BA190 STRATEGIC MANAGEMENT

CASE STUDY

CONSUL, Christine
PAJOTAGANA, Hazel May
PEÑAFLOR, Ma. Vanessa
SULAPAS, Alpha Cino Estos
TALAGON, Ana Mae
TUSING, Beatrice Emilia
 I. STATEMENT OF THE PROBLEM

What strategies should Dynamic Packaging Company execute to increase its market share in its
three major service lines and increase sources of growth?

FRAMEWORK ANALYSIS

Based on the thorough analysis that the case was subjected to, it was determined that
the organization fell short on the 5th phase, which is the generation, evaluation and selection of
strategies.

Their 25 years of existence was mainly run in the past by the connections they have
established with their clienteles. They haven’t really made something outside the industry of
repacking (NOTE: without their name on it) despite the age of their business.

It was only last 2001 that the manager realized that he wanted his company to be
recognized for its company name which is already a bit too late considering the pace of their
environment’s growth. They’ve been hidden behind the names of their big clienteles that their
name wasn’t able to reach its end consumers. They’ve been focused on striking deals with
clienteles to gain revenue and eventually profit, nothing more.

They weren’t able to anticipate the fact that their big clienteles may suddenly opt to
perform the packaging of their products on their own that when Nestle decided to do it with
Nescafe they were caught off guard. It was only then that they realized they really need to
make adjustments in their current strategies in terms of the incorporation of their brand name
in the products they are repacking, venturing into repacking even non-food products, and finally
into retailing.

II. COMPANY ANALYSIS

Dynamic Packaging Company (DPC) which started its operations in 1988 is engaged in
the repacking of food-based products such as liquid items like catsup and other food sauces,
and powdered products like coffee, sugar and crème. It operates in three major service lines:
(1) packaged products (all in), (2) contract packaging, and (3) toll packaging/manufacturing
services. DPC has four major product types: (1) liquid portion packs, (2) powder portion packs,
(3) hot cups, and (4) special projects.

The owners of DPC have also invested in another business entity called Marketing
Systems, Inc. (MSI). This firm handles the toll manufacturing service lines of DPC.

In 2001, DPC was the third largest in the food packaging industry. The company’s
President is Mr. Gabby Santos and the marketing manager is Mr. Lloyd Silvestre.

Key Focuses

Management. Currently, the company has a centralized organizational structure given that
MR. Santos preferred a centralized decision-setting style. For the future performance of the
company, it is better to have a decentralized decision-setting since DPC will go into retailing.

Financial Health. The company has increasing sales revenue over the years from P 40 million
in 1999 to P 48 million in 2000. The sales reach of the company has also expanded from 1999
which caters Metro Manila, North Luzon, North Mindanao, Iloilo and Bacolod to 2000 which
already included Mega Manila and Suburbs, the whole of Mindanao and part of Cebu in addition
to the previous market reach in 1999. The net profit of the company has also increased from P
3.3 million in 1999 to P 4.3 million in 2000.
III. STRATEGIC MANDATES OF DYNAMIC PACKAGING COMPANY

A. Vision Statement

 To participate actively in the upliftment of the food service industry of the Philippines by
providing quality, value-for-money products and services.

 To uplift the reputation of Philippine Packaging industry and step up the game by
providing packaging solutions that does not only enhance the aesthetics of the products
and services it covers, but the perception of their quality as well.

 To enhance the image of products and services in the Philippines by exhibiting striking
product and service personality through aesthetics development/enhancement

B. Mission Statement

We commit ourselves to:

 Provide packaging solutions to customers in need of efficient, economic, and effective

dispensing of their products

 Provide our customers a range of choices from a menu of products and services that will
offer convenience and savings in their operations

 Provide packaging solutions that’ll give the customers the unwavering feeling of security
in consuming the products and services we cater to

 To build a profitable and reliable company that can withstand the test of time and
circumstances and upholds the culture of integrity and humility

 To harness out resources, channel them to greater productivity and, ultimately, share
the fruits of our labor with our shareholders, employees, and the community
 To unceasingly safeguard the environment by utilizing production processes that are
environment friendly while at the same time still efficient and effective

C. Core values

 The Customer is King

“If we do not take care of him, somebody else will.”

 Fairness
“Fairness is our guiding principle in dealing with our workers, suppliers, customers,
shareholders, and the community where we belong.”
IV. STRATEGY FORMULATION
A. INPUT STAGE
a) External Evaluation Matrix

External Factor Evaluation (EFE) Matrix for Dynamic Packaging Company (A)

Weighted
Key External Factors Weight Rating Score

Opportunities

1. Clients want convenience at a relatively

0.17 2 0.34
affordable price

2. To venture into retailing or repackaging

0.15 2 0.3
items, carrying their own brand name

3. Diversification to repacking even non-

0.17 2 0.34
food items (e.g. shampoo, toothpaste, gel, etc.)

4. Limited industry players; huge growth

0.12 3 0.36
potential

5. Toll packing/manufacturing another

0.11 2 0.22
venue for growth

Threats

1. Greatest competitor holds 50% of

0.11 2 0.22
market share

2. Possibility of major clients repacking

0.17 3 0.51
their own products

Total 1 2.29
 b) Internal Factor Evaluation (IFE) Matrix

Internal Factor Evaluation (IFE) Matrix for Dynamic Packaging Company (A)

Weighted
Key Internal Factors Weight Rating Score

Strengths

1. Does an annual planning session 0.03 3 0.09

2. Operates in three service lines 0.02 3 0.06

3. Major clienteles include 7-Eleven, Shell,

0.07 4 0.28
Pizza Hut, Star Mart, Total, CM Star, Kraft)

4. Products in generic prints can be

0.06 3 0.18
customized on request

5. Personalization to customers desired

0.06 3 0.18
package design and their preferred contents

6. Product liability is extended only to the

0.02 3 0.06
packaging materials (not to the contents)

7. Provides packing services to large

0.07 4 0.28
companies such as RFM, LTS, Phils., Wrigleys, Kraft

8. Contract/purchase orders have a

0.01 3 0.03
duration of 6 months or more

9. Four major product types include special

0.04 3 0.12
projects for specific customer interest

10. Investment in Marketing Systems, Inc. to

0.04 3 0.12
handle toll manufacturing and service lines of DPC

11. 3rd Place in terms of market share in the

0.06 4 0.24
industry

12. Good corporate values and strong

0.06 3 0.18
customer relationships

13. The president is highly engaged in the

0.03 3 0.09
operations

14. Liquid line repacking services provides

0.07 4 0.28
best income opportunities
 15. Toll packing/manufacturing entails small
0.05 3 0.15
working capital

16. Cost Leadership 0.06 4 0.24

17. Strong Brand Image 0.06 4 0.24

Weakness

1. Did not have formal written company

policies on procedures of different functions 0.04 1 0.04

2. Was only able to update HR-related

policies 0.02 2 0.04

3. Fair product position 0.02 2 0.04

4. Packaging or repacking function did not

bear DPC’s name 0.07 1 0.07

5. Centralized organizational structure 0.04 1 0.04

Total 1 3.05

c) Competitive Analysis

Dynamic Packaging Company’s direct competitors would include all the other companies
in the packaging industry who are into food repackaging.

In terms of market share, DPC’s greatest competitor still holds 50% of the market. The
other major competitors of the company in the industry holds an advantage in terms of forward
integration and cost position in relation to their resource position. Major competitor’s level of
product differentiation, product line breadth, marketing/sales, and technology used is almost
the same as DPC’s.

The price of the services offered by major competitors is relatively higher. Major
competitor’s brand reputation and special customer relationships are not that strong compared
to DPC. Their customer and resource position are also relatively weaker than DPC.
 B. MATCHING STAGE
a) SWOT MATRIX

SWOT MATRIX STRENGTHS WEAKNESSES

1. Does an annual planning 1. Did not have formal
session written company
2. Operates in three service lines policies on procedures
3. Major clienteles include 7- of different functions
Eleven, Shell, Pizza Hut, Star 2. Was only able to
Mart, Total, CM Star, Kraft) update HR-related
4. Products in generic prints can policies
be customized on request 3. Fair product position
5. Personalization to customers 4. Packaging or repacking
desired package design and function did not bear
their preferred contents DPC’s name
6. Product liability is extended 5. Centralized
only to the packaging materials organizational
(not to the contents) structure
7. Provides packing services to
large companies such as RFM,
LTS, Phils., Wrigleys, Kraft
8. Contract/purchase orders have
a duration of 6 months or more
9. Four major product types
include special projects for
specific customer interest
10. Investment in Marketing
Systems, Inc. to handle toll
manufacturing and service
lines of DPC
11. 3rd Place in terms of market
share in the industry
12. Good corporate values and
value for customer
13. The president is highly
engaged in the operations
14. Liquid line repacking services
provides best income
opportunities
15. Toll packing/manufacturing
entails small working capital
16. Cost Leadership
17. Strong Brand Image
18. Strong Customer Relationships
OPPORTUNITIES SO WO
1. Clients want 1. (S3, O1) Reach out to 1. (W3, O4, O2, O3)
convenience at a untapped Big Clienteles for Diversify and improve
relatively affordable Business Partnerships product lines (Product
price (Market Development) Development)
2. To venture into 2. (S14, O4) Maintain and 2. (W1, O2, O3) Taylor
retailing or repackaging improve Liquid Line Services policies that can control
items, carrying their (Market Penetration) employees to work
own brand name 3. (S16, S17, S18, O2, O3) effectively and efficiently
3. Diversification to Create New and Related to address the future
repacking even non- product lines (Related expansion
food items (e.g. Diversification) 3. (W1,O2, 03) Establish a
shampoo, toothpaste, 4. (S18, O1) package in a lot written policy pertaining to
gel, etc.) smaller quantities or do some the do’s and don’ts in
4. Limited industry pairing with products to dealing new clients and
 players; huge growth entice clients cost sensitive geographic area
potential especially on and convenience focused 4. (W5,O2, O3) Apply a
liquid line services clients (Product centralized organizational
5. Toll Development) structure to accommodate
packing/manufacturing 5. (S4, O14) Capitalize on liquid new product venture and
another venue for line services by allocating diversification
growth more budget and focus on it 5. (W3,W4, O2) Create a
6. (S17,O2)Retailing of repacked brand logo that will
items under the company’s immediately make the end
own brand name (Product consumers recognize the
Development) products the company
caters to
6. (W4, O5) Strike an
agreement with companies
being dealt in toll
packing/manufacturing for
the company to have the
ability to put their own
brand in the packaging,
like a partnership
THREATS ST WT
1. Greatest competitor 1. (S7, T2) Maintain Cost 1. (W3, T1) Improve
holds 50% of the Leadership to keep Clients product position
market 2. (S3, S4, S12, S17, T1, T2) 2. (W3, T2) Offer
2. Possibility of major Maintain and Improve Market product/service packages
clients deciding to Position to major client
repack their products 3. (S3, S7, S15, T1,T2) Give 3. (W1, T1) formulate formal
more attention on the toll policies on procedures of
packing/manufacturing different functions to help
services and offer incentives guide the employees of the
or profitable packages to the company
clients/customers to ensure
that they will retain in the
company and to attract
possible customers
 b) SPACE MATRIX

FINANCIAL STRENGTH Rating

1. Return on Investment on the year 4
2000 is 33% and is expected to
become 40% in the year 2004.

2. Return on Equity is 38% by the year 5

1999 and 65% on 2000

3. Net profit is too small. If the sales 1

revenue is 40-48 Million from 199-
2000, and the net profit is 3.3-4.3
Million pesos, it only means that the
expenses is too high

INDUSTRY STRENGTH Rating

1. The company’s reach is growing wider 6
and the number of customers is
increasing
4
2. Technology/Innovation
4
3. Does not entail large working capital
other than accounts receivable
requirements 6

4. Profitability
ENVIRONMENT STABILITY Rating
1. Barriers to entry -2

2. Competitive market -2
 3. Replacement potential -5

COMPETITIVE ADVANTAGE Rating

1. Large customer base -2

2. Higher margins, limited players in the -1

industry

3. Third place in terms of market share in -2

the industry

4. Technological know-how -3

5. Backward Integration -2

6. Forward integration -5

7. Customer Relationships -1

CONCLUSION:

FS Average: 10.00/3= 3.33

IS Average: 14.00/3= 4.67

ES Average: -9.00/3= -3

CA Average: -16/7= -2.29

Directional Vector Coordinates:

x-axis: -2.29 + 4.67=2.38

y- axis: -3.00 + 3.33= 0.33

CONCLUSION:

Given the results, Dynamic Packaging Company (A) should employ aggressive strategies.
 c) GRAND STRATEGY MATRIX

Quadrant I Quadrant II
 Firm is in excellent strategic  Industry is growing but cannot
position compete effectively
 Firms are in rapid market growth
industry

Strategies Strategies
 Market penetration and market  Intensive strategy
development  Horizontal integration if the firm is
 Product development lacking a distinctive competence
 Can take risk aggressively when or competitive advantage
necessary  Divestiture or liquidation-
 When there is excessive divestiture can provide funds
resources, then backward, needed to acquire other
forward or horizontal strategy businesses or buy back shares of
stocks
Quadrant III Quadrant IV
 Firm is in a low growth industries  Firm is in a strong competitive position
and have weak competitive but in a slow growth industry
positions
Strategies
Strategies  Have the strength to launch diversified
 Firm must make some drastic programs into more promising growth
changes quickly to avoid further areas (related or unrelated
decline and possible liquidation diversification)
 Extensive cost and asset reduction  Joint ventures
 Shift resources away from the
current business into different
areas (diversify)
 Divestiture or Liquidation
 Fast Market
Growth

Quadrant II Quadrant I

Weak Strong
Competitive Competitive
Position Quadrant III Quadrant IV Position

Rapid Market
Growth

Dynamic Packaging Company (A) belongs to Quadrant I. It is in a strong competitive position

and rapid market growth industries. The following strategies could be applied by the firm:

 Market penetration and market development

 Product development
 When there is excessive resources, then backward, forward or horizontal strategy
 d) Initial Strategies from Matching Stage

SWOT Matrix Grand Strategy SPACE Matrix

(S3, O1) Reach out to  Maintain and improve  Maintain and improve
untapped Big Clienteles Liquid Line Services Liquid Line Services
for Business (Market Penetration) (Market Penetration)
Partnerships (Market  Maintain and Improve  Create New and Related
Penetration) Market Position (Market product lines (Related
Penetration) Diversification)
(S14, O4) Maintain and  Create New and Related  package in a lot smaller
improve Liquid Line product lines (Related quantities or do some
Services (Market Diversification) pairing with products to
Penetration)  package in a lot smaller entice clients cost
quantities or do some sensitive and convenience
(S16, S17, S18, O2, O3) pairing with products to focused clients (Product
Create New and Related entice clients cost sensitive Development)
product lines (Related and convenience focused  Diversify and improve
Diversification) clients (Product product lines (Product
Development) Development)
(S18, O1) package in a lot  Diversify and improve  Create a brand logo that
smaller quantities or do product lines (Product will immediately make the
some pairing with Development) end consumers recognize
products to entice  Create a brand logo that the products the
clients cost sensitive will immediately make the company caters to
and convenience end consumers recognize (Product
focused clients (Product the products the company Development)
Development) caters to (Product  Strike an agreement with
Development) companies being dealt in
(S4, O14) Capitalize on  Give more attention on the toll
liquid line services by toll packing/manufacturing packing/manufacturing
allocating more budget services and offer for the company to have
and focus on it incentives or profitable the ability to put their
packages to the own brand in the
(S17,O2)Retailing of clients/customers to packaging, like a
repacked items under ensure that they will retain partnership (forward
the company’s own in the company and to integration)
brand name (Product attract possible customers  Maintain and Improve
Development) (Product Development) Market Position (Market
 Strike an agreement with Penetration)
companies being dealt in  Give more attention on
(W3, O4, O2, O3) toll packing/manufacturing the toll
Diversify and improve for the company to have packing/manufacturing
product lines (Product the ability to put their own services and offer
Development) brand in the packaging, incentives or profitable
like a partnership packages to the
(W1, O2, O3) Taylor (forward integration) clients/customers to
policies that can control  (S17,O2)Retailing of ensure that they will
employees to work repacked items under the retain in the company
effectively and company’s own brand and to attract possible
efficiently to address the name (Product customers (Product
future expansion Development) Development)
 (S17,O2)Retailing of
(W1,O2, 03) Establish a repacked items under the
written policy pertaining company’s own brand
to the do’s and don’ts in name (Product
dealing new clients and Development)
geographic area

(W5,O2, O3) Apply a

centralized
organizational structure
to accommodate new
product venture and
diversification

(W3,W4, O2) Create a

brand logo that will
immediately make the
end consumers
recognize the products
the company caters to
(Product Development)

(W4, O5) Strike an

agreement with
companies being dealt
in toll
packing/manufacturing
for the company to have
the ability to put their
own brand in the
packaging, like a
partnership (forward
integration)

(S7, T2) Maintain Cost

Leadership to keep
Clients (Cost Leadership)

(S3, S4, S12, S17, T1, T2)

Maintain and Improve
Market Position (Market
Penetration)

(S3, S7, S15, T1,T2) Give

more attention on the
toll
packing/manufacturing
services and offer
incentives or profitable
packages to the
clients/customers to
ensure that they will
retain in the company
and to attract possible
customers (Product
Development)

(W3, T1) Improve

product position

(W3, T2) Offer

product/service
packages to major client

(W1, T1) formulate

formal policies on
procedures of different
functions to help guide
the employees of the
company

e) Strategy Criteria

These criteria will help in choosing and prioritizing the strategies that will best help Dynamic
Packaging Inc., in advancing its goals: (1) to be king in its industry in terms of sales and
market share; and (2) to be able to create their own brands and product lines.

1. SPECIFIC- Is the strategy specific? Can it solve or attend to a specific issue and
problem?
2. MEASURABLE- Is the strategy measurable? Can we determine whether or not the
strategy can be successful?
3. ATTAINABLE- Is the strategy attainable? Can we achieve and perform the strategy
with the given resources of the company?
4. REALISTIC- Is the strategy realistic? Can we perform the strategy with the given
resources elsewhere?
5. TIME-BOUND- Is the strategy time-bound? Can we achieve it in a particular and
reasonable time schedule?
6. PROFITABILITY- Is the strategy profitable? Can it provide more returns than the costs
it can incur?
 f) Strategy Analysis

Advantages Disadvantages
Strategy 1: 1. 1.It increases the 1. 1.They may lose focus
Maintain and improve probability of higher on and neglect their
Liquid Line Services profit since Liquid line other product lines
has the highest 2. 2. Being too focused
potential among its on a single thing can
lines block one’s view on
2. Strengthens the roots the bigger picture
of their Liquid Line
services
3. Liquid Line Services
has low
manufacturing/fixed
cost
Strategy 2: 1. Increase in 1. 1.Promotes
Reach out to untapped Big coverage/reach dependence on
Clienteles for Business (Market Share and different partners for
Partnerships Market Growth) productivity
2. Not that costly to 2. Possibility of being
implement controlled by partners
3. It becomes closer to because of the
the end customers partnership
4. It improves their brand 3. Promotes the
image due to clienteles’ brand name,
additional big names not theirs
that’ll be associated to
them
5. Better Public Relations
to big companies
6. Opens more
opportunities and
chances of penetrating
larger markets
7. Gains more
connections
8. Lessens their liabilities
on the repacked
products
Create New and Related 1. Creates opportunities 1. Costly
product lines of getting into new 2. Requires research
and untouched market about the market they
segments want to tap
2. Increases the number 3. Attracts more
of their product lines competition
offerings 4. Risky because it is
3. Diversification going beyond what
 increases their reach they are used to
4. They’ll be able to really
meet the customers’
other needs
Retailing of repacked 1. Provides more control 1. 1.It is costly because
items under the on the products being they will be needing to
company’s own brand packaged change their
name 2. Their own brand name organizational culture
will be more visible to to accommodate their
the market growth
3. They’ll be more 2. Costly because they
independent from may need a R&D team
other clienteles to formulate new
products products
4. They’ll be able to 3. They’ll have increased
capitalize on their liability in the items
strength in terms of that they’d release in
cost leadership the market
5. They’ll be able to 4. They’ll be competing
create their own name their newly established
both in the packaging brand against the
and commodity established ones in the
provider industry market
6. Less dependence on
clienteles and partners
 C. DECISION STAGE
a) Quantitative Strategic Planning Matrix (QSPM)

Strategy 1: Strategy 2: Strategy 3: Strategy 4:

Reach out to
Maintain and untapped Big Retailing of repacked
improve Liquid Clienteles for Create New and items under the
Line Services Business Related product company’s own brand
Partnerships lines name
Key Factors Weight
AS TAS AS TAS AS TAS AS TAS
Opportunities
1. Clients want
convenience at a relatively 0.17 2 0.34
affordable price 4 0.68 3 0.51 1 0.17
2. To venture into retailing
or repackaging items, carrying their 0.17 2 0.34
own brand name 1 0.17 3 0.51 4 0.68
3. Diversification to
repacking even non-food items (e.g. 0.15 0
shampoo, toothpaste, gel, etc.) 0 0 0
4. Limited industry players;
0.1 2 0.2
huge growth potential 4 0.4 3 0.3 1 0.1
5. Toll
packing/manufacturing another 0.16 1 0.16
venue for growth 4 0.64 3 0.48 2 0.32

Threats
1. Greatest competitor
0.13 4 0.52
holds 50% of market share 3 0.39 2 0.26 1 0.13
 2. Possibility of major
0.12 0
clients repacking their own products 0 0 0

Total 1

Strengths
1. Does an annual
0.03 0
planning session 0 0 0
2. Operates in three
0.02 0
service lines 0 0 0
3. Major clienteles include
7-Eleven, Shell, Pizza Hut, Star Mart, 0.07 4 0.28
Total, CM Star, Kraft) 2 0.14 3 0.21 1 0.07
4. Products in generic
0.06 0
prints can be customized on request 0 0 0
5. Personalization to
customers desired package design 0.06 0
and their preferred contents 0 0 0
6. Product liability is
extended only to the packaging 0.02 0
materials (not to the contents) 0 0 0
7. Provides packing
services to large companies such as 0.07 4 0.28
RFM, LTS, Phils., Wrigleys, Kraft 2 0.14 3 0.21 1 0.07
8. Contract/purchase
orders have a duration of 6 months 0.01 0
or more 0 0 0
9. Four major product
types include special projects for 0.04 1 0.04
specific customer interest 4 0.16 2 0.08 3 0.12
 10. Investment in Marketing
Systems, Inc. to handle toll
0.06 4 0.24
manufacturing and service lines of
DPC 1 0.06 3 0.18 2 0.12
11. 3rd Place in terms of
0.04 0
market share in the industry 0 0 0
12. Good corporate values
0.04 0
and strong customer relationships 0 0 0
13. The president is highly
0.03 0
engaged in the operations 0 0 0
14. Liquid line repacking
services provides best income 0.07 0
opportunities 0 0 0
15. Toll
packing/manufacturing entails small 0.07 1 0.07
working capital 4 0.28 3 0.21 2 0.14
16. Cost Leadership 0.06 1 0.06 4 0.24 3 0.18 2 0.12
17. Strong Brand Image 0.06 1 0.06 4 0.24 3 0.18 2 0.12

Weakness
1. Did not have formal
written company policies on
procedures of different functions 0.04 0 0 0 0
2. Was only able to update
HR-related policies 0.02 0 0 0 0
3. Fair product position 0.05 4 0.2 3 0.15 2 0.1 1 0.05
4. Packaging or repacking
function did not bear DPC’s name 0.07 2 0.14 1 0.07 3 0.21 4 0.28
5. Centralized
organizational structure 0.01 0 0 0 0
Total 1 2.93 3.76 3.62 2.49
 V. STRATEGIC OBJECTIVES

Marketing Objectives:

1. Increase the number of DPC’s loyal customers by 10%

2. Increase liquid line services’ contribution to DPC’s overall sales revenue to 20%
3. Increase DPC’s market share by 5%
4.
Financial Objective:

1. To generate sales revenue of P9, 600,000 from retail products

VI. ACTION PLAN

The Quantitative Strategic Planning Process Matrix (QSPM) revealed the attractiveness
of the four proposed strategies from the Strategy Formulation Stage. These four will be carried
over and implemented to best achieve the marketing and management problems to be
addressed.

The strategies will be implemented in January 2002, nine months after their last annual
planning session in March 2001. The nine months will serve as the preparation stage. This plan
aims to describe the effect of the proposed strategies within the next five years in terms of
financial and competitive growth of the Dynamic Packaging Company.

The strategies are all considered to have the attractiveness and propensity to cause
growth to the company. So a 4-point Strategic Plan will be used, all having the characteristic to
ignite positive change.

Strategy 1 – Maintain and improve Liquid Line Services

Rationale: The Liquid Line Services of DPC posed the greatest opportunity for growth. This
service line bested in the contribution margin analysis because of higher returns, limited players
in the industry, and the huge potential for growth. In order to maximize this strength, DPC
should invest to improve its Liquid Line Services. This strategy shall be in two-folds: improve
and maintain.
Before we go to the specific actions, presented below are the proposed standards for the
products under the Liquid Line Services:

Packaging items:

a. Should ensure good quality packaging items. There should be no leakage when
liquid products are packed.
b. Should not have chemical reaction/s with the product.
c. Should maintain the original taste of the items
d. Should help lengthen the shelf-life of the product
e. Crack resistance, puncture and tear resistance and have a tensile strength (for
specific products only)

Tactics

(1) This strategy will be under the Research and Development, and Marketing
Divisions of DPC.
(2) The R&D Division will take care of the researches needed to ensure the quality of
the packaging system under the Liquid Line Services.
(3) Improvements will be also be proposed by the Marketing Division to ensure that
each packaging item conforms to the specification of the client’s needs and the
standards of the company.

Strategy 2: Reach out to untapped Big Clienteles for Business partnerships

Rationale: Business partnerships with big clienteles will ensure a surge in DPC’s market share
since it entails better penetration of the brand among its customers. Potential clienteles for DPC
include Procter & Gamble, PepsiCo, and Unilever. Although establishing partnerships with three
of the biggest companies is a long shot, DPC should aim to take a slow but sure approach. This
can be done through (a) offering service packages to attract possible cost-sensitive clients,
and (b) giving incentives to clients in the form of discounts for specific volume of job orders.
When offering service packages to attract possible cost-sensitive clients:

(1) The Sales Department will be tasked to create sales groups (each with a
sales manager) to attract potential cost-sensitive clients through sales calls.
(2) The Marketing Department can aid in the calls by providing promotional
materials regarding the company and its current partners to give potential
clienteles an idea about DPC in a nutshell. The marketing department can
create service packages that are ideal for the potential clienteles and their
existing strategic positions.
(3) The Finance and Accounting Department can work together with the
Marketing Department to create service packages that will be most cost-
effective.

PACKAGE DEALS

PACKAGES ITEMS INCLUDED

1 6 shampoo + 1 conditioner
2 6 coffee + 1 creamer
3 5 catsup + 1 hot sauce
4 6 bar soap + 1 powdered soap
5 10 chocolate mix + 5 sugar
6 6 toothpaste + 1 bar soap
7 10 vinegar + 5 soy sauce
8 5 chocolate mix + 5 coffee + 5 sugar
9 3 mustard + 1 mayonnaise
10 6 creamer + 6 sugar + 6 milk
11 3 milk + 3 coffee + 3 sugar
12 3 milk + 2 chocolate mix
*minimum size of every items

When giving incentives to clients in the form of discounts for specific volume of job orders:

(1) The Management Department can work with the Marketing Department
regarding the incentive systems that will be most beneficial to the
company, with the marketing department placed in-charge of delivering the
message to the potential clienteles.
 (2) The Finance and Accounting Department will aid the management and
marketing departments in coming up with the best incentives (discounts) in
accordance with a specific volume of job orders. They will determine the
specific volume of job orders and their corresponding discounts.

Strategy 3: Create New and Related Product Lines

Rationale: To increase DPC’s market share in the three product lines and augment the
company’s sources of growth, DPC can create new and related product lines. This will be done
through product development (by creating a new product line) and propagated by promotional
tactics (to increase knowledge of customers about the new product line). DPC can diversify to
even repacking the non-food items such as shampoo, gel, toothpaste, and other related
products—in addition to their existing product lines.

There are two possible actions the company can take: (a) to create a new product line
for repacking non-food items; or (b) to create a new product line manufactured from inside and
out by DPC’s own production and operations as a result of research and development which will
carry the DPC brand name. The latter will require more expense, which entails that the former
will be most ideal.

In creating a new product line for repacking non-food items:

(1) The company can partner with consumer goods companies and the like to
increase its market share and credibility, by having a long-term contractual
partnership to repack their products.
(2) The Management Department can assign a manager to the new product line
for repacking non-food items, and provide rewards to the employees who
are able to establish partnerships with consumer goods companies. With
that, the management can link pay to the employees’ performance.
(3) The Operations Department can utilize the existing manufacturing and
repacking site to keep costs down. Additionally, the management should
allocate a portion of the company’s resources to the new product line.
(4) Then, through promotional efforts spearheaded by the Marketing
Department, such as pamphlets sent out to consumer goods companies, DPC
may increase awareness about their new product line (repacking of non-food
 items) not only to the said companies, but also to non-partner companies
who may be interested in availing their repacking function.
(5) In addition, the Marketing Department will use exclusive dealerships with
potential partners rather than using multiple distribution channels to
strengthen the ties between DPC and potential partners.
(6) The Management can also utilize management information systems
(MIS) for easier collection, storage, and retrieval of data concerning DPC’s
customers, inventory, sales, human resources, and divisions.

In creating a new product line manufactured from inside and out by DPC’s own
production and operations as a result of research and development which will carry the DPC
brand name:

(1) The company should first conduct research through its Research &
Development Department. The purpose of this research is to know which
products would most likely gather the best response from the market, and
provide best use of DPC’s existing resources.
(2) If the company does not have an R&D department, then the Management
has the choice to either establish an in-firm R&D department or sign a
contract with outside research firms to make the process less complex
for the company.
(3) The Finance Department should determine whether the amount of money to
be allocated to R&D will be high, average, or low. Considering that the
company uses cost leadership as its competitive strategy, it is advisable to
use a low to average amount of money.
(4) Since the company will be creating new products from scratch, the
Management should develop a division for the new product line. In
partnership with the Marketing and R&D departments, the company should
look for the vacant niche in the current market scenario. The best way is to
look for an unserved segment that will still generate good returns (based on
the results of market research).
(5) The Marketing Department will use the results of the research to create a
marketing plan for new products and will encompass the price (how much
the product will cost), product (what is the product and the possible product
 lines it may have), place (how will the product reach the customers), and
promotions (how will DPC promote the product) for the said plan.
(6) After substantial research has been conducted, the Operations Department
can now be placed in-charge for the manufacturing and production of the
product, to the packing, and distributing of the product to its channels. The
overall packaging and product design will be done in accordance to the vision
of the Marketing and Management Departments.
(7) When the new product is introduced into the market, not only will it be
produced and packed by DPC, but it will also carry the DPC brand name
and logo.
(8) The Management can also utilize management information systems
(MIS) for easier collection, storage, and retrieval of data concerning DPC’s
customers, inventory, sales, human resources, and divisions.

Strategy 4: Retail repacked items under the company’s brand name

Rationale: This strategy will come in both push and pull. Push strategy, in the form of Direct
Selling, to promote the products to merchandise and retail level establishments, while pull
strategy to be implemented in the form of place marketing within these establishments.

(1) By October 2001, the Production/Operations Division of Dynamic Packaging

Company (DPC) is assumed to have already manufactured and printed both
food and non-food products carrying their brand name.
(2) To start the push strategy, the Marketing Division will take care of the
Segmenting, Targeting, and Positioning (STP) of the products. They
will start segmenting the establishments in the National Capital Region
and nearby provinces, particularly Rizal, Cavite, and Bulacan. From a
standpoint of starting a new business, it will be strategic for Dynamic
Packaging Company to start selling their new product lines within close
proximity to minimize logistical costs.
(3) After determining the geographical locations of target establishments,
Dynamic Packaging Company should then segment them according to size.
This strategy will target small to medium merchandising and retailing
stores.
 (4) After determining the stores to be partnered, the products of Dynamic
Packaging Company will be positioned to be among the cost leaders in its
respective categories. The potential partners will enjoy the cheap prices of
the products, ensuring to capture the price-sensitive customers.
(5) After the STP Process, the Logistics Division will take care of the travelling
tasks: carrying the goods and transportation expenses. While Marketing will
do the Direct Selling. Funding will then be provided by the Finance Division.
(6) To entice these establishments better, discounts and free package deals
will be implemented. For example, for every 5 dozens of DPC toothpaste
purchased by the establishment, another half dozen will be given for free.
The list of package deals is presented below.
(7) For the Pull strategy, posters of the products of Dynamic Packaging
Company will be placed inside the establishments. It will be displayed in walls
and near the shelves. It will emphasize the cheap prices of the DPC product
lines.

VII. RECOMMENDED ORGANIZATIONAL STRUCTURE

 In this organizational structure we assumed that the company chooses to create their
own Research and Development Department. Therefore another department is added. The
reason behind this is that research and development will help the company continuously
improve their packaging materials.

Notice that under the operations manager or supervisor we added retailing

manager/supervisor and quality control manager. This is to aid the strategy of retailing of
repacked items that would carry the brand’s name and also to ensure that the quality of every
packaging material would conform to the specifications of the company. Through the addition
of these positions, the company will surely carry out their plans.

VIII. STRATEGY REVIEW AND EVALUATION

Dynamic Packaging Company

BALANCED SCORECARD

Area of Objectives Measure Target Time Primary

Expectation Responsibility
Customers
1. Provide quality Number of 1 out of 75 Employ quality
products customer control measures
1 year
2. Increase % of complaints 10% Customer loyalty
loyal customers Number of increase program
repeat orders
Operations/Processes
1. Reduce Amount of 10% Tap low-cost
1 year
production cost production decrease suppliers of raw
cost materials
Financial
1. Increase % Revenue per 20% of Market liquid line
revenue from product type revenue services to new
liquid line clients
services Increase in
2. Increase the number of 20% of 1 year Offer convenient
market share clients revenue and low-cost
3. Increase in % Revenue per services
revenue from business unit 20% of Market retail
retailing revenue products to target
establishments