STRATEGIC MANAGEMENT PLAN FOR AGTANG GENERAL MERCHANDISE

HOLY ANGEL UNIVERSITY

A Strategic Management Plan for

Agtang General Merchandise

A Strategic Management Plan

Presented to the Faculty of School of Business and Accountancy

Holy Angel University

Angeles City

In Partial Fulfillment
Of the Requirements for the Degree
Bachelor of Science in Business Administration Major in Business Management

By:
Adora, Jason Earl M.
Balajadia, Princess Alice V.
Dayrit, Lancel Kate D.C.
Galang, Gherome D.
Manalang, Orven Jefti T.

December 2018
STRATEGIC MANAGEMENT PLAN FOR AGTANG GENERAL MERCHANDISE

HOLY ANGEL UNIVERSITY

IV. Environmental Scanning

1. Economic

Many economic factors affect retail sales which can have a positive or negative

impact on businesses. The state of the economy decides the type of impact economic

factors have on retail companies. The economy consistently faces factors that can change

its growth and decline, thus affecting everyone (Twist, 2017).

The favorable combination of strong sustained growth, a young and increasingly

affluent middle-class, and high consumer confidence are combining in the Philippines to

create one of the most robust retail sectors in South-east Asia. With the Philippines‟

growing population now exceeding the 100m mark, 6.6% GDP growth in 2016, lower

inflation rates and a healthy consumer-driven market, the country presents significant

opportunities for retail products and services for both well-established domestic players

and international brand names (www.oxfordbusinessgroup.com).

The tangible effects of these positive growth factors have resulted in Philippine

retail sales spiking 10.6% year-on-year in the first half of 2016, a significant jump from

the 6.9% growth experienced during the first half of 2015, according to data from the

Philippine Statistics Authority (PSA). Wholesale trade also edged upward over the same

period, up 8.6% compared with the 7.7% growth registered the previous year. Retail and

wholesale sales for the first six months of 2016 totalled P928.6bn ($19.6bn) and

P229.6bn ($4.9bn), respectively (www.oxfordbusinessgroup.com).

STRATEGIC MANAGEMENT PLAN FOR AGTANG GENERAL MERCHANDISE

HOLY ANGEL UNIVERSITY

1. Legal/Political/Government

Laws, regulations and other government policies can have a number of positive or

negative effects on the retail industry. Government assistance, like government-backed

loans and subsidies, can help fledgling retailers grow or allow an established company to

keep costs low for consumers. However, government policies can also hinder businesses

by imposing regulations that increase costs, like requiring the development and integration

of new systems or procedures or establishing a minimum wage that small retailers may not

be able to afford. The retail industry also relies heavily on governmentsupported road and

transportation infrastructure to move goods and bring customers to retail locations

(Treadwell, 2018).

Republic Act 8762, otherwise known as the Retail Trade Liberalization Act, is a

law that intends to promote both Filipino and foreign investors to forge efficient and

competitive retail trade in the interest of empowering the Filipino consumer through lower

prices, higher quality goods, better services and wider choices. Retail Trade is the act,

occupation or calling of habitually selling direct to the general public merchandise,

commodities or goods for consumption. Under Section 4 of the said law, a natural born

citizen of the Philippines who has lost his Philippine citizenship but who resides in the

Philippines shall be granted the same rights as Filipino citizens (www.invest.cfo.gov.ph).

 Victorino Abrugar, an entrepreneur, wrote an article and listed some of the laws

related to retailing in 2013:

 Tax Reform Act of 1997 or Republic Act No. 8424 which amended the National

Internal Revenue Code (NIRC) is the law that governs the national taxation in the
STRATEGIC MANAGEMENT PLAN FOR AGTANG GENERAL MERCHANDISE

HOLY ANGEL UNIVERSITY

Philippines and gives the Bureau of Internal Revenue (BIR) the power and duty to

assess and collect national internal revenue taxes in the country.

 The Local Government Code of the Philippines or Republic Act No. 7160 is the

law governing local taxation in the Philippines, including the taxation on real

properties.

 Labor Code of the Philippines (Presidential Decree No. 442) – is the law that

governs employment practices and labor relations in the Philippines.

 Intellectual Property Code of the Philippines or R.A. 8293 is the law that governs

the registration of patents, trademarks and copyright, and the enforcement of

intellectual property rights in the Philippines.

 The Corporation Code of the Philippines or B.P. 68 is the law that governs the

registration and regulation of corporations in the Philippines.

 Social Security Act of 1997 or R.A. No. 8282 is the law that mandates employers

to register their business and their employees with the Social Security System

(SSS).

 National Health Insurance Act of 1995 or R.A. No. 7875 is the act that mandates

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

Insurance Corporation or PhilHealth.

 Consumer Act of the Philippines or Republic Act No. 7394 is 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.

 Barangay Micro Business Enterprises (BMBEs) Act of 2002 (R.A. No.

STRATEGIC MANAGEMENT PLAN FOR AGTANG GENERAL MERCHANDISE

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2. Socio-Cultural/Demographics

An archipelago state which is home to more than 100 million people, the

Philippines is gradually transforming into a burgeoning modern consumer market.

Generally speaking, Filipino consumers still make use of the informal sector, mainly in

the form of sari-sari stores (small neighbourhood stores), to shop for groceries and

personal care products. Sari-sari stores offer low prices and a greater degree of

convenience to consumers (Kenix, 2017).

The sustained strong economy in the Philippines led to an increase in consumer

spending, which was felt across all retail channels. 2017 was a good year for retailing in

the Philippines, as the majority of key players increased their outlets and sales, brands

emerged to provide more options for Filipinos, and companies continued to improve the

shopping experience, with a special focus on convenience (www.euromonitor.com).

3. Technological

It might be unclear how technological factors can directly affect business, unless

you take a step back and look at all of the technology that was used in day-to-day life.

Think about the machines which are used to print on the t-shirts you buy, the computer

servers which are used to keep up the website(s) you own, or the fuel used to power the

car(s) you drive. Technology hugely dictates the way many things are done, in business or

otherwise (Bush, 2016).

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Additionally, according to Thomas Bush, general examples of Technological

Factors affecting business include the existence of 3D technology, computer calculation

speed/power, the ability of computers to create truly „random‟ numbers, engine efficiency,

internet connectivity, wireless charging, automation, security in cryptography. (2016).

4. Environment

According to an article written by Umar Farooq, every business, whether large or

small, is affected not only from internal organizational factors but, from several external

factors. Companies have no control on the external environment. Developing marketing

strategies should include considering environmental factors so an accurate picture of the

market trends and environment can be presented and to understand as to where the

company is standing. Ignoring environmental aspects is similar to walking on a path where

there are unsuccessful marketing and lost revenues which can ultimately impact the health

of the business brand.

Climate change became an insidious threat to businesses as its pace can be

recognized only when it is taken into consideration on the basis of decade-after-decade.

Increasing issue of global warming and adverse weather conditions in the recent few years,

it is difficult for companies and organizations to operate equally in every type of weather

condition. Directly dependent businesses upon adequate water supply e.g., field sports or

agriculture will be affected adversely if climatic changes resulted in reduced rainfalls.

Even consumers are becoming aware and keen about this factor and are prone towards

those brands which are saving the environment or supporting this cause.
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Pollution can also have an impact over business strategies. Pollution may cause

some major environmental events which can result in the disruption of supply chains or

an increase in the cost of raw material. Organizations need to monitor such events and

develop contingency plans so as to deal with them.

Business-related activities impact the environment; however, the environment also

has an effect on businesses and the market environment. Now enterprises have realized

that to achieve business goals, there is a need to draft environmental-friendly policies.

Green agenda is a plan where enterprises manage their operations in such a way so that

there is minimal negative impact on the local or global environment. To be

environmentally responsible, corporations need to devise plans and procedures in their

operations and activities which is beneficial not only company but, for the overall

environment as well.

Environmental policies are another external factor that can impact the strategy of

a business. Environmental policy is the commitment of a business to the regulations, laws

as well as other policy mechanisms that are concerned with environmental issues.

Environmental policy impacts businesses because the law implies organizations to change

their operational procedures and equipment so as to meet those standards which can cost

businesses some good amount of money.

STRATEGIC MANAGEMENT PLAN FOR AGTANG GENERAL MERCHANDISE

HOLY ANGEL UNIVERSITY

Availability of natural resources. Amongst external environment factors, this

factor refers to the physical environment of a business. Natural resources are very

important for most businesses and many corporations have natural resources as their major

raw material. Lack of natural resources can hinder an organization‟s producing ability and

hence its output (Farooq, 2018).

5. Opportunities and Threats