SAN MIGUEL CORPORATION CASE STUDY ANALYSIS

I. Company Background

a. Include a brief history and description of the chosen firm. Discuss in detail the supply chain
strategies, opportunities, and challenges of the company.

San Miguel Corporation is a publicly traded Filipino multinational conglomerate holding

corporation. It is the Philippines' largest corporation in terms of income, employing over 24,000
people across the Asia-Pacific region at over 100 significant sites.

It is one of the Philippines' oldest and largest corporations. Over the course of its 100-
year history, it has developed a strong leadership position in the Philippine beer business, as well
as successful ventures into other related and unconnected product categories. Eduardo
Cojuangco, CEO of the San Miguel Corporation, discovered in the late 2000s that South Asia
was the largest food and beverage firms to. Cojuangco was caught in a bind because he wanted
San Miguel to be involved in areas with high development potential. He had to move, which
meant establishing leadership positions in critical industries that would generate growth not just
for San Miguel, but also for the Philippines. Simultaneously, San Miguel Company would
abandon its intentions for worldwide expansion. The case focuses on the debate of this approach,
tracking challenges of internationalization in non-related firms in the Philippines, such as energy,
mining, infrastructure, and other utilities, in comparison to a focused domestic product growth.

SMC's objective is to capitalize on new growth markets through acquisitions while also
strengthening its competitive position through improved synergies across current operating lines.

• Opportunities

- New ventures, investments and acquisitions for the company

- Penetration to other regions / market around the world
- Can merge into non-allied business, can engage into more profit oriented businesses
- Successful and effectiveness of diversion plans : profitability

• Challenges

- Huge local and international competitors (i.e. Asian Brewery; Beer na Beer and Western
Influences: Heineken)
- Incorrect analysis and evaluation and plans (Strategic Planning)
- Losing of other contracts, acquisitions, investments to other country/market due to credit rating
downfall and slow growth rate (financial crisis)
- Social, culture and government differences, rapid changes in the environment

II. Statement of the Problem

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 a. Include a clear and concise logistics problem derived from complex research and analysis of
the company’s supply chain strategies, opportunities, and challenges.

•What is the objective of SMC to increase the organizations flexibility in responding to

environmental changes and to adapt to new environmental opportunities and realities?
•What is the objective of SMC to examine the loopholes in the planning process in order to know
what causes the time too consuming and to develop a strategy for an efficient planning process?

•What is the objective of SMC to determine the effects of having no planning manual or "hand-
holding" and to decide on the need for developing a planning manual for the planning process?

b. The statement of the problem can also be derived from any identified gaps in the company
operations or any mishap that hinders the company to do better or perform based on standards.

•How does San Miguel Corporation affect the Philippine economy?

III. Alternative Courses of Action

a. It must contain at least three (3) courses of action that will resolve the given statement of the
problem. It must present the advantages and disadvantages of each course of action.

1. Constitute a more active team of managers that is separate from the members of the board in
the planning process, develop new strategies based on the past, expand their research to cope up
with the future and provide planning manuals to all Business Family and Business Elements.

•Advantage

- Innovation or upgrade of products will commence following the trend in the environment.
- The performance of efficiency and effectiveness of the personnel will be determined.
- Plans are materialized and initiated at a small time frame.

•Disadvantage

- The provision of manuals to all managers can be costly.

- Conflict of perception between managers and bosses may arise.
- Inefficiency and ineffectiveness caused by the old strategies may be carried out over to the new
strategies.

2. Create a decision team, formulate new strategies and resist giving plan manuals.

• Advantage

-New strategies may lead to enhanced performance adapting the changes in the environment.
- Formation of a decision team would lead to a better decision making and plan implementation.

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 • Disadvantage

- Hand-holding will not be lessened without plan manuals.

- Reformation of strategies may be time consuming and costly.
- Time frame in making decision can be lengthened.

3. No allocation of human resources or cross fertilization and independence in family and

element teams' management decisions.

• Advantage

- There will be no complex in the strategic planning process.

- Will develop independence of work among employees

• Disadvantage

-No effective and efficient communication with regards to the strategic planning process
- Loopholes will not be solved
- Inability to adapt to environment changes due to independence.

b. This part must also reflect some, if not all, concepts of logistics management such as demand
planning, inventory planning and control, aggregate planning and scheduling,
economic decisions, logistics systems, warehouse management, order management, and
customer relationship management.

• Strengths

- Globally well-known enables to penetrate and compete with international market

- Ability to merge and involve into non-allied business (diversification)
- Large group of company (corporation)
- Enable to developed their budgeting and long-ranged planning systems/upgrade their planning
capability
- Strong and competitive company, one of the top 10 Corporations of the Philippines

• Weaknesses

- Suffered from a credit rating downfall and slow growth rate

- Losing its international assets (i.e. UK& Australia)
- Dynamic market environment
- Immediate acquisition without analyzing the external factors and implication to the business
- Domestic businesses was left behind, focus on international market

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 San Miguel Corporation is already known in the business industry. San Miguel Brewery
Inc. (the original name) was the first brewery in the Southeast Asia. They were known as the
largest selling beer in the Philippines and Hong Kong.
They own San Miguel Food and Beverage Inc., the Philippines’ leading food and
beverage company, they are also a majority owner of Petron Corporation, the market leader in
the fuels and oil industry in the Philippines, and a strong player in the Malaysian downstream oil
market.
They also have over 24,539 employees in their company, making them one of the nation’s
largest employers. SMC also produces close to 300 products including: B-MEG, Wilkins, Viva,
Coca-cola and Eight O’clock. SMC also has 3 core business; beverage (which include beer, hard
liquor, soft drinks, bottled water and fruit juice), food and agribusiness (chickens, feeds, pork and
beef), and lastly the packaging (which include the glass, metal, plastic paper products, flexible
pouches and laminates).

IV. Recommendation

a. Present the best course of action among the presented alternatives in resolving the given
statement of the problem.

Constitute a more active team of managers in the planning process to develop new
strategies and expand their research to cope up in the future.

b. This part must clearly present why a particular alternative was chosen over the other proposed
alternatives.

In this alternative, there will be great advantage on the side of the company and to the
employees. More active managers in the companies, more effective ideas will be made and
realized, and top management will be more open for the new plans and strategies. Expanding
researches also broaden the plans and problems. Though setting up the new ideas and planning
processes were time consuming but cooperation of the members will shorten the time and
produced better plans for the company's good operations and to achieve the zenith of its success.

V. Implementation Program

a. This part must present that the recommended strategy is feasible for wide company
implementation.

The best solution to the problem is alternative number 3 which is thinking the benefits that each
company should need to experience because they need to show the benefits and advantages of
both public and the organization itself. Their employees will enjoy because belong to the plans of
the companies.

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 • Plan of Action

1. They should devote long period of time.

2. They need to consult inside the organization that has a capacity to see the future of the
company.
3. The ideas of developing the plan should be started in the top management.

VI. Management Lessons Learned

a. Discuss the takeaways from the research.

Manufacturers and retailers depend on supply chain managers to design networks that
meet customer service goals at the least total cost. Efficient supply chains enable a firm to be
more competitive in the market place. Supply chains have the potential to make or break a
company. Through analyzing the strengths, weaknesses, opportunities and threats/challenges, it
helps the company to build on what they do well, to address what they are lacking, to minimize
risks, and to take the greatest possible advantage of chances for success.

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