Cruz, Mary Grace Kristine C.

BA 237
99-17979 Prof. A. Mella-Alcazar

Research Paper Outline : Goldenas Incorporated

C OMPANY : Goldenas Incorporated

I. A BOUT THE C OMPANY :

Goldenas, Inc., is a corporation engaged in fine

jewelry manufacturing. The company originated
from Boy Atienza Jewel Art, a jewelry contracting
shop, which started in 1982. Goldenas, Inc. offers a large selection of fine jewelry made of gold and set
with diamonds, pearls, and other semi-precious precious stones. With more than 20 years of experience
in the jewelry business, it is knowledgeable in every facet and detail of the jewelry trade and committed
to deliver excellent customer service.

With the main office located in # 145 Saluysoy, Meycauayan, Bulacan, Goldenas Inc., is categorized as
a small corporation having an investment capital ranging from P1 Million to 10 Million. From being a
small workshop with 3 employees, it currently employs a total of 80 craftsmen and personnel. This is
broken down into 14 direct employees and 66 indirect employees.

The company is continually upgrading its technology on jewelry production and keeps up with the latest
trend in fashion. It envisions being the market leader of proudly Philippine- made fine jewelry by
creating wearable works of art at their very best.

Vision
Market leader of proudly Philippine-made fine jewelry.

Mission

 To make every piece of jewelry a masterpiece.

 To train quality employees to their full potential.

 To give our share to strengthen community, enrich our country and build a better world.
II. T HE P HILIPPINE J EWELRY I NDUSTRY

There is no doubt that the Philippines is gifted with an abundant

supply of gold, silver, pearls and various gemstones. This
fostered and further helped in the development of the fine jewelry
industry in the country. In a 2004 data from the Mines and
GeoSciences Bureau (MGB) recorded that the production of gold
in the Philippines was estimated at 35,464 kgs equivalent to
almost $457 Million. On the other hand, silver production in the
same year is placed in 9,315 kgs. worth $2Million. In addition to
the precious metals, the country has abundant sources of South Sea Pearls in the provinces of
Palawan and Mindanao. Deposits of major gemstones are also available in different areas of the
country. Among the gemstones sourced locally are Zambales jade and mauve, Mindoro jade, jadeite,
jasper, garnet, tektite, quartz, epidote, blue and green schist, and opal.

In a report by the Department of Trade and Industry (DTI), there are about 250 enterprises
manufacturing and exporting fine jewelry nationwide. The industry employs about 100,000 workers.
Most of the firms are concentrated in Metro Manila and the nearby province of Bulacan.

Other producers are found in Baguio City and Camarines Norte in Luzon; Cebu in the Visayas; and
Davao, Surigao and Zamboanga in Mindanao. Small and medium-scale jewelry enterprises comprise
about 50% of the industry, while the top 10 largest jewelry chains and manufacturers represent less than
25%. Only a few firms subcontract work. Most rely on in-house workers for production

The global market for fine jewelry was estimated at about $76 billion in 2004. About two thirds of this
figure is made up of unmounted or unset diamonds. The United States is the largest market for fine
jewelry, accounting for 31% of jewelry imports in 2004. Other major buyers include Belgium, the
United Kingdom and Hong Kong.
As far as major exporters of fine jewelry are concerned, Belgium is the largest, accounting for 22% of
world exports of jewelry in 2004. Other major suppliers are the United States, the United Kingdom and
Hong Kong. Philippine exports of fine jewelry for 2005 amounted to $37 million which is up by 55%
from 2004.

Jewelry made from precious metals and cultured pearls comprise about 80% of industry exports for the
year. In 2005, the United States was the largest market for Philippine fine jewelry, accounting for 39%
of industry exports. Other important markets include Hong Kong, Italy, Japan and Australia. Overall
growth of fine jewelry exports since the year 2000 to 2005 averaged about 14% annually, due mainly to
the large increase experienced in 2005.

The United States and Europe remain the major export markets for fine jewelry firms in the Philippines.
Secondary markets include Japan and the rest are to other Asian countries. In 2005, key markets for
were United States, Europe, Japan, and Hong Kong.

III. P RODUCTION OF F INE J EWELRY

The manufacture of fine jewelry covers basic processes namely inputs,

processes and outputs of the industry. Inputs may are referred as the tangible
materials that undergo a transformation process to generate finished goods
that satisfy customers. These are the common materials used in
manufacturing fine jewelry that include precious metals, precious and semi-
precious stones, pearls and other items like leather or non-precious metals
used as part of the design configuration.

Processes, on the other hand, are the consecutive steps performed to change basic materials into
different fine jewelry items. Some of the specific activities can be broadly categorized into those that fall
under casting operations and those that are part of the stamping process.

Finally, the third process is the outputs. Products of the industry cover fine jewelry items in a variety of
designs for different functions such as rings, necklaces, bracelets, etc. These are indicated in the last
column of the figure under outputs.
IV. C OUNTRIES FOR C ONSIDERATION

In International Business, it very critical that a company which plans to engage in a Foreign
Direct Investment (FDI) must be very much knowledgeable of the market the country it plans
to venture into. To say that company management must be fully be familiar with the macro
and microeconomic environment of the country is an understatement. It is advised that a
company should consider investing in a feasibility study before entering a foreign market. For
example, relying simply on the increase in population of foreign country does not necessarily
translate to strong purchasing power of citizens of that country. As mentioned, important
determinants have to be taken into serious consideration such as (1) macroeconomic; (2) industrial; and
(3) international policies of the country for consideration. Both the macroeconomic and microeconomic
performance and prospects should be ensured because a stable economy lowers the risk of market failure
to foreign investments. However, the robustness of an economy is not enough to ensure FDI flows.
Availability of infrastructure, a skilled workforce and good labor relations and good governance are
prerequisites to promoting inward investments since these factors contribute to the efficiency of the
investment by minimizing the costs of production.

For this paper, three countries will be taken into consideration. These are China, Italy and Saudi Arabia.
An environmental scan shall be used to help assess which country is most fitting for Goldenas Inc.,
particularly highlighting the current jewelry industry in those countries. In addition, the political,
economic and socio-political features of the country are also briefly discussed to help Goldenas Inc. in
their assessment should they plan to establish their operation in that country.

Area of China Italy Saudi Arabia

Analysis

Political Features  The government's efforts to
promote rule of law are
significant and ongoing.
 After the Cultural
Revolution, China's leaders
aimed to develop a legal
system to restrain abuses of
official authority and
revolutionary excesses.
 In recent years, China has
 The politics of Italy take  The central institution of
place in a framework of a Saudi Arabian
parliamentary, democratic Government is the
republic, and of a multi- monarchy. The Basic Law
party system. adopted in 1992 declared
that Saudi Arabia is a
 Government and Politics monarchy ruled by the
in Italy, which is mainly sons and grandsons of
democratic in nature King Abd Al Aziz Al
recognizes individual Saud, and that the Holy
freedom and preaches Qur'an is the constitution
liberalism in all spheres of of the country, which is
 prosecuted many corrupted
individuals or government
officials, and it is continuing
its fight against corruption.
However, it is still behind
Singapore and New
Zealand. China has to take
event further action in order
to eliminate corruption .
human life. The republican governed on the basis of
character of it allows Islamic law (Shari'a).
popular rule within the
country for a better  There are no political
government. parties or national
elections; however, the
country held its first
municipal elections in
2005.

 Legal reform became a  In the past the leading

government priority in the members of the royal
1990s. Legislation designed family chose the king from
to modernize and among themselves with the
professionalize the nation's subsequent approval of the
lawyers, judges, and prisons religious leaders.
was enacted.
 In November 2006, King
Abdallah announced the
formation of an Allegiance
Commission which, in the
future, will select crown
princes upon the death or
incapacitation of the king
or crown prince.

Economic Features  China's investment climate
has changed dramatically in
a quarter-century of reform.
 In the early 1980s, China
restricted foreign
investments to export-
oriented operations and
required foreign investors to
form joint-venture
partnerships with Chinese
firms.
 Since the early 1990s, China
has allowed foreign investors
to manufacture and sell a
wide range of goods on the
domestic market, and
authorized the establishment
of wholly foreign-owned
enterprises, now the
preferred form of FDI.
 China is now one of the
leading FDI recipients in the
world, receiving over $80
billion in 2007 according to
the Chinese Ministry of
Commerce.
 Foreign-invested enterprises
produce about half of China's
exports, and China continues
 The economy of Italy was
in 2008 the 7th largest
economy in the world and
the 4th largest in Europe,
according to the
International Monetary
Fund.
 Italy belongs to the Group
of Eight (G8)
industrialized nations, a
member of the European
Union, OECD, and the
Group of Seven (G7).
 Tourism is one of the
fastest growing and most
profitable sectors the
national economy.
 In fact, it is the 5th
major .tourist destination
and the 4th highest tourist
earner in the world.
 The northern part of the
country concentrates with
capitalistic economy,
where the private sector
companies account for the
total productivity and
profitability.
 Oil which was discovered
by US geologists in the
1930s made it possible the
rapid economic
development in the 1960s
and accelerated
spectacularly in the 1970s.
 Saudi Arabia's oil reserve
is the largest in the world.
The country is the leading
producer and exporter of
oil.
 Oil accounts for 90% of
the nation's exports and
75% of the government's
revenues.
 The country's basic
infrastructure was viewed
as largely complete, but
education and training
remained areas of concern.
 Private enterprise was
encouraged, and foreign
investment in the form of
joint ventures with Saudi
public and private
companies was welcomed.
 to attract large investment  The southern regions is
inflows. little less developed
compared to the industrial
north, owing to the
extensive agricultural
activities carried out by a
section of the country's
population.

Socio-Cultural
 There are seven major  The Italians, expert and  Ethnic make-up is
Features Chinese dialects and many efficient in all cultural comprised of 90% Arabs
sub dialects. Mandarin (or spheres like literature, and 10% are Afro-Asians.
Putonghua), the predominant music, architecture and
dialect, is spoken by over sculptures are the creators  Arabic is the official
70% of the population. It is of masterpieces in their language but English is
taught in all schools and is respective fields. also widely spoken.
the medium of government. English is also used in
 Ethnic make-up is business and is being
 The education quality is comprised of small taught in secondary
pretty good in China. clusters of German, school.
Although compared to the French, Slovene-Italians in
US, the ratio of the colleges the north and Albanian-  Islam is practiced by all
and universities students are Italians and Greek-Italians Saudis and governs their
much lower, which is a result in the south. personal, political,
of greater restrictions to economic and legal lives.
enter a university in China.  Italian is the official
language of Italy, and 93%
 The Culture of China is one of population are native
of the world's oldest and Italian speakers. Around
most complex cultures. 50% of population speaks
a regional dialect as
 Most social values are mother tongue.
derived from Confucianism
and Taoism. The subject of  The family is the centre of
which school was the most the social structure and
influential is always debated provides a stabilizing
as many concepts such as influence for its members.
Neo-Confucianism,
Buddhism and many others  Appearances matter in
have come about. Italy.
The way people dress can
indicate social status,
family's background, and
education level.
First impressions are
lasting impressions in
Italy.

 The concept of 'bella

figura' or good image is
important to Italians.

Jewelry Market  With the fast growth of the  In 2008, the Italian market  The gold and jewelry
economy, the Chinese markets in the Arabian
 jewelry industry has also
developed rapidly in the past
22 years.
 The annual turnover has
reached around RMB 100
billion today, among which
the consumption of gold,
diamond, platinum and silver
is RMB 28 billion, RMB 15
billion, RMB 12 billion, and
RMB 5 billion respectively.
 The main jewelry markets of
China are centered in the city
of Shanghai which has an
estimated share of 20% of
China's market followed by
the Guangdong Province.
 The Chinese have never been
in lack of a passion for
jewelry, not only for fashion
and decoration but also for
social status. It is not
surprising to see sales of
jewelry increasing rapidly in
a relatively short time period
since 1982.
V. S OURCES OF I NFORMATION
 http://www.goldenasjewelry.com/about_us.htm
 Technical Paper “State of the Sector Report on Philippine Fine Jewelry”, July 2006.
Ample Printing Press, Manila
 “Jewelry Becomes Hot Property in China”, July 2002. Xinhua News Agency.
for jewelry was worth €
5,058 million in terms of
retail sales and was the
largest EU market for
precious jewelry, followed
by France. However, for
costume jewelry, Italy was
the 3rd largest market after
France and the UK.
 Around 36% of imports by
value (€ 520 million) came
from developing countries
(80.4% by volume or 7.6
tonnes). The share of
imports by developing
countries was up from
30.8% in 2004 in value (€
245 million), and slightly
down from 80.5% (5.2
tonnes) in volume terms.
 Italy has a higher than  The passion of the Saudi
average share of
developing country
imports compared to other
EU countries for this
sector. It was not a
significant re-exporter to
other EU countries.
 Italian women are quite  Saudi
fashion-conscious and
therefore regard the design
of a jewelry piece more
important than its material
content.
 Therefore, imitation
jewelry made of steel,
copper, or titanium has
been more popular. They
are often combined with
charms, crystals, glass
beads, shells, resin, wood,
leather or any other
material (silicone, rubber).
gulf region are considered
as one of the rapidly
growing markets in the
world due to the huge
purchasing power and
unprecedented volume of
trade in such commodities
in the region and
particularly in the
Kingdom of Saudi Arabia.
 The diamond jewelry
market is expanding by
leaps and bounds across
Saudi Arabia and the rest
of the Middle East. The
Middle East accounts for
20 percent of the world's
$50 billion market for
diamonds and diamond
jewelry.
people for fine jewelry,
combined with high
disposable income, has
created the world’s largest
and most dynamic multi-
billion dollar jewelry
market.
Arabia’s annual
consumption of jewelry
and gold is estimated at
around $7.2 billion and the
Kingdom accounts for 70
percent of total diamond
consumption in the region.
 “The Jewelry Market in Italy”, September 2009. CBI Market Information Database.
www.cbi.edi.eu

 “Saudi Arabia’s Annual Consumption of Gold and Jewelry at $7.2 billion”, November
2007. Bahrain Tribune

 “Brief Report on the Chinese Jewelry Industry”, July 2004. Shanghai Flash