Case 3: Struktura, Inc.

I. The Facts of the Case

Timeframe The context of time of this case study is at 1988, seven years after signing of
contract between the Federal Republic of Germany and the Republic of the Philippines to
develop applications of solar energy.

Case Struktura Inc. had been working with the PGSEP for around four years. They
manufactured the best quality steel frames and bases for the panels. Furthermore, Frank
Schneider had high regard for SIâs president, Antonio Co. He had offered Anton to examine
the possibility of assembling the SHS units and marketing them to the Burias community and
even the other rural areas of the Philippines. The introduced technology involved the
encapsulation of the sunâs rays through panels of PV cells, charging a wet cell battery. The
project also trained a pool of Filipino engineers who are now experts on solar thermal
technologies and installation of solar systems. They have tested charging stations, poultry
incubators, various systems and even larger power grids. Though it would be deemed
feasible if the community was located within 17 kilometers from an existing conventional
power grid. The alternative was a stand-alone unit for a single household, owning a PV
panel, BCU, battery and DC appliances. This particular application could be an answer to the
Philippineâs rural electrification needs especially from sparsely populated areas where line
extensions from existing conventional grids were not economically feasible and they have
local companies that could reliably supplies the needed components. However, PGSEP had a
problem: the project was to be terminated by the end of the year. Unless they could identify
a local group to undertake the project commercially, they were afraid their efforts to
propagate the technology were useless. In fact, there are communities like Burias, Masbate
that indicates willingness to order the system. Furthermore, they reasoned that a firm with
commercial interests in mind would professionalize the operations. Their contract with the
Philippine government also disallowed tem from commercializing the venture. Anton Co and
his consultant, Bingo Dimalanta, had inspected stand-alone PV energy generation units.
Anton had given the leg work to his consultant and instructed to study the project and give
 his recommendations. III. Viewpoint Mr. Anton Co An entrepreneur and the owner, manager
and president of ALCO Group to which Struktura, Inc. affiliated.

II. The Problem/s

The problem is the decision whether Anton Co should accept Frank Schneiderâs offer.
Anton needs to confirm the viability of the said project.

III. The Causes of Problem/s

 The drastic downgrade of Heavy Industries Corporation as a whole and its imminent
danger for major losses with slim chances of recovery.

IV. Area of Consideration

The areas to be considered are analyzed by utilizing SWOT Analysis
Strength
 They manufacture best quality steel
frames and panel bases.
 They have foreign connections.
 Their quality work is impeccable.
 They have reliable suppliers.
Threats
 The termination of the project at the
end of the year
 Peopleâs preference over cheaper
options
 Peopleâs adamancy in changing the
traditional means of power source.
 The power of Philippine Government
Opportunities
 Frank Schneider is offering SI to
commercialize SHS units.
 People are willing to buy for its
convenience and environmental-
friendliness.
 The market will have few
competitors.
Weakness
 The price of the installation.
 Their main target is exclusively for
rural areas only.
V. Alternative Courses of Action
1. Accept the offer, serving as the local group to commercialize the project.
Advantage:
 It will be an additional source of income.
 It will expand the production line of the company.
 It will promote utilization of environmental-friendly products.
Disadvantage:
 It will need additional capital investment
 It requires more effort in advertising due to its small market size.

2. Maintain the current operation and the status quo of the ALCO Group.
Advantage:
 Free from risk and further cost
 Can concentrate more on current production line.
Disadvantage:
 Company would be less competitive.
 Loss of the opportunity.

VI. Selection of Best Alternative/s

It is recommended to follow the first alternative course of action, to serve as the local group
that would commercialize the said project. Â Based on the data provided, 92% of the total
72% of the population in Burias Island is willing to purchase the system. Moreover, Burias
Island population increase by 2.4% every year may increase at the same rate the number of
people who will want to avail and need the generator units. Most of them are willing to shift
to solar energy system because it is economical in the long run and convenient to use. Of
course, potential customers and statistics of unelectrified in the Philippines displays a
possible share in the market in the country especially that there are no major direct and
indirect competitors. As per recommendation, commercialization of the Solar Home System
is beneficial for both the people in rural areas and the local group who would
commercialize. To make sure of the viability of the project, conducting a feasibility study is
recommended so that it could verify its marketing potential and at the same time, formulate
marketing strategy.

VII. Plans for Implementation

Develop a marketing strategy Marketing Dept. c/o Mr. Co and Dimalanta Prepare for the
financial statements and concerns Finance Dept. c/o Mr. Co and Mr. Schneider Prepare the
needed documents for commercialization Legal Dept. Contact suppliers for the raw
materials and components PPC Dept. c/o Mr. Co Introduce and advertise the product Sales
Dept. c/o Mr. Co and Mr. Schneider