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I.

STATEMENT OF THE PROBLEM

Metro Ferry, a river transport system established to serve as an alternative mode of transport in Metro
Manila with the objective of decongesting the city’s status of land traffic, is experiencing continuous
losses and faces the possibility of ceasing its operation if its operator, the Magsaysay Lines, Inc. (MLI),
could not avail a solution to turnaround the current situation of low passenger patronage resulting to
continuous losses. Should MLI shutdown its operation of Metro Ferry or continue looking for ways to
successfully market its service and increase passenger patronage?

II. OBJECTIVES

 General Objective

To determine the appropriate action.

 Specific Objectives:
 To examine the internal and external factors surrounding and affecting the management
and financial performance of Metro Ferry.
 To exploit the weaknesses and threats of Metro Ferry and convert such into
opportunities using the strengths of the company.

III. PESTEL AND SWOT ANALYSIS IN IFE AND EFE MATRIX

The analysis of the political, economic, social, technological, environmental and legal considerations
affecting the operation of MLI are grouped into internal and external factors which are further classified
as either strength, weakness, opportunity or threat (SWOT) in the table below.

INTERNAL FACTORS EXTERNAL FACTORS


FACTORS STRENGTH WEAKNESSES OPPORTUNI- THREATS
TIES
Unfulfilled
 Chosen by  Inability to  Government promises of the
DOTC to impose the promised a government such
POLITICAL exclusively fulfilment of support, if not as:
operate the Government’s subsidize, the  To construct
ferry system. promises. operation of permanent
Metro Ferry. terminals,
 To evacuate
squatters living
beside some of
the stations,
 To dredge the

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Pasig River and
remove 19
sunken barges
especially in
Buting station
which is critical
link to Taguig
due to presence
of a jeepney
terminal
 To help in
securing access
to facilities by
coordinating
with the LGUs in
Metro Manila

 No competitors  Cost and  Jeepneys and  Low


in Pasig river difficulty of buses are not passenger
transporting and finding space to servicing patronage
educational tour build many areas, resulting to sales
services. permanent particularly below breakeven
terminals those outside point
ECONOMIC  Proven to be a EDSA.
viable means of  High operating  DOTC
transportation expenses,  Alternative completed the
particularly in means of fly-over,
maintenance of earning increased the
vessels, income is number of buses
remuneration of available like and introduced
personnel, and educational metro shuttle,
fuel fieldtrips, which in effect
consumption. servicing relegated the
Mactan-Cebu Metro Ferry to
 Inability to Transfer and the background.
maintain the island-
ferry boats hopping tours
resulting them in Cebu in
to look rusty partnership
and dilapidated with a known
which became resort,
an additional Tambuli
discouragement Beach Resort.
to potential

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customers.  Large
market that can
be exploited
 Some of the  Metro  Metro
crew members Manila has a Manilans
lacked proper high rate of believe that sea
training and population transfer is not
SOCIAL discipline. and has safe or not safe
 Poor inadequate as land
information means of transportation
dissemination mass and therefore
transportatio prefer the
n adding to traditional
the transport
congestion. system.

 MLI’s  Use of second-  With adequate


expertise in hand vessels financial
shipping causing high support, MLI
TECHNO- operations. repairs and has the ability
LOGICAL maintenance to upgrade its
 Ability to costs. ferries into
operate on more durable
time.  Use of floating and efficient
platoons as ones.
temporary
stations
discourages
passenger as
this is viewed
as instable and
unsafe.

 Limited
capacity to
accommodate
students for the
educational tour
as a result of
their
retrenchment
program.

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 Social media,
which
nowadays
serves as
inexpensive
means of
marketing and
spreading
information, is
not yet
available that
time.

 Permanent  Dependence  Business  Smell of Pasig


CPC/franchise on water level and River can be
for 10 years. of operation. academic strongly fetid
establishme discouraging
ENVIRONMEN nts are transfers
-TAL located especially
along the during summer
banks of the months
river. causing
opportunity
cost and
shutdown cost

 Garbage and
debris thrown
and submerged
in Pasig pose
as danger in
the operation
of MLI.

 Lack of a
strategic
program for
river
rehabilitation

 Life jackets  Improper


and implantation
LEGAL comprehensive of traffic

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travel rules and
insurance are regulation
provided exacerbating
the situation
of land traffic

IV. ALTERNATIVE COURSE OF ACTION

From the consideration presented above, we can actually figure out that in the Boston Consulting Group
(BCG) Matrix, the Metro Ferry or the PRTCI operation in Pasig River is actually a Question Mark
because they, at that time, hold a low market share that consume large amount or resources and incurs
losses but has the potential to gain bigger market share and become a star. However, this requires
intensive effort and close consideration. Thus, we present the following as the possible courses of action.

Market Penetration Market Development Divestiture

Continue operating and intensify After penetrating its current Cease the operating in the
its marketing efforts in market, it can expand into new Pasig River and focus its
communicating the value Metro markets like realizing the island- efforts in educational tour
Ferry could offer to Metro hopping tour in Cebu in and its operation in Cebu.
Manilans. Find ways to present partnership with Tambuli Resort
good publicity and and bring that same idea in Manila
by searching for hotels that can be
a business partner in offering
island hopping tour in the Manila-
Laguna route (or other possible
routes).

V. RECOMMENDATION

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The MLI has yet to exploit all the possibilities and in its current products and market, thus, the
researchers recommend that MLI, specifically its PRTCI business unit, should exert its effort towards
identifying opportunities for growth within its current business.

INTENSIVE GROWTH STRATEGIES


Market Penetration Strategy Market Development Strategy
Advertise in radio stations and tap government
Increase its operation in Cebu by adding more
officials like mayor in any city part of Metro
boats and adding more routes. Simultaneously
Manila to be the celebrity endorser encouraging
applying for a permanent license to operate.
its people to try and support this mode of transfer.

Realize the partnership with Tambuli resort and


Distribute leaflets in buses and jeepneys which are
later on, determine the possibility of offering
considered an alternative route of Manilans in lieu
island hopping tours in other parts of Cebu (south
of taking the ferry ride. It can also be in the
and north) which are also touristy. Maybe, if
waiting sheds. This will attract the exact market
feasible, exploit other tourist destinations in the
the Metro Ferry is able to cater as of the period.
Philippines where ferryboats could be of service
Embark in social programs that will bring good for tours and transfers.
publicity at the same time such as making the
Create more strategic alliances with educational
rehabilitation of Pasig River as its core corporate
institutions and offer educational tours not only in
social responsibility activity. This way, they will
Manila but also in Cebu and any other places
be able to encourage volunteerism from various
Metro Ferry can enter in relation to the above
sectors and individuals while being able to
recommendation.
promote the value it offers to people. They can
make the prospect customers believe that
patronizing the Metro Ferry is a way of helping to
clean the Pasig River.

Implement partnership with businesses and


schools where they could ride Metro Ferry at a
lower rate compared to regular rate by presenting
their work or school IDs to urge greater patronage
from them.
VI. CONCLUSION

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MLI has a value to offer to its customer but failed to communicate this well to a larger number of people,
thus, we believe that if they can properly execute the above strategies, they have the potential of turning
around their financial performance while at the same time, becoming a socially responsible company. The
greatest strengths of MLI should also be highlighted in its information drive. People should know that
these ferries are operated by world renowned shipping company. In any case that they will be
experiencing increase in sales due to these programs, they must then repair their structural issues
especially those which are noticeable to become more an attractive means of transport. Also, once they
are already having bigger market share in traffic, they will surely get the attention of government and
thereby, as an important tool in their goal of alleviating traffic issues, they can please the government to
enter into written contract with them which will impose the fulfilment of its promise especially with
regards to construction of terminal stations and dredging the Pasig River leveraging its promise to
continue in its effort in alleviating traffic condition through river transport service. They can also ask the
government then for subsidy or provision of new and more efficient ferry boats.