Introduction

San Miguel is South East Asias largest food and beverage company. Traditionally
diversified among three main products, which are food, beverage and packaging. Its flagship
product San Miguel beer Pale Pilsen maintained the lead in its industry and owns seven of the
top the selling beer brands in the Philippines. Meaning with its large market share the volume of
its sales has started to pose a slow growth and started to depend on the Philippines population
growth for more volume. Facing these and other new economic realities San Miguel Corporation
started to re-think and change its business model as the first decade of the millennium drew to a
close. San Miguel decided to pursue and shift into non-allied businesses in the Philippines
following important trends for its and the Philippines future growth such as energy, mining,
infrastructure and other utilities, forgoing its international expansion plans.
San Miguel Corporation before its diversification into non-allied businesses in the
Philippines pursued growth through international expansions. In has invested in a number of
countries such as China, Indonesia, Australia, Vietnam, Thailand and other countries although it
dropped its Australian assets in 2008 in pursuit of its new change in direction. Its strategy had
allowed san Miguel to maintain its space among the top ten beer companies in the Asia Pacific
region but remain a relative minor player on a global scale and soon dropping its market share in
the Asia-Pacific region in the late 2000s.
When San Miguel started to reinvent the company and focus on a new direction it sold
off its Australian Assets which were National Foods in 2007 to its strategic partner Kirin
Holding and J. Boag & Son in 2008 at a higher price than when it was purchased and 42.2%
stake in its joint venture with NutriAsia group. It also started to reorganize its food business,
concentrating and placing a deeper focus on the brands it fully owned and finally turning its beer

division into a separate subsidiary called San Miguel Brewery becoming a separate entity in the
Philippine stock exchange. This was done in order to raise capital and isolate the beer business
from the potentially negative impact of the companys new direction. After San Miguel has
diversified into a number of businesses such as energy, oil, telecommunications and even
proposed on a project which involved the construction of a dam, hydropower plant and water
treatment and storage facilities. In 2008 in acquired 27% of Meralco but later had to unload its
stock due to PLDTs continued pursuit for the said company. It also acquired 50.1% of Petron
and upon its takeover implemented a number of changes, transferring key personnel to Petron.
Lastly it pursued a joint venture with Qtel and in 2009 acquired 32.7 percent stake in Liberty
Holdings, Inc. Aside from its successful acquisition it also had numerous failed attempts in
acquiring other business concerning energy.
During the late 2000s San Miguel has already began gaining most of its profits from its
new businesses. Having the Philippines largest and most dominant oil company and becoming
the largest electric power producer in the Philippines despite its few setbacks the previous years
failed attempts in acquiring contracts. But this does not mean that the company has left its
traditional businesses to rot. Improving sales both nationally and internationally in its beer
operations and gaining revenue growth in both its food and packaging operations. San Miguel
however was not successful in all its new divestitures. Its telecommunication business was still a
small player in its industry and a few of its infrastructures are still at its infancies. Recently San
Miguel had acquired Exxon Mobil Malaysia and 49% of Philippine airlines and plans of
investing heavily in both businesses.
Define the Problem
1. Planning process is much time consuming which involved more work than one might
reasonably expect of people.

2. Need to re-assessed and emphasized in developing the objectives and strategies programs
led to past strategies outweighing the new strategies.
3. There were some business family and elements teams who were asking for holdholding to guide the process.
4. They have to search for a process that would enable them to upgrade their planning
capability.
5. The root cause of re-invention : credit rating downfall (stocks), slow growth rate,
financial crisis and the competitors.
Alternative Courses of Action
ACA NO. 1
1. Constitute a more active team of managers in the planning process, develop new
strategies based on the past and provide planning manuals to all Business Family and
Element Team.

ADVANTAGES

The capabilities and skills of the personnel will be evaluated.

The performance efficiency and effectiveness will be determined.

Plans are materialized and initiated at a small time frame

Loopholes within the organizational strategy, goals and mission will be resolved.

DISADVANTAGES

The provision of manuals to all managers will be costly

Inefficiency and ineffectiveness caused by the old strategies may be carried over

to the new strategies

Conflict of perception between the managers and the bosses

Optimizing the capabilities and skills of the personnel may be time consuming

ACA No. 2
2. Formalize a decision team, formulate all new strategies and resist giving plan manuals.
ADVANTAGES

New strategies may lead to enhance performance.

The formation of a decision team would lead to better decision making and plan
Implementation

Innovation of new ideas lead to greater employee motivation and participation

Loopholes within the organization strategy, goals and mission will be resolved

DISADVANTAGES

The formulation of new strategies may lead to even more loopholes

Hand-holding will not be listened without plan manuals

The reformation of the strategies may be time consuming and costly

The time frame in making a decision is lengthened

Conclusion

We, therefore conclude, San Miguel management should change their marketing strategy, as well
as their planning programs, especially that the business had meet its slow growth rate. They can
use twist to make their product more presentable. Such as, the improvement of their product
packages. They can also add some flavor to their current selling beers. Making new mixes to
have new and attractive flavors. As well as, they can also use the gimmick approach to try if the
response from the market and projected customers will be great help. Advertisements using
celebrities to catch the attention of people and customers patronization.
Decision to be made
As our alternative course of action, we strongly recommend and chose
#1.Constitute a more active team of managers in the planning process, develop new strategies
based on the past and provide planning manuals to all Business Family and Element Team.
1. Managers will be more active in the organizations and learn firsthand how the
organizations operate.
2. The more active managers are within the organization, the more aware they become of
the inefficiencies and ineffective aspects of the operations. .
3. The more active managers are within the organization, the more aware they become of
the inefficiencies and ineffective aspects of the operations. .
4. A more active team of managers would generate better decisions made through employee
cohesion, collusion and synergy.
5. A manager is responsible for resources and methods at his disposal. He is to use these
resources to reach his objectives.
Steps to be undertaken

1. Examine loopholes in the planning process

2. Develop a strategy for an efficient planning
3. Study the pros and cons of the involvement of past strategies in developing the
objectives and strategic programs
4. Determine the effects of having no planning manual for the planning process or
hand-holding
5. On the need for developing a planning manual for the planning process