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CHAPTER IV

EXTERNAL ANALYSIS

A. General Statement

Analyzing opportunities that can benefit an organization and threats that

should be evaded outside the environment of a company is the main purpose of an

external analysis. These are factors that are uncontrollable and unexpected so that

create a big impact on the business success to attain its objectives and goals. For the

success of achieving on organization’s goals and objectives.

4.1. Political, Legal and Governmental Focus

The government plays as the major regulator and regulators of any business

that exists in any country. They serve as an important external environment for the

company that can represent key opportunities or threats. Any trends in politics and

government as well as the change in laws have a significant effect on the company.

4.1.1 Publication in the New Age

Almost 15 years after the Tañada ruling, the E-Commerce Act of 2000 was

passed, with the view of adapting to the age of modern technology. Such law

espouses, among other things, the universal application of the twin principles of

functional equivalence and non-discrimination. These entail that information stored,

processed or transmitted electronically shall have the same footing as those that are

found on paper-based materials, and that there should be no disparity of treatment

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between those found in paper-based form and those in electronic form. These

principles paved the way for the possible inclusion of electronic means for the

satisfaction of the publication requirement.

As previously stated, the requirement of prior publication of laws, rules and

regulations, and other issuances for their effectively springs from the right to be

adequately informed of the law that will apply to their actions, which is an aspect of

due process. The requirement is also the foundation of the conclusive presumption

that every person knows the law, justifying the prohibition of using lack of

knowledge of the law as an excuse for non-compliance with such. Finally, such

requirement is also the fulfillment of the right to be informed concerning matters

that govern the public enshrined in our Constitution.

Relevance: Programs like the CPRB encourages Bangko Mabuhay (BM) to further

strengthen their corporate viability, management and governance as well as their

expansion to a much wider range. BM sees this as an opportunity because of its

dominance as a surviving entity despite of the decreasing rural banks in number in

the industry.

4.1.2 Growing and intensive support of government on publishing industry

 Publishing industry development

Printed matters like religious books, pocketbooks, magazines, etc. produced in

the Philippines have markets in countries with a large number of overseas Filipinos

such as Hong Kong, Taiwan, Saudi Arabia, etc. There is also a potential market in

the North America which has a large Filipino-American population eager to

reestablish their links with the Philippines.

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While the National Book Development Board (NBDB), the governing body created

under the Republic Act 8047 to implement the rules and regulations for the

privatization of book publishing for public schools, may have been successful in

transferring the development, publishing, and distribution of textbooks from the

Department of Education (DepEd) to the private publishers, it however encountered

difficulties in market development.

 Intensive support of the government on publishing field

The Philippine book industry’s economic struggle was aggravated during the

twenty-year rule of Ferdinand Marcos. His government took two steps that proved

disastrous to Filipino book publishing. The first was the presidential decree

imposing compulsory licensing. Euphemistically called “The Reprint Law”, it

effectively legalized piracy and disregarded copyright conventions and laws. The

Decree allowed any book to be reprinted with complete impunity, so long as it was

sold cheaper than the original edition. Designed to make books available at so-

called affordable prices, the Decree not only antagonized the American publishing

industry, but resulted in a great number of foreign books, including paperbacks,

being reprinted on poor quality newsprint.

American publishing companies lobbied against the Decree, which was later

amended to cover only titles used in schools. Filipino publishers seeking to reprint

US or other imported textbooks must secure certifications from the schools to the

effect that the books will be used in the classrooms. The reprint house is also

required to request the original publisher’s permission to reprint and to offer a

royalty. Should permission be refused by the original publisher, the reprinter is

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permitted to go ahead, subject only to a legal requirement that he remits 10% of the

cover price as royalty to the original publisher. This so-called “Reprint Law”,

designed to help book buyers and publishers, has unintentionally wreaked havoc on

the book industry. Because of the ease of production and lower investment required

to reprint, many publishers substituted reprinting for publishing. Locally-written

books were neglected. This brought the country’s book production to an all-time

low of fewer than 1,000 titles per year.

4.1.3 Law by the Government

June 1995, President Ramos signed a law, it is called “Republic Act No

8047, an Act providing for the Development of the Book Publishing Industry

through the Formulation and Implementation of a National Book Policy and a

National Book Development Plan”. The two most important provisions of the law

are, firstly, that paper used in book production will be tax- and duty-free, and,

secondly, that the IMC will be phased out within three years. It has always been

anomalous that books imported into this country have been tax- and duty-free,

under the UNESCO Florence Agreement of 1954 guaranteeing the free flow of

information among signatory countries, while imported paper used for book

production has been heavily taxed to protect local paper mills. Even this

protectionist policy has not worked. Locally-milled paper remains more expensive,

is of inferior quality and offers little variety. As a result, many books published in

the Philippines have been printed outside the Philippines and imported tax-free, to

the detriment of the Philippine printing industry. So far as paper and production are
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concerned, the playing field is now level, and this should result in lower printing

costs for book publishers and lower prices to the public.

4.2. Economic Focus

The economic environment has major role in industry. It identifies the

growth of the companies. indicators such as GDP, inflation rates, interest rates, and

others have a domino effect in terms of banking because major policies such as the

monetary policy, monitors and controls the operations of bank to sustain the whole

economic stability and growth.

4.2.1 Positive Growth (GDP)

Recognizing the Philippine printing and publishing industries’ potential to

greatly contribute in the country’s economic growth, the government said it remains

supportive in enabling the sectors to be more globally competitive. The book

publishing industry posted a gross domestic product (GDP) growth of .98% or

PhP88.32 billion in value added (VA) in 2010. In 2014, output of the printing

industry accounted for .30% of the total manufacturing output, or an average of .

33% over the last ten years. These two industries have contributed significantly in

generating employment in recent years. Core copyright industries (CBIs) generated

109, 654 jobs or 2.76% in 2010 alone. Attended by various stakeholders in the

printing and publishing industries, the proposed roadmaps for the sectors were

discussed including a general situationer of the industries, strategies and targets, and

current measures undertaken and areas where government support and interventions

are needed to propel growth of the industries. In the ASEAN region, the Philippines

placed 8th in producing new titles published per million people per year. Identified
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driver of growth for the publishing industry during the presentation. These are

education, demand and readership, and technology. With the implementation of K-

12 program for basic education there will arise a tremendous opportunity for the

printing and publishing sector in the Philippines. The Department of Education has

allotted PhP3.4 billion for the purchase of various learning materials. Flores noted

that demand and readership has not dropped despite the fact that books and printed

materials are faced with more competition such as electronic form or e-books and

other digital formats.

4.3. Social, Cultural and Demographic Focus

The advent of digital technology has brought changes in the print industry

with the introduction of latest printing technologies and solutions that offer

convenience and lower cost to users as well as helping business operations remain

relevant and competitive. While many assume that print will no longer be relevant

as the world becomes more and more digitalized, this, however, has not been the

case as printers have evolved, and print remains a vital requirement in

communication across businesses in the Philippines. “We may have gone more

digital over the years, but the amount of information we print day-by-day remains

to keep the local print industry relevant,” said Francis Chua, marketing manager at

HP Philippines. Data collected from the Philippine Printing Technical Foundation

(PPTF) showed that the print industry has around 3,000 printing businesses in the

Philippines, 20 of which are part of the country’s Top 1,000 corporations. This

indicates that despite the rise of digital technology today, print still proves to be a
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vital component in the way we function and go about our daily lives, according to

Chua.

Despite the growing demand for printers, the sale of this peripheral device in

the Philippines has not been adversely affected by the increasing rate of inflation

which rose up to more than six percent last year. According to Jan Edward Saballo

Taneca, market analyst, Imaging, Printing, and Document Solutions at IDC

Asia/Pacific, vendors were able to anticipate and absorb the initial impact of the

rising inflation, with the printer market showing growth for the past few quarters.

They also continued their end-user and channel programs in promoting their

products which helped market demand to be stable. Good aftersales service and

availability as well as launching promotions such as bundles, discounts, and

freebies push vendors’ printer products to the market.

4.4. Technological Focus

The emerging trends for 2020 in the printing industry are expected to raise

the value of the market considerably. The rapid rise in digitalized printing is the

main cause of this expected growth across the industry. Digital printing technology

has improved significantly in recent years with artificially intelligent devices

allowing for high-quality print designs. The printing industry will basically be

transformed by brand-new digitalized technologies that will help to boost

productivity and benefit consumers. Print services can adopt modern techniques and

strategies to improve workflow and help them to focus on expanding the business.

Opting for digitally advanced multifunctional machinery and print products will

almost guarantee internal growth and provide customer satisfaction.

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These emerging trends for 2020 in the printing industry will be key factors

for improving company productivity, increasing revenue, and for important

collaborations and communications with consumers. Companies that are able to

adapt in the digital era will surely be capable of reaching business success.

Integrating new developments in advanced technologies into infrastructures and

across all systems will enable print services to continue to compete in an extremely

competitive environment. The industry must approach the digital era with the

confidence that technology will suffice. Digitalization is a part of globalization, and

it will help the print industry in many different areas, including: Although the

competition may be increasing across the print industry, companies can still

compete for a significant market segment. Organizations will still have the capacity

to improving productivity and increasing revenues if they continue to digitalize

their systems and follow all of the emerging trends. 2020 could be a great year for

the print industry. Recruitment and sales figures are expected to rise because the

key to finding the right staff and increasing sales is digitalization and globalization.

The industry recognizes that, and it will surely adapt and apply the correct

technologies such as brand-new hardware and software systems to help its

companies to continue on the path of high performance and overall business

success.

4.5. Competitive Forces

The main focus regarding the printing and related industries is to direct

attention on ways to do things differently in order to gain economic benefits so that

the business can survive but at the same time to make the world a better place to

live in. Green business are more likely to succeed if there is commitment by all
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stakeholders, especially the top leadership. These commitments and efforts should

be turned into marketing advantages for the business. Even though going green

comes with some initial costs. In order to demonstrate commitment to sustainable

practices, it is important that the workforce are educated. Management must

demonstrate that the business is serious in waste reduction and going green. The

commitment to these goals could help boost customers’ satisfaction efforts.

Customer can feel satisfied when they are provided assistance with how to make

sustainable business decisions.