Alaska Paper

Strategic Management for Alaska Milk Corporation
CHAPTER I - EXECUTIVE SUMMARY
ALASKA MILK CORPORATION (AMC) is a leading milk manufacturer of milk
products in the Philippines. It has established a strong brand heritage and recognition
among Filipino consumers wit its traditional liquid canned milk products, marketed under
the Alaska Brand. In addition, the company has developed a strong competitive position
in the powdered milk category. Alaska Milk Company delivered another year of solid
performance ending 2017, with a net income of P1.87 billion, a 29% improvement over
the 1.41 billion net income earned in 2016. Fueling the growth was the strong sales
volume expansion across the company’s portfolio of milk product alongside lower input
costs as well as prudent spending. Sales/Revenue ending 2017 is P658,153 sales
growth of 16.43%. in addition, sustained advertising campaign and demand-generating
promotional initiatives help push sales volumes higher year on year.
Alaska Milk Corporation current market share, based from its revenue in 2018,
PHP 39.56 billion, is 17.23% in the dairy industry. Its major competitors are Century
Food Pacific Incorporation and Nestle.
A situational analysis, both for the internal and external environment, was made
for Alaska Milk Corporation. It was found out that major strengths of the firm includes a
very well-known and trusted brand, variety of their products, have timely and updated
television and radio advertisement, affordability of the products, innovative
pasteurization and processing of dairy products. Alaska Milk Corporation opportunities
Astoveza, Butor, Coronacion, Repolles, Salcedo, Santiago Page 1 of 51

ACTP01 Ms. Arlene San Pablo
include continuous growth of the population in the country, exporting Alaska products in
other countries, rapid technological advances and product innovation.
By using matrixes to filter appropriate strategy to fulfill Alaska’s objectives
recommended strategy is to continously offer different variety of products using
innovated production process and continous promotion in mainstream media and the
community. Financial and strategic objectives, businesss and organizational strategies,
action plan and programs, and a balances scorecard are further recommended.
CHAPTER II – COMPANY’S BACKGROUND
Alaska Milk products were first manufactured in the Philippines in 1972 through
Holland Milk Products, Inc. (HOMPI), a partnership between AMC's former parent
company, General Milling Corporation (GMC), an industrial foods company with interests
in flour, feed and soy bean milling, and a Dutch dairy company, Holland Canned Milk
International B.V. HOMPI initially manufactured liquid canned filled milk products,
(evaporated and sweetened condensed milk) and eventually expanded to manufacture
powdered filled milk and UHT milk products division up until AMC's spinoff and
incorporation as a separate and independent corporate entity in 1994. It was also a time
when the company embarked on a major expansion program which prompted the
company to tap the capital markets through an initial public offering (IPO) to raise funds
for the capacity expansion of its powdered milk facilities. Alaska Milk shares were listed
in the Philippine Stock Exchange in 1995. Post-IPO, GMC held 66% of AMC while 34%
was left in free float to the public. In mid-1997, however, GMC transfered its 66%

ownership in AMC to individual shareholders of GMC through a property dividend, thus
fully divesting its interest in AMC and enabling management to consolidate and focus its
efforts in pursuing AMC's interests in the consumer foods industry. Currently,
management and strategic partner Campina Melkunie hold 56% while 44% is in public
free float.
For over thirty years, AMC has emerged as one of only two major players in the
Philippine milk industry, consistently maintaining brand leadership in the liquid canned
milk category and holding a strong and growing position in powdered milk. It has also
expanded into higher value-added milk products, particularly in UHT/Ready-to-Drink milk
category. Apart from growing its core businesses, AMC endeavors to diversity and
explore opportunities in related consumer products with global food companies that will
complement AMC's existing revenue base.
Mr. Wilfred Uytengsu, Sr. is the Chairman of AMC and Mr. Wilfred Steven
Uytengsu, Jr. is the President and Chief Executive Officer.
Alaska produces 8 different milk products: Alaska evaporated milk, Alaska
condensed milk, Alaska evaporated creamer and Alaska condensed creamer, Alaska
powdered filled milk and ready-to-drink milk such as Alaska Fresh and Alaska Slim milk
and Yamoo flavored milk.
The company partnered with Gawad Kalinga and the Municipality of San Pedro,
Laguna in order to construct 100 homes in the six-hectare relocation site in

Bayanbayanan, Barangay San Vicente. The village will be the new home for some of the
municipality's squatters. The company chose San Pedro, Laguna because it has been
the home of AMC's manufacturing plant since 1972 and is Alaska's turn to give to the
residents who welcomed them into their municipality.
To promote good nutrition for kids, Alaska Milk Corporation has formed ties with
Children's Hour as well. Company employees and even Alaska Aces players and
coaching staff are invited to donate a percentage of their salaries to the fund. Alaska
Milk Corporation’s has a total of 501-1,000 employees.
Alaska Milk Corporation (AMC) is the leading milk company in the Philippines. It
has consistently maintained its leadership in the canned liquid milk category (evaporated
and sweetened condensed), thus, paving the way into growing Alaska into a mega-
brand by competing in the powdered, ready-to-drink, and creams market, among others.
In 2007, AMC further expanded its liquid milk portfolio by licensing Carnation and
Milkmaid from Nestle and acquiring Alpine, Liberty and Krem-Top. This development led
to AMC’s move to a dominant position in the category.
Apart from growing its core businesses, AMC endeavors to diversify and explore
opportunities in related consumer product categories. In March 2012, Alaska Milk
Corporation partnered with Royal Fries land Campina, the fifth largest dairy company in
the world.

AMC continues to further its mission of nourishing Filipino dreams, bringing in
affordable nutrition across different life stages to every Filipino home for over 40 years. It
is committed in providing nutrition to Filipino households, ensuring high quality standards
in its products, developing innovative marketing plans and programs, and promoting
outdoor sports as part of a healthy lifestyle.
AMC looks beyond selling milk– it sells nutrition and by doing so, the Company
and brand Alaska is doing its part in nation building. Through youth sports development
programs, Alaska Milk is able to help nourish children for them to develop into
champions in the field of interest and, in general, in life.
Today, Alaska is still best known for its tagline “Sa sustansiya’t lasa, wala pa ring
tatalo sa Alaska” (In nutrition and taste, nothing beats Alaska).
CHAPTER III – COMPANY’S VISION AND MISSION
Their Vision
To be the leading providers of affordable nutrition by offering families and children
a wide range of delicious, high quality dairy, and dairy-based products. Alaska Milk
Corporation’s valued commitment is to bring nutrition to every Filipino across all stages
and occasions of their lives. Alaska Milk faces up to the challenge of pursuing the efforts
to help raise milk consumption levels in the country.

Today, the Philippines remains to have lower per capita dairy consumption levels
when compared to our Asian neighbors. By providing dairy products in the right formats
and price points, Alaska Milk helps provide good health to every child in every Filipino
home and contributes in bringing down malnutrition levels in the Philippines and in the
world.
Their Mission
Product Development
We pledge to continue building on the strengths and competitive attributes of our
brands and develop their full product potential. We will continue to identify market
opportunities while developing new products, mindful of our task to be responsive to the
ever-changing and growing needs of our consumers.
Customer Service
Customer relationship is an integral part of building the Alaska business. We aim to
provide our partners in trade the best and most efficient service, making use of leading
edge technology to ensure timely product availability and accessibility. We strive to know
and understand our customers fully to bridge the gap between what they need and what
we can give.
Quality

Ultimately, the consumer whom we serve and their level of satisfaction with our
products become our final judge and jury. We are committed to deliver high quality milk
and other consumer food products from production to consumption. We will respond to
the call to deliver higher quality nutrition to every Filipino home.
People
We recognize that our people, the Alaska Team Members, are one of our most
important assets and we are committed to promote their safety and welfare. Their wealth
of experience, ideas, dedication and strong work ethic lay the foundation for the
Company’s continued success. It is our goal as much as it is theirs, to pursue and reach
their full potentials through continuing education, training, and skills enhancement
programs. We challenge each individual by providing the opportunity to contribute to the
Company’s endeavours.
Profitable Growth
Growth that creates value for our shareholders is paramount. We will deploy our
resources on investment opportunities that are within our core competence and yield
excellent returns relative to its risks and which are consistent with our growth objectives.
Social Responsibility

We recognize our role in nation building by promoting the protection of the
environment and taking part in various community-building projects that help enhance
and uplift the quality of life of the underprivileged and the marginalized sectors of our.
Using David’s evaluation matrix of mission statements, a table below is used to evaluate
Alaska Milk Corporation’s Mission Statement.
Components YES NO
01 Customers 
02 Products/Services 
03 Markets 
04 Technology
05 Concern for Survival, 
Growth, and Profitability
06 Philosophy 
07 Self-concept 
08 Concern for Public Image 
09 Concern for Employees 
Revised Vision
The vision statement of Alaska Milk Corporation is as follows:
To be the leading provider of quality yet affordable dairy products that it is still
nutritious and can be afford even the lower-class Filipinos nationwide.

Revised Mission
On the other hand, the mission statement of Alaska Milk Corporation are as
follows:
The company will continue to nurture and develop Alaska products.
Customers
By giving them the most nutritious dairy products that will still be affordable
to all types of customers.
Product
To be a competitive dairy product company that will pass or suit the
international standards.
Markets
To be a trending and leading market that can give dairy products that is
well-known and innovative.
Technology
To have and advance technology that can use to innovate dairy products
that will lead for the dairy products to be safe in consumption.

Concern for Survival, Growth and Profitability
To be a competitive market that will can increase sales across international
dairy companies. Also, to empower the people, create partnerships and
coordinate the resources to grow the profitability of Alaska dairy industry.
Philosophy
To supply and provide quality and affordable products that will commit to
develop and grow our team so that they are able to operate in safe, caring and
secure environment.
Self-Concept
To secure the highest value of the Alaska dairy products while creating
opportunities for their growth.
Concern for Public Image
To promote the image and consumption of Alaska dairy products amongst
consumer and the broader population.
Concern for Employees
To be a leading, competitive dairy products company delivering improved
shareholder value by being a preferred corporate citizen, preferred employer, and
preferred supplier selling preferred products.

Using Fred David’s evaluation matrix of mission statements, a table below is used
to evaluate the recommended Alaska Milk Corporation mission statement:
Components Comment/s
01 Customers “All types of consumer.”
02 Products/Services “That will pass or suit the international standards.”
03 Markets “Be a trending and leading market.”
04 Technology “To have and advance technology.”
05 Concern for Survival, “Empower the people, create partnerships and coordinate
Growth, and Profitability the resources.”
06 Philosophy “To supply and provide quality and affordable products,”
07 Self-concept “Creating opportunities for their growth.”
08 Concern for Public Image “Promote the image and consumption.”
09 Concern for Employees “Delivering improved shareholder value by being a
preferred corporate citizen, preferred employer, and
preferred supplier selling preferred products.”

CHAPTER IV – EXTERNAL ANALYSIS
A. General Environment
1. Economic Developments
Alaska chairman Wilfred Uytengsu Jr. told that they are hoping to have double-
digit sales growth this year. He said that the company expects demand and consumption
of milk products to grow following the increase in income or spending power of
consumers. As disposable income rises, food is generally a beneficiary of that growth,
so they would expect to be part of that,” he said. He said the first package of the
government’s tax reform program has contributed to improving consumption.
Under the Tax Reform for Acceleration and Inclusion law which took effect earlier
this year, the government reduced personal income tax rates and imposed higher taxes
on fuel, cars, tobacco and sugar beverages to offset foregone revenues. With prices of
consumer goods on the rise, Uytengsu said the company is keeping its prices in check in
order to grow sales. While prices of Alaska’s milk products have remained steady, he
said the company is keeping a close watch on the cost of skim milk powder, as well as
the exchange rate. Alaska imports 100 percent of its skim milk powder, which accounts
for almost 50 percent of its total cost. The company has a production facility in San
Pedro, Laguna which recently completed its modernization program. Uytengsu said the
company spent almost P1 billion two years ago to increase the plant’s capacity and
improve safety. While the company ships products based on orders from traders to

countries with a small Filipino population, he said bulk of the sales still comes from the
domestic market.
2. Socio-Cultural, Demographic Trends, and Lifestyle Changes
The company VP Marketing, Ma. Belen M. Fernando. expressed that Alaska Milk
Corp. was a far second to Bear Brand. Its share was only about 10 percent. So they put
a major plan to relaunch the Alaska Powdered Milk Drink, touching the 6Ps. With the
concept using milk as a way of improving the lives of Filipino families. We priced this at
20 percent less than the heritage/classic line in order to capture those who had tuned
out of the category over the past years. The target were housewives who wanted to help
augment their family’s income so that they could have a better life. They are called
“mompreneurs,” the negosyantes who would open small businesses.
3. Technological Developments
Uytengsu-led Alaska Milk Corp. plans to spend P230 million this year largely for
maintenance and the upgrade of manufacturing facilities, the company said in a filing
with the Securities and Exchange Commission. The amount is 27.67% lower than the
P318 million in expenditures last year, used primarily for the expansion of Alaska Milk’s
manufacturing facilities and the construction of a warehouse. It has completed a new
instant filled milk powder plant in San Pedro, Laguna, consisting of a recombined milk
processing plant, equipment for spray-drying, and filling and packaging lines. "The
company does not foresee the need to raise additional funds externally to meet its

working capital requirements and planned capital expenditure for 2008," the listed
company said. For 2008, Alaska Milk said it would continue to focus on growing its core
milk business by expanding to other categories within the domestic milk market, either
through a new product or through strategic alliances such as licensing agreements, joint
ventures, or business acquisitions. Alaska Milk offers a wide range of milk products
beyond the traditional canned evaporated filled and sweetened condensed filled milk,
powdered filled milk and plain and chocolate-flavored UHT (ultra-high temperature) milk
in Tetra briks" Today, Alaska Milk has a dominant position in the liquid milk category,
accounting for about 80% of the market," the milk company said. Alaska Milk saw a 66%
year-on-year increase in net income at P669.04 million in 2007 from P402.58 million in
2006 amid inflationary pressure from cost increases for many of its major ingredients
and packaging materials. As domestic consumption of milk products recovered last year,
net sales grew by 53.38% to P9.08 billion from P5.92 billion through aggressive sales
and marketing.
Ecological Aspects
Alaska Milk Corporation’s Safe, Healthy and Environmental Policy consider its
environmental sustainability and states that they are commited to protect the
environment and sustain resource use. As of 2018, Alaska Milk Corporation’s signed an
agreement with Lingkod Kapamilya Foundation’s Bantay Kalikasan which is owned by
ABS-CBN. Alaska agreed to be part of Bantay Kalikasan (BK) because they want to
properly disposed the used lead-acid batteries from vehicles and used oil from their

industrial plant. Through partnering with BK, the company Director of Operations, Jan
Wegenaar, expressed and stated the Alaska’s efforts to reduce their carbon footprint
and that the company aims to be as minimal as possible and be less and less over time
and are actually investing in smart solutions in order to make sure that the amount of
energy used will be less than what we are using today.
B. Industry and Competitor Analysis
1. Industry Situation
The dairy supply situation for 2017 is characterized by increasing local milk
production and decreasing imports and exports of milk and dairy products. The net
supply stood at 439.83 million kg., 50% lower than last year’s net supply of 445.67
million kg. Local production grew by 8% while imports and exports down by 8% and 9%
respectively.
For 2017, imports of milk and dairy products declined by 8% (from 452.99 million
kg. to 417.07 million kg.). In terms of value, it went up to 12% (from total dairy import bill
of US$807.72 million to US$903.10 million) indicating an increase in unit import cost of
21% and 29% in dollar terms and in pesos respectively.
The increase in local production of 8% accompanied by a decrease in imports of
liquid milk by 11%, resulted in 27% share of local production to total liquid milk supply

(higher than the previous year’s level of 24% share). Hence, local production contributed
more than one glass out of four glasses of liquid milk supply.
In terms of sources and value share, New Zealand remained to be the leading source of
imported dairy products, accounting for 40% to total dairy import bill. USA ranked as
second supplier, followed by Germany and Netherlands with 22%, 5% and
5%respectively.
The volume of exports reached 25.86 million kilograms, lower by 9% compared to last
year’s volume of 28.48 million kilograms.
Ice cream/ice cream mixes and condensed milk were the big export items during the
year. Condensed milk, cream, ice cream/ice cream mixes and other milk & cream
products posted also an increase. On the other hand, liquid milk, whole milk powder and
evaporated milk and butter/butterfat recorded decrease in exports.
Malaysia and Singapore were the top market of Philippine dairy products, accounting for
18%and 14% respectively of the entire dairy export value. Next was United Arab
Emirates that took 12% of the total value and with other countries of destination that
include Vietnam and Canada with shares of around 11% and 8%, respectively.

Gross earnings in the dairy sector recorded 13% increase from P715.42 million in 2016
to P809.33 million this year. The dairy sector accounted for 0.05% and 0.28% of the total
agricultural and livestock production value (at current prices) of Php1,714.93 billion and
Php291.57 billion, respectively.
2. The Porter’s Five-Forces
Threat of New Competition/Entrants
As A relatively capital-intensive industry, with commodity product, the threat of
new entrants is low.
Threat of Substitute Products
With the other products being used to produce milk power such as soya, oats,
rice and artificial flavors, natural milk powders have more competition, this trend is likely
to grow.
Bargaining Power of Buyer
The consumer power is high because of a lot of competitors, buyers have a lot of
choices in what their preference.

Bargaining Power of Suppliers
Merging with farmers or working with co-ops and a general trend way from
farming by youth, availability of the raw milk is reducing, so suppliers are getting
stronger.
Intensity of Competitive Rivalry
This is low with many milk powder providers being relatively local or with a small
number of big providers per country. This appears to be relatively stable.
3. Competitors Analysis
For this strategic marketing management paper, two competitors were
considered for the competitive profile matrix:
A) The major competitors of Alaska Milk, Corporation are Nestlé Philippines,
Incorporation and Century Pacific Foods, Incorporation. We chose these two brands as
our competitors because they have different products that can offer to the market and
also, they are both have affordable price in terms of selling their milk products.
Competitor’s Profile
Nestlé

Nestlé is a Swiss transnational food and drink company headquartered in Vevey,
Vaud, Switzerland. It is the largest food company in the world, measured by revenues
and other metrics, since 2014. It ranked No. 64 on the Fortune Global 500 in 2017 and
No. 33 on the 2016 edition of the Forbes Global 2000 list of largest public companies.
Nestlé’s Products
 Bear brand
 Cerelac
 Chuckie
 Carnation
 Coffee-mate
 Kitkat
 Milo
 Nescafe
 Nido
Nestlé’s Price
 Bear brand 600g – Php 260.00
 Coffee-mate 450g – Php 110.00

 Carnation Evaporated Milk 370ml – Php 42.00
 Nestle Cream – Php 70.00
Century Pacific Food Incorporation
Century Pacific Food Inc. (CPFI) is a Filipino food company based in Pasig City,
Philippines. The company was founded as Century Canning Corporation by Ricardo S.
Po, Sr. in 1978. It changed its name to Century Pacific Food in 2014.
Century Pacific Food Incorporation’s Product
 555 (canned tuna, sardines, mackerel, carne norte)
 Angel (condensed milk, evaporated milk & coffee creamer)
 Argentina
 Birch Tree (powdered milk)
 Blue Bay (canned tuna, sardines, and mackerel)
 Century Quality
 Century Tuna (canned tuna)

Century Pacific Food Incorporation’s Price
 Birch Tree 300g – Php 98.00
 Krem Top 250g – Php 50.00
 Angel Evaporated Milk 410mL – Php 39.00
 Angel Condense Milk 380mL – Php 56.00
Competitor Analysis
The major competitors of Alaska Milk Corporation are Nestlé Philippines,

Incorporation and Century Pacific Foods, Incorporation. We chose these two brands as
our competitors because they have different products that can offer to the market and
also, they are both have affordable price in terms of selling their milk products.
Nestlé is a Swiss transnational food and drink company headquartered in Vevey,

Vaud, Switzerland. It is the largest food company in the world, measured by revenues
and other metrics, since 2014. It ranked No. 64 on the Fortune Global 500 in 2017 and
No. 33 on the 2016 edition of the Forbes Global 2000 list of largest public companies.
Nestle Philippines Incorporation was established in 1911.
Century Pacific Food Incorporation, on the other hand, is a Filipino food company
based in Pasig City, Philippines. The company was founded as Century Canning
Corporation by Ricardo S. Po, Sr. in 1978. It changed its name to Century Pacific Food
in 2014.

Competitive Profile Matrix (CPM)
Alaska Milk, Nestlé Century Pacific

Corporation Philippines, Inc. Foods, Inc.
Critical Weight Rating Weighted Rating Weighted Rating Weighted
Success Scale Scale Scale
Factors
Promotional 0.08 3.00 0.24 4.00 0.32 2.00 0.16
Tools
Longevity in 0.08 3.00 0.24 4.00 0.32 2.00 0.16
the Industry
Assortment of 0.12 2.00 0.24 4.00 0.48 3.00 0.36
Products
Food Quality 0.14 3.00 0.42 4.00 0.56 2.00 0.28
Human 0.08 3.00 0.24 4.00 0.32 2.00 0.16
Resource
Management
Affordability 0.14 4.00 0.56 2.00 0.28 3.00 0.42
of the
Products
Corporate 0.08 3.00 0.24 4.00 0.32 2.00 0.16
Social
Responsibility
Innovation of 0.12 3.00 0.36 4.00 0.48 2.00 0.24
the
Machineries
TOTAL 1.0 2.54 3.08 1.94
The ratings in the CPM refers on how well companies doing in each area, they
range from 4 to 1, 4 means a major strength, 3 minor strength, 2 minor weakness and 1
as a major weakness. We put the highest weight in the food quality and the
affordability of the products, the reason for this is, as a consumer they must be
satisfied with what they buy and also, they want to spend their limited income wisely. In
the result, the Nestle Philippines is the strongest performer.
In Longevity in the Industry, our basis is as follows: Alaska Milk Corporation was
founded 1972, Nestle Philippines founded in 1911 and Century Pacific Foods founded in
1978.

In Affordability of the Products, our basis is the price of the Powdered Milk they
sell. In Alaska, they have Alaska Powdered Milk 300g for Php 104.00, in Nestle, they
have Bear Brand 300g for Php 135.00, and in Century Pacific Foods, they have Birch
Tree Full Cream Milk 300g for Php 129.30.
In Assortment of Products, our basis is Nestle has over 2000 brands with a wide
range of products across several markets, including coffee, bottled water, milkshakes
and other beverages, breakfast cereals, infant foods, performance and healthcare
nutrition, seasonings, soups and sauces, frozen and refrigerated foods, and pet food.
Century Pacific Foods produced canned and processed fish, canned meat, tuna export,
and dairy and mixes. The canned and processed fish segment produces and markets a
range of tuna, sardine, other fish and seafood-based products under the Century Tuna,
555, Blue Bay, Fresca and Lucky 7 brands. Dairy products, such as evaporated milk,
condensed milk, full cream powdered milk and creamer under the Angel and Birch Tree.
Alaska is more on selling canned milk and powdered milk.
The basis for the promotional tools and other critical success factor is that, Nestle
is the largest food company in the world, measured by revenues and other metrics, since
2014. It ranked No. 64 on the Fortune Global 500 in 2017 and N0. 33 on the 2016
edition of the Forbes Global 2000 list of largest public companies. Alaska Milk
Corporation is the second milk leading company in the Philippines and Alaska Powdered
Milk was a far second to Bear Brand which is produced by Nestle Philippines.
C. Summary and Conclusion
1. Using the results of your general environment and industry analyses, identify
and summarize the major opportunities and threats.
• Opportunities
Continuous growth of the population in the country

- having dairy products which is a commodity, population growth means steady
flows of new customers and more demand for the product.
Strategic Alliances – Alaska’s partnership with Royal Friesland Campina- one of
the top five dairy companies of the world, will boost the prospects of an overseas
presence of Alaska.
Rapid technological advances
- the integration of production methods with the latest developments in
computers certainly has the potential to make manufacturing autonomous,
cheaper and more efficient. In addition to that, technology through the use of the
Internet also gives businesses an effective platform for showcasing what they
have to offer. Whether it’s a portfolio and testimonials from clients on a website,
or an album on a Facebook page with photos of your newest products, it has
never been easier to let the world know what you have to offer. With a few simple
clicks, your customers can see what you’re all about. An online presence is an
extension of your brand that never sleeps.
Product Innovation
-Introducing products that meet changing customer needs. New Product
formulations that will respond to the trend towards consumer leading healthier
lifestyles. Innovative dairy products, protein drinks and extended shelf life

beverages. Low fat, Fat-free, reduce sodium and sugar, lactose-free, organic,
probiotic cultures, fortified with nutrients, calcium and protein.
•Threats
Competitors
- A lot of new brands that have been entering the market and they are usually
packaged in a cheaper price compared to Alaska products. It is getting the market
for small enterprises and for regular consumers, it is usually preferred since
consumers can save money and not all of the consumers give that much
importance on brands. They can switch easily if the situation permits.
Increase cost of raw materials, increase cost of utilities (i.e. diesel, electricity,
water) and Increase inflation rate (6.7% as of September 2018)
- Manufacturers is greatly affected by TRAIN LAW, its inflationary pressure impact
on the cost of production with a higher raw material cost. As a result, the prices of
commodities will be higher affecting Alaska products.
Preference over other beverages
-Filipinos are not considered as milk drinkers. They tend to drink a lot more of
other beverages such as coffee, tea, or water. Filipino children’s milk intake is
also declining and their milk consumption is way below than recommended by
nutrition experts.

2. External Factor Evaluation (EFE) Matrix
The External Factor Evaluation (EFE) Matrix is concerned with external factors.
These factors are one that is subjected to the will of social, economic, political and legal
forces. The firm’s strategies effectively take advantage of existing opportunities and
minimize the potential adverse effects of external threats. The opportunities and threats
here are the critical success factors in the external environment that can help position
the industry to be profitable. A rating of 4 (superior) for was given to adding new variety
products. The average total weighted average score is 2.67. Alaska Milk Corporation is
effectively taking the advantage of existing opportunities and minimizes potential
adverse effects of external threats.
Key External Factor Weight Rating Score
Opportunities
01 Continuous growth of the 0.15 3 0.45
population in the country.
02 Strategic Alliances 0.09 2 0.18
03 Rapid technological 0.17 3 0.51
advances.
04 Product Innovation 0.12 3 0.36
Threats

01 Competitors 0.12 2 0.24
02 Increase cost of raw 0.17 3 0.51
materials
03 Increase cost of utilities 0.12 2 0.24
04 Preference over other 0.06 3 0.18
beverages
TOTAL 1.0 2.67
Alaska taking an advantage in the opportunity of technological advances and
rapid population growth. Rapid population growth means steady flows of new customers
and more demand for the product. The increasing cost of raw materials and cost of
utilities could be address by the usage of new technological innovations that leads to a
higher operational efficiency.
Alaska, until now, is a household brand that every consumer trusts. It have been
a staple in the Filipino kitchen providing products for households and businesses alike.
Whether you are feeding a family or running a business. Consumer’s love for the quality
of the dish they are making are the primary source of the loyal customers whom despite
of new emerging cheaper brands, still chooses Alaska for its premiere quality.

CHAPTER V – INTERNAL/COMPANY ANALYSIS
ALASKA MILK CORPORATION is a leading milk manufacturer of milk products in
the Philippines. It has established a strong brand heritage and recognition among
Filipino consumers with its traditional liquid canned milk products, marketed under the
Alaska Brand. In addition, the company has developed a strong competitive position in
the powdered milk category. Alaska Milk Company delivered another year of solid
performance ending 2017, with a net income of P1.87 billion, a 29% improvement over
the 1.41 billion net income earned in 2016. Fueling the growth was the strong sales
volume expansion across the company’s portfolio of milk product alongside lower input
costs as well as prudent spending. Sales/revenue ending 2017 is P658,153 sales growth
of 16.43%. In addition, sustained advertising campaign and demand-generating
promotional initiatives help push sales volumes higher year on year.
Operating expenses for the year increased significantly. The increase can be
attributed to higher advertising and promotional spending to boost consumer demand for
Alaska Milk ProAlaska Milk Corporation recognizes that their people, the Alaska team
members are one of their most important assets and there are committed to promote
their safety and welfare. Their wealth of experience, ideas, dedication and strong work
ethic lay the foundation continued success. It is the company’s goal as much as its theirs
to pursue and reach their full potential through continuing education, training and skills
enhancement programs. They challenge each individual by providing opportunities to
contribute to the company’s endeavors.

The Company’s first generation of milk products are Alaska Evaporated Filled
Milk and Alaska Sweetened Condensed Filled Milk. Alaska Evaporada and Alaska
Condensada are the perfect enhancers various food and beverages preparations.
Today, Alaska Milk Corporation has a dominant position in liquid canned milk category,
accounting for nearly 80% of the market. Alaska Condensed milk, Alaska Sweetened
condensed milk, Cowbell condensada , Alaska Evaporada , Alaska Condensada, Alaska
Creamer etc. )
The company has likewise built a solid position in a Powdered Milk Category.
With the heritage gained by the Alaska line of liquid canned milk products, the
Company’s Alaska Powdered Milk drink, the most nutritious powdered milk drink , has
emerged as the second leading brand in the market.

THREE-YEAR Revenue/Sales Review
Net Revenues
34496
28288
23325
2015 2016 2017
Based from its three-year revenue/sales review, the revenue/sales is in increasing
trend within a year. But in the year of 2018, a short-coming occured and can be
observed.
CHANGE IN
REVENUE
QUARTER PERCENT (%)
2016 2017
Q1 PHP 6.4 B PHP 7.48 B 16.87%
Q2 PHP 13 B PHP 16.05 B 23.46%
Q3 PHP 20.96 B PHP 25.27 B 20.56%
Q4 PHP 28.29 B PHP 34.50 B 21.95%

2017 2018
Q1 HP 7.48 B PHP 9.13 B 22.06%
Q2 HP 16.05 B PHP 19.32 B 20.37%
Q3 HP 25.27 B PHP 29.48 B 16.66%
Q4 HP 34.50 B PHP 39.56 B 14.77%
Based from the horizontal analysis of Alaska Milk Corporation’s revenue per
quarter increases in volatile rate. But also has a decrease in yearly and quarterly
revenue/sales growth.
B. Internal Factor Evaluation (IFE) Matrix
This strategy formulation tool summarizes and evaluates the major strengths and
weaknesses in the functional areas of business, and it also provides a basis for
identifying and evaluating relationship among those areas. The Internal Evaluation
Factor (IFE) Matrix found below the list of ten key internal factors. Five of these factors
are considered strengths of Alaska Milk Corporation while the other three are
weaknesses. The rate suggests whether internal factors are the major
strength/weakness and minor strength/ weakness. With the total weighted scale of 2.98,
Alaska Milk Corporation has a strong internal position.

Key External Factor Weight Rating Score
Strengths
01 Very well-known and 0.15 4 0.6
trusted brand.
02 Variety of their products. 0.12 3 0.36
03 Have timely and updated 0.11 3 0.33
television and radio
advertisements.
04 High Quality of product 0.18 4 0.72
05 Experienced and well 0.14 4 0.56
trained employees.
Weaknesses
01 High Cost turnover 0.10 2 0.10
02 Few distributions in rural 0.09 1 0.09
areas.
03 Higher Price than 0.11 2 .22
competitors
TOTAL 1.0 2.98
C. Summary and Conclusion
Note that in the IFE Matrix, High Quality of the product are the most advantages
in Alaska Milk Corporation. When AMC gain the confidence and loyalty of consumers,
they can do more with business, such as raise prices. The high quality of AMC product is
one way to help get consumers to appreciate and believe in what they have to offer.
While the highest factor of weaknesses in AMC is there price is higher than Its

competitors. Company that produces high quality product but sells in lower price than
AMC, will increases their customer and always tend to buy their products than AMC
products.
VI. STRATEGY FORMULATION
STRENGTHS WEAKNESSES
1. Very well-known 1. High Cost turnover
and trusted brand.

2. Few distributions in
2. Variety of their rural areas.
products.
3. Higher Price than
3. Have timely and competitors
updated television
and radio
advertisements.
4. High quality
products.
5. Experienced and
well trained
employees.

OPPORTUNITIES SO STRATEGIES WO STRATEGIES
1. Continuous growth of the  Select an artist,  Have a great
population in the country. celebrities and expertise in
personalities to management which

2. Strategic Alliances
endorse the product enable to perform
3. Rapid technological
in TV ad. (S1, S2 managerial task
advances.
,S3, O2,) effectively and
4. Product Innovation. effiently. (W1, W2,
 Invest on research
W3, O2, O3)
and development
and also the  Expansion of the
technology for the manufacturing plants
innovation of the and new equipment
process of the dairy that the company will
products. (S5, O3, be using. (W2, W3,
04) O3)
 Make new products  Lead a statistical
that will suit the surveying where the
taste of your new product has a higher
consumer. (S1, S4, utilization. (W2 , O1)
O1, O2)

THREATS ST STRATEGIES WT STARTEGIES
1. Competitors  Cut down  Have a great
operational costs. management team to

2. Increase cost of raw
(S4, S5, T2, T3) maintain the
materials.
operational cost (T2,
 Make a good
3. Increase cost of utilities.
T3, W1, W3)
reputation with the
4. Preference over other
consumer and the  Bringing down the
beverages
retailer. (S1, S2, price to have an edge
S3, T1, T4) to different
contenders. (T1, T4,
W2, W3)
Strategic Position and Action Evaluation (SPACE) Matrix
The SPACE Matrix has four- quadrant network whether aggressive, conservative,
defensive or competitive strategies are most appropriate for a given organization. The x-
axis represents two internal dimensions (financial strength [FS] and competitive
advantage [CA]) while the y-axis represents two external dimensions (environmental
stability [ES] and industry strength [IS])
Financial Strength (FS) (+1 Worst, Rate Competitive Advantage Rate
+6 Best) (CA)
(-6 Worst, -1 Best)

Liquidity (22% as of 2017) +4.00 Customer Loyalty -3.00
Return on Investment (-43% as of +1.00 Product Quality -1.00
2017)
Inventory Turnover (21% as of 2017) +4.00 Promotional Tools -1.00
TOTAL +9.00 -5.00
Environmental Stability (ES) Industry Strength (IS) (+1
Worst, +6 Best)
(-6 Worst, -1 Best)
Flexible to Technological Changes -2.00 Diversification of Products +4.00
Inflation Rate -4.00 Resources Availability +5.00
Flexible to Trends -1.00 Longevity in the Industry +5.00
TOTAL -7.00 +14
y- axis x-axis
Environmental Stability = -7 ÷ 3 = - Competitive Advantage = -5 ÷ 3 = -
2.33 1.66
Industry Strength = 14 ÷ 3 = 4.66 Financial Strength = 9 ÷ 3 = 3.00

AVERAGE +2.33 +1.34
6
5
4
Conservative 3
Aggressive
2
1
0
-6 -5 -4 -3 -2 -1 -1 0 1 2 3 4 5 6
-2
Defensive -3 Competitive
-4
-5
-6
The table above demonstrate that AMC rate in financial strength is +3.00. This is
a result of the positive income of the corporation when contrasted with the earlier year.
Its environmental stability is at -2.33 with a good result. Even if there are many strong
competitors AMC still got a -1.66 results contrasted with its rivals. Ultimately a +4.66 rate
is given to AMC a normal rate since most rate is in nature.
Plotting these points on graph, where the sum of the financial position and
competitive advantage is +1.34 (X coordinate), and the sum of the industry strength and
environmental stability +2.33 (X coordinate), this implies that AMC budgetary quality is
an overarching factor in the business. This infers AMC may design much procedure to
have more noteworthy offer in the market since its funds is sufficient for its systems. In
addition, this implies AMC is a good position to utilize its inward qualities to exploit the

outside circumstances, conquer inside short comings, and evades or limits outer danger.
Since it falls in the aggressive quadrant (+, +), AMC may have aggressive strategies
such as backward, forward, horizontal integration, market penetration, market
development,
INTERNAL
SPACE MATRIX
SWOT MATRIX EXTERNAL
MATRIX
STRATEGY CATEGORY
Select an artist, celebrities and Market Forward Forward
personalities to endorse the Penetration Integration Integration
product in TV ad.
Invest on research and Product Diversification Forward
development and also the Development Strategy Integration
technology for the innovation Strategy
of the process of the dairy
products.
Make new products that will Product Product Product
suit the taste of your new

consumer. Development Development Development
Have a great expertise in Market Market Market
management which enable to Penetration Penetration

Penetration
perform managerial task
effectively and effiently.
Expansion of the Diversification Market Market
manufacturing plants and new Strategy Development Development
equipment that the company
will be using.
Lead a statistical surveying Market Market Product
where the product has a higher Development Penetration Development
utilization.
Cut down operational costs. Diversification Product Product
Strategy Development Development
Make a good reputation with Product Market Market
the consumer and the retailer. Development Penetration Penetration
Have a great management Diversification Market Market
team to maintain the Strategy Penetration Penetration
operational cost.

Bringing down the price to Market Horizontal Forward
have an edge to different Penetration Integration Integration
contenders.
From summarizing the tale presented above summarizing strategies that were
found out of the matrixes used earlier, four strategies were common – forward
integration, backward integration, market penetration and market development. To
assess which among strategies presented in the SWOT Matrix will be prioritized; a
Quantitative Strategic Planning will be used.
Quantitative Strategic Planning Matrix QSPM
The strategy that has the highest weighted attractiveness score is best strategy to
implement. Invest on research and development and also the technology for the
innovation of the process of the dairy products (6.70) is more attractive strategy when
compared to Make a good reputation with the consumer and the retailer (5.59), Taking
into account both the external and internal factors that would affect the company, the
QSPM suggests that Alaska Milk, Corporation should engage into a product
development.

VII. OBJECTIVES, STRATEGY RECOMMENDATIONS AND ACTION PLANS
Factors 2018 % 2019 % 2020 % 2021
01 Revenue/Sales 811.2M 15% 932.9M 20.5% 973.4% 25% 1.014B
02 Market Share 20% 22% 24.40% 22% 29.77% 22% 35.72%
03 Return on 11.73% 10% 12.90% 10% 14.19% 10% 15.61%
Investment
04 Brand used 10% 13% 11.30% 13% 12.77% 13% 14.43%
more often
(BUMO)
Financial Objectives
-To increase Alaska Milk Corporation’s revenue by 5% per year in 2019-2021
over 2018 revenue of P811.2 Million.
-To increase Alaska Milk Corporation’s return on Invested Capital by 10% per
year in 2019-2021 from 2018 return on investment of 11.73%
-Last public update, Alaska Milk Corporation, cut its cost of sales and operating
expenses for rising from P3.73 billion to P4.41 billion.
Strategic Objectives
-To increase Alaska Milk Corporation’s market share by 22% per year in 2019-
2021 from 2018 market share of 20%.

-To increase Alaska Milk Corporation’s brand used more often (BUMO) by 13%
per year in 2019-2021 from 2018 range of 10%.
-Product advertisement of Alaska Milk Corporation has been iconic and
remarkable to its product buyers because of its jingle which firmly ingrained in the heart
of Filipinos. - Last public update of Alaska Milk Corporation, Uytengsu family set aside
P250 million for its continuing business expansion and refurnish existing manufacturing
facilities.
Business and Organizational Strategies
The proposed strategy, as it was filtered with into six matrixes, is:
"To reduce operating cost in the production process."
The following are the business strategies to achieve the objectives:
• It is important that the we are all heading to one goal and that goal must be
known from the top management to the different functional areas. It must be
communicated to them that our goal is to reduce operational cost.
• We will have strategic alliances, partnership with one of the best dairy companies
in the world would be great opportunity for Alaska to have a presence abroad.
• The company will use the advancement of technology because it is cheaper and
more efficient. Through the use of internet, we will have an online platform like a
website for the customers to have an access in our products.

• We will have an evaluation and assessment to cut down operational costs.
Through this we can identify the inefficiencies in both materials and time, so we
can reduce waste.
• The company will have a product innovation, new product formulations in the
dairy products that will respond towards consumer leading healthier lifestyle.
• The company will target the rural areas for the distribution of dairy products. We
will make sure that Alaska products will distribute to the retailer stores in the rural
areas.
• The company's research and development group will have a research on the
possibility of not importing skimmed milk powder to cope up with the operational
cost due to importation cost and changes in exchange rate.
Invest on research and Make a good
development and also the reputation with the
technology for the innovation consumer and the
of the process of the dairy retailer.
products
OPPORTUNITIES W AS TAS AS TAS
Continuous growth of the .18 2 0.36 4 0.72

population in the country.
Strategic Alliances .15 4 0.60 3 0.45
Rapid technological .14 4 0.56 2 0.28
advances.
Product Innovation .14 4 0.56 3 0.42
THREATS
Competitors .09 4 0.36 3 0.27
Increase cost of raw .10 4 0.40 - -
materials
Increase cost of utilities .10 3 0.30 - -
Preference over other .10 3 0.30 4 0.40
beverages
TOTAL 1.0 3.44 2.54
STRENGTHS
Very well-known and .10 3 0.30 4 0.40
trusted brand.

Variety of their products. .15 4 0.60 3 0.45
Have timely and updated .12 3 0.36 2 0.24
television and radio
advertisements.
High Quality of product .20 4 0.80 3 0.60
Experienced and well .14 3 0.42 4 0.56
trained employees.
WEAKNESSES
High Cost turnover .09 2 0.18 - -
Few distributions in rural .10 3 0.30 4 0.40
areas.
Higher Price than .10 3 0.30 4 0.40
competitors
TOTAL 1.0 3.26 3.05
TAS 6.70 5.59

VIII. STRATEGY IMPLEMENTATION
Activity Time Table Expected Person/s Responsible
Output
Meeting per June 2019- One goal and  Top
functional areas July 2019 attainment of Management
objectives are  Managers from
clearly all functional
communicated areas
from top  Supervisory
management Employees
up to
supervisory
management
Current Product July 2019- Assessing  Marketing Dept

 Research Dept
Line August 2019 different
Assessment products being
offered. From
that, we can
know what
more can we

offer
Creating product September A  Marketing Dept

 Research Dept
innovation for 2019-October comprehensive
the product line 2019 research of
advertising
focusing on the
core purpose
of the
company
which is proper
nutrition
resulting to a
healthy
consumer
Implementing October 2019 More than 95%  Marketing Dept

product  Research Dept
- November of the
innovation
2019 advertising
plans were
able to be

implemented
Evaluation of November 90% of the  Marketing Dept
product 2019 innovation
innovation goals and
objectives
were achieved
by Alaska
Creating a plan November Research  Research Dept

to cut down regarding the  Production Dept
2019-
operational cost possibility of
December
not doing
2019 imports for an
ingredient.
Research on
new
technology that
can help
improve the
production
process and to
reduce waste.
Implementing December More than 95%  Production

plans on cutting 2019-January of the plan Dept.

down
2020 were able to  Finance Dept
operational cost.
be
implemented
Evaluation on January 2020 90% of the  Production

plans on cutting
plan were able Dept.
down
to be
operational cost
implemented.

IX. Strategy Evaluation, Monitoring and Control
Strategic Objectives Measures Targets Programs

Priorities
Financial Decreasing Effective Financial Minimize cost Evaluation

Operational and Statement. and expenses in Operating
Cost to efficient Financial used in Expenses
increase production Ratio operations
revenue/profit plans
Customer Keep Consumer KPI or Key Expanding Introduce

Consumer- Behavior Performance the additional
Buyer trends Indicator or relationship benefits for
Relationship towards Survey between customers
quality current and
service new
customers
Internal Recognizing Increase KPI or Key Increasing Market

the the number Performance understanding Share
employees of Alaska Indicator or and Performance
by training members Survey appreciation Evaluation
and with strong of Employees
enhancing work ethics
their skills
Learning Continue Effective Research, Taking the Marketing

& Growth investing the Market Survey and opportunity to Strategy and
brand and Penetration Analytic grow more Product
Improve high Strategies Report Strategy
quality of
products
Bibliography

https://phdessay.com/marketing-plan-alaska/?fbclid=IwAR3YjlCNIQLLL-
TOI6K47AvurpTuc2IrNQ-NjiZ4gFEHqQ_hxK9LDBjwH_M
https://www.gmanetwork.com/news/money/content/85381/alaska-milk-lowers-capital-
outlay-for-
08/story/?fbclid=IwAR3kFO8cAATIelFxlcEc9FFwsJFDWTuMjDq_kFxB4Lyw6Tr_LOEyW
XN_PUM


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Strategic Management for Alaska Milk Corporation

CHAPTER I - EXECUTIVE SUMMARY

ALASKA MILK CORPORATION (AMC) is a leading milk manufacturer of milk

costs as well as prudent spending. Sales/Revenue ending 2017 is P658,153 sales

growth of 16.43%. in addition, sustained advertising campaign and demand-generating

promotional initiatives help push sales volumes higher year on year.

Food Pacific Incorporation and Nestle.

television and radio advertisement, affordability of the products, innovative

pasteurization and processing of dairy products. Alaska Milk Corporation opportunities

Astoveza, Butor, Coronacion, Repolles, Salcedo, Santiago Page 1 of 51

other countries, rapid technological advances and product innovation.

By using matrixes to filter appropriate strategy to fulfill Alaska’s objectives

recommended strategy is to continously offer different variety of products using

community. Financial and strategic objectives, businesss and organizational strategies,

CHAPTER II – COMPANY’S BACKGROUND

(evaporated and sweetened condensed milk) and eventually expanded to manufacture

Astoveza, Butor, Coronacion, Repolles, Salcedo, Santiago Page 2 of 51

ownership in AMC to individual shareholders of GMC through a property dividend, thus

efforts in pursuing AMC's interests in the consumer foods industry. Currently,

expanded into higher value-added milk products, particularly in UHT/Ready-to-Drink milk

complement AMC's existing revenue base.

Uytengsu, Jr. is the President and Chief Executive Officer.

Alaska produces 8 different milk products: Alaska evaporated milk, Alaska

and Yamoo flavored milk.

Laguna in order to construct 100 homes in the six-hectare relocation site in

Astoveza, Butor, Coronacion, Repolles, Salcedo, Santiago Page 3 of 51

residents who welcomed them into their municipality.

Milk Corporation’s has a total of 501-1,000 employees.

to AMC’s move to a dominant position in the category.

opportunities in related consumer product categories. In March 2012, Alaska Milk

Astoveza, Butor, Coronacion, Repolles, Salcedo, Santiago Page 4 of 51

AMC continues to further its mission of nourishing Filipino dreams, bringing in

is committed in providing nutrition to Filipino households, ensuring high quality standards

outdoor sports as part of a healthy lifestyle.

champions in the field of interest and, in general, in life.

tatalo sa Alaska” (In nutrition and taste, nothing beats Alaska).

CHAPTER III – COMPANY’S VISION AND MISSION

To be the leading providers of affordable nutrition by offering families and children

to help raise milk consumption levels in the country.

Astoveza, Butor, Coronacion, Repolles, Salcedo, Santiago Page 5 of 51

We pledge to continue building on the strengths and competitive attributes of our

ever-changing and growing needs of our consumers.

Customer relationship is an integral part of building the Alaska business. We aim to

Astoveza, Butor, Coronacion, Repolles, Salcedo, Santiago Page 6 of 51

the call to deliver higher quality nutrition to every Filipino home.

programs. We challenge each individual by providing the opportunity to contribute to the

Astoveza, Butor, Coronacion, Repolles, Salcedo, Santiago Page 7 of 51

We recognize our role in nation building by promoting the protection of the

Alaska Milk Corporation’s Mission Statement.

09 Concern for Employees 

The vision statement of Alaska Milk Corporation is as follows:

nutritious and can be afford even the lower-class Filipinos nationwide.

Astoveza, Butor, Coronacion, Repolles, Salcedo, Santiago Page 8 of 51

The company will continue to nurture and develop Alaska products.

to all types of customers.

To be a competitive dairy product company that will pass or suit the

well-known and innovative.

that will lead for the dairy products to be safe in consumption.

Astoveza, Butor, Coronacion, Repolles, Salcedo, Santiago Page 9 of 51

Concern for Survival, Growth and Profitability

To be a competitive market that will can increase sales across international

dairy companies. Also, to empower the people, create partnerships and

coordinate the resources to grow the profitability of Alaska dairy industry.

opportunities for their growth.