PESTEL ANALYSIS OF SAN MIGUEL

CORPORATION
San Miguel Corporation's commitment to bring quality products to each and
every Filipino home has brought together well-loved brands that make everyday life a
celebration. No other company in Philippine history has developed such a rich and
diverse product portfolio covering the beverage, food and packaging industries as San
Miguel.
The imported product looked and tasted like its primary competitor, playing upon
the fact that in the Philippines, the San Miguel brand was synonymous with "beer." It
was a creative counter to San Miguel's notoriously aggressive and sometimes cutthroat
competitive strategy, which had reportedly included "attempts to sabotage [Asia
Brewery's] sales network and smash its empty bottles." Asia Brewery, whose owner
was reputedly connected to Marcos sympathizers, even hired away San Miguel's brew
master.
San Miguel Corporation is one of the oldest and largest companies in the
Philippines. In its 100 year history, it has established a clear leadership position in the
Philippine beer industry, as well as having made successful forays into other related
and unrelated product areas. In the late 2000s, Eduardo Cojuangco, the CEO of San
Miguel Corporation, which was South Asia's largest food and beverage company, found
himself in a quandary. Cojuanco wanted to move San Miguel into industries that had
scale and good future growth possibilities, to build leadership positions in key industries
that would drive growth not just for San Miguel but also for the Philippines. At the same
time, San Miguel Corporation would reverse its international expansion plans. The case
involves discussion of this strategy, tracing issues of internationalization versus a
domestic product focused growth in non-allied businesses in the Philippines, such as
energy, mining, infrastructure and other utilities.

Political

San Miguel has moved to strengthen its ties with the Philippines Government. In
a country where political connections can be crucial for all sorts of reasons, this should
be seen as a bullish sign for the stock price. On a purely business level, the company's
recent results have been excellent. Its long-term development plans are promising on
the back of sound finances. The political influence may be very positive for San Miguel's
activity in infrastructure development and in an ongoing telecoms case.
 Although San Miguel enjoyed virtual monopolies in its markets, that status did not
shield it from the political machinations of the Philippines. The dictatorial reign of
Ferdinand Marcos brought this element into sharp focus in the 1980s, when an intra-
familial proxy fight at San Miguel turned political. The dispute was instigated in 1983 by
Enrique Zobel, a wealthy cousin of the Sorianos who owned the Ayala banking and real
estate group and sided with the Marcos government. Unable to execute a takeover on
his own, Zobel sold his 19.5 percent stake to Eduardo Cojuangco, Jr. known in some
circles as "the coconut king". Although Cojuangco was a cousin of Marcos opponent
Corazon Aquino, he too sided with Marcos. Cojuangco's Coconut Industry Investment
Fund (a.k.a., United Coconut Planters Bank) accumulated an additional 31 percent of
San Miguel, giving him effective control of the conglomerate and leaving the Soriano
family with a mere 3 percent. Cojuangco scooped up the chairmanship in 1984, when
Andrés Soriano, Jr., died of cancer. However, his reign over San Miguel lasted only two
years. When Marcos lost the 1986 election to Aquino amidst the "people power"
revolution, Cojuangco and many other Marcos backers fled the country.

Economic
The household income of the country has increased constantly in the last decade
and half, compare to the USA market where household income is still below 2007 levels
and not increased in real terms since early 1980’s. San Miguel can leverage this trend
to expand the market beyond its traditional customers by employing a differentiated
marketing campaign. Work force productivity in US has grown by 25-30 % in last two
decades even though the salaries are not reflecting those gains. It can enable San
Miguel to hire skilled workforce at competitive salaries. Economic factors of a country
and region have a direct impact on the potential attractiveness of a given market. Some
of the economic factors that San Miguel should evaluate both in the present market and
one in which it wants to enter are – inflation rate, GDP growth rate, disposable income
level etc.

Social
A higher portion of the younger population is beneficial for San Miguel
Succession in the Philippines Largest Corporation as it will allow the company a larger
consumer population base. In addition, a younger population will also promise San
Miguel Succession in the Philippines Largest Corporation with more skilled and
educated workers and human resources, thereby adding breadth and depth to the talent
pool. A moderate to high middle class is also important for San Miguel Succession in
the Philippines Largest Corporation as its current consumers, and advocates. San
Miguel Succession in the Philippines Largest Corporation has introduced health aspects
in its marketing, and also add features of health in their products as per consumer
research and behavioral assessments.
The increased health consciousness has also led San Miguel Succession in the
Philippines Largest Corporation to make collaborations and take CSR initiatives
focusing not only on physical, but also mental and emotional health and wellbeing.

Technological
The technological infrastructure of San Miguel Corporation increasingly,
businesses in the Philippines the Largest Corporation are incorporating technological
up-gradations and innovation to increase business efficiency and affectivity. There is
high rate of innovation across all industries, which makes companies including San
Miguel Succession in the Philippines Largest Corporation competitive as well as
progressive. The improved technological infrastructure also helps in attracting foreign
direct investment, which in turn leads to further development and advancement. The
improved technological infrastructure also helps in attracting foreign direct investment,
which in turn leads to further development and advancement
As a result, San Miguel Succession in the Philippines Largest Corporation has a
distinctive competitive advantage in terms of technological advancements, and the
business continues to make use of, as well as participate in innovation processes to
enhance the business cycles and operations. Increasingly, social media is also being
used by businesses like San Miguel Succession in the Philippines Largest Corporation
for gathering consumer data and information. San Miguel Succession in the Philippines
Largest Corporation also interacts with, gathers feedback, and communicates
promotions to customers through official social media channels. Business like San
Miguel Succession in the Philippines Largest Corporation have also started using social
media for purposes of recruitment, which highlights the changing trends in the business
community with respect to social media.

Environmental
San Miguel Succession in the Philippines Largest Corporation has launched
specific sites for disposing off products to be recycled like many other players, is also
introducing a novice product line of recycled products for consumers to benefit from.
San Miguel Succession in the Philippines Largest Corporation should associate itself
with, and register with the waste management authorities and institutions to be able to
follow regulations, maintain checks, and avoid any future hassles. San Miguel
Succession in the Philippines Largest Corporation, in view of environmental
sustainability, already has a controlled and designated process of managing waste, and
disposing waste in an environmentally friendly manner. San Miguel has also introduced
a green product line – which is a variation of its existing products. The company plans
on increasing weightage for the green product line gradually to increase its role in
environmental sustainability.
San Miguel Succession in the Philippines Largest Corporation also contracts with
suppliers and distributors in its integrated back chain, who are following strong
principles with regards to environmental sustainability.

Legal

San Miguel Succession in the Philippines Largest Corporation has placed high
importance of the safety and health of its employees, and continually strives to improve
it further. San Miguel Succession in the Philippines Largest Corporation practices
employment laws, and briefs its employees about the same during the recruitment
process. The HR department of San Miguel Succession in the Philippines Largest
Corporation also regularly conducts workshops and training sessions for employees to
engage them, and make them aware of the employment laws, along with other legal
formalities. As result, has always been comfortable with diversity in its workforce, and
has framed internal company policies to support diversity. The company follows the
anti-discrimination law in all its processes – from recruitment to promotion. The San
Miguel Succession in the Philippines Largest Corporation ensures this by following
regulations about the anti-discrimination law as well as through regular investment in
trainings and employee development sessions.
References:

San Miguel Corporation - Company Profile, Information, Business Description,

History, Background Information on San Miguel Corporation. (n.d.). Retrieved June 7,
2022, from https://www.referenceforbusiness.com/history2/90/San-Miguel-
Corporation.html
Staff, M. B. (2022, June 7). Smgby Stock Forecast, Price & News (san
miguel). MarketBeat. Retrieved June 7, 2022, from
https://www.marketbeat.com/stocks/OTCMKTS/SMGBY/
Analysis, S. & P. E. S. T. E. L. (2019, May 4). MBA Pestel / Pest Solution :
Reinventing the San Miguel Corporation Pestel / Pest /Step Analysis & Solution.
EMBA Pro for Executive MBA Professionals. Retrieved June 7, 2022, from
https://embapro.com/frontpage/pestelcase/3472-miguel-san
Pestel analysis of San Miguel Succession in the Philippines Largest Corporation.
247caseanalysis. (n.d.). Retrieved June 7, 2022, from
https://www.247caseanalysis.com/case/San-Miguel-Succession-in-the-Philippines-
Largest-Corporation-23326-Pestel-Analysis
 DIVINE WORD COLLEGE OF LEGAZPI CITY
LEGAZPI CITY

PESTEL ANALYSIS

Submitted by:
Maria Aila Ataiza
Anabel B. Bindo
BSBA-MM4

Submitted to:
Mr. Jesus Molato
OJT Coordinator