St.

Luke’s Farmers Association

Strategic Management

Abalos, Claudine B.

Mangmangon, Erwin M.

Mendoza, Louie

Pontalba, Jasmin Mae T.

Rueme, Jackielyn C.

I. INTRODUCTION

St. Luke’s Farmers Association, formerly known as Malapat Farmers Savings and
Development Cooperative was established with the sole purpose of helping the farmers. In
the year 1996, through the initiative of Fr. Junnifer Yapes, they formed an organization to
help and assist the farmers by providing funds and capital which enable the farmers start
their farming operations. After years of operation, the organization is starting to fail due to
the mishandling of funds and the lack of experience. In the year 2003, they reorganized the
organization and changed the organizations name and its Board of Directors. Yearly growth
and increase made the association stabilized up until this day.

St. Luke’s Farmers Association is a service type of business. They provide services to
their members by lending funds. A person should at least be a member of the Association,
whereas 2000 share capital is the minimum requirement for a membership in order for a
person to be eligible for credit/loans, the said share capital serves as their fixed deposit. A
member may obtain a loan without any collateral but only up to the value of their share
capital, however, he/she may also be granted a loan for a large amount of money but a
collateral is needed. The collateral for a loan should be a real estate, which 60% of
appraisal value of the said real estate is the ceiling amount that a member can loan.

In any kind of business, a purpose/objective is the very reason why an organization

is established- for St. Luke’s Farmers Association, they envisioned that farmer’s lives can be
so much better with a little financial help. The association targeted the farmers at Malapat
Cordon, Isabela and has grown to what it is now. The Association has more than
650,000php as their net profit for the period ended December 31,2020 and has more than
1,200,000 as their revenue as of December 31,2020.

In their years of operation, St. Luke’s Farmers Association was able to sign up
members outside Malapat Cordon-specifically from Santiago City, Isabela and they plan to
expand and help more people.

Timeline of St. Luke’s Farmers Association

II. RESEARCH DESIGN AND METHODOLOGY

This section presents the different methods, procedures and sources that will be
used in gathering the data needed in the study. It also includes major assumptions of the
organization.

Sources of Data

Primary source will be used in gathering the data. All needed information and
materials will be directly requested and asked to the members or board of directors of St.
Luke’s Farmers Association.

Data Gathering Procedures and Methodology

Questionnaire and Interview will be used as a means of gathering information. The

chosen members of the association will be given questionnaires to answer and some will be
interviewed personally. The cooperative will also be asked to present or give a copy of their
financial statements and other documents necessary for the analysis and study of the said
organization.

Major Assumptions

The association assumes that the organization will continue to provide assistance to
its members in the long run not only financially but also on other areas especially things
related to their members’ businesses/products. The cooperative also will be able to
maintain the peace and harmony among its members.
III. PROPOSED VISION AND MISSION STATEMENT

Our Vision
“St. Luke’s Farmers Association envisions to be a leading Partner of Philippine
Farmers. To be a responsive, viable and globally competitive organization with empowered
and fully committed members, who freely exercise their rights and enjoy an improved
quality of life under a cultures of accountability, commitment, mutuality and quality
service.”

Our Mission
“St. Luke’s Farmers Association mission is to provide a client-centered quality and
accessible services to improve the financial well-being of its members. To give competitive
financial support and opportunities to agriculture, agribusiness, small and medium
enterprises and micro-borrowers. And which provides programs that will strengthen skills
of members to better produce, process and market their commodities.”

The new suggested Vision & Mission Statement is more recommendable upon
consultation with David’s Framework. It was created to focus more on the satisfaction and
the benefits that a customer can reap which will then attract more potential members or
consumers.

Vision & Mission is useless if not disseminated properly. With that being said,
statements will be circulated mainly through seminars aside from physically posting them
on establishment boards. In a more fitting way due to the consequences of the pandemic,
webinars through social media platforms will be utilized. By appropriately informing
existing and potential members, we can achieve a higher chance of committing these vision
and mission to fulfillment.
IV. EXTERNAL ANALYSIS

In this chapter, an external analysis was performed to evaluate the position of the
association within the industry and image to the public. Through analysis using Porters’
Five Forces Framework, External Factor Evaluation matrix and CPM matrix, we have
identified the strengths, weaknesses, threats and opportunities in consideration to
economic developments, socio-cultural, demographic, technological, political and other
changes.

A. Industry Analysis Using Porter’s Five Forces Framework

-No established competitor Competitiv

-Customer loyalty Rivalry -Adaptation to changes
-Technology integration

Supplier Threat of
Power New Entry
Porter's Five
Forces
-Expansion of target area
for membership Framework -Non-agricultural loans
-Depositary function

Buyer Substitu-
Power tion

-Absence of collateral
-Minimal interest rates

Competitive Rivalry
St. Luke’s Farmers Association is a business entity that provides loans to its
members. The location of the association at Malapat, Cordon was a huge advantage.
Aside from individual lenders, there are no established association or entity that
provides similar services within the main target area. Another competitive
advantage is its operation in the long run gaining the trust and loyalty of every
member.
 No established competitor within target area
 Customer loyalty

Threat of New Entry

New cooperatives and associations that provides lending services may
always emerge in the market. However, in the case of St. Luke’s Association, threat
of new entry is very minimal. Since its reestablishment, the association was the first
to provide agricultural services to the target local community. To further expand the
coverage and strengthen the foundation of the association, adaptation to different
changes was taken earnestly. Such as the integration of technological advancements
into members’ ventures.
 Constant growth since re-establishment through adaptation
 Integration of technological developments

Substitution
St. Luke’s Farmers Association offers opportunity to its members by lending
the farmers the amount needed in starting/continuing their farming operations. The
association may encounter problems in the future that might disable and
incapacitate them in lending the members the capital that the farmers need. An
example would be the increase of non-agricultural business ventures by the
members. To address such situations, the association has considered providing
alternative loans that will cater to these undertakings. Another services newly
introduced by the association is the creation of savings deposit accounts.
 Loans catering non-agricultural ventures
 Acceptance of savings deposit accounts

Buyer Power
 A person should be a member of the association with at least 2000 share
capital to be eligible for loans. The number of members of the said association has
increased because they offer lower interest rates to loans when compared to banks.
Potential customers may obtain credits or loans from individual lenders because
they don’t require collateral, but it has no guarantee that they charge lower interests
than the association. By ensuring that each loan extended will be held with the
minimum interest, members’ preference will always be towards the benefit of the
association leading to its ability to maintain minimal rate of interest.
 Members’ absence of collateral or hesitance to submit property as
collateral.

Supplier Power
St. Luke’s Farmers Association’s source of income are from the loans and
savings of their members. The association’s situation being a service concern has
considered its members as its supplier. With that, the target market has expanded
to their neighboring places, specifically Santiago City of Isabela. Encouraging people
to be a member of the association allows them to have more assets which will
enable them to lend capital for the members.
 Extending membership outside local target area

B. External Factor Evaluation Matrix

EFE Matrix
  Opportunities Weight Ratings Wgt.Score
Absence of organized competitor within
1 the main target area. 0.14 3.00 0.42
Improved agricultural system through
2 utilization of technologies. 0.17 4.00 0.68
Increased market demand to variety of
3 agricultural products. 0.10 2.00 0.20
4 Surge of non-agricultural ventures. 0.15 4.00 0.60
         
  Threats      
Agricultural lands turned into
1 residential/commercial areas. 0.05 1.00 0.05
2 Increased number of businesses outside 0.15 4.00 0.60
 agriculture.
Lack of interest of succeeding
3 generations towards agriculture. 0.09 2.00 0.18
Low or fluctuating prices of agricultural
4 products. 0.08 2.00 0.16
Severity of exposure to natural
5 calamities. 0.07 2.00 0.14
Total 1.00   3.03
Legends:
 Key External Factors
Opportunities and threats that affects or might affect the association.
 Weight
It indicates how important or how vital the key factor in the success.
 Ratings
Refer to how effectively the current strategy responds to key factors. 1 = the
response is poor. 2 = the response is below average. 3 = the response is above
average. 4 = the response is superior.
 Total Weighted Score
Total weighted score is simply the sum of all individual weighted scores. The
association can receive total score from 1 to 4. The total score of 2.5 is an
average score. In external evaluation a low total score indicates that
company’s strategies aren’t well designed to meet the opportunities and
defend against threats.

Every entity must be knowledgeable about external factors that could greatly
contribute in the achievement of its success. The EFE matrix is a tool used to
identify these critical key external factors both threats and opportunities.
Subsequently after determination, an analysis on how well the responses of the
entity in addressing them will help in the formulation of new strategies or corrective
actions.

Considering the relevant areas that could provide significant impact to the
association, the External Factor Evaluation matrix has resulted to the following
marks. Key factors were weighted from 0.00 (not/least important) to 1.00 (most
important) and given rating that ranges from 1 to 4 depending on the effectivity of
managements strategies in addressing certain factors.

Everything around us has been continuously improving and is developed

through the use of technology. Fortunately, technological advancement is extended
towards the industry of agriculture. In the matrix above, improved agricultural
system through the utilization of technology was given the highest weight of 0.17
and a rating of 4 under the opportunity category. With the help of machineries and
other equipment in agriculture, our farmers as the main clients of the association
will be able to reduce their costs and manual labor resulting to a higher profit. A
rating of 4 was designated since current strategy used by the association in
introducing these technologies to their clients has been deemed effective. However,
a rating of 2 or below average response is assigned to the increased demand of
varied agricultural products. Such opportunity has been hard for the association to
address since farmers’ decision on what crops to produce will be followed. Due to
unbalanced and sometimes unfavorable climate condition, farmers are hesitant to
try other crops. This has led them to play safe and stick on to agricultural products
that is highly resistant to unfriendly climate condition.

On the other hand, weight of 0.15 is given to factor where there is an increase
in number of businesses outside agriculture under category of threats. Notice that
the same factor was also placed under opportunities. The region is tagged as area of
agriculture however we cannot deny that industrialization is something that no one
could ever stop. Due to the improvement of our economy, people were given the
chance to venture into different opportunities. Industrialization was categorized as
a threat as it can slowly eradicate one of the foundations of the association which is
agriculture itself. Despite of the weight of threat which has the second highest
weight in all factors, it was given a rating of 4. With the aim of the organization to be
a partner of every farmer in their success, the association decided to extend help to
their clients that covers ventures aside from agriculture-related businesses which
eliminates the threat of reducing the customers’ patronage. Reversibly, the same
threat has become an opportunity for the growth and expansion of the association.

Overall, the matrix analysis resulted to a total weighted score of 3.03. The
score was above the average score of 2.50 which suggests that current strategies
being implemented were efficiently working towards the benefit of the association
and to its members.
C. Competitive Profile Matrix

St. Luke's
  Association DISADECO Abrasa MPC
 
Weighted Weighted Weighted
  Weight Score Score Score Score Score Score

Marketing 0.10 2 0.20 4 0.40 4 0.40

Business Range 0.10 2 0.20 4 0.40 3 0.30
Location 0.25 3 0.75 4 1.00 3 0.75
Security and
Safety 0.15 4 0.60 3 0.45 3 0.45
Customer
Loyalty 0.15 4 0.60 2 0.30 2 0.30
Geographical
Expansion 0.10 2 0.20 4 0.40 2 0.20
Management
Experience 0.15 4 0.60 3 0.45 3 0.45
TOTAL Score 1 3.15 3.40 2.85

Legends:
 Critical success factor
-Are the areas that a company must perform at a highest possible level of
excellence because these are vital to its success and will enable a positive
outcome for the organization. CSF includes both internal and external factors.
 Weight
-It shows how important the factor is in succeeding in the industry. Each CSF
should be assigned a weight ranging from 0.0 (low importance) to 1.0 (high
importance). The sum of all weights must equal to 1.0.
 Score
-Refers how well companies are doing in each area. They range from 4 to 1,
where 4 means a major strength, 3 as a minor strength, 2 means minor
weakness and 1 being a major weakness.
 Weighted Score
-The product of weight and score. The company which receives the highest
total score is the strongest among its competitors.

A Competitive Profile Matrix (CPM) is a tool that compares the firm and its
rivals and reveals their relative strengths and weaknesses.  This will highlight the
relative strengths and weaknesses of St. Luke’s Association and its competitors
which are DISADECO and Abrasa MPC. Every company must establish and formulate
their strategies according to their strengths and weaknesses. They must know
which areas they should develop and which areas to look after. If an organization is
 the strongest players, they must work hard to retain their competitive advantage.
But if they aren’t, the CPM will help them visualize where they need to improve to
catch up with the top players.

Based on the illustration, it shows that St. Luke’s Association is the second
strongest competitor among the three mentioned agricultural cooperative with a
total weighted score of 3.15. St Luke’s Association has a major strength on security
and safety, customer loyalty and management experience since this cooperative has
been doing its business for 25 years in addition to absence of competitors within the
local community. Furthermore, the analysis revealed that SLFA’s weakness includes
geographical expansion along with marketing and business range due to absence of
marketing department to be charged with the task of introducing the association on
the market. On the other hand, DISADECO has become an industry leader on
marketing as well as business range and location as it has its own marketing
committee which takes the works in promoting and expanding the reach of their
cooperative. Being in the same location and serving the same market, Abrasa
notwithstanding its evident profitability was completely dominated by DISADECO in
all key factors.

D. Summary and Conclusion

In an industry analysis using Porter’s five forces, it was said that they would
engage in marketing strategies that will help the expansion of the association. In
order to encourage new memberships/clients, SLFA is trying to accept members
from neighboring places since their competitors are mostly located outside the
targeted municipality.

The total weighted scores under the EFE Matrix was 2.53. Smart adaptation
of the effects brought by modernization such as utilization of technological
advancements, lack of established competitor within the main target area, and the
good response to the surge of non-agricultural related ventures, the resulting total
weighted scores is subjectively a good indication that the association is effectively
and efficiently implementing their current strategies and resources.
 According to the Competitive Profile Matrix (CPM), the St. Luke’s Association
is on the lead in the comparative analysis with the total weighted score of 3.30 and
followed by the Abrasa MPC with the total weighted score of 3.10. Having the areas
of marketing, security, customer loyalty and management experience dominated by
SLFA over other association within the same industry, suggest that St. Luke’s
Association is in a good position for earning an above-average score and is
responding effectively on internal factors.

In conclusion, St. Luke’s Farmers Association has a strong competitive

position within the industry. A strong advantage identified by the matrices were the
ability of the association to adapt with respect to changing economy, environment
and other factors. In area coverage with regards to competition, the association has
already established its name to the public for its quality services which
subsequently earned the trust and loyalty of its members. This was evidenced by its
long-time operation and continuous patronage of the public which lives until
present.
IV. INTERNAL/COMPANY ANALYSIS

A. Organizational Structure

St. Luke’s Farmers Association Organizational Structure

DAVID LIGSOT

President

Board of Directors

RAY NORMAN RUBEN DAVID BENEDICT

INHUMANG CATAY BITAGA LIGSOT CIANO

Cooperative Committee

SONIA ELENA JENNIFER RUBEN

BITAGA INHUMANG SAPIIL BITAGA
Audit Cmte. Credit Cmte. Elections Cmte. Education Cmte.

Management Staff

ANGELITA FRANCISA ROMANA

MAMANTEO PONTALBA PAGAYPAY
Manager Bookkeeper Treasurer

Management of the association was vested on the appointed members of the

Board of Directors. The board consists 5 members including the President and four
individuals who must be a member and have competitive and adequate knowledge,
and experience in managing the association. As written in the article of the
association, one member of the board shall be a priest appointed by the episcopal
diocese of Santiago. Each member can hold their position for a maximum of 3 terms
with 2 years in each term unless terminated earlier or removed through elections
with given valid justifications. Tasks of the BOD members include but is not limited
to (1) oversee the implementation of rules and regulations in relation to
association’s objectives, (2) authorize officers to execute their designated functions,
and (3) create strategic plans and decisions in light with the achievement of goals.

To help the implementation and ease the BOD’s task of overseeing the operations,
different committees have been created. The four committees include Audit, Credit,
Elections, and Education and Training Committee.

 Audit Committee
-Ensures the organization and safekeeping of records, plans and the
monetary funds of the association and the members
-Engaged in promoting and maintaining a healthy environment and
proper communication within the organization among members, staffs,
other committees, BOD and other officials.

 Credit Committee
-Caters the papers and forms for the application of new members.
-Conducts investigation on credit worthiness of members availing offered
loans to ensure the payment of such credit when matured.
-Examines the nature and background of cash inflows and cash outflows.
-Primarily obligated in ensuring the collection of maturing loans
extended.

 Elections Committee
- Safeguards and guarantees the fairness in the conduct of any election.
- Schedule and/or postpone or cancel an election when there is doubt on
election fairness.
-Examines the credibility and decides on members’ application for a
position that involves management of the associations.
 Education and Training Committee
 - Appointed by the BOD members and shall be headed by the vice-
chairperson.
- Suggests and implements new resolution handed down from the BOD
- Acts as observers for necessary actions needed for the improvement of
the association.
-Conducts trainings and seminars to members relating to their ventures
to help them in making smarter decisions.

Other significant employees needed to oversee the day-to-day operation of

the association aside from the BOD members and different committees includes the
manager, the bookkeeper and treasurer.

B. Review of Company Performance

An analysis of the Company performance plays a vital role in assessing its

development, profitability and going concern status. Financial statements were
being analyzed especially Its financial position and company’s result of operations.
Specifically, the comparison of company performance comparing different line items
such as the Revenue, Expenditures and Income. Said items will be associated with
the company’s past performances to identify the trends and changes. The
assessment will be beneficial in helping the management determine the
organizational growth of the association.

In addition, different financial ratio in comparison to industry average will

also be computed and analyzed. Ratios to be computed include profitability ratio,
solvency ratio and liquidity ratio. The following analyses will contribute in the
determination of future objectives, corrective actions needed and strategies needed
for the furtherance of the association.

Presented below are the financial statements specifically Income Statement

for the Period Ended December 31, 2020 and Financial Position as of December 31,
2020.
 ST. LUKE'S FARMERS ASSOCIATION
Income Statement
For the Period Ended December 31, 2020

REVENUES
Interest on Loans 1,115,509.53
Service Fee 129,400.27
Filing Fee 6,700.00
Fines on Loans 2,287.00
G.A. fines 1,800.00
Bank Interest - net 1,049.76
Membership Fee 500.00
Passbook 250.00
Late comer Fines 200.00
Loan Form 10.00
Totals 1,257,706.56

EXPENDITURES
Community Service 1,500.00
G.A. Expense 32,898.00
Honorarium 209,000.00
Per diem 46,545.00
B.O.D. And Com. Expense 3,161.00
Office supplies 1,530.00
Transportation 1,850.00
interest on loan 46,029.00
service fee 38,970.00
13th month pay 19,000.00
MAF 50,000.00
Retirement Benefits 50,000.00
Honorarium 19,000.00
Christmas Party 14,994.00
Performance bonus 41,656.00
Members' cash incentive 18,000.00
Total 594,133.00
Net Income December 31, 2019 663,573.56
 ST. LUKE'S FARMERS ASSOCIATION
Statement of Financial Position
As of December 31, 2020

ASSETS
Cash on Hand 6,501.04
Cash in Bank 843,200.33
Loan Receivables 6,213,500.00
Office quipment 7,100.00
Total 7,070,301.37

LlABILITIES
Loan Payables- St. Luke 72,241.14
Retirement 100,000.00
MAF 282,000.00
MAF contribution 57,000.00
Members' Cash Incentive-for distribution 18,000.00 529,241.14

MEMBERS' EQUITY AND RESERVES

Share Capital 4,133,800.35
General Reserve Fund 467,004.91
CETF 456,603.78
Optional Fund 435,807.78
Equipment Fund 197,809.34
Contingency Fund 186,460.51 5,877,486.67

Net Income For the Year Ended Dec.31, 2019 663,573.56

TOTAL 7,070,301.37

Income Statement Analysis

Year 2018 2019 2020

Revenue 1,046,991.35 1,201,183.74 1,257,706.56
Expenditure 541,319.00 556,434.00 594,133.00
Income 505,672.35 644,749.74 663,573.56
 1,400,000.00
Income Statement
1,200,000.00
1,000,000.00
800,000.00
600,000.00
400,000.00
200,000.00
0.00
2018 2019 2020

Revenue Expenditure Income

In the comparative income statement provided by the association for the

years 2018, 2019 and 2020, trend and changes in the revenue, expenditure and
income were evaluated. Based on the graph presented as results of operation for
three consecutive years, there is a constant increase in all areas especially in the
years 2018 and 2019. Comparison shows that the association has been
continuously growing and still profitable. However, it can be observed that the
increase under three areas between 2019 and 2020 income statements were
significantly lower than previous years. The reduced income was reported to be a
result from the onset of the COVID19 pandemic. Due to the pillaging effect of the
pandemic, many restrictions were implemented that affected the operations of the
association. One of which was the reduction of loans acquired by the members.

Organizational Growth

People are looking for a more effective method of growing agricultural

produce as we move towards economic development. And naturally with the
anticipation of selling at a higher and profitable price. Integration of advanced
methods and machineries into their ventures entails higher cost to the farmers. To
afford such supplies, many availed loans which the association has provided.
Extending credit services or loan programs for the acquisition of machineries or
equipment has significantly increased the propensity of members to avail loans.
 In addition, the demographic location of the association being next to
Santiago City as the center of commerce in Isabela has greatly contributed to its
success. The surge of many non-agricultural businesses which was perceived as a
threat to the agricultural industry turned out to be a good opportunity to grow and
expand the reach of the association.

In today’s current situation with the COVID19 pandemic, some activities such
as seminars and educational presentations in helping members as well as general
assembly meetings were temporarily halted. But with the use of social media
platforms and other online services, the association is still active with its duty to
give assistance to its members.

Financial Ratios comparison of St. Luke’s

Farmers Associations to Industry Average
Industry
2019 2020
Ave.
Liquidity Ratios
Working Capital 6,5133,960.23 5,793,344.58
Current Ratio 7.43 13.34 1.39

Solvency Ratios
Debt Ratio .13 .07 0.59
Debt to Equity Ratio .15 .08 0.40

Profitability Ratios
Gross Margin 46.32% 47.23% 21.70%
Net Profit 53.68% 52.76% 02.00%
Return on Total Assets 9.61% 9.39% -01.4%
Return on Total Capital 15.56% 10.14% -17.0%

Value Added Chain

As an organization creates their product it passes through sections that
improves the products quality. And this also affect a service by creating activities
that will help ensure customer satisfaction.

Seminars/ Webinar
 Seminars or in today’s situation Webinar is a good method of adding values
to the services offered by the organization by giving the customers or future
members the benefit they could have if they procure our services or if they join the
organization

Costumer Service
This activity provides customers a way to ask about the services the
organization offer and where they can gain more knowledge

Notification Services
With member who availed our services will then be notified for important
information that will be beneficial, in which will simplify their business activity, and
with when to pay their loans with and explanation of why they should pay that
much

A. Company’s Internal Diagnosis

1. David’s Functional Audit
St. Luke’s Farmers Association’s has a detailed and organized constitution
and by-laws. The association uses strategic management concepts well in
planning and making strategies to achieve its mission and vision. The
organizational structure covers all important role that the association must have
and each position has a detailed and specific job description. It is also shown
how good and organized the management is when the cooperative followed the
concept of the segregation of duties. Members of the association are increasing
and it even included farmers outside Cordon, which proves the good reputation
and expansion of the organization. Employees have low salary but it is
understandable since the cooperative is still growing and still considered as
small organization. Members of the cooperative are active and do their best in
cooperating and following the organization’s policies and activities. The location
of the cooperative is good since there are limited competitors in the area.
Although the increase rate in income each year is not high, its revenue is still
steadily growing which proves that the cooperative is stable financially.
2. Galbraith’s Star Model

Major Strengths and Weaknesses Strategy. St. Luke’s Farmers Association’s

provides services and accepts members within and outside Cordon, Isabela as
long as they have properties in the said location. It also gives loans with very low
interest rate which attracts more members. The association not only provide
financial help but also gives other services and organize seminars and trainings
that is beneficial to their members especially in their planning and decision
making skills.

Structure. The association has its own set of board of directors, officers, and
different committees. Each role has their own work or area to manage. The
general assembly (GA) or the regular members still have the power and
authority to elect, impeach, and decide on important matters through voting.

Process. Information flows from top-bottom and bottom-top. Regular and

special meetings are held in order to discuss plans and decide on the different
things associated to the well-being of the association and its members.

Rewards. Members of BOD are given compensations every regular and special
meeting while managers, bookkeeper and the treasurer are given monthly
salaries. The association covers all expenses and allowances of appointed
members who will attend meetings and activities.

People. The employees hired are skilled and have enough experience and
knowledge regarding the job they are assigned with. They also join seminars and
undergo trainings to develop their skills. They are competent enough and do
their work well.

The association’ major strength is that it accepts members living outside the
municipality of Cordon as long as they have properties within the said
municipality. The employees and staffs are also well-oriented and competent
which helps greatly in managing the organization smoothly and executing plans
well. Offering a very low interest rate for loan services also helps in attracting
 more customers, and lastly, the well detailed by-laws which serves as the
foundation or guide in operating the cooperative creates an organized and
harmonious environment which makes it easier to run and manage the
organization. The cooperative’s salary may be low but it can be increased when
the organization has grown and can afford to give higher
rewards/compensations.

3. Internal Factor Evaluation (Ife) Matrix

St. Luke’s Farmers Association’s internal strengths and weaknesses are

assessed by giving each key factor a weight ranging from 0.0 (low importance) to
1.0 (high importance) and a rate ranging from 4 to 1 as shown in the table below.

Strengths Weight Rate Weighted Score

Low interest rate on loans 0.18 4 0.72
Loyal and competent employees 0.15 4 0.60
Increasing members 0.13 3 0.39
Good Reputation 0.12 3 0.36
Excellent management 0.14 4 0.56
Weaknesses
Lack of marketing programs 0.10 2 0.20
Low interest rate on deposit 0.18 2 0.36
Total 1 3.19

Company’s Internal Strengths

a. Low interest rate on loans. One advantage of St. Luke’s Farmers Association
is that it offers a low interest rate of 1.5% per annum on its loan services.
Interest rate is one primary factor that affects the association’s operation,
thus, it is rated at 4 and given a weight of 0.18.
b. Loyal and competent employees. The employees hired are all experienced
and have enough knowledge on the field they are assigned to. Even with a
low salary, they still are committed with their job and are constantly joining
trainings/seminars to further develop their skills, hence, it is given a rate of 4
and a weight of 0.15 since employees are one of the core components of an
organization.
c. Increasing members. There’s an increase of members and the association
has successfully expanded for its members are not limited to farmers in
Cordon but also from Santiago City. An increase in members means increase
in assets and equity hence the rate of 3 and weight of 0.13.
d. Good Reputation. From its steady increase in income and members, it is seen
that the association has a good reputation. Reputation is important in every
business/organization. It is rated 3 and weighted at 0.12.
e. Excellent Management. The cooperative has detailed explanations and
specific job for each employee/position in the organization. The segregation
of duties is well done which minimizes possibilities of fraud and errors.
Having good management is important in running and developing a business
thus, it is weighted at 0.14 and rated at 4.

Company’s Internal Weaknesses

a. Lack of Marketing Programs. Since the association has no marketing

committee, it lacks activities that promotes and advertise the association’s
services. The cooperative has a wide market area, thus, it should implement
marketing programs to attract more members and customers. It has a rate of
2 and weighted at 0.10.
b. Low Interest Rate on Deposit. One of the major factor in attracting people to
invest in the cooperative is the interest rate on deposit which is why it is
weighted at 0.18 and rate of 2. The cooperative has an interest rate of 1% per
annum on deposit.