CASE 10

ARGOL TOBACCO
CORPORATION
BACKGROUND
• 1964 – founder CHAN KEE LAN, less popular
brand: Sports, York, Good Companion,
and Golden Coin sold at P0.35 to P0.50
per pack.
• 1968 – develop Varsity sold at P0.50 per
pack. Added to these were
H & B and Casino Royale.
BACKGROUND
• 1970 – brand Venture, Valenzuela, and Miss
Asia were introduced.
• 1971 – Chan Kee Lan, met an accident and
passed away. London-educated Jimmy,
who was Mr. Chan’s oldest son, took
over the helm.
BACKGROUND
• 1978 – new capital was infused. Jimmy
Chan’s share was bought out and a
new board of directors was introduced.
Social and Visa were presented to the
market.
• 1981 – Sun was being introduced.
STATEMENT OF THE PROBLEM
Mismanagement
Resignation of the efficient employee of the
company
Overpricing of the products by salesmen
Buying of rights to manufacture the
products coming from company
that is planning to close down
Low quality of machines and equipment
STATEMENT OF THE PROBLEM
The cigarette-making process is open to
public
The number of laborers in process is
deficient
Performance of the laborers
Improper checking of
packaging of cigarette products
STATEMENT OF THE PROBLEM
Lack of advertisement
Competitors in the business
Lack of interest to manage the
company and to supervise the subordinate
Lack of communication
inside the company
ALTERNATIVE SOLUTION
 They should limit on their cash loan,
to avoid cash shortage.
 They should hire accounting
personnel or staff to check always
the inventory if it is balance.
ALTERNATIVE SOLUTION
 They should prepare funds for
advertising so that their product can be
recognized.
 They should lower the price which the
salesmen offer so that the people can
afford to buy their product.
ALTERNATIVE SOLUTION
 They should buy high end machine and
equipment.
 They should buy rights to manufacture
the products coming from well known
company that is not planning to close
down.
PROPOSED SOLUTION
 Hire a new manager who is more experienced
and has expertise in running the business
 Every achievement of the employee that is
contributed to the company, the company
should give reward incentives to motivate
them to work more efficiently
PROPOSED SOLUTION
 The company should held an open forum
wherein the suggestions of employees
are fairly accepted
 Hire more employees especially in the
inspection and production of the
product
PROPOSED SOLUTION
 They should do formal market research to
know whether one’s brand has climbed over
the most popular brands in the market
 They should not agree with whatever
amount by the senior sales agent ask for
promotional expense
RECOMMENDATION
ATC should hire a new manager
who is more experienced and has
expertise in running the business
They should limit on their cash
loan, to avoid cash shortage
RECOMMENDATION
 They should produce same quality
product like their competitors but
cheaper price
 They should do formal market research to
know whether one’s brand has climbed
over the most popular brands in the
market
RECOMMENDATION
 They should not stop their
advertisement even if their product
become popular so that their consumer
will not forget about them and they can
encourage more consumers to buy their
product