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University of Caloocan City

College of Business and Accountancy


Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

Research about the market strategy of

Frabelle Market Corporation regarding their

Hotdog Product

Prepared by:

Atengco, Aira Mariz M.

Agapito, Eliza

Cajilig, Bevie Nicole

Cruz, Ricamella

Cuatrona, Mary Gellyn

Macadat, Ana Marie

Gadiane, Patricia Marie

Mr. Roy Valencia

Course Professor
University of Caloocan City
College of Business and Accountancy
Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

CHAPTER 1
Introduction

1.1 BACKGROUND OF THE STUDY

It is evident that processed foods have been part of daily life of every Filipinos. From
home-made cuisines which we have learned traditionally from our ancestors, nowadays
processed foods or preserved food are more patronized by Filipino families. The reason why
processed-food arise is because of the new lifestyle of people --- getting busy from work and
has no time to prepare delicacies; processed food is easy to prepare and not time-consuming.
Most of us prefer processed-food because we believe it is more convenient and it taste better.
Later on, the demand for this kind of products began to arise. This is also the reason why
Foods Corporation started to operate.

Technically, food processing is the transformation of raw ingredients, by physical or


chemical means into food, or of food into other forms. Food processing combines raw food
ingredients to produce marketable food products that can be easily prepared and served by the
consumer. Food processing typically involves activities such as mincing and macerating,
liquefaction, emulsification, and cooking (such as boiling, broiling, frying, or grilling);
pickling, pasteurization, and many other kinds of preservation; and canning or other
packaging. (Primary-processing such as dicing or slicing, freezing or drying when leading to
secondary products are also included.)

As technology evolves, from traditional --- most manufacturing company nowadays


uses machinery and equipment to lesser the time of production and increase the quality of
products.

Among hundreds of manufacturing companies all over the Philippines, our team
decided to study Frabelle Market Corporation and its production of Hotdog Products as well
as its market strategy in the society and marketplace.

Frabelle Fishing Company was established in the 1960’s. Company name coined after
its founder, Francisco and his wife Bella. In 1997, Frabelle Market Corporation (FMC) was
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College of Business and Accountancy
Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

established. It is involved in the procurement, processing, packaging and distribution of


various types marines products for the retail and institutional markets.

Frabelle Company has expanded its operations to Shipyard, Aquaculture, Canning, Cold
Storage Chain, Food Trading, Seafood Processing, Meat Processing, Properties and Power.

In 1997, Frabelle Market Corporation (FMC) was established. It is involved in the


procurement, processing, packaging and distribution of various types of marines products for
the retail and institutional markets.

In 2011, Frabelle Group of Companies entered the meat processing business under Frabelle
Corporation (FBC). FBC manufactures and distributes branded processed meat products in
key wet markets and major supermarkets.

Frabelle Group of Companies widen their supremacy in manufacturing as they have branches
all over United Kingdom, Papua New Guinea. Malaysia and Taiwan: their main office and
company is located here in the Philippines especially in Navotas and Caloocan.

1.2 Objective of the Study

Frabelle Market Corporation is now one of the biggest and largest corporation under
the Frabelle Group of Companies, in the world regarding production that is why we decided
to study and research this company.

The following are the main goals and objectives of this study:

a. To know the best-selling product of FMC, its availability in the market, its
popularity and quality.
b. To study their marketing strategies and techniques.
c. To know their stand in the industrial competition of manufacturing goods around
the country.
d. To promote their product as we prove its good quality.
University of Caloocan City
College of Business and Accountancy
Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

1.3 Research Design and Methodology


This research gathered information through direct-personal interview with the
executives and staffs of Frabelle Market Corporation. As well as we conducted personal
survey with the society to come up with interrelated results.

1.4 Scope and Limitation

This study was conducted to determine the status of FMC regarding their production
of hotdogs and its stand in the market. It includes the study of its availability and quality that
makes it more popular to the society. This study also involves market strategy to find out how
they strategize their product in the market and the analysis of competition FMC has with
other competitor.

This study will not cover the other products as its focus is on hotdogs. This will limit
the information to make it more specific and qualitative.
University of Caloocan City
College of Business and Accountancy
Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

CHAPTER 2
Identification of the Industry

2.1 Nature and Users of products or services of the industry


Frabelle recent venture in meat processing industry gives the consumers a good alternative to
the brands that we usually consume. . Frabelle brings the traditional and modern practices together by
means of using old world culinary disciplines in food processing and state of the art technology in
locking in the freshness and flavors of the food.

Since FMC is a manufacturing company under the FFC, food processing and food
preservation takes place. Manufacturing business or company generally buy raw materials from its
trusted suppliers or to find ingredients needed for the product. Then, when raw materials or
ingredients are complete, processing of the raw materials takes place. Most of the companies
nowadays use hi-tech machineries to do the food-processing and use modernized technologies and
methodologies to improve the quality of their product. After the products are finished, manufacturer
sell them to interested customer or reseller; with that cash is returned and manufacturer use it to make
new products again.

FMC is known for its variety of products.

Users of Frabelle Hotdogs

 Clients

 Practical Moms

 Kids

 People that are Young at Heart


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College of Business and Accountancy
Biglang-Awa St., Grace Park East
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2.2 Nature and operations of firms within the industry

Operations Management in Manufacturing

Like Frabelle Market Corporation, all

manufacturers set out to perform the same

basic function: to transform resources into

finished goods. To perform this function in

today’s business environment,

manufacturers must continually strive to

improve operational efficiency. They must

fine-tune their production processes to focus on quality, to hold down the costs of materials and labor,

and to eliminate all costs that add no value to the finished product. Making the decisions involved in

the effort to attain these goals is the job of the operations manager. That person’s responsibilities can

be grouped as follows:

 Production planning. During production planning, managers determine how goods

will be produced, where production will take place, and how manufacturing facilities

will be laid out.

 Production control. Once the production process is under way, managers must

continually schedule and monitor the activities that make up that process. They must

solicit and respond to feedback and make adjustments where needed. At this stage,

they also oversee the purchasing of raw materials and the handling of inventories.

 Quality control. Finally, the operations manager is directly involved in efforts to

ensure that goods are produced according to specifications and that quality standards

are maintained.
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College of Business and Accountancy
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Planning the Production Process

The decisions made in the planning stage have long-range implications and are crucial to a

firm’s success. Before making decisions about the operations process, managers must

consider the goals set by marketing managers. Does the company intend to be a low-cost

producer and to compete on the basis of price? Or does it plan to focus on quality and go after

the high end of the market? Perhaps it wants to build a reputation for reliability. What if it

intends to offer a wide range of products? To make things even more complicated, all these

decisions involve trade-offs. Upholding a

reputation for reliability isn’t necessarily

compatible with offering a wide range of

products. Low cost doesn’t normally go

hand in hand with high quality.

With these factors in mind, let’s look at

the specific types of decisions that have to

be made in the production planning process. We’ve divided these decisions into those dealing

with production methods, site selection, facility layout, and components and materials

management.
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College of Business and Accountancy
Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

CHAPTER 3
Industry Problem

3.1 Marketing Problems


The heart of any business success lies in marketing. Most aspects of a business
depends on a successful marketing strategy. The overall marketing umbrella covers
advertising, public relations, promotions and sales. Marketing is a process by which a product
or service is introduced and promoted to potential customers. Without marketing, a business
may offer the best products or services in your industry, but none of your potential customers
would know about it. Without marketing, sales may crash and companies may have to close.

There are problems encountered during the run, challenges arise as time flies. One of the
biggest challenge a manufacturing company could face is sometimes (1) insufficiency of
resources. Producing content is easy. Producing good content is much harder. It takes time
and skill to produce quality content consistently. Many small businesses tackle their own
content marketing efforts, and for good reason. Unfortunately, producing consistently great
content can get in the way of other things, like actually running your business.

A lack of time is arguably one of the biggest barriers to content marketing that many
businesses face. The other is a lack of sufficient budget. After all, if you don’t have time to
produce your own content, it stands to reason that paying someone else to do it makes sense.
The problem with this approach is that, since it takes skill to produce great content, many
would-be content producers are faced with what is known as the project management
triangle.

Another is the (2) increasing competition that arises in the society. You cannot control or
manipulate other people not to build or establish same business like yours as manufacturer.
At the present time, various corporations and manufacturing company began to operate.
Obviously, rivalry and competition is highly seen.
University of Caloocan City
College of Business and Accountancy
Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

You cannot always assure that the products you create will probably please or satisfy your
customers. As a manufacturer, sometimes it becomes one of the common problems a
manufacturing company encounter.

(3) The role of marketing in the firm is also considered as a conflict that turns to
challenging ones. Some companies do not understand the mere role of marketing. There is a
long history of debate between how academic researchers conceptualize “marketing” and
how that is reflected in the activities firms may engage in and how they organize to
accomplish these activities. Thus, academic views and corporate practice concerning the role
of marketing within the firm have often been out of alignment. However, as the world has
become flatter, governments have increasingly shaped policy, supply chains have globalized
and “customer demand” (not supply) is the limiting factor on corporate growth, it’s clear that
from both perspectives the role of marketing within the firm needs to be carefully re-
examined.

(4) The digital transformation of the modern corporation. Digital issues focus on pressing
managerial problems at multiple levels of analysis. Our belief is that marketers have taken a very
narrow view—examining social media, Big Data and the transformation of marketing
communications. However, at the C-suite level, corporate executives are focused on much larger
issues of business model change, survival and future competitive advantage. This is very evident in
the world of banking and retail. However, even traditional industrial firms such as GE are
transforming themselves from “dumb” to “smart” within the Internet of things. In almost every
industry, firms are moving from products to information and service businesses. It does not mean
“products” disappear. Rather, they become the vehicles and platforms for information-based
businesses. Nowhere is this more evident than in health care. We are seeing the migration of patients
from hospitals to homes, with attendant monitoring and care through information-rich technologies.
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College of Business and Accountancy
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3.2 Technical Problems

Manufacturing companies are now engaged in the modernized-technology in


processing their products. Machineries are used to ease the procedure of processing, to shrink
the time of production, assure the consistency of the products and to lessen the need of man
power.

We cannot deny that everything always go right. Surely there are conflicts or problems
encountered during the process or with the machines used for process. Cleanliness should
highly be maintained and proper sanitation should be implemented.

Problems caused by microbial contamination of foods tend to be expensive, particularly if


these result in consumer recalls. As a result of the development and application of
increasingly mild preservation technologies, processed foods become more sensitive to
microbial (re)contamination, requiring greater control of the manufacturing process. One way
to achieve this added control is to "build in" hygiene into the equipment used in the food
manufacturing facility from the start.

There is an increase in the involvement of regulatory and advisory bodies in the area of
hygienic processing and hygienic design. In the European Union (EU), specific legislation,
such as the Machinery Directive 98/37/EC and the Council Directive 93/43/EEC on the
hygiene of foodstuffs, requires all food handling to be performed under hygienic conditions.
In the framework of the machinery directive, many technical committees (TC) continue many
efforts with regard to the preparation of standards.

Selected Hygienic Design Criteria and Requirements


There are several aspects of designing hygiene into equipment that should be considered by the food
processor before reengineering or introducing process equipment into the plant. In general,
construction materials that may come in contact with food should not be able to make a food product
toxic. Equipment must be designed to be self-drainable to make it possible to remove all residues of
products and chemicals. To be cleaned without difficulty, surfaces must be smooth and free from
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College of Business and Accountancy
Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

crevices, sharp corners, protrusions, and shadow zones. When surfaces are not clean, microorganisms
may be protected from destruction by heat or chemicals.

Selected Hygienic Design Criteria and Requirements


There are several aspects of designing hygiene into equipment that should be considered by the food
processor before reengineering or introducing process equipment into the plant. In general,
construction materials that may come in contact with food should not be able to make a food product
toxic. Equipment must be designed to be self-drainable to make it possible to remove all residues of
products and chemicals. To be cleaned without difficulty, surfaces must be smooth and free from
crevices, sharp corners, protrusions, and shadow zones. When surfaces are not clean, microorganisms
may be protected from destruction by heat or chemicals.

Selected criteria and basic requirements for a variety of hygienic equipment characteristics provide a
fundamental overview of areas that can be addressed by food manufacturers:

Materials of construction. Materials used for the construction of a food processing plant must fulfill
certain specific requirements. Product-contact materials must be inert to the product under operating
conditions, as well as to detergents and antimicrobial chemicals (sanitizers) under conditions of use.
They must be corrosion-resistant, mechanically stable, and such that the original surface finish is
unaffected under all conditions of use. In addition, non-contact materials shall be mechanically stable,
smoothly finished and easily cleaned. The reinforcement in plastics and elastomers should not be
allowed to contact the food product.

Surface roughness. Product contact surfaces should be smooth enough to be easily cleanable. The
roughness (or smoothness) of a surface usually is expressed in µm, as Ra-value.[23] Generally, the
cleaning time required increases with surface roughness. The American 3-A Sanitary organization and
the EHEDG specify that food contact surfaces have a maximum roughness of Ra = 0.8 µm. To
achieve this quality of surface, polishing or other surface treatment may be required. Cold-rolled
stainless steel sheet material, used for vessels and for piping, usually has an Ra-value between 0.2 and
0.5 µm, and thus, further treatment is not needed. According to the EHEDG, rougher surfaces can be
acceptable if tests have shown that the required cleanability is achieved. Porous surfaces usually are
unacceptable. To be cleaned without difficulty, surfaces must not only be smooth but also free from
crevices, sharp corners, protrusions and shadow zones. This applies not only when equipment is new,
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but during its entire functional lifetime.

Crevices. Crevices cannot be cleaned, and as such, will retain product residues that may effectively
protect microorganisms against inactivation. In some cases, crevices are unavoidable. This may be the
case if slide bearings must be in contact with product; for example, as bottom bearings of top-driven
stirrers or as bearings in scraped-surface heat exchangers. The presence of slide bearings should be
considered when writing procedures for cleaning and disinfection. These procedures may require
instructions for both partial or total dismantling of equipment, or for increased cleaning times.

In most cases, crevices are the result of incorrect choices when designing (or selecting) equipment.
When parts of equipment must be mounted together, metal-to-metal contacts (other than welds) must
be avoided because they leave very narrow and deep crevices. Elastomers should be used between
metal components, but not in the form of O-rings in standard O-ring grooves, as this, too, will create
crevices. The elastomeric material must be mounted in such a way that the seal is at the product side
and excessive compression is prevented to avoid destruction of the elastomer. This can be achieved by
including design features that align the surfaces of the various parts and provide a metal stop.

Screw threads. The use of screw threads and bolts in the product area should be avoided. Where
unavoidable, the crevices created should be sealed, at minimum (Figure 1).

Sharp corners. Sharp corners in the product area should be avoided. Exceptions are constructions
where the sharp corner is continually swept, such as in lobe pumps. Welds should not be made in
corners, but on the flat surfaces, and must be smooth (Figure 2).

Dead areas. There is a significantly reduced transfer of energy to the food residues (soil) in dead
areas in process equipment that is placed outside of the main flow of cleaning liquids than there is to
the soil in the main flow. Such areas are difficult to clean, and therefore, should be avoided. If
unavoidable, their presence should be taken into account when devising the cleaning procedures.
Typical shadow zones, for example, can be found in the legs of T-pieces in pipelines, which are used
to mount sensors such as pressure gauges.

Drainability of equipment and process lines. To make it possible to remove all chemicals from
process equipment, the equipment must be designed to be self-drainable. Thus, surfaces and pipes
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should not be completely horizontal, but slope toward drain points. There should be no ridges that
may hamper draining. Where it is not possible to build equipment in such a way that proper draining
is possible, procedures must be designed to ensure that residues of cleaning and disinfection liquids
can be removed in another way. The method used should be well documented with clear instructions.
Draining also is important, even in cases where no chemicals are used, because many microorganisms
can easily grow in residual water, needing only minute amounts of nutrients to multiply.

Top rims of equipment. The design of the top rims of product-containing equipment must avoid
ledges, where product can lodge and that are difficult to clean (Figure 3). Open-top rim design must
be rounded and sloped for draining. If the top rim is welded to the wall, the weld must be flush and
polished to provide a smooth surface. In this case, the rim must be totally closed. The weld must be
continuous and any holes must be sealed by welding, gaskets or plastic caps (Figure 4).

Mandoor covers. Mandoor covers intended to protect the food products may accumulate dirt, which
will enter the product in the vessel when the lid is opened. Policy should specify that no tank is
opened during production unless absolutely necessary.

Shaft passages and seals. Shaft passages and seals may leak product to the outside of the line.
Microorganisms may then multiply in the product and grow back to the product side. In the case of
dynamic seals, such as those for shafts of valves, pumps and mixers, the movements of the shaft will
assist the transfer of product to the outside and the transfer of micro-organisms to the product side.
This applies to reciprocating shafts, and to a lesser extent, to rotating shafts, the latter always
displaying some axial movement. Reciprocating shafts can be sealed by means of flexible diaphragms
or bellows. To prevent the ingress of microorganisms in rotating shafts, double seals with
microbiocidal barrier liquids should be used. If not replaced in a timely manner, however, such
barriers may become a growth medium for microorganisms.

4.3 Management Problems

Manufacturing is an ever-changing industry, where manufacturers face new issues and


concerns every year. Since this year is no exception, here are a few of the top concerns that
manufacturers are grappling with.
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Regulatory compliance and traceability. Nearly every type of manufacturer faces


increasing regulations aimed at everything from ensuring product safety to managing disposal
and reclamation procedures. While many regulations may be beneficial to consumers, each
regulation adds an additional burden to the companies that must comply with the
requirements, which often differ from country to country.

Manufacturers must ensure they have complete visibility into global supply chains so they
can prove not only their own compliance, but also that of their suppliers. Regulations often
require the ability to track where specific items have been used or to trace materials from an
end-item at a customer site back to specific materials used in its manufacture.

Companies in highly regulated industries, such as medical devices, are facing new regulations
including UDI (Universal Device Identification) and ePedigree requirements, while chemical
and electronics manufacturers deal with REACH (Registration, Evaluation, Autorization, and
Restrictions of Chemicals) and similar laws. Keeping abreast of regulations and managing
compliance reporting is often a full-time activity for multiple people or teams at many
manufacturing companies.

Keeping products relevant. Product innovations come at a dizzying pace, and


manufacturers struggle to keep up. As companies vie to be first to market with a new concept,
the temptation to skip steps or skimp on quality materials can be overwhelming. Companies
need to plan to have adequate engineering time to ensure that the specifications for critical
materials such as wires and cables are in line with operating conditions. The last thing a new
product needs is to develop a reputation for poor quality right out of the gate.

Fast times to market mean that companies may need to become more systematic about
managing innovation rather than leaving new product ideas to chance. Product preferences
change so quickly that delays in introducing new ideas may be the death knell for once
popular products. Implementing procedures that keep a steady stream of new product ideas
and innovations in the pipeline is essential to manufacturing success.

Aging workforce / Skills gap. As baby boomers reach retirement age in record numbers,
they are leaving the workforce and taking their hard-won skills and experiences with them.
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Younger workers are not readily available to replace these retirees, and those that are
available don’t have the necessary skills for many critical roles.

Manufacturers may need to work with schools in their communities to ensure that the
educational system includes the topics and skills training those younger workers need to fill
these roles. In addition, manufacturers may need to be more flexible with their aging
workforce, allowing workers to slow down by working part time rather than retiring abruptly.
This phasing to full retirement meets the needs of baby boomers and allows them to pass on
their skills to following generations of workers.

Healthcare costs. Rising costs of healthcare for workers put a strain on already fragile
manufacturing cost structures. Manufacturers in the U.S. in particular face the burden of
providing healthcare while their competitors in other countries do not. There is no strong
alternative to the current solution on the horizon, so manufacturers need to be cognizant of
this large and growing item that can increase the cost of products to the point where they are
not competitive.

Environmental concerns. Many local and regional regulations affect various aspects of the
manufacturing process, from the ability to use certain materials, to worker exposure, to
disposal of waste and byproducts. Manufacturing is inherently a harsh environment, so
ensuring the safety and health of workers with proper care and equipment is of crucial
importance. Disposing of waste products and recycling programs for scrap and returned
materials add costs and complexity to manufacturing, but also result in a healthier
environment and protection for customers and workers alike.

Balancing maintenance with throughout. Keeping equipment functioning is an essential


part of running a manufacturing facility. Regular preventive maintenance, including replacing
worn wires and cables, can help increase throughput and ensure customer satisfaction with
delivery lead times.

Sometimes manufacturers are tempted to postpone or delay preventive maintenance or they


replace factory components with lower-quality items. This practice may create unsafe
conditions in harsh manufacturing environments if these lesser components can’t stand up to
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operating conditions. For example, poor-quality or worn cable and wires can result in risk of
shocks or electrocution for workers in the worst case, or they may simply cause unplanned or
excessive downtime. Using components, cables and wires that meet or exceed manufacturer
specifications and performing preventive maintenance on recommended schedules keeps
operating costs low and throughput high while helping to ensure worker safety.

FMC for its long time operation, faced many challenges regarding on how to handle properly
its staff, its machineries and assets.

3.4 Financial Problems

The financial crisis delivered a body blow to the manufacturing sector from which it
is still recovering. The seizure of world trade and credit financing in the wake of the collapse
of Lehman Brothers in 2008 triggered a recession that led to a slump in orders, a rash of job
losses and mass factory closures. (CIMA, 2010)

As governments wrestle with how to sustain economic growth and bring the financial
services sector to heel, cuts in public spending combined with uncertainty over the fragility of
the private sector recovery will put manufacturers’ confidence under pressure. At the same
time firms need to consider a host of issues that manufacturers must always address, but
which have been magnified by the credit crisis. These include currency volatility, fears over
the sustainability of supply chains and downward pressure on prices.

Knowingly, financing is one of the biggest part of the decision-making process because it
involves money. Frabelle, just like other manufacturing companies, already encountered lots
of financial break-down before it has reached its success.

There are receivables that are not yet paid on time that affects the flow of cash and the
payment of their liabilities. So, obviously, financing is required to properly allocate the needs
in terms of finance and receivables.
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CHAPTER 4
Prospect of the Industry

4.1 Government Regulation, Law affecting the industry

For partnerships or corporations, a certificate of registration must be obtained from

the Securities and Exchange Commission (SEC).

Aside from the certificate of registration, the business would also need to comply with other

requirements and must apply for certifications/permits/licenses/identification numbers from

other government agencies and organizations.

• A homeowner's clearance is required if the business will operate within the village or

subdivision.

• The business must secure a barangay clearance and acquire a community tax certificate

(CTC).

• With complete requirements, it must secure a business license or mayor's permit at the local

government unit (municipality or city hall office).

• A business tax payer identification number (TIN) from the Bureau of Internal Revenue

(BIR) must be obtained along with an SSS number (for the business and employees). The

business should also register with Home Development Mutual Fund (HDMF), Philippine

Health Insurance Corp. (PhilHealth), and Department of Labor and Employment (DOLE).

*Special clearances and permits must be acquired by certain businesses from select

government agencies in order for them to operate legally. For example, businesses that deal
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with animals, animal products and facilities, and veterinary drugs must apply for

certification from the Bureau of Animal industry. For the list of required certifications for

certain businesses.

Ownership land/real properties in the Philippines by foreign investors/corporations

Foreign companies and investors can acquire lands as long as these are privately owned and

foreign equity doesn't surpass the 40% cap. There are, however, some exceptions to land

ownership by foreign investors and corporations

Aside from private lands, foreign corporations and investors can also own real properties like

buildings and condo units and may invest on land improvements. They can even lease lands

according to the conditions set by the Investor's Lease Act

In every country there are business and commerce laws that every business owner and

entrepreneur should be aware of. In the Philippines, there are also laws and regulations that

govern businesses from registration, operation, up to termination. It is important that business

owners and entrepreneurs know what business laws are applicable to their type of business

and activities. These laws and rules should be followed to avoid punishments, charges and

penalties from the government or authorities that are implementing and enforcing them.

Some of these laws are not only created to obligate business owners to do their duties but

they are also made to obligate the government to protect these business owners. To make sure

you are doing business legally and to know the decrees that give your business protection and

privileges, the following is a list business laws in the Philippines that entrepreneurs should be

aware of.
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4.2 Proposed Government actions

Consumer Act of the Philippines (Republic Act No. 7394) – The law that protects

the interest of the consumers in the Philippines, promote their general welfare, and establish

standards of conduct for business and industry.

Financing Company Act of 1998 (R.A. No. 8556) – the Act that governs the

registration and regulation of financial companies in the Philippines.

Electronic Commerce Act of 2000 (R.A. 8792) – an act providing for the

recognition and use of electronic commercial and non- commercial transactions, penalties for

the unlawful use thereof, and for other purposes.

The Philippine Fisheries Code (R.A. No. 8550) – the law that governs commercial

fishing in the Philippines.

Food and Drug Administration (FDA) Act of 2009 (R.A. No. 9711) – the law that

governs the inspection, registration, licensing and monitoring of establishments and health

products.

National Health Insurance Act of 1995 (R.A. No. 7875) – the act that mandates

employers to register their business and their employees with the Philippine Health Insurance

Corporation or PhilHealth.
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Social Security Act of 1997 (R.A. No. 8282) – the law that mandates employers to

register their business and their employees with the Social Security System (SSS).

The Corporation Code of the Philippines (B.P. 68) – is the law that governs the

registration and regulation of corporations in the Philippines.


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4.3 Prospect of the Industry with Proposed government actions

As provided by laws, any corporation should abide with the procedures, guidelines,

and regulations before operation. Everyone should abide with the promulgated regulations

and law to be legally considered as a corporation.

Following the law and regulations make it as a first step for a successful beginning of

any business.

4.4 Prospect of the Industry without Proposed government actions

In business industry, government regulation is important for the success of the company or

the industry. It is a law that controls the way that the business can operate or all of this laws

are considered together. A business company without government regulation is considered

weak.

Government regulation affects the financial services industry in many ways, but the specific

impact depends on the nature of the regulation. Increased regulation typically means a higher

workload for people in financial services, because it takes time and effort to adapt business

practices to ensure that the new regulations are being followed correctly. Government

regulations can also benefit the financial services industry as a whole in the long term.

The Securities And Exchange Commission (SEC) regulates the securities markets and is

supposed to protect investors against mismanagement and fraud. Ideally, these types of
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regulations also encourage more investment, and help protect the stability of financial

services companies. This does not always work

Frabelle Corporation is the second largest corporation in the world. If the company has no

government regulation or do not abide with the laws and regulations, they will not meet their

success. The prospect of the industry will run slowly and will not become larger. Government

regulation has also been used in the past to save businesses that would otherwise not survive.

Implementing these regulations was expensive, but the act gave more protection to people

investing in financial services, which can increase investor confidence and improve overall

corporate investment.

The government plays the role of moderator between brokerage firms and consumers. Too

much regulation can stifle innovation and drive up costs, while too little can lead to

mismanagement, corruption and collapse. This makes it difficult to determine the exact

impact that a government regulation will have in the financial services sector, but that impact

is typically far-reaching and long-lasting.


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CHAPTER 5
Market Analysis

5.1 Demand

The demand for processed food in the Philippines rapidly increased over a
decade. The Philippine market has a strong consumer base. While overall per capita income
is $2,7923 , the 10 million population in and around the capital of Manila has a per capita
income of $8,3004 or three times the national average. Roughly 90 percent of the Philippine
f&b processing industry’s output is consumed locally. Consumption growth in the coming
years is underscored by the country’s robust economy and a fast-growing, highly urbanized
population with increasingly sophisticated tastes and ever-growing access to supermarkets.

Food and beverage manufacturing is an important component of the Philippine


economy. In 2009, gross value added in food manufactures and beverage industries reached
P903.7 billion at current prices, contributing 58 percent of total manufacturing output and 12
percent of the country's gross domestic product (GDP). In real terms, the sector contributed
nearly half of total manufacturing output and 11 percent of GDP.

The industry has generally grown over the past five years, withreal growth of 4.8
percent per year. The key growth drivers include theconsumers' increasing demand for
convenience, the growing number of workingwomen (and hence, less time for home
cooking), fast-paced and changinglifestyles, as well as the changing retail and distribution
landscape.
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There are several categories of processed products based on NSO's Family Income and
Expenditure Survey (FIES). They range from cereal preparations, meat preparations, fish and
marine products, dairy products and eggs, fruit and vegetable preparations, non-alcoholic
beverages, alcoholic beverages, and other food commodities not elsewhere classified
(e.g. sugar products, sauces, condiments, cooking oil, etc.). In 2009, total family spending on
processed foods and beverages reached PhP 408.2 billion, equivalent to 12percent of the total
family expenditure during the year and about 30 percent ofthe total family expenditure on
food. Spending was highest for cereal and cereal preparations with nearly 21 percent share,
followed by dairy products and eggs with 18 percent and food n.e.c with nearly 15 percent.

The demand for Frabelle Foods products has evidently increased by 80% because of its taste,
affordability, consistency and good packaging. Its Bossing Hotdogs competes just one step
close to Purefoods tender juicy hotdogs.
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5.2 Supply
The compilation of the Food Balance Sheet requires basic data on production, stocks,
foreign trade, domestic utilization, nutrient values, dietary allowances and population which
were obtained from the results of censuses, household and establishment surveys,
administrative reports of government agencies and special studies conducted by various
research institutions.

(a) Fish and Other Marine Products

For fish and other marine products, production data were sourced from the quarterly fishery
surveys of the BAS such as the Survey of Commercial Fish Landing Centers, Survey of
Municipal Fish Landing Centers, and Survey of Aquaculture Farms. The above surveys
provided data on total fish production including the production of other marine products such
as crustaceans, mollusks, and other seafoods like seaweeds, sea urchins, etc.

(b) Processed Food Commodities

The Census of Establishments (CE) and the Annual Survey of Establishments (ASE) were the
primary sources of data for processed food commodities such as wheat flour, cassava flour
and starch, processed vegetables, processed fruits, fats and oil and other miscellaneous foods.
The 1988 and 1994 CE provided the baseline data while the ASE provided the annual data to
estimate production. The data used from the CE/ASE include value of products sold and the
value of inventory for each commodity. To derive the volume of production, the producer's
price of each commodity from the Monthly Producer's Price Survey of the NSO were used.

Due to the increased demand for processed food, Frabelle (FMC), supply for products
that are highly demanded by the consumers also increased. From 40% before, now it
increased by 21.7% all over the world.
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5.3 Supply and Demand Analysis

As demands for Frabelle Hotdog products increased, its supply should also increase;
this is to meet the consumers satisfaction about your products.

The quantity demanded of any good is the amount of the good that buyers are willing
and able to purchase. As we will see, many things determine the quantity demanded of any
good, but in our analysis of how markets work, one determinant plays a central role—the
price of the good. If the price of ice cream rose to $20 per scoop, you would buy less ice
cream. You might buy frozen yogurt instead. If the price of ice cream fell to $0.20 per scoop,
you would buy more. This relationship between price and quantity demanded is true for most
goods in the economy and, in fact, is so pervasive that economists call it the law of demand:
Other things equal, when the price of a good rises, the quantity demanded of the good falls,
and when the price falls, the quantity demanded rises.

Income. What would happen to your demand for ice cream if you lost your job one summer?
Most likely, it would fall. A lower income means that you have less to spend in total, so you
would have to spend less on some—and probably most—goods. If the demand for a good
falls when income falls, the good is called a normal good. Not all goods are normal goods. If
the demand for a good rises when income falls, the good is called an inferior good. An
example of an inferior good might be bus rides. As your income falls, you are less likely to
buy a car or take a cab and more likely to ride a bus.
Prices of Related Goods Suppose that the price of frozen yogurt falls. The law of demand
says that you will buy more frozen yogurt. At the same time, you will probably buy less ice
cream. Because ice cream and frozen yogurt are both cold, sweet, creamy desserts, they
satisfy similar desires. When a fall in the price of one good reduces the demand for another
good, the two goods are called substitutes. Substitutes are often pairs of goods that are used in
place of each other, such as hot dogs and hamburgers, sweaters and sweatshirts, and movie
tickets and DVD rentals. Now suppose that the price of hot fudge falls. According to the law
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of demand, you will buy more hot fudge. Yet in this case, you will buy more ice cream as
well because ice cream and hot fudge are often used together. When a fall in the price of one
good raises the demand for another good, the two goods are called complements.
Complements are often pairs of goods that are used together, such as gasoline and
automobiles, computers and software, and peanut butter and jelly. Tastes The most obvious
determinant of your demand is your tastes. If you like ice cream, you buy more of it.
Economists normally do not try to explain people’s tastes because tastes are based on
historical and psychological forces that are beyond the realm of economics. Economists do,
however, examine what happens when tastes change. normal good a good for which, other
things equal, an increase in income leads to an increase in demand inferior good a good for
which, other things equal, an increase in income leads to a decrease in demand substitutes
two goods for which an increase in the price of one leads to an increase in the demand for the
other complements two goods for which an increase in the price of one leads to a decrease in
the demand for the other Figure 3 Price of Ice-Cream Cone Quantity of Ice-Cream Cones
Increase in demand Decrease in demand Demand curve, D3 Demand curve, D1 Demand
curve, D2 0 Shifts in the Demand Curve Any change that raises the quantity that buyers wish
to purchase at any given price shifts the demand curve to the right. Any change that lowers
the quantity that buyers wish to purchase at any given price shifts the demand curve to the
left.
Expectations.Your expectations about the future may affect your demand for a good or
service today. If you expect to earn a higher income next month, you may choose to save less
now and spend more of your current income buying ice cream. If you expect the price of ice
cream to fall tomorrow, you may be less willing to buy an ice-cream cone at today’s price

5.4 Marketing Strategies

A good marketing strategy should be drawn from market research and focus on the
product mix in order to achieve the maximum profit and sustain the business. The marketing
strategy is the foundation of a marketing plan.
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Many manufacturers rely on a marketing strategy of using resellers or distributors to


sell their products. This eliminates the need for you to sell individual products from your
facility or open multiple stores to make the product available. Choosing the best marketing
strategies for manufacturing therefore requires careful planning to design efforts that increase
your company’s profitability.

Audience Analysis
Deciding which marketing strategies to use starts with thinking like the people who
actually use your product. Learn the end user’s demographics, including their interests, the
reasons why they buy your product and who is most likely to make purchase decisions. Share
this valuable information with your resellers and distributors to give them the tools and
motivation to sell. In addition, learn everything you can about what makes your resellers want
to sell your product, as this gives you additional ways to encourage them to sell more.

Resellers and Distributors


Finding an outside dealer, agent or independent representative requires you to hold
them accountable for reaching sales goals. Motivating your resellers to get out there and sell
your product may require incentives for both them and their management team once sales
goals are met. Once your product line is well established, look for a distributor to help you
reach more resellers. Distributors represent a variety of products that they convince suppliers
to buy, ideal if you’re trying to break into larger markets or big box stores.
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5.4.1 Product

Frabelle Hotdogs are:

1. Naturally Smoked

While most hotdogs are cooked with artificial liquid smoke. Frabelle hotdogs are smoked with 100%

natural imported wood chips that give the hotdogs their smoky aroma and flavor.

2. Locked in freshness and taste

Frabelle hotdogs are frozen instantly with frabelle foods’ fresh-lock technology, keeping the hotdogs

fresh and flavorful.

3. Bigger hotdogs = Better bites

With thicker diameter than most hotdogs, Frabelle hotdogs give you a better bite, making every

mouthful more meaty and more delicious.

4. Loaded with cheese

Each yummy Frabelle hotdog is filled with a hefty serving of cheese for a combination that is

awesomely rich and creamy.


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5.4.2 Price

One of the secrets to business success is pricing your products properly.


Price your products correctly and that can enhance how much you sell, creating
the foundation for a business that will prosper. Get your pricing strategy wrong
and you may create problems that your business may never be able to
overcome.

"It's probably the toughest thing there is to do," says Charles Toftoy, associate
professor of management science at George Washington University. "It's part
art and part science."

There are a variety of different types of pricing strategies in business. However,


there's no one surefire, formula-based approach that suits all types of products,
businesses, or markets. Pricing your product usually involves considering
certain key factors, including pinpointing your target customer, tracking how
much competitors are charging, and understanding the relationship between
quality and price. The good news is you have a great deal of flexibility in how
you set your prices. That's also the bad news.
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5.4.3 Promotions

Buy advertising space in industry-specific magazines related to your products to


attract resellers or distributors. If you sell directly to consumers, use your target market
analysis to determine which publications your prospective buyer is most likely to read. Get
word out about your products by renting a booth at industry tradeshows so resellers and
distributors learn about your new product and want to represent it.

Promotional and marketing strategies are often first brainstormed and written as part
of an organization's marketing plan. If your small business doesn't have a marketing plan, you
should seriously consider developing one. Most marketing plans include the current or
expected strategies you have for your products, the price points of those products, how you
intend to distribute the products, and your advertising and marketing tools. A marketing plan
is also important for developing a promotional strategy as it helps your business identify its
target markets and to set measurable goals. It is vital to the success of the organization that
you implement a marketing plan that aims for growth and positive change in the bottom line.

Promotional and marketing strategies are also important for guiding your business
into the development of financial goals. Financial goals are two-fold: They are related to your
sales targets and also to your expenses budget. Sales targets are initially set as part of the
marketing plan but might change over time according to changing market conditions,
increases in product price, or increases or decreases in consumer demand.
Frabelle products are promoted by advertisement, through employees, through its
packaging, through clients and in-store display.
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CHAPTER 6
Technical Analysis

6.1 Product Description

. Frabelle brings the traditional and modern practices together by means of using old world

culinary disciplines in food processing and state of the art technology in locking in the freshness and

flavors of the food. The star of their meat product line-up is the Yummy Hotdog with a unique flavor

that comes from 100% natural smoking procedure using imported woodchips. They also have

Cheesedog and Jumbo versions of the Yummy Hotdog which the kids can definitely enjoy.

Frabelle Hotdogs are:

1. Naturally Smoked.While most hotdogs are cooked with artificial liquid smoke. Frabelle hotdogs are

smoked with 100% natural imported wood chips that give the hotdogs their smoky aroma and flavor.

2. Locked in freshness and taste. Frabelle hotdogs are frozen instantly with frabelle foods’ fresh-lock

technology, keeping the hotdogs fresh and flavorful.

3. Bigger hotdogs = Better bites . With thicker diameter than most hotdogs, Frabelle hotdogs give you

a better bite, making every mouthful more meaty and more delicious.

4. Loaded with cheese

Each yummy Frabelle hotdog is filled with a hefty serving of cheese for a combination that is

awesomely rich and creamy.


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6.2 Location

In 1997, Frabelle Market Corporation (FMC) was established. It is involved in the


procurement, processing, packaging and distribution of various types of marines products for
the retail and institutional markets.

In 2011, Frabelle Group of Companies entered the meat processing business under Frabelle
Corporation (FBC). FBC manufactures and distributes branded processed meat products in
key wet markets and major supermarkets.

Frabelle Group of Companies widen their supremacy in manufacturing as they have branches
all over United Kingdom, Papua New Guinea. Malaysia and Taiwan: their main office and
company is located here in the Philippines especially in Navotas and Caloocan.

Frabelle Products are distributed to markets and supermarkets all over the Philippines such as
Puregold, San Roque Market, Savemore, SM and other retailers.

6.3 Lay-out

A trip down any aisle in the grocery store will show just how far the packaging industry has
come. Today’s consumers are greeted with innovative options that run the gamut from eco-
friendly packaging to designs that actually assist in the food preparation process. So much
consideration and science goes into selecting the correct container that, for manufacturers,
packaging is a strategic decision. The following variables should be considered when
choosing a container’s design:

1. Protection against damage or contamination by micro-organisms, air, moisture and


toxins – Products must be safeguarded against rough transport and possible tampering as well
as ensuring they meet any physical, chemical or biological needs.
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2. Prevention of product spilling or leaking – Packages must be tightly sealed and made
resilient to ensure the product remains uncompromised at all stages of distribution until
opened by the consumer.
3. Product Identification and Labeling – Nutrition, ingredients and sell-by dates are
important not only to the consumer, but to grocery stores as well. Bar codes help stores to
track inventory and sales.
4. Marketing of Product to Consumers – The integrity of the product is extremely
important, but marketing is equally essential. In addition to containing and protecting the
item, the packaging must speak to a buyer and ultimately lead to a sale. Containers that
achieve the ‘wow’ factor can set any product apart from its competitors.

Cost: Capital costs of equipment and facilities can be enormous. Through the utilization of a
contract packaging service, startup costs are significantly reduced while energy and labor
costs are kept low.
Speed: Co-packing services can significantly reduce lead time in getting a product to market
and can ensure enough time is allowed for quality assurance and validation. State-of-the-art
equipment like continuous motion machinery produces consistent and high speed assembly,
enacting multiple processes simultaneously without interruption.
Quality and Innovation: Today’s market presents countless options in packaging and
labeling needs. Co-manufacturers guarantee meeting all food specifications and requirements.
More value is added by assisting in product development. Suggestions can be made in
regards to alternative ingredients, raw materials, processes and packaging. As product lines
continue to broaden, many manufacturers are faced with the constant need to evolve their
products. Relying on contract packagers allows them to remain flexible and respond quicker
to changes in the market.

Food packaging is the most reliable method food containment. This is the best way to safely
control and protect the food against physical, chemical, biological and environmental factors.
It would be our duty as consumers to check the goods or food that we purchase in the market
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whether they are well packaged or sealed. Good thing there are modern and well
developed automatic food packaging machines that are available for retail markets to use.
Automated packaging machines are currently the best way to protect and seal the food that
we eat. This method of food containment is mostly used by food industries. This is also the
best way to preserve fish, meat and poultry products.
There are also modified packaging equipment that could segregate food categories example
of which are pork, meat and poultry packaging machines. These sets of equipment are made
to give barrier protection to meat products. Barriers would include oxygen, water and dust.
With all the barriers affecting the packaging of our food, it may result to quick shelf life span
of the food that could result to unsuitability of the commodity to be available in the market.
With pork, meat and poultry packaging machines, our meat products could stay fresh, clean
and safe for the intended shelf life.
Automated packaging machines can also reduce the security risk of shipment. Automatic
food packaging machines can be made with improved tamper resistance feature to prevent
food tampering. It is important that this food containment attribute is part of the system to
authenticate the legitimacy of the product.
With the automated packaging machines, portion control could be easily implemented. All
packaging equipment are programmed to give proper proportion for the contents to control
usage. Individual households need to have options to select suitable sized packages for bulk
commodities such as salt, sugar, oil and dairy products.
With all the packaging methods, automatic packaging system is the most convenient way to
contain consumable commodities, take into consideration the distribution, handling, stacking,
display and marketing of food products.
As for consumers, it would be highly recommended to take part on checking the packaging of
the goods that we purchase in the market. It will be a great precaution from harmful effects of
packaging barriers and best of all the security of our family’s health.
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6.4 Manpower

With the exception of some very small businesses, such as sole proprietorships,
company manpower is a critical issue. Manpower impacts everything from production to
client relationships, so managers pay careful attention to the number of workers a business
engages at any given time. The importance of company manpower is best understood by
looking at its benefits in depth.

Productivity
The link between manpower and company projects is fairly simple: Manpower is
proportional to productivity. The more people are available to work, the faster projects can be
completed or the more projects a company can take on. Conversely, a lack of adequate
manpower prevents businesses from completing tasks. The lack of productivity translates into
a reduction in revenue and profit, which in some cases means the business can't stay
operational.

Safety
When a company employees a sufficient number of workers, workers generally do not need
to work a high number of overtime hours. The assigned workload is more appropriate
because there are more people to handle tasks. As a result, workers usually are less stressed
and more rested and alert. Similarly, when enough workers are on the clock, there are more
people to check adherence to safety regulations and policies, and workers can seek assistance
for physically challenging work. A good level of manpower thus helps prevent problems such
as burnout and injury. Lawsuits and workers' compensation claims may be reduced as a
result.

Options and Innovation


When the level of manpower in a company is adequate, the business has more options in how
it operates. It has some flexibility in terms of which employees cover shifts; it is easier to get
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people to fill in. The company also has a greater pool of workers with which to construct
strong teams and is more likely to have employees with the skills, knowledge and abilities to
tackle current company problems. Additionally, the company has more employees who can
give their own ideas and perspectives. It therefore may have an easier time remaining
innovative and competitive.

Customer Relations and Finance


Good manpower allows companies to keep the production and delivery promises they make.
If companies do this, they can establish and maintain good client relationships. This can lead
to additional sales. At the same time, keeping promises can prevent companies from having
to pay fines and penalties, which keeps the amount of profit higher.

Accountability
Most companies in the United States operate under the traditional master-servant relationship.
This just means the employer calls most of the shots and the employee is supposed to work
for the benefit of the company. However, if not kept in check, some employers abuse the
power this type of relationship allows. If there is a large amount of manpower in a company,
employees are better able to band together and lobby for fair treatment. For example, if
managers receive just one complaint, they might not give it a high level of priority. If the
company receives 1,000 complaints, however, the issue at hand become

6.5 Utilities

What utilities your business requires will depend on the nature and size of
your operation. For instance, the law requires even a small bistro to provide
workers and clients with warm running water and restrooms, but you can start a
dog walking business with little or no access to utilities. It all depends on the
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particular needs of your business and the licensing requirements set by federal
and local authorities.

Frabelle has a storage for its raw materials and finished products
separately and monitored regularly to maintain and check the product’s
expiration date and stability.

6.6 Production Capacity

Capacity decisions abound in the business world, and balancing various capacities
reflects how a company approaches business. Production capacity deals with output and how
a manufacturer balances raw materials, machinery, labor and storage to match demand for its
products. Decisions about production capacity can be strategic and operational, long- and
short term. Factors affecting production capacity interrelate to such a level that a change to
one potentially affects all.

Raw Materials
Materials need to be readily available in sufficient quantity to supply your production line.
Your supplier's turnaround time on additional orders is also important. With long lead times,
you must either schedule ordering or maintain sufficient quantities on hand. The quality of
raw materials may be an issue that affects production capacity. One reject per 10,000 parts
may not affect production, but one reject per 100 parts may slow down the line as bad parts
are removed.

Equipment
When machinery is used for processes and fabrication, the speed and throughput of the
equipment are limiting factors for production capacity. Equipment reliability impacts
capacity, as does the effectiveness of your maintenance department. A small business may
not have the resources to afford backup machinery, so decisions about spare parts and
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ordering procedures affect production capacity. Anything that affects the way equipment
performs must be factored into capacity decisions. Electrical grid brownouts, for example,
may affect work done on desktop computers.

Labor
Staffing may be the most effective variable in short-term production capacity management.
Adding or reducing staff varies output of a production line. If a machine is capable of 1,000
units per shift, adding staff to run three shifts per day increases capacity to 3,000 units per
day. In retail, adding a person to handle only a single function during rush periods, perhaps
re-stocking shelves, improves the capacity of the main staff to handle the increased flow of
customers.

Storage
Warehousing affects capacity both inbound and outbound. Raw materials must be
warehoused and similar considerations affect finished goods. Shelf life may also affect
capacity. If a product cannot be stored indefinitely, it cannot be produced without considering
losses to spoilage. An ideal sales condition would be that production output is sold prior to
manufacture, so that shipping occurs for every unit as it is produced, relieving the need for
finished goods storage.
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CHAPTER 7
Management and Ownership Analysis

7.1 Ownership
Frabelle Market Corporation is a daughter company of Frabelle Corporation owned
by Francisco Tiu Laurel Jr. Formerly, it was classified as sole proprietorship. As its name
been known almost all-over the Philippines, investors became interested and decided to
joined in partnership with Mr. Laurel Jr

7.2 Forms of business organizations

A business can be organized in one of several ways, and the form its owners choose will
affect the company's and owners' legal liability and income tax treatment. Here are the most
common options and their major defining characteristics.
Formerly, it was classified as sole proprietorship. As its name been known almost all-over the
Philippines, investors became interested and decided to joined in partnership with Mr. Laurel
Jr.
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7.3 Present Management and staffing pattern

Incubator
Guided Missile
 organizations secondary to
individual fulfillment
 highly Egalitarian
 existence precedes
 task-oriented, impersonal
organization
 team approach emphasized
 aim at self-expression and
 cross-disciplinary
self-fulfillment
 performance emphasized
 personal and egalitarian
 loyalty to professions / project
 minimal structure; minimal
greater than to company
hierarchy
 Motivation intrinsic
 emotional commitment
 creative, innovative

(USA, UK, Canada)


(Sweden)

Family
Eiffel Tower
 personal, close face-to-face
relationship  hierarchal
 hierarchal ("father knows  structure more important than
best") function
 power-oriented (leader is  leader is boss (not father)
fatherly figure)  relationships specific; status
 home-like work atmosphere ascribed
 long-term relationships of  highly bureaucratic,
employee to company; high depersonalized
loyalty  rules dominate; roles before
 values, norms, atmosphere people
set by father" or "elder  careers depend upon
brother" professional qualifications
 symbolic of machine age

(Japan, Singapore, South Korea, (Germany, Austria)


Spain, Italy, India)
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7.4 Compensation of Employees

From 100 workers, FMC’s employees grew to 1500 separately from Navotas and Caloocan

Branch. These employees are under the responsibility of FMC Management and are

compensated according to their workloads and work description.

There are benefits that employees should receive appropriately. Mentioned as SSS,

PhilHealth, GSIS and PAG-IBIG (For government employees), Insurance, 13 month salaries

and others. As benefits stated below, all were complied by FMC for their employees.
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CHAPTER 8
Financial Analysis

8.1 Financial Starting of players in the industry

Frabelle, like other manufacturing companies, started at its lowest point. From nothing or
small, it turned into the second largest corporation in the world.

Manufacturing companies have several different accounts compared to service and


merchandising companies. These include three types of inventory accounts—raw materials,
work‐in‐process, and finished goods—and several long‐term fixed asset accounts. A
manufacturing company uses purchased raw materials and/or parts to produce a product for
sale. At a point in time, the company's inventories consist of raw materials, those materials
and parts waiting to be used in production; work‐in‐process, all material, labor, and other
manufacturing costs accumulated to date for products not yet completed; and finished goods,
the cost of completed products that are ready to be sold. The value of each type of inventory
is disclosed in a company's financial statements. The amounts may be shown individually on
the face of the balance sheet or disclosed in footnotes.

In the long‐term asset section of a manufacturing company's balance sheet, one would expect
to find factory buildings and equipment and possibly a small tools account. A manufacturer
often has patents for its products or processes. The capitalized costs associated with a patent
would be included in the intangible asset section of the balance sheet. The income statement
for a manufacturing company is similar to that prepared for a merchandising company. In
calculating cost of goods sold, only the finished goods inventory account is used, as shown.
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College of Business and Accountancy
Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

8.1.1 Capitalization

Frabelle started its capital not exceeding hundred thousand, because it started in its
lowest point. This part is confidential and as a researcher, we understand the confidentiality
of this matter in the side of the owners. There are only limited informations the company
shares to the public, due to the high rivalry within the industry, resulting to hoarding of
information.

The terms in accounting can have different meanings as compared to its usage in a general
case. Capitalization is one example of such a word which has an entirely different concept in
finance. The word refers to the cost required to buy an asset. This includes the price to get a
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College of Business and Accountancy
Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

particular asset. The retained earnings of a company added with the stock and long term debt
will include the invested capital of the company.

The company’s shares that are currently outstanding when multiplied by the share price will
give the market capitalization of that company. The values of capitalization as different from
the normal values are symbols of potential negatives in the market. There can be deviations
from the normal values of capitalization including the overcapitalization and
undercapitalization. Both of these refer to potential negatives.

Capitalization can also be referred to as the long term financing required by a firm. The
financing modes can be stock or preferred stock. It can also be retained earnings or long term
debt. If the firm is capitalized with little or without long term debt is considered to have
financed conservatively. Capitalization is also referred to as financial structure, capital
structure or total capitalization.

A company can include various assets that can be bought and sold. This determines the shares
of the company. This share can be multiplied with the number of shares in the company gives
the capitalization of the company. Companies are categorized based on the capitalization. If
the capitalization is above $10 billion, the company falls under large-cap. If it is between $2
billion and $10 billion, the company is a mid-cap company. If it is between $250 million and
$2 billion, the company can be called small-cap. Those companies which have
a capitalization below $250million are commonly known as a micro-cap.

Capitalization is a determination of the market value of the company. This is based on the
economic and monetary status of the company. Thus it is never dependent on the previous
history of a company. There can be economic bubbles where companies are caught for a
particular period.

There can be immediate changes brought about in the market at any time. There cane be
unexpected happenings as well. All these can determine the capitalization of a company also.
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College of Business and Accountancy
Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

8.2.2 Profitability

Profitability is the primary goal of all business ventures. Without profitability the
business will not survive in the long run. So measuring current and past profitability and
projecting future profitability is very important.

Profitability is measured with income and expenses. Income is money generated from the
activities of the business. For example, if crops and livestock are produced and sold, income
is generated. However, money coming into the business from activities like borrowing money
do not create income. This is simply a cash transaction between the business and the lender to
generate cash for operating the business or buying assets.

Expenses are the cost of resources used up or consumed by the activities of the business. For
example, seed corn is an expense of a farm business because it is used up in the production
process. Resources such as a machine whose useful life is more than one year is used up over
a period of years. Repayment of a loan is not an expense, it is merely a cash transfer between
the business and the lender.

Profitability is measured with an “income statement”. This is essentially a listing of income


and expenses during a period of time (usually a year) for the entire business. Information
File Your Net Worth Statement includes - a simple income statement analysis. An Income
Statement is traditionally used to measure profitability of the business for the past accounting
period. However, a “pro forma income statement” measures projected profitability of the
business for the upcoming accounting period. A budget may be used when you want to
project profitability for a particular project or a portion of a business.
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College of Business and Accountancy
Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

8.1.3 Liquidity

Liquidity is the term used to describe how easy it is to convert assets to cash. The most liquid
asset, and what everything else is compared to, is cash. This is because it can always be used
easily and immediately.

Certificates of deposit are slightly less liquid, because there is usually a penalty for
converting them to cash before their maturity date. Savings bonds are also quite liquid, since
they can be sold at a bank fairly easily. Finally, shares of stock, bonds, options and
commodities are considered fairly liquid, because they can usually be sold readily and you
can receive the cash within a few days. Each of the above can be considered as cash or cash
equivalents because they can be converted to cash with little effort, although sometimes with
a slight penalty. (For related reading, see The Money Market.)

Moving down the scale, we run into assets that take a bit more effort or time before they can
be realized as cash. One example would be preferred or restricted shares, which usually
have covenants dictating how and when they might be sold. Other examples are items like
coins, stamps, art and other collectibles. If you were to sell to another collector, you might
get full valuebut it could take a while, even with the internet easing the way. If you go to
a dealer instead, you could get cash more quickly, but you may receive less of it. (For further
reading, see Contemplating Collectible Investments and A Primer On Preferred Stocks.)

Other than selling an asset, cash can be obtained by borrowing against it. While this may be
done privately between two people, it is more often done through a bank. A bank has the cash
from many depositors pooled together and can more easily meet the needs of any borrower.

Furthermore, if a depositor needs cash right away, that person can just withdraw it from the
bank rather than going to the borrower and demanding payment of the entire note. Thus,
banks act as financial intermediaries between lenders and borrowers, allowing for a smooth
flow of money and meeting the needs of each side of a loan.
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College of Business and Accountancy
Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

8.2 Sources of Financing

Financing is needed to start a business and ramp it up to profitability. There are


several sources to consider when looking for start-up financing. But first you need to consider
how much money you need and when you will need it.

The financial needs of a business will vary according to the type and size of the business. For
example, processing businesses are usually capital intensive, requiring large amounts of
capital. Retail businesses usually require less capital.

Debt and equity are the two major sources of financing. Government grants to finance certain
aspects of a business may be an option. Also, incentives may be available to locate in certain
communities and/or encourage activities in particular industries.

Frabelle Food Corporation and Frabelle Market Corpration, as sister companies,


managed their source of finance through their receivables ( either from clients, customers,
retailers and etc).

As a corporation, stated below are the following source of finance of Frabelle

Market Corpration:

The capital markets:


i) new share issues, for example, by companies acquiring a stock market listing for the first
time

ii) rights issues

· Loan stock -Government sources


· Retained earnings - Business expansion scheme funds
· Bank borrowing -· Venture capital
· Franchising
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College of Business and Accountancy
Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

CHAPTER 9
CONCLUSION

There are no easy beginning for something that lasts. As we have learned from the
information we gathered during the research, it is proved to us that building a business is not
just as easy as you think. It takes process. It undergoes several investigations and procedures
before you can start your business operations.

Frabelle, though now a big group of Companies, has started from below. Frabelle undergone
many challenges before it has reached its success today.

Frabelle products, especially the Bossing Hotdogs, are patronized by Filipino families and
also people around the world because of its quality, good taste and consistency. Evidently,
the rivalry between Frabelle products and products of other company is truly in high level.
But Frabelle still wave its name due to its trusted and delicious products.

Success of a business lies on the marketing strategies a company use. In line with this, we can
see that Frabelle is not last when it comes to product innovation and improvement.
University of Caloocan City
College of Business and Accountancy
Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

CHAPTER 10
Recommendations

Many arising processed-foods products are introduced in the market many


names are being advertised. Various products are created to compete with
existing ones and to gain profit.

As we conducted the one-to-one survey with the people on community and


society, it is evidently proved that Frabelle Bossing Hotdogs is well-known for
its delicious taste, quality and good packaging, More moms trusted and liked
this product because of its nutritious characteristics,

As a researcher and students, we ourselves can also testify that Frabelle


products are merely in its finest and best condition whenever it is introduced in
the markets.

Therefore, we recommend to all the readers of this research, to all the future
researchers, to the consumers and to all whom it may benefit, that Frabelle
Bossing Hotdog is indeed good, delicious and trusted.
University of Caloocan City
College of Business and Accountancy
Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

Appendices

A. Books
Principles of Economics, Gregorio Zaide (2005)
Principles of Marketing, Philip Kotler(2001)

B. Cites or Links
• http://www.bestjobs.ph/companies/jobs-of-frabelle-
corporation-
• https://www.facebook.com/frabellefoods/about/?entry_po
int=page_nav_about_items
• https://www.emis.com/php/company-
profile/PH/Frabelle_Fishing_Corporation_en_1671805.ht
ml
• https://books.google.com.ph/books/foodprocessing
• http://wbbbb-ams.blogspot.com/2012/07/nature-of-
manufacturing-business.html
• http://www.wordstream.com/blog/ws/2015/03/16/content-
marketing-challenges
• http://www.foodsafetymagazine.com/magazine-
archive1/februarymarch-2003/hygienic-design-of-
equipment-in-food-processing/
University of Caloocan City
College of Business and Accountancy
Biglang-Awa St., Grace Park East
12th Avenue, Caloocan City

• http://www.foodsafetymagazine.com/magazine-
archive1/februarymarch-2003/hygienic-design-of-
equipment-in-food-processing/
• http://www.manufacturing.net/article/2014/11/six-
challenges-facing-modern-manufacturing-companies
• http://www.referencemedia.investopedia/corporate
ownership.html
• Http://www.investopedia.com/articlebasicliquidity.asp

C. People
Mr. Jolee Lorden D. Carinan, CPA
Internal Auditor and Staff
Frabelle Foods Corporation/ Frabelle Market Corporation