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Weaving the Magic Wand for the IPMC Weavers

September 22, 2017


I. ABSTRACT

Indag-an Primary Multi-Purpose Cooperative (IPMC) is a local textile industry which is


known for its hand woven Hablon, a textile made of fibrous material, which consisted of jusi
(banana fiber), pia (pineapple fiber), and abaca, as well as locally grown silk threads, cotton,
rayon, and other indigenous materials. It was the first cooperative to have officially
registered the hablon in the textile industry. Hablon became a major player in the Philippine
textile industry and was at its peak during the 1950s to 1970s but suffered a decline in the
1980s due to predominance of machine-made textiles, which also led to a significant
decrease in the number of weavers. The industry is facing a critical stage right now because
of the impending threat of its stability and sustainability in the market. The need to ensure
its growth and development relies on its ability to contend to increasing competition,
innovation in its product design and quality, and expansion of its local market through
exportations. As a cooperative, IPMC needed to increase its level of productivity, because the
coop members depended on weaving as their major source.

II. STATEMENT OF THE PROBLEM

Main Problem

The weavers are not yet ready or not yet capable of competing with the existing
competition in the local and global market. Given the increasing competition in the
Hablon textile industry as well as with the predominance of machine-made textiles, the
weavers cannot be able to compete because they lack skills to innovate products that would
contend in the market. They also lack man power to speed production.

Sub-Problems

1. Low Production Level. There is a significant decline of the number of weavers who opt to
look for other means of living. As the number of weavers declined, production also decreases.
An individual weaver who works at average of six hour a day can only produce 3-4 shawls
per day. In the case of textiles, a weaver could only finish 3 meters of textile per day. In this
pace, the company cannot beat the competition.
2. Increasing competition of similar and substitute products. Many new hablon entrepreneurs
have recently emerged and are taking advantage of the growing market for hablon.

III. Conceptual Framework

How will IPMC weavers weave their talents and skills to attain a sustainable growth and
development for Hablon industry?

High
Manufacturing
Low Cost
Production
Level

Increasing
Competition

The weavers are not yet ready or not yet capable of competing
with the existing competition in the local and global market.

IV. ASSUMPTIONS

There were no assumptions because all the analysis made are based on facts given.
V. ANALYSIS

How will IPMC weavers weave their talents and skills to attain a sustainable growth
and development for Hablon industry?

1. Develop the potentials and skills of the weavers. Develop the weavers not just
mainly on the weaving of hablon products but also on their entrepreneurial and marketing
skill by provide training, seminars and workshops about innovative production of hablon
products and on entrepreneurial marketing skills. Hablon weavers should also be well
educated with regards the existing competition in the market. They must be well
knowledgeable about the factors that cause the competition and how will they cope with it
and even overcome it. In addition, the work environment of the weavers should also be
improved to develop their productivity and the quality of the products they are making. This
should always be a reminder to every firm, entity or industry that the human capital of an
organization must be one of their major focus. It is because, it is them who is the centre of
the organization, or the heart of the industry. Thus, if profitability is more prioritized than
the welfare of the workers, the industry is soon to experience loss.

2. Develop a business plan that will help weavers attain the desired level of
production and the growth and development they want to achieve.

SWOT Analysis

STRENGTH It is the passion of the weavers as part of


their heritage to do hablon, thats what
makes it easy for them to create a product
that basically reflect to their tradition and
culture.

WEAKNESSES The workers are incapable of competing


because of their less knowledge about
business matters.
OPPORTUNITIES There is a great opportunity that is waiting
for them in the global market. They could
expand the business industry in a global
scope.
THREATS Competition in the existing markets threat
the sustainability of the industry.

The following pricing strategy will help Hablon industry in making appropriate prices for the
products made.

1. Target pricing

In target costing, IPMC will base their price to the market price of the
products with the similar products existing in the market. Since there is a huge
competition in the market, IPMC should base their cot to the target cost after
achieving its desired profit.
2. Cost-Plus Pricing

Cost-plus pricing is another way of setting the most appropriate price for the
product. In this method, to achieve the price, cost incurred should first be known.
Then a desired profit will be added to the cost to develop to appropriate price
IPMC should choose the better strategy to be used that will set an appropriate price for the
products. Among the two, the cost-plus pricing strategy is a lot better for it will set a price
that is just right for the existing competition.

VI. ALTERNATIVES

1) To focus on the welfare of the weavers and develop a cost-efficient business


plan with an effective marketing plan.

One way of insuring that the workers and workforce are capable of competing
in a local and global market is to enrich, educate and train them. By this, they will be able to
work through a rough competition where their skills is the greatest factor to ensure the
sustainability of IPMC. This solution of focusing on the workforce will be as follows.
By providing extensive training and education about the how the competition
goes and how to deal with the increasing pressure brought by the local and
global expansion of the business.
By improving the place where production happens. This is one of the
hindrance why workers cannot do their best in manufacturing the product.
One of the workers strength comes from the place of comfortability.
By hearing the problem and other suggestions of the workers. Giving voice
means power and freedom to the workers which will result to calmness of
mind reliability of this worker to their work.

Cost-efficiency

The best way to compete in a place where competition rises is to lower the
mark-up of the products. Lowering the mark-up does not meant loss but a
significance of strength that you know your competitors and the market that you are
entering. Assuming that the mark-up on the products is 20% increase in cost, so by
lowering it to 15% is an advantage over the competitors and an attraction to the
customers.

Marketing strategies

The arising problem of marketing the product while preserving the tradition
of making the hablon weighed heavily on the IPMC and on Marjorie Segurigan as the
Chairman of the board. The status quo of the marketing flow of IPMC hablon product
consisted of institutional and individual buyers. This product is sold through a
souvenir store, special orders, and educational institution as a part of their school
uniform, and seasonal time such as festivals where demand for hablon increases.

One of Marjories target market for this new marketing strategy are the
existing customers with improve conditions to sustain the seller-buyer relationship.
This conditions include:

1) Purchase in bulk in any items whether institutional or individual.

At least 40% partial payment to start the process of making hablon.


A discount of 5% is given if purchased in bulk.
No additional payments for special request (ex. Names, additional designs) as
long as it does not need additional raw materials.
Computation:
Example: Sale of bandana
Selling price (P70x50pcs) P 3,500
Discount (P3,500x95%) P 3,325
Net selling price per unit (P3,325/50 pcs) P66.50
2) In case of seasonal period.
Reduction of mark-up by 50% which will reduce to selling price of every
hablon product.
No additional payments for Special request (ex. Names, additional designs) as
long as it does not need additional raw materials.

This privilege included in the product will surely attract more customers and
will develop and sustain the relationship between the buyer and the seller. By this
improved marketing strategy, IPMC could have an edge over their competitors even
though it does not have high income.

2) To focus on expanding the business through new investors and partners.

One way of sustaining and expanding the business is to search for new
investors and partners who will provide capital and help for the growth of the business. This
is one of the effective ways to have an advantage over your competitors. Investors and
partners can help Hablon industry to develop a sustainable growth and development.

This investors may be local or overseas. By entering a bigger market place we can see
opportunities and threats. Opportunities for new investors, supplier and customer, and
threats like new competitors, complex market place and an increasing demand for quality.
Though the opportunities are high, competition might as well lead us to losses we never
expected.
VII. RECOMMENDATION
The best way to attain the desired sustainable growth and development is to focus on
the welfare of the weavers and develop a cost-efficient business plan with an effective
marketing plan.

In order to compete, the coop must focus in equipping their human capital so that
they can be able to innovate their existing products to make it more attractive or marketable,
in the market.