JAVELLANA GULLEM

CASE STUDY: SAN MIGUEL CORPORATION Issues tackled in the case:

THROUGH THE YEARS... San Miguel Corporation (SMC) has been the top playmaker in different industries. It has also grown big because of its different product lines. Andres Soriano, the Chairman and CEO of SMC, says that their product is only meeting the consumers needs. It does not go out of its way and remains as it is. SMC should be more open to explore untapped markets. From that, they would be able to create interest in different fields. San Miguel Corporation creates their products based on Filipinos interests. It has formulated brands which are up to now strong in the Philippine market. SMC has yet the most formidable brands in the country. They suit the most patronized products with regards to taste and satisfaction. Though SMC had been operating internationally, it still never fails to delight Filipinos taste. Its significant presence overseas paved way to a more enhanced performance. By issues in the growth of the company: the food industry is a mature industry, thus the management will have to deal with that as they keep on purchasing smaller food companies. The recent decision to rid itself of its domestic beer business has caused concern among investors. The companys share price has fallen despite recent gains in profitability. Concerns over the ability of the company to diversify into unrelated businesses may be a contributing factor to the stocks decline. Even though SMC will maintain ownership of San Miguel brands and properties, and receive rents and royalties, spinning off the core enterprise in favor of unrelated diversification has worried some investors. Further Questions: 1. Is privatization always a good idea? 2. Is the strategic plan of investing in traditionally public sector industries really a good idea for San Miguel?

3. Acting as an independent outside analyst, provide advice to both San Miguel and the participation of the government of the Philippines concerning their proposed courses of action.