of tourism in Davao City 0.10 4 0.40
Increase in distribution channels 0.10 3 0.30
Trade Fairs 0.10 0 0.00
Threats
Existence of well-known competitors 0.09 1 0.09
Implementation of more strict regulatory requirements 0.07 4 0.28
Saturated market 0.07 2 0.14
Increase in taxes due to the new tax reform law 0.07 0 0.00
Adverse weather conditions 0.05 0 0.00
TOTAL 1.00 2.27
Key Internal Factors
Strengths
Produce Natural Organic Products 0.07 4 0.28
Owns own processing facility 0.12 0 0.00
Low-priced, consumer friendly product 0.05 3 0.15
OTOP (One town, one product) 0.07 0 0.00
Social Responsibility 0.04 0 0.00
Produce Unqiue Products 0.06 4 0.24
Fixed Suppliers 0.05 0 0.00
Owns a large portion of land 0.06 0 0.00
Weaknesses 0.00
No facility to check nutritional content 0.04 0 0.00
Difficult to obtain approval for new strategic choices 0.07 0 0.00
Poor Marketing Strategies 0.10 4 0.40
Limited Distribution 0.10 4 0.40
Narrow-range of products 0.05 0 0.00
Location of the business 0.08 0 0.00
No loyal customer base 0.04 2 0.08
TOTAL 1.00 1.55
GRAND TOTAL 3.82
Market Development
AS TAS
3 0.36
4 0.48
1 0.11
3 0.30
4 0.40
0 0.00
2 0.18
1 0.07
1 0.07
0 0.00
0 0.00
1.97
3 0.21
0 0.00
2 0.10
0 0.00
0 0.00
3 0.18
0 0.00
0 0.00
0.00
0 0.00
0 0.00
3 0.30
3 0.30
0 0.00
0 0.00
1 0.04
1.13
3.10
QSPM continuation
Customer Relationship
Key External Factors Management
Opportunities Weight AS TAS
Increase in demand of health-conscious products 0.12 2 0.24
Incerasing demand in pineapple exports in the global market 0.12 1 0.12
Disposable income among citizens due to tax exempt
exemptions 0.11 3 0.33
Boost of tourism in Davao City 0.10 1 0.10
Increase in distribution channels 0.10 2 0.20
Trade Fairs 0.10 0 0.00
Threats
Existence of well-known competitors 0.09 3 0.27
Implementation of more strict regulatory requirements 0.07 3 0.21
Saturated market 0.07 4 0.28
Increase in taxes due to the new tax reform law 0.07 0 0.00
Adverse weather conditions 0.05 0 0.00
TOTAL 1.00 1.75
Key Internal Factors
Strengths
Produce Natural Organic Products 0.07 1 0.07
Owns own processing facility 0.12 0 0.00
Low-priced, consumer friendly product 0.05 1 0.05
OTOP (One town, one product) 0.07 0 0.00
Social Responsibility 0.04 0 0.00
Produce Unqiue Products 0.06 2 0.12
Fixed Suppliers 0.05 0 0.00
Owns a large portion of land 0.06 0 0.00
Weaknesses 0.00
No facility to check nutritional content 0.04 0 0.00
Difficult to obtain approval for new strategic choices 0.07 0 0.00
Poor Marketing Strategies 0.10 2 0.20
Limited Distribution 0.10 2 0.20
Narrow-range of products 0.05 0 0.00
Location of the business 0.08 0 0.00
No loyal customer base 0.04 4 0.16
TOTAL 1.00 0.80
GRAND TOTAL 2.55
Cost Reduction
AS TAS
1 0.12
2 0.24
4 0.44
2 0.20
1 0.10
0 0.00
4 0.36
2 0.14
3 0.21
0 0.00
0 0.00
1.81
2 0.14
0 0.00
4 0.20
0 0.00
0 0.00
1 0.06
0 0.00
0 0.00
0.00
0 0.00
0 0.00
1 0.10
1 0.10
0 0.00
0 0.00
3 0.12
0.72
2.53
 By using QSPM in the decision stage, we have determined the most attractive
alternative strategy considering key internal and external factors as market penetration.
The results suggested that the company should intensify their product promotion and
advertisement to reach a wider market. This strategy makes use of the company’s
strengths of producing natural products and of selling them at a low price which is
consumer friendly. These strengths are advantageous when matched with the opportunity
of a current shift of the market demand to a healthier diet.
 STRATEGY IMPLEMENTATION

The proponents have chosen intensive strategies for current and long-term
implementation.

The current situation can be best handled by the market penetration strategy. The
cooperative must present its pineapple products in present markets here in Davao
through enhanced marketing efforts. Strategic issues that can be addressed by this
strategy include limited market reach, relatively low market share, unpopularity of the
products and lack of local patronage.

On the other hand, market development strategy can be considered in the long
run. Products can be presented in new geographic areas outside Davao City such as
Davao del Norte, Davao del Sur and other neighboring cities to expand market reach. All
the strategic issues identified which are limited market reach, relatively low market share,
fluctuating profits, unpopularity of the products and lack of local patronage can be solved
by this strategy.

Specific Strategies Actions to be taken Timeline/Period Success Indicators

of
Implementation
1. Intensify Study potential target Apr-18 Presentation of
research and market abroad; Outsource detailed analysis
development marketing research studies reports

2. Foster capital Encourage membership to Immediately At least 10% increase

growth to the cooperative; Develop in quarterly
accumulate profit-centered marketing memberships; At
earnings to be set strategies for its pineapple least 5% monthly
aside for proposed food products; Continue increase in profits and
business venture employed regulations in resulting at least 3%
other business activities annual increase in
retained earnings

3. Establish strict Comply with regulatory Jul-18 Securing approval

legal compliance requirements needed to from appropriate
engage in pineapple authorities
plantation
 4. Global Possible Aug-18 Signed contract and
Distribution partnership/contract agreement between
Channel signing to established the parties
exporters
5. Intensified Orientation, empowerment 3 months before Equipped human
worker and and programs for the actual resource
stakeholder persons involved exportation
orientation

Market Development
1. Intensify Research and Development

To successfully implement the market development strategy, it is essential that a

thorough research of the target market be made. Analyzing the potential market for
pineapple fruit would aid in identifying other details that are necessary to make the
proposal fit for the global market. For instance, some countries have meticulous food
safety requirements for imports and these must be strictly complied or else, products
will not be allowed in the market. In addition, it would be beneficial for the company to
outsource marketing research studies specific in partnership or trade relations
agreements between grower and exporter as this is an entirely new route for the entity’s
operations.

2. Foster capital growth to accumulate earnings to be set aside for proposed business
venture

Financial support is important to get a project moving, however, since the

cooperative has three existing business activities - lending, food processing, canteen –
resource allocation with an additional business venture would prove to be challenging.
To acquire sufficient funds for the new business, the cooperative should direct efforts in
accumulating earnings through increasing memberships, developing and employing
profit-centered marketing strategies for its existing food products, and continuing current
operational tactics in other business divisions, if the need to change does not arise.
3. Establish strict legal compliance

To be able to engage in business in the Philippines, compliance with domestic rules

and regulations is of great importance. Securing approval from appropriate authorities is
necessary for the business to be legally recognized. The company may need to comply
with requirements from and acquire the approval of the Local Government Unit (LGU),
the Food and Drug Authority (FDA), the Department of Trade and Industry (DTI), the
Environmental Management Bureau (EMB), and the Department of Environmental and
Natural Resources (DENR).

4. Global Distribution Channel

Given that the company is a neophyte when it comes to venturing their products
internationally, basics and know-hows from the established exporters are of great
contribution to the company’s success. They may enter into agreements and possible
partnerships from multi-national companies like Dole. The aim of Daveco is to enter the
global market with their raw pineapple/pineapple products and it would be too hard for the
company to penetrate it directly. Thus, distribution channels already etched internationally
are available. The company can be a “grower” for a brand like Dole where they will enter
into a contract to supply them with their products to be exported.

5. Intensified worker orientation

A need to orient and to empower stakeholders and the human resource is essential if
the company is going to globalize. It is necessary to communicate what this big step is all
about. This encourages the persons involved to be proactive and be more engaged in the
company’s strategy. This requires a higher effort from the workforce but will eventually
redound to their benefit. Some issues that should be discussed about are the changes in
the work that is needed to be done, the technicalities of exporting and the possible
changes in management among others.
Potential Problem Analysis

Market development is one of the most important strategies at hand because it

attains business growth. Its successful implementation is crucial to the business. In
accordance with this, Daveco must consider the challenges that it will be facing in the
execution of this strategy. Developing an awareness of these hurdles will help Daveco
develop tools to assist its strategies’ successful implementation

Potential Problem Nature of the Problem Suggested Solution

Conflicting priorities in the
workplace
Everyone in the workplace
might not have the same
priorities as of the others.
One may prioritize the
short-term strategies and
disregard the one beneficial
in the long run. This
challenges the attainment
of the specific strategies
enumerated because the
attention of the
management may be
divided according to the
different chosen priorities of
the employees. Instead of
working as a team for, this
potential problem may tend
to divide the needed
collaborative efforts of each
members in the
cooperative.
Daveco shall engage all
levels of its management in
the strategic planning
process to communicate
the things that the
cooperative has to
prioritize. Employees and
all stakeholders must
understand why these
strategies are being put
and placed as goals. It is
also important that the
cooperative listens to the
voice and suggestions of its
employees in order to
harmonize the priorities of
each and everyone in the
workplace. Daveco must
also put emphasis on
balance among strategies.
Inability, resistance, Because of their fear for
indifference to change of change, entering a new
employees market may cause non
cooperation among
employees. They may have
misunderstood about the
need for change, may have
attributed this as additional
work, may have lack of
knowledge and
competence, and may have
low trust in the success of
the implementation.
Additional expenses and This strategy comes with it
lack of resources outsourcing marketing
research studies,
orientations and seminars,
etc. This means that this
strategy has its respective
cost. Thus, implementing
this would require a huge
amount of resources.
Correspondingly, all
businesses never seem to
have enough resources to
accomplish every strategy
it wants to achieve.
Informational sessions or
trainings must be done to
make employees
understand the need for
change, the need for
market development.
Furthermore, the strategies
must be implemented with
motivation to its
employees. It is important
that all of them are
enthusiastic about the
change. In addition,
Daveco could make its
employees feel rewarded
for helping in making
change happen.
Daveco should minimize
the effect of resource
shortages by prioritizing
their resource allocation
without prejudicing the
strategies. It should set
aside funds specifically for
the implementation of the
strategies, or seek for
sponsorship.
Inability to reach general This strategy must pass the Daveco must require its
assembly consensus cooperative’s general members to be committed
assembly before any to the common goal of the
implementation shall be cooperative, and to
made. Consensus decision differentiate and justify their
making is the process used own personal preferences.
by Daveco. Its inability to
reach consensus among its
members creates a huge
challenge in the
implementation of the
strategies above. Aside
from the assumption that
every member has a valid
perspective, biases among
factions may still arise.

Market failure Failure in the market is not Daveco should ensure the
a new thing in today’s commitment of each
business world. This members in the success of
happens in many ways. the strategies. Regular
Especially when the assessments shall also be
management becomes done by the firm in order to
complacent. Too often, monitor and evaluate even
members may the tiny details of the
underestimate the strategy process. If it fails, Daveco
development process and shall always be ready and
view it as a finite initiative. immediately perform other
After undergoing the courses of alternatives to
strategy formulation remedy the possible
process, some members problem.
might find themselves
jumping back or immersing
themselves in other firm
matters. Also, this potential
problm might occur if
Daveco’s attempt to
engage in market
development of exporting
pineapple products fails,
leading the business to
incur loss.
 MARKET PENETRATION

Specific
Actions to be taken Time period Success Indicators
Strategies
Intensive Increase product Immediately Increase number of
marketing promotion through social plant visits by 10% and
Strategy media advertising, increase revenue by
regularly updating atleast 10%. Garnered
facebook pages and atleast 2,000 audiences
blogs, and partnering with the company's
with local entities to join social media accounts
festivals and trade fairs.
If possible, employ trade
discounts for bulk
purchases
Additional Contract with more June 6, 2019 Reach an agreement
distribution densely populated with Kapitan Tomas
channels elementary schools to Monteverde Sr. Central
sell the pineapple juice and Palma Gil
and with grocery stores elementary schools to
in malls to sell all the sell the pineapple juice
pineapple products of exclusively. Successful
the cooperative arrangement with
Gaisano Malls and
Central Warehouse to
distribute all the
pineapple products of
the cooperative.
Improve Hire a freelance Immediately Reduced production
products' Professional Designers expenses in packaging
design to upgrade products' materials by 10% of
aesthetics, ergonomics, current expenses.
graphic design, Increase sales in
promotional materials distribution channels by
and product feel. atleast 5% every
quarter.

1. Intensive Marketing Strategy

Having your brand known is an essential component to a company's success.
Hence, Improving or intensifying the marketing efforts of the company can greatly
contribute to the success of the company. The company may gain more market share
and attention. Thereby, increasing the likelihood of new customer ship and subsequent
increase in its revenue. However, resource allocation may be a problem as the company
needs a hefty amount of money in order to actualize its plan to gain brand recognition.
Another problem that may arise is the lack of monitoring and evaluation. To address this
potential issue, the company may prioritize its resource allocation on the basis of value
contribution and the company may opt to conduct regular meeting to assess the effectivity
of marketing efforts and to determine if it is correctly implemented.

2. Additional Distribution Channels

Having more distribution channels increases the accessibility of the products.

Distribution channels enable the customers to buy the products whenever and wherever
they want. This increases revenue while helping to get the product's brand name out
there.

3. Improve product's design

Product design is directly related to the company’s performance, efficiency and

value of the products. An effective redesigned product could reduce costs and risks to a
business. Customers tend to pay or acquire more for products which are pleasing to the
eyes and which have better functionality and sustainability. Also, it could help in improving
the packing process and using its materials efficiently and making their products
environmental friendly.
Potential Problem Analysis
Potential Problems Nature of the Problem
Lack resources or A common problem which all
budget to support company experiences not only
marketing efforts, and DAVECO. Without sufficient
possible lack of resources, the company cannot fully
monitoring and utilize its potential and cannot
evaluation pursue its strategies. Additionally,
the management after
implementation of such strategy
might be complacent enough not to
notice the incorrect implementation
of the said strategies. These
problems are rooted from the
inability of the company to obtain
sufficient resources for its activities
and its inability to fully manage all its
activities given the volume of its
operation. These problems hinder
the company to fully reap the
benefits of the strategies presented
Inadequacy of The cooperative may not have
production capacity enough resources to cater the
and short shelf life of expected increase in demand of
pineapple juice their products which comes after
successful arrangements with more
distribution channels. The short
shelf life of the pineapple juice is
also a problem to the health of the
consumers. Distribution channels
may overlook the expiration date of
the pineapple juice and sell
customers expired ones to the
detriment of the cooperative.
Resistance of current Current's distribution channels and
distribution channels customers may not like the new
and customers to product design and opt to buy lesser
redesigned products or not (worst case) of the
redesigned products. They may
associate the changes in
appearance to changes in its quality
as well, where in fact, no changes
will be made to the products’ quality.
Suggested Solution
Prioritize resource allocation in
relation to its value contribution to
the company. Conduct regular
assessment with the team
responsible for its implementation
and conduct follow-ups to insure
correct implementation.
Increase production capacity by
investing in machineries to
reduce production time while
increasing quantity produced.
Allocating reasonable quantities
of pineapple juice to each
distributor and making sure the
distributors are employing FIFO
inventory method
Organize a pre-launch
announcement on company's
website and inform ahead the
current resellers that there will be
changes in the products'
appearance but the quality still
remains. Also, conduct soft
launches in malls and elementary
schools to test the water and to
make necessary adjustments of
the new design using customer's
feedbacks.
 EVALUATION AND CONTROL

Balanced Scorecard
 LEARNING CONCLUSION

 A close study of the market is essential to understand the needs of the customers
and improve the quality of the products accordingly.

 It is important to assess the market, the strengths and weaknesses of your

competitors, and the customers most likely to make a purchase.

 It is important to point out your company’s weaknesses to eliminate or at least

lessen them and help the company grow.

 All businesses need some sort of assistance in funding. It is best to find an investor
who shares the same passion, someone we believe we can work with.

 We don’t just start a business because something is in vogue and commercializing

it will make money. We should develop a business concept or strategy that we’re
passionate about related to something that we have experience with and come up
with a product or service that we believe can enhance the people's lives.

Disclaimer: This research paper is for school purposes only. The information contained on this
paper are those of the proponents and does not necessarily reflect the views and opinions of
the subject company, DAVECO Agrarian Reform Beneficiaries Cooperative.