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Case Study

UNIVERSITY OF LUZON Perez blvd.Dagupan City Business Policy and Staregy Henry Sy and John Gokongwei ( case study 3) Leader : Sheila Cerezo Assistant: Cyrel Jing Abaga Members: Monica Cabatin Stephen John Ramirez Belita Garcia Diana Rose Manangan Ma. Geneva Mapanao Karen Lamsen MarylleUngos We are aware that Robinsons and SM are popular shopping centers in the Philippines. These two companies are always compared, the founder of these are also compared. That is why we want to study about Henry Sy and John Go (kongwei was added to the suffix of his name which means bright). Its because many business minded people and business related course of students like accountancy want to know what are the differences and similarities between the two business tycoons. We are interested of what kind of management they had and came up with this far. Many people question: what are the characteristics they had that made their success right now. One of the reasons why we want to study this article is to be able

for us to determine among the two who is more successful. We also want to come up with their negative sides, to know their strength and weaknesses. And most of all, having this study will help us to get inspiration from Henry Sy and John Gokongwei to be applied in our future career as an Accountancy students today and CPA tomorrow. (1.) What makes some companies market leaders where others fail? 1. Henry Sy and John Gokongwei say: Focus, Be industrious and Determination to attain their goals. Specifically, focus on one of three value disciplines: product or service excellence, customer intimacy, and operational excellence. They explain the last: Operationally excellent companies deliver a combination of quality, price, and ease of purchase that no one else in their market can match. Businesses which have vigorously pursued a strategy of operational excellence have built an -Processes for end-to-end product supply and basic service that are optimized and streamlined to minimize costs and hassle. -Operations that are standardized, simplified, tightly controlled, and centrally planned, leaving few decisions to the discretion of rank-and file employees. -Management systems that focus on integrated, reliable, high-speed transactions and compliance to norms. 1.Strategy, Structure and Execution. No company can achieve and maintain success without appropriate attention to each component and a deep understanding of their interdependencies. The importance of Structure is often overlooked, either due to insufficient knowledge about the fundamentals of organizational development or belief that a companys Structure is static. Structure is both dynamic & foundational. Employees are constantly joining the company, getting promoted and moving on to new challenges. And, this flow works best

when there is a fundamental infrastructure to support it. Training, development and constructive feedback should be ongoing activities not simply annual box-checking exercises. At the same time, the underlying infrastructure should be periodically evaluated to ensure that it adequately supports the Strategy. Changes to Structure should be thoughtful, wellorchestrated and proactive. The Structure is the critical link between Strategy and Execution. The Structure forms the infrastructure that supports the organization in its quest to execute the Strategy. An appropriate Structure maximizes the likelihood that the business will achieve success. An optimized Structure improves operating efficiencies and creates value for employees. In creating a sound structure, think of Structure as the how and where of the business when answering the following questions referring to Strategy. When thinking about Structure in todays complex world, it is impossible to ignore the realities of matrix management. Just like many other things, matrix management seems to have taken on a new level of complexity in recent years. Matrix management has gotten a bad reputation over the years thanks to countless dual (or worse, triple and quadruple) reporting structures signified by the dreaded dotted line accountability. Serving multiple masters is not an easy thing, especially when those masters seem to operate in isolated silos and rarely if ever communicate with each other. At enlight, we think of matrix management across four dimensions: Functional Management Functional management includes all the usual functional suspects: finance, production, marketing, sales, human resources, etc. Product Management Product management is based on either specific products or on the underlying production methods, ie: companies with multiple production methods often feel that organizing around the production capabilities is the key to success. (This is not necessarily a recipe for success.) Regional Management

Regional management is based on the nuances of the various geographic sub segments. Customer Management Customer management is based on either specific large customers, or more likely, groups of customers with similar needs or attributes. How can weexpect individual functions to operate without the benefit of input and interaction, not only amongthemselves, but also with product, regional and customer context. (2.) Where are the best place to put up SM and Robinsons? The best place to put up SM and Robinsons is where many people you can see and aside from that, very accommodating and near them to fill their wants and needs anytime and in case of calamities. Also, where areas are very good and easy to find and near the theme park like Manila Ocean par, Star City, and Enchanted Kingdom because (3.) How do Henry Sy and John Gokongwei started their businesses and become successful? The will to strive for excellence and to overcome the harsh environment of poverty through discipline of hard work and frugality. Success is not just about good luck. It is a combination of hard work, good credit standing and opportunity for investment than finance available. If this is not the case the management are simply not looking at their business clearly. Should you really not be able to reinvest productively on the shareholders behalf you had better return the money to them, so that they can make their own decisions. Every one of us will be forced to do our real job, to focus our business ruthlessly back down to its basics, and to concentrate our cash into those areas which we see as representing advantage over our competitors. (4.) Why does Shoemart and Robinsons still progressive and successful nowadays?

Of course, there is no recipe or template for greatness. Sy and Gokongwei points out that none of the Good to Great companies launched a program or campaign that was designed to achieve greatness. They just had disciplined people, processes ad actions in common. The bottom line is that executives must focus on making the company the best that it can be, and if they are disciplined greatness may follow. However, equipped with Sy and Gokongweis wisdom and insights, we can certainly increase the odds of success. Demonstrate respect for all customers and employeesregardless of role, background or skills- to instill confidence and establish a culture of respect. Focus efforts on achieving the desired results- financial or otherwise- and eliminate any activities that are not tied to delivering results or maintaining legal compliance and integrity. Empowerment gives employees authority consistent with their responsibility and allow them to exercise that authority freely. Ensure employees know when they are expected to seek input or elevate decisions. Clarity ensure roles, responsibilities and expectations are clearly and frequently communicated throughout the organization. Each employee should know how he or she contributes to company success. Strengths * Both Henry Sy and John Gokongwei are health conscious. They value health more than they value their ventures. Henry engaged not in any forms of vices while John has already quitted smoking. * Being Filipino-Chinese, both have good business strategies (i.e., no major borrowing), as one may identify this particular characteristic of their race. This helped them put up projects without relying to bank credits. It is important in a business to lesser your liabilities and increase your assets. * As for their businesses, the innovation technique they presented towards their shopping malls for example, attract people and may somehow feel that they, the customers, are just a step behind their needs and wants. * One thing that is great about Henry Sy and John Gokongwei is that they are both optimistic. They feel good vibes for whatever step they are taking. Their minds are focused on a better and brighter future for the Philippines.

* John Gokongwei in particular can be described as a prudent person. It is evident with the quote in the case stressing that for him, as some people think; one is safer when he knows he has a pistol tucked under his belt. * There is no doubt with this: they are both competitive. The rapid expansion of their business empires proves that they are not only competing within the nation but them competing globally. * Learning is a never ending process. These two business tycoons believe that apart from their inherited knowledge, they can still acquire things that may better their businesses. Their minds are open for suggestions and innovations. * Both businessmen view business as an element of lifes quest not just a mere means of livelihood. * This may be their greatest strength, their affection towards fellow Filipino people. They never stop to expand and improve their craft for the Filipinos. It may be somehow stated that they want to see a better Filipino having a bright future through their struggles to improve his quality of life. * They have good intuition/visions towards opportunities coupled with enduring faith in the creativity and resilience of the entire Filipino national community. Weaknesses * They devoted so much of their time doing their businesses. They have a limited social life and dont actually embark on long vacations because, according to Business World, for them, opportunities might crop up anytime and swift decisions have to be made. In other words, opportunities dont take vacations. Opportunities * Their businesses created thousands of job openings that eventually solved unemployment problems in the country. This also helped the nations economy to improve through the taxes theyve been paying.

* They serve as an inspiration to ordinary people to pursue their dreams/goals as well as to their fellow entrepreneurs. * They do community services since both have an interest in people and doing it overwhelms their competitive instinct. Threats Monopoly on business - Eventually as their businesses expand to different areas/fields, they can somehow increase the prices of their certain products knowing that they are the only establishment to manufacture that kind. Too much pressure is automatically bestowed upon their children. It is because the family themselves and the people surrounding them expect an equal or greater performance in business matters compared to their father. It is evident that Henry Sy and John Gokongwei saw something big and sunny ahead of them regardless of their status when they were born. They strive to reach their dreams and proved that poverty is not a hindrance to ones success. Their optimistic minds see opportunities for every threat that may occur. Both of them are characterized with their longrange visions that helped them to keep away from the frustrations brought by their short-range failures. Lastly, their undying support and affection towards fellow Filipino people serves as the burning flame that enables them to keep moving forward. 1. To make proper use of time. Time is the most neglected treasure in the world. All of us are equally given 24 hours a day and yet the distribution of wealth is unequal. A lot of people always complain about their financial condition. They just fail to recognize that the state they are in now is the result of what they have done before. They failed to make proper use of time. Like Sy and Gokongwei, they spotted opportunities and took advantage of time and leverage to create wealth from nothing. If we read through their life stories, we will see that our status is equal to or better than their financial status before. If they were able to make it before, then there is no reason why we cannot do it too. The only hindrance is the negative mindset about wealth building.

2. To accumulate personal wealth. Money is important not for me personally, but for my projects that benefit a lot of people. If I didnt put up at least a certain amount of equity in them, and relied on the banks to finance them 100 percent, they would not be my projects anymore but the banks. So I have to work to raise the money to use as equity in my projects. I dont work for myself. I work for my dreams for the both possible and enjoyable. (Gokongwei) 3. To offer Filipino consumers the same-designer shirts, lipstick, fuel additives, car accessories, appliances, movies, pansit and hamburger, insurance, credit cards, and of course shoes (Sy) 4. To learn the value of honesty and patience in the business ( Sy) 5. To create pride for our nation. If we want to be practical, we can say that, with brands that succeed in the world, we create more jobs for our people, right here. Then, we are able to take part in whats really important-giving our people an opportunity to raise their standards of living, giving them a real chance to improve their lives. (Gokongwei) Henry Sy and John Gokongwei Henry Sy and John Gokongwei were both born very poor. This situation, one may conclude, served as a blessing for the two most celebrated entrepreneurs in the Philippines on their journey to wealth. Shoeless and with only clothes on his back, Henry Sy started his entrepreneurial career by tending at his fathers sari-sari store in Cebu. But Henry dreamed of something big for his future. He dreamed of having his own business to provide him enough money. In 1945, he put up a small shoe store in Carriedo, Quiapo. From then on, that humble shoe store became Shoemart (commonly known as SM). Since there was a constant pouring of capital back into this venture, he then expanded into textiles and household goods and was then opening outlets to selected parts of the country, centering at the Metropolis.

On the other hand, John Go (kongwei meaning bright was suffixed later to his name later) started his road to success by hawking wares in Cebu. This led to his dream of building his own retailing kingdom. He first started by trading and manufacturing corn starch in 1955 and has soon expanded into supplying groceries and animal foodstuffs in bulk. Later, he ventured also in textiles, banking and real estate, hotels and shopping complex developments. The abrupt expansion of the enterprises of the two business tycoons marked the start of a period of transition for the business empire built over the past three decades by these two businessmen. Since then, Henry Sy has always been proud that his SM outlets had been gradually upgraded into larger commercial complexes without drawing on bank credits. John Gokongwei also managed to put up projects without having major borrowings. He had only relied to the big sums of cash Universal Robina Corporation and Commonwealth Foods Corporation were generating and from the support of his relatives and associates.