BACNOTAN

CONSOLIDATED
INDUSTRIES
INCORPORATED

HALOG, Loremar Ellen D.

BSA-2
SWOT ANALYSIS

FACTS S W O T
Mr. Santos realized that the company was proud of its long 
tradition of consistent dividend payment to its shareholders.
The initial year of BCI saw extensive improvements to 
increase the plant production and operating efficiency.
Employee’s salaries, wages and benefits were raised and 
working conditions improved to establish a proper labor-
management relationship.
BCI became a major supplier of cement in the Northern Luzon  
region
In 1963, the company acquired a galvanized iron sheet plant 
in Poro, San Fernando, La union. Further, in 1966, BCI
established a second cement plant and another GI sheet plant
in Davao City, both of which became operational in 1968.
The government adopted a program for a modernization and 
rationalization of the cement industry.
Although BCI had established a pattern of growth in both its 
assets and earnings in its corporate life, its net income
performance was affected by the economic downturn
experience.
In FY 1981, BCI reported income from operations of about 18 
million which was 9 million lower than FY 1980’s income of 7
million, or a 33% decline.
In FY 1982, earnings went down to 16.7 million or a light 7% 
decline relative to the previous year.

I.TIME FRAME
May 1984
II. VIEWPOINT
Mr. Rufino R. Santos, Vice- President and treasurer of Bacnotan Consolidated
Industries, Inc. (BCI).
III. STATEMENT OF THE PROBLEM
What will Bacnotan Consolidated Industries (BCI) do in order to give both the
needs of the shareholders and the need of the company for the current expansion?

IV. STATEMENT OF THE OBJECTIVES

 To meet the policy of the company
 To sustain BCI’s improvement and expansion project
V. AREAS OF CONSIDERATION
 The company was proud of its long tradition of consistent dividend payment to its
shareholders
 BCI had a diverse shareholder group which generally preferred more dividends
but had been so far amenable to lower dividends if properly justified by the
management.
 The composition of the company’s stockholders group’s influence on
deliberations and their representatives of the Board of Directors may have had
some influence on the deliberations regarding dividends.
 BCI and Filipinas Cement appeared to be the front-runners, with the World Bank
extending its credit line to both firms in their respective expansion and
modernization programs.

VI. ALTERNATIVE COURSES OF ACTION

 Reduce the dividend payment and the additional incentives for the stockholders
 Apply a loan for the improvement and expansion project of BCI.

VII. EVALUATION OF ALTERNATIVES COURSES OF ACTION

ALTERNATIVE COURSES OF ADVANTAGES DISADVANTAGES

ACTION
 Reduce the dividend
payment and the additional
incentives for the
stockholders
 Apply a loan for the
improvement and expansion
project of BCI.
a.) Meet the policy of the a.) Dissatisfaction of
management shareholders
b.) Additional fund for
the expansion
a.) Tax Benefit a.) liabilities
b.) it won’t affect the b.) strict requirements
dividend payment c.) high- interest

VIII. RECOMMENDATION
I highly recommend that Mr. Santos should reduce the dividend payments and
additional incentives that the BCI’s regularly give to its shareholders. With the half
dividend and stocks that BCI would save, BCI will use it as additional capital for the
improvement and expansion project. Since the shareholders are part of the BCI, they’ll
benefit from it. They won’t feel the effect right now, but soon, as the expansion and
improvement of the company is done.
IX. PLAN OF ACTION
PERSON
SPECIFIC ACTION RESPONSIBLE TIME FRAME BUDGET

Set a meeting with the shareholders Mr. Santos A day 1,000

After they set
Discuss about the decision Mr. Santos the meeting 10,000
Shareholders and After the
Negotiating a contract Mr. Santos discussions 5,000
Shareholders and
Signing of contracts Mr. Santos 1 day 2,000