LS10-A Industry Research

Comments on 1st Pass

Group 1 - Power Generation Industry

TeaM Energy Corporation and the power generation industry. Methodology: add the EPIRA law (to understand the political and economic framework and variables involved) as well as internet, library and office research especially in the Dept. of Energy and the Energy Regulatory Board Significance: size and demand are already known and easily projected by the Dept. of Energy; what is important is to understand better the political and economic framework under which the industry operates and the critical factors for success in the power generation segment. Background and Elements of the Value Chain look very good except that under the EPIRA law, it is longer the NPC that pays TeaM Energy but prices are determined by complex market forces.

Group 2 Supermarket Industry

South Supermarket and the groceries/supermarket industry. Methodology should include the other parts of the study, thus internet (including Euromonitor), library and office research as well as personal observation and interviews regarding other supermarkets especially of SM and Puregold near the areas where South Supermarket operates. Significance should be more general to understand how a medium sized firm in the industry can compete with the very large firms that seek dominance in the industry.

Background South Supermarket

Lacks basic financial data available from SEC as this is very important in comparing performance with SM and Puregold (financial data of holding companies available at PSE or company website since these are listed companies; if branches near South Supermarket are separate companies, their Financial Statements will also be available at SEC). Location a brief description of the location of existing branches and how they grew in these areas would also be important.

Elements of Value Chain

A little brief; some critical info would be on:
Inbound logistics where scope and efficiency could play a very important role Operations: consist of two parts, merchandise planning which includes pricing and inventory control (backroom operations) as well as actual store operations. Technical support especially MIS.

Group 3 Coconut Oil Milling Industry

Tantuco Enterprise Inc. and the coconut oil milling industry. Methodology and significance look OK. Background looks fine although attaching a simplified financial statement (income statement and balance sheet) for the last 2-3 years would be very helpful.

Tantuco Enterprise Value Chain

Inbound logistics where and how copra is sourced/procured and delivered to the mill and how it affects quality, production volumes and unit costs is an important part of the value chain. The manufacturing process (what type is it still an old process that is being used or are there modern and more efficient processes used today) and the plant Marketing & Selling: Are products produced mainly exported or sold locally;
if locally, how and using what channels of distribution, brands used and local pricing strategy, if any. If exported, where to and how are the products shipped abroad?

Technology (secondary): Is there any R&D

Group 4 Newspaper Industry

Manila Bulletin and the newspaper industry, limited to newspapers with papers with national or general circulation and excludes local papers with limited circulation provincial or regional circulation. Background OK (better if summary of FS used can be included as an attachment) but include official circulation figures known to the industry which are very important (just like TV ratings).

Manila Bulletins Value Chain

How news is monitored, obtained, validated and disseminated actually plays a more important part than the newsprint and ink purchased so this is part of the value chain of inbound logistics. Circulation is another important part of the value chain as this is what gives value to the other customers, business institutions that advertise. How the newspapers are sold and distributed throughout the country or outbound logistics is there an important part of the value chain. How advertisements are solicited, paid for and printed is another important part of the value chain. Since advertisements account for 53% of revenues, this is a primary activity and not just secondary. Managing the website now forms an important part of the value chain and may be primary or secondary depending on how it contributes to revenues. There are many important secondary activities, human resources management and corporate infrastructure (finance and administration) as well use of the latest communication technology and facilities and networking with other news agencies.

Group 5 The Distribution Business

WEGO Merchandising and the merchandising and distribution of salon equipment, cosmetics, beauty products and fashion accessories, and various novelty items through stores. Methodology via interviews inadequate, other sources of data equally important. Significance as value of new business techniques and information is always priceless not meaningful. Perhaps it is more relevant to identify the critical factors for success in this kind of industry.

WEGO Background
Clarify if the 40 store branches are wholesale or retail outlets and type of customers these stores cater to. Describe the major product lines or types of merchandise distributed, their importance in terms of contribution to revenues or profits, whether distribution margins and strategies are the same or different for the different product lines. Strategic Location of stores and brief history in those key locations could be very important to mention in distribution business as well as which locations are growing and which are flat or declining.

WEGO Background
A general indication of magnitude of revenues in the past 3 years as well as of fixed assets, no just of current or inventories, and capitalization (can be rounded off) with indications of whether growth is high, moderate, low, flat or declining. Some product lines may be growing, some declining brief description or explanation may be in order. OK to mask some figures (just give order of magnitudes) but indication of size and growth could make a big difference in the analysis.

WEGO Value Chain

Value chain discussion quite detailed; Discussion of location of branches and warehouses important to mention especially in outbound logistics; State of technology, MIS as secondary or support activity may be important

Indicative Grades for pass 1

Grp 1 TeaM Energy Grp 2 South Supermarket Grp 3 Tantuco Enterprise Grp 4 Manila Bulletin Grp 5 WEGO B+ C+ B B B