JOSE RIZAL UNIVERSITY

Shaw Boulevard, Mandaluyong City

A Strategy Paper of Tropical Hut

Presented to the Faculty of
College of Business Administration
Major in Marketing Management

Ronalyn B. Delfin

Cyrin S. Bofitiado

Mar lowie A. Duran

Maritonie A. Luces
Mary Jane B. Malaluan

Submitted by

4th Year/ 401k

Year/Section

Dr. Mller Mercado

Submitted to
 CHAPTER 1

INTRODUCTION

Tropical hut is one, if not the oldest, fast food joint in the Philippines. It started in
1962 when the Que family had this Idea of putting up a coffee shop within the confines of
their supermarket, thus, Tropical Hut Hamburger was born. Now, it has more than 50
branches nationwide and still growing, proving that it can hold its stance in the fast food
arena. In 1962, the business has grown into a grocery store and expanded rapidly into a
Supermarket. It was also in this year that the concept of a Coffee Shop within the
Supermarket was launched with the introduction of Tropical Hut Hamburger.

Today, THFMI has six (6) TH Supermarket branches, five (5) TH Drugstores, fifty-
five (55) TH Hamburger outlets and four (4) 10/Q Convenience Stores to serve its variety
of growing customers.

Company Background

In the early 1960’s the Que family entered the world of business. They started their
own sari-sari store which in 1962 had grown into a grocery store and rapidly expanded
into a Supermarket. It was also that year, when they conceptualize putting-up a coffee
shop inside a supermarket and implemented it. Everything the family has built was
patronized by many Filipino at that time. On February 26, 1965 Mr. Mariano Que
introduced the Tropical Hut Hamburger in Ortigas, Metro Manila Region, Philippines. This
is when the family had the idea of having a coffee shop within the confines of their
supermarkets. In the 1970’s Mercury Drug Inc. acquired the THFMI and their status has
remained one of the best leading Fast Food chain in the Philippines. In 1980’s - 1990’s
competitors came and THFMI began to decline some of its branches. It may have not
move together with the advancement and remained in to its original state which has
brought it now to its declining stage. Tropical Hut is the pioneer in the fast food business
and had immediately tapped the needs of its market. It was established and created to
provide fast food service to the Filipino people and with its 53 years of existence in the
food industry they have indeed reached its milestones and achieved its goals. As of today,
THFMI are still working to remain in the business industry as they have not improved their
advertisement, lack of marketing strategy and no product quality control that result of
decreasing of branches and increasing of Prices which was not synchronized on their
competitor’s market price.

Mission Statement

The pursuit of excellence in providing the general public with superior quality
products at competitive/reasonable prices as well as prompt, convenient, courteous,
friendly and effective service. This is our commitment to God Almighty, Our Fellowmen,
family and Country.

Vision Statement

To become the No. 1 food service and merchandising in the country with human
and technological resources at part with the best in the world.

CORE VALUES

4 C’s OF OPERATION

1. CONSISTENCY

We have to be consistent in giving good service to our customers, providing quality

food and clean surroundings at all times.

2. COOPERATION

We need to foster good teamwork in order to achieve the best results in our daily
undertaking.
3. COMMUNICATION

We need to communicate with our team in order to familiarize ourselves with the
implementation of company policies.

4. CONTROL

We need to have a better control in the operations in order to achieve the

goals/objectives in delivering profitability to our company

Company History

Tropical Hut

Founded 1962

Food: Hamburger, Spaghetti, Fried Chicken, Local Breakfast, Salads, Sandwiches, etc.

Website: http://www.facebook.com/tropicalhut#/tropicalhut

Payment Method Cash, Visa, Amex, Master Card

Business Hours: 6:00 A.M – 9:00 P.M

Saturday - Sunday: 6:00 am – 9:00 pm

Monday – Friday: 7:am – 9 pm

Services: Delivery
Specialty : Hamburgers, Sandwiches and Fries
Organizational Structure

Mariano Que
Chairman

Dr.Antonio Macatangay
President/ Director

Josefina P. Romero Atty.Inocencio Ortiz-Luis Jr.

Treasurer / Director Corporate Strategy

Vivian Que Azcona

Director

Sulpicio Batilaran
Director
1. Structure and Responsibility

Organizational structure is the chain of hierarchy, which divides entire employees

of an organization based on their level, roles, and responsibilities. It defines the clarity in
between employees to report whom and also employees are aware of what the employer
expects from them so that they can deliver their best to meet the expectations. The board
of directors' key purpose is to ensure the company's prosperity by collectively directing
the company's affairs, whilst meeting the appropriate interests of its shareholders and
stakeholders. In addition to business and financial issues, boards of directors must deal
with challenges and issues relating to corporate governance, corporate social
responsibility and corporate ethics.

2. Functions of the Board

The function of the Board of Directors of THFMI is to manage, represent and

supervise, as may be necessary, so as to ensure that the Company fulfils its corporate
objectives, while seeking to protect the Company’s general interests and create value for
the benefit of all the shareholders.

Without prejudice to the powers delegated to it, the Board, directly or through its
Committees, has exclusive powers regarding a number of matters, including:

Approving THFMI strategic guidelines, management goals and annual budgets.

Approving THFMI policy in the following areas: investments and finance, structure of the
group of companies, corporate governance, corporate social responsibility, remuneration
and evaluation of senior executives, risk control and management, shareholder
remuneration and own shares.

Appointment and removal of the Company’s Managing Director, after consultation with
the Nomination and Remuneration Committee.
Directors’ remuneration, based on a proposal from the Nomination and Remuneration
Committee.

Drafting financial statements, monitoring the Company’s quarterly financial statements

and supervising the information that must be provided periodically to the markets or
supervisory authorities.

Approving investments or transactions whose size or special characteristics makes them

strategic, except where their approval is reserved for the Shareholders’ Meeting.

Approving the incorporation and acquisition of holdings in companies domiciled in tax

havens and of special purpose vehicles, where their nature, object, accounting, finances
or any other circumstance might impair the group’s transparency.

Based on a report by the Audit and Control Committee, granting the exemptions and other
authorizations regarding directors’ duties which are within its power, in accordance with
the Regulation of the Board of Directors.

3. Chairperson

The board shall appoint chairperson who shall be responsible for:

-Leadership of the board

-Efficient management committee functions properly

-Facilitating the organization managed effectively.

-Briefing directors of key issues.

4. Relationship with Management

Board of directors is responsible for the actions of the management and hence not
only does the board need to monitor the management, the management needs to take
the board into confidence about its decisions.
5. Meeting

The board shall meet on a regular basis and is accordance with schedule agreed
prior to the communications of each calendar year. Any director can call a meeting of
the board.

6. Access information

Any director shall be entitled to seek information and clarification directly from any
employee or external party provide that the director first consults the chairperson. The
Board, a committee, or an individual director may engage an independent external
adviser in relation to any board or committee matter at the expense of the company.
Before the external advice is sought, consent needs to be obtained from the chairman of
the board. The Chairpersons and Committee Chairperson shall be provided copy of the
advice and they may determine if the advice be circulated to the remainder of the board
or the committee.

Company Policies

Conflict of Interest Policy

The Company expects everyone in the organization, from the ordinary rank and
file up to the Members of the Board of Directors, in the performance of their duties, to be
objective, fair and to act for and in the best interests of the Company.Private and personal
interests should never interfere with one’s duties, and one’s position should never be used
as leverage for personal or financial gain or advancement. Any situation which may
constrain or oblige one to favor or give a co-employee or business partner whom one may
have had or has a personal, commercial, familial or other significant relationship an unfair
advantage should be avoided.
The following and analogous acts are prohibited:

Self dealing and Cronysim

Accepting gifts, benefits and/or favors from business partners

Influence peddling

Unauthorized use of confidential information

Outside employment or moonlighting that compromise or interfere with one’s commitment

and duties to the organization

Using Company time and property for personal advantage/advancement nepotism

To eliminate or reduce Conflict of Interest Situations, every employee, officer and

Director is required to disclose any potential conflict of interest (including but not limited
to holdings, connections and/or association with any outside business entities and
organizations), and is prohibited from receiving or accepting gifts or favors from business
partners. Supplier sponsored trainings/conferences are subject to the approval of the
Executive Office. The Human Resources and Administration Division (HRAD) of the
Company is mandated to provide a mechanism by which employees can declare or
disclose their potential conflict of interest.

Insider Trading Policy

To ensure the Company’s adherence to applicable securities laws and regulations

on Insider Trading, and that Company’s investors are given equal opportunity, the
Company’s directors and officers are required to report their beneficial ownership of the
Company’s shares to the Securities and Exchange Commission and the Philippine Stock
Exchange within two (2) to trading days from their appointment or election. In case of
changes in their beneficial ownership, such changes should be reported within two (2)
trading days from the date of the acquisition, disposal, or change in their shareholdings.
Copies of the reports filed with the Securities and Exchange Commission should be
submitted to the Company’s Compliance Officer and/or Corporate Secretary within the
same period.

For purposes of reportorial requirements, a director’s or officer’s beneficial ownership

shall include not only shares directly owned by said director or officer, but also shares:

(i) held by members of his immediate family sharing the same household;

(ii) held by a partnership in which he is a general partner;

(iii) held by a corporation of which he is the controlling shareholder;

(iv) subject to any contract, arrangement or understanding which gives him voting power
or investment power with respect to such shares.

All directors, officers, employees and agents (including consultants, third party contractor)
of the Company in possession of material nonpublic information and their immediate
family are prohibited from:

(i) Dealing in Company shares from the time the director, officer, employee or agent
acquired such material nonpublic information and until two trading days after the material
nonpublic information is disclosed to the public;

(ii) Disclosing or passing such material nonpublic information to any person, except if
disclosure is made to (i) a person who is duty bound to maintain trust and confidence to
the Company (i.e. auditors, investment bankers, legal counsels, and financial advisers)
and (ii) a person who agrees in writing to maintain the material information in the strictest
confidence and not use the information to trade in the Company’s shares or for material
benefit;

(iii) Dealing the company’s shares during blackout periods imposed by the compliance
officer.

The prohibition shall apply even after the director, officer, employee and agent has
ceased to be employed or connected with the company so long as the information have
not yet been made public.
Policy and Data relating to health safety and welfare of employees

Ensuring employees continues growth

The Company believes and is committed to the continuous growth of its

employees. Guided by its Learning Framework –the 3 Cs of Corporate Education—the
company ensures that employees go through a holistic learning experience geared
towards fully imbibing the business of Splash. This starts with helping employees
appreciate the history of the company, its values, and culture (Corporate Citizenship),
moving on to understanding the “Splash Way” of doing business (Contextual Framework),
and then mastering the competencies necessary to execute individual roles (Core
Workplace Competencies).

Employees’ Individual Development Plans are defined in their respective Employee

Competency Profiles prepared yearly to ensure responsiveness of enhancement
initiatives. The company employs the most effective and needs-appropriate learning
methodologies such as classroom training, blended learning, on-the-job training,
coaching, mentoring, and even e-learning. The company ensures all its employees, and
not just a few ones, are given opportunities for growth and development by setting a yearly
minimum training hours target which forms part of employees’ annual performance
deliverables.

Safety & Welfare

It is the intention of the company to provide a safe working environment for its
employees. Every employee is expected to know, follow, and enforce the safety
standards, and participate in the safety programs set by the Company. Violation of
safety/sanitary/ housekeeping rules (such as CGMP, HAACP, etc.) is a punishable
offence under the Company’s Code of Conduct.
Anti Sexual Harassment Policy

Sexual harassment violates the dignity of individuals and is considered a grave

and terminable offense under the Company’s Code of Conduct.

Smoking Policy

In the interest of providing a safe and healthy work environment, smoking is not
allowed within Company premises, including company issued motor vehicles.

Related party transactions policy

Business Units under the Splash Corporation are diversified in its operations;
hence, one business unit may be a customer of another business unit and so on. While
each business unit operates distinctly or as separate entity from each other, the group is
created to operate in a manner that will provide synergy and maximization of opportunities
to increase shareholder value within the parameters allowed by law. Intercompany
transactions are therefore inevitable.

To standardize, regulate and monitor transactions within the Group as well as to improve
transparency and strengthen internal control within the context of good corporate
governance, transactions with related parties are expected to comply with the
requirements of applicable tax law, rules or regulations and shall be subject to
appropriate corporate approvals and disclosures.
Whistle blower policy

The Company espouses Ethical Governance as one of its core vaue. Employees
and non-employees are encouraged to report questionable practices and activities
without Fear of retaliation, discrimination and harassment. In addition to the Company’s
operational reporting procedures, reports may be submitted through any of the following:

By mail 74 Elisco Road Pasig City, Metro Manila, Philippines

by email tropicalhutfoodmarketinc@yahoo.com.ph

By Phone (02) 7558000

Reports will be kept confidential to the extent possible, consistent with existing law and
the need to conduct an adequate investigation. The protection offered under the
Whistleblower Policy however, will not apply to reports made in bad faith..

Current Corporate Strategy

Corporate Strategy takes a portfolio approach to strategic decision making by

looking across all of a firm’s businesses to determine how to create the most value. In
order to develop a corporate strategy, firms must look at how the various business they
own fit together, how they impact each other, and how the parent company is structured
in order to optimize human capital, processes and governance. Corporate strategy builds
on top business strategy, which is concerned with the strategic decision making for an
individual business.
Production Strategy

Tropical Hut Products

Marketing Strategy

Tropical Hut depends on high customer traffic and tight operations management.
It offers great service to the high volumes of people who patronize its outlets by
functioning as a well-oiled machine with close tabs on daily operations.

Tropical hut focus:

USP:

The Unique Selling Proposition of the Tropical Hut Hamburger brand is:

1) Fast, Good, Clean, Cheap food

2) Caters to local needs

3) Consistency, reliability over all its outlets.

Driving Revenue and Profitable Growth

-We are experts in customer acquisition.

Who is our target market?

Target Market Profile

Age Generation Genaration X 1960's-1980's

Genaration Y (Millenials) 1980's-1990's

Gender Male and Female

Employment Status Status, Working, Non-working, and Retired

Positioning

Ensuring high traffic needs an emphasis on store location and positioning Tropical
Hut in the minds of the consumer as a place that they would enjoy eating fast food. This
entails proper branding and positioning of the service offered.

The service that is offered should be consistent over all Tropical Hut stores,
however this might be a problem as the division has been slimmed recently and resources
might be stretched too far.

Product

In the case of Tropical hut, it went from being a supermarket confine with a coffee
shop to serving hamburgers made with a home style recipe.

The product offered by Tropical Hut appeals to the Filipinos taste for burgers. By
concentrating its resources on satisfying the Filipino palate, Tropical hut has been able to
serve localized dishes that are unlike any found in the other fast-food chains in the
Philippines. In addition to offering the usual French fries that accompany the meals found
in McDonald’s, KFC, Burger King, and so forth,

Tropical Hut also serves rice or spaghetti, Filipino style. Even the burgers are
cooked exactly as Filipinos want them done— sweeter and with more seasonings, often
likened to what a Filipino mother would cook at home.

Tropical Hut focus in capturing the local tastes.

 Tropical Hut accomplished this by local adaptation of the menu and by positioning
the food chain as a family restaurant.”

Place

The location of outlets is of key importance to the marketing strategy of Tropical

Hut. For Example, the outlet in FTI is located at Sunshine mall near Bus station where a
large number of Filipinos pass by..

Promotion

Tropical Hut have an existing promotions and advertisement provided to the public.
these promotions are available around metro manila such as billboard in edsa cubao also
they offer a valentine promotions, unli rice meals, bulk order freebies, bundle promo,
anniversary promotion and seasonal promotions.

Competition

Major and Minor Competitors

Wendy's

Wendy's International, Inc. is the operator, developer, and franchiser of the Wendy's
restaurant chain, which is the number three hamburger chain in the United States (with a
market share of 12.7 percent in 2000), trailing McDonald's (43.1 percent) and Burger King
(18.8 percent). At the end of 2001, there were more than 6,000 Wendy's restaurants
around the world; about 5,300 of these were located in the United States with the balance
located in 26 other countries and territories. About 1,200 of the units were company
operated, while the remainders were run by franchisees. System wide sales for the
Wendy's chain totaled $6.84 billion in 2001. Wendy's hallmark square hamburgers and
homey atmosphere were introduced in Columbus, Ohio, in 1969, and since that time the
company has enjoyed phenomenal growth.

Burger King

Burger King is flamed-broiled burgers, fries and soft drinks at a good value, served quickly
and consistently by friendly people in clean surroundings.

Burger King Corporation is the second largest fast-food chain in the United States, trailing
only McDonald's. The company franchises more than 10,400 restaurants and owns about
1,000 for a chain wide total exceeding 11,455, with locations in all 50 states and 56
countries. The company serves 15.7 million customers each day and over 2.4 billion
Burger King hamburgers are sold each year across the globe. In the late 1990s and into
the new millennium, Burger King was plagued by falling sales and deteriorating franchisee
relationships. Burger King's parent, Diageo plc., sold the company to a group of investors
led by Texas Pacific Group in late 2002.

Jollibee. Jollibee is multinational chain of fast food restaurants owned by Jollibee Foods
Corporation (JFC). As of 2018, JFC had a total of about 1200 Jollibee outlets worldwide;
with the presence in Southeast asia, the Middle east, East asia, North America, Europe
and Italy.

McDonalds. McDonald's is an American fast food company, founded in 1940 as a

restaurant. They rechristened their business as a hamburger stand, and later turned the
company into a franchise. McDonald's is the world's largest restaurant chain by
revenue,[8] serving over 69 million customers daily in over 100 countries[9] across 37,855
outlet.
Human Resource Strategy

Tropical Hut Food Market inc, hire right candidate to manage its operation and
strategy planning. THFMI, gives training programs to employees about building customer
relationship and management-employee relationship.

Operation Manager

What we can offer?

Earn more than 25,000 a month.

Benefits such as HMO, Allowance, Sick leaves, vacation leave.

Requirements

College graduate in any Business Administration.

Experience of working in a customer-facing environment or managing teams.

ability to lead and motivate teams and influence people

Service Crew

What we can offer?

Earn more than 14,000 a month Requirements

Candidate must possess at least High School Diploma or Vocational Diploma/ Certificate
No work experience is required for this position

Preferably less than 1 year experience specialized in Food / Beverage / Restaurant

Service Management

Financial Strategy
 CHAPTER II

INDUSTRY AND FIRM ENVIROMENT

The whole chapter will discuss the external and internal analysis of the Tropical
Hut Hamburger. It includes Political – legal factors, economic, socio – cultural and
technological.

Industry analysis is used to facilitate the position of a company relative to other

companies. Understanding the forces at work in the overall industry is an important
component of effective strategic planning. Industry analysis enables companies to identify
the threats and opportunities facing their businesses, and to focus their resources on
developing unique capabilities that could lead to a competitive advantage.

I. External Environment

1. Economic Forces

Factors such as GDP trends, Interest rate, money supply, inflation rate,
unemployment level, wages and consumer spending, which determine the state of
competitive environment in which a firm operates. These forces affect the outcome of the
firm's marketing activities, by determining the volume and strength of demand for

1.1 GDP Trends

The economy of the Philippines is the world's 34th largest economy by nominal
GDP according to the 2017 estimate of the International Monetary Fund's statistics, it is
the 13th largest economy in Asia, and the 3rd largest economy in the ASEAN
after Indonesia and Thailand. The Philippines is one of the emerging markets and is the
sixth richest in Southeast Asia by GDP per capita values, after the regional countries of
Singapore, Brunei, Malaysia, Thailand and Indonesia.
 The Philippines is primarily considered a newly industrialized country, which has
an economy in transition from one based on agriculture to one based more on services
and manufacturing. As of 2017, GDP by purchasing power parity was estimated to be at
$1.980 trillion.

Primary exports include semiconductors and electronic products, transport

equipment, garments, copper products, petroleum products, coconut oil, and fruits. Major
trading partners include Japan, China, the United States, Singapore, South Korea,
the Netherlands, Hong Kong, Germany, Taiwan and Thailand. The Philippines has been
named as one of the Tiger Cub Economies together with Indonesia, and Thailand. It is
currently one of Asia's fastest growing economies. However, major problems remain,
mainly having to do with alleviating the wide income and growth disparities between the
country's different regions and socioeconomic classes, reducing corruption, and investing
in the infrastructure necessary to ensure future growth.

The Philippine economy is projected to be the 5th largest in Asia and 16th biggest
in the world by 2050. According to the Price water house Coopers, it estimates that it will
be the 12th to 14th richest economy in the world by 2060. While this opposes other reports
from HSBC Holdings PLC, that by the year 2050, the Philippines will have been stated to
surpass the economy of Indonesia due to its yearly higher GDP growth rate of 6.5%
(Second, after China). However, the economic statistics may still vary depending on the
performance of the government every year.
1.2 Interest Rate

The central bank of the Philippines left its key overnight reverse repurchase facility
rate unchanged at 4.5% on its June 20th 2019 meeting, while markets had expected it at
4.25%. Policymakers said the decision remains consistent with the manageable inflation
outlook and firm domestic growth prospects, unveiling that a prudent pause allows it to
observe and assess the impact of prior monetary adjustments. The bank noted the uptick
in inflation to 3.2% in May from 3% in April, which is likely to be temporary and still within
the 2-4% target range. Also, the BSP cut its inflation forecasts for 2019 to 2.7% from 2.9%
and for 2020 to 3% from 3.1%, amid declining oil prices and the prospect of a stronger
peso. Interest Rate in Philippines averaged 7.84 percent from 1985 until 2019, reaching
an all time high of 31 percent in January of 1985 and a record low of 3 percent in June of
2016.

1.3 Money Supply

Money Supply M3 in Philippines increased to 11741647.54 PHP Million in May

from 11668580 PHP Million in April of 2019. Money Supply M3 in Philippines averaged
2524633.76 PHP Million from 1980 until 2019, reaching an all time high of 11741647.54
PHP Million in May of 2019 and a record low of 56544 PHP Million in January of 1980.
1.4 Inflation Rate

The Philippines' annual inflation rate fell to a 22-month low of 2.7 percent in June
2019 from 3.2 percent in the previous month and below market expectations of 2.9
percent. Food inflation dropped to its lowest since January 2017, and there was a
slowdown in cost of both housing and transport. On a monthly basis, consumer prices
rose by 0.2 percent in June, easing from a 0.3 percent gain in May. Inflation Rate in
Philippines averaged 8.35 percent from 1958 until 2019, reaching an all time high of 62.80
percent in September of 1984 and a record low of -2.10 percent in January of 1959.
1.5 Unemployment level

The unemployment rate in the Philippines dropped to 5.1 percent in the June
quarter 2019 from 5.5 percent a year ago. The number of unemployed persons fell by 75
thousand to 2.29 million while the number of employed grew by 135 thousand to 42.24
million. Meanwhile, the labor force participation rate increased to 61.4 percent from 60.9
percent. Among employed persons, workers in the services sector made up 58.5 percent
of the total, followed by those in the agriculture sector (22.3 percent) and industry (19.2
percent). Unemployment Rate in Philippines averaged 8.31 percent from 1994 until 2019,
reaching an all time high of 13.90 percent in the first quarter of 2000 and a record low of
4.70 percent in the fourth quarter of 2016.

1.6 Wages

The Department of Labor and Employment (DOLE) confirmed the P25 across-the-
board wage hike for minimum wage earners in Metro Manila. New minimum wage rates
for agricultural workers, firms in the manufacturing sector with at most 10 workers, and
firms in the retail as well as service sectors with at most 15 workers will earn at least P500
daily, from the previous P475.

Non-agricultural workers, meanwhile, will soon have a daily minimum wage of

P537 from P512.

Under Wage Order No. 22, the P10 cost of living allowance (COLA) will also
become part of the basic pay. Previously, the minimum basic pay ranged from P465 to
P502, with an additional P10 COLA.

National Wages and Productivity Commission Executive Director Criselda Sy

explained that the integration of COLA in the basic pay means bigger computations for
overtime pay and 13th month pay.

1.7 Consumer spending

Consumer Spending in Philippines decreased to 1568669.77 PHP Million in the

first quarter of 2019 from 1789083.47 PHP Million in the fourth quarter of 2018. Consumer
Spending in Philippines averaged 741653.33 PHP Million from 1981 until 2019, reaching
an all time high of 1789083.47 PHP Million in the fourth quarter of 2018 and a record low
of 305524.42 PHP Million in the first quarter of 1981.
 2. Political – Legal

Tropical Hut has a made reasonable effort to provide nutritional ingredient information
based upon standard product formulation and following the FDA guidelines using
formulation and nutrition labeling software. Variation may occur due to: ingredient
substitution and differences in product assembly or size at the restaurant. Test products,
limited time offers and regional menu variations may not be included and not all items
listed may be available in all restaurants.

1. Tax Reform Act of 1997 (Republic Act No. 8424) –which amended the National
Internal Revenue Code (NIRC) is the law that governs the national taxation in the
Philippines and gives the Bureau of Internal Revenue (BIR) the power and duty to assess
and collect national internal revenue taxes in the country.

2. The Local Government Code of the Philippines (Republic Act No. 7160) – is
the law governing local taxation in the Philippines, including the taxation on real
properties.

3. Labor Code of the Philippines (Presidential Decree No. 442) – is the law that
governs employment practices and labor relations in the Philippines.

4. Intellectual Property Code of the Philippines (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.

5. The Corporation Code of the Philippines (B.P. 68) – is the law that governs the
registration and regulation of corporations in the Philippines.

6. Civil Law of the Philippines (R.A. No. 386) – the civil code of the Philippines
includes the laws on obligations and contracts. It also governs special contracts such as
contract of agency and partnership.

7. 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).
 8. 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.

10. 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.

11. 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.

12. 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.

13. Insurance Act of the Philippines, as amended – the law that governs the
insurance business and insurance transactions in the Philippines.

14. Foreign Investments Act of 1991 (R.A. No. 7042) – the law that governs foreign
investments in the Philippines.

15. Anti-Money Laundering Act of 2001 (RA 9160) – An Act that aims to protect and
preserve the integrity and confidentiality of bank accounts and to ensure that the
Philippines shall not be used as a money laundering site for the proceeds of any unlawful
activity

16. The Anti-Red Tape Act of 2007 (RA 9485) – an act enacted to improve efficiency
in the delivery of government services to the public by reducing bureaucratic red tape,
preventing graft and corruption in all the offices of the government.
 3. Technological

Technological forces influence organizations in several ways. A technological

innovation can have a sudden and dramatic effect on the environment of a firm. First,
technological developments can significantly alter the demand for organizations or
industry's products or services. Now a day’s technology is improving so as baking and
heating ovens will be of new and efficient technology and will provide efficient service.
Due to new technology there are new ways of marketing like internet; telemarketing and
the organization can advertise their products with much more faster pace. Computer
based customer data that is MIS (managing information system) helps in collecting
customer data, daily transactions, future forecasting and decision making. New vehicles
will make their service more efficient.

3.1 Energy availability and cost

The Manila Electric Company (Meralco) announced May 7, that overall electricity
rates for the month will decrease to P10.29 per kilowatt hour (kWh) from April's P10.56.

The downward adjustment of P0.27 per kWh will mean a decrease of P55 in the
total bill of a typical household consuming 200 kWh.

For households consuming more than that, the savings would be: 400h - P82, 400
kWh - P109, 500 kWh - P136. Meralco said the generation charge went down, primarily
due to lower charges from independent power producers and power supply agreements.
WESM provides some 12% of Meralco's total supply needs.

3.2 Telecommunication Infrastructure in Philippines

A substantial amount of capital continues to be invested in building

telecommunications infrastructure throughout the Philippines.

Telecommunications investment in the Philippines will continue to see increasing

emphasis on supporting high speed broadband access. The bulk of the fixed services are
in urban areas. In contrast, the fixed line market in the Philippines remains
underdeveloped and fixed line penetration continues to show stagnant growth. A major
reason for this is due to the dominance of the mobile segment and the rapid expansion
of the mobile broadband segment.

Despite competition from new carriers and mobile operators, PLDT has continued
to be the Philippines’ dominant fixed-line provider. However, in recent years, Globe
Telecom in particular has been pushing hard to overhaul the incumbent and now is the
leading mobile provider in term of overall subscribers.

In 2018 the Department of Information and Communications Technology (DICT)

published its guidelines to accommodate the entry of a third major telecoms operator in
the local market.

Over the past five to ten years and particularly more recently over the past two
years there has been significant new data centre builds and additions to existing capacity
as new providers enter the South East Asian data centre market. More and more people
are getting online and using cloud computing services, driving demand for data centres
services.

The Philippines government passed a Bill which seeks to provide for an online
network establishment (ONE) policy for the country to reduce the digital divide and
accelerate the rollout of more wireless communications technology across the country.

In recent few years, the major operators have also been forced to cope with the
pressures of slowing growth in traditional areas of the market and rising investment needs
for new growth areas in such as consumer broadband – both fixed line and mobile. In
particular, there has been good progress in the rollout of optical fiber infrastructure. PDLT
announced plans to accelerate a network modernization plan that will see it switching to
fiber over the following two years.
 4. Socio-Cultural

Commitment to possibly impact the communities we serve has always been a

hallmark of Tropical Huts. Everyday our branches give back to their communities in a
number of ways through their involvement with local charitable programs and initiatives.

4.1 Labor Workforce

If there will be no importation due to the Government Instability, then there will be
no available work for the fresh graduates of the country. According to the Commission on
Higher Education (CHED) statistical analysis of the graduates of state universities and
colleges in the country, there is a grand total of 280,796 prospective student graduates
that will look for a job after they graduate. This would provide a chance for the PRBL to
get possible employees with fresh skills and will to work and harnessing their skills as
newly graduates for them to grow larger and reach towards their goals.

Industry Analysis

As per Philippine Stocks Exchange, restaurant industry leads the sector in terms
of number of establishment. The result of the 2015 Annual Survey of Philippine Business
and Industry (ASPBI) showed that a total of 27,028 establishments in the formal sector of
the economy were engaged in Accommodation and Food Service Activities. Among
industries, restaurants led the sector with 6,652 establishments, accounting for 24.6
percent of the total number of establishments. Fast-food chains ranked second with 4,477
establishments or 16.6 percent, followed by refreshment stands, kiosks and counters with
3,772 establishments or 14.0 percent.

Other industries with more than a thousand number of establishments were the following:
• Cafeterias, 3,748 establishments
• Hotels and motels, 2,276 establishments
• Bars and cocktail lounges, 1,445 establishments
• Other restaurants and mobile food service activities, n.e.c., 1,353 establishments
The graph shows that the Philippines revenue in the “Food & Beverages’ segment
amounts to US$31 in 2018.
 The revenue is expected to show an annual growth rate of (Compound Annual
Growth Rate 2018 – 2022) of 15.3 % resulting in a market volume of US$ 56M in 2022.

In “Food and Beverages” segment, the number of users is expected to amount to

7.6M by 2022.
 User penetration is at 4.4 % in 2018 and is expected to hit 6.7% in 2022.

The average revenue per user in the Food and Beverages segment amounts to
US$6.69 in 2018.
 With a market volume of US$ 19,130M in 2018, most of the revenue is generated
in China.

With the rate of 40.9 %, the user penetration in the Food and Beverages

segment is the highest in the United States.

 Various Franchises remained the largest contributors to value sales in fast food in
2017, with combined value share of 34%. This could be attributed to the success of
existing fast food brands, which entrepreneurs have continued to capitalize on.
Meanwhile, Jollibee Foods Corp. has maintained its lead among chained operators, with
a 32% value share, as its fast food brands nagain led sales within their own channels. In
the Jollibee Foods Corp brand portfolio Chowking, Jollibee, Burger King, Red Ribbon,
Mang Inasal and Greenwich all maintained a strong performance.

Six Forces

1. Competitors

The major competitors of Tropical hut is Jollibee, McDonalds, Burger King, and
Wendys. Jollibee and McDonalds has a competitive advantage when it comes to capital
budget, product development,and marketing schemes. Jollibee owned 57% share at the
market, McDonalds occupied 36% share of the market and the rest was divided among
other fast food chain

2. New Entrants

Fast food industry have big players that dominating the market. However, there
are new companies entering market that adds to the level of competition. Such as Zarks’s
Burger, S&R New York Style Pizza, and Subway. Zark’s Burger is owned by Zark E.
Varona, HRM graduate from Philippine Women’s University, Zark’s Burger offers a wide
variety of Burger with a competitive price aside from that Zark’s Burger also offers hotdog
sandwiches, Buffalo wings and chips, chix N’ chips, Fish N’ chips, Burger steak, french
fries, potato chips, nachos, Rice starter, desserts and drinks. S&R New York Pizza Style
is owned by Sol & Robert. S & R is a membership shopping warehouse type store and
they expand their business by putting up S & R Newyork Pizza Style. The food offerings
from S & R New York Pizza Style are their famous wide variety of Pizza, also they have
burgers, sandwiches, chicken, ceasar salad, pasta and fries. Subway started by Fred
DeLuca and fund by Peter. Subway is originated in California, by 1974 they began
franchising here in the Philippines there are 23 outlets of Subway. The Subway brand has
earned a worldwide reputation for offering a nutritious alternative to traditional fast foods.
All SUBWAY sandwiches and salads are made to order, right in front of you, to your
specifications, using the ingredients you select from a wide variety of meats, vegetables,
fresh baked breads and flavorful condiments and Sauces.

3. Substitute products

A substitute product is one that may offer the same or similar benefits to a company
as a product from another industry. As per Philippine Stocks Exchange, restaurant
industry leads the sector in terms of number of establishment. Fast-food chains ranked
second with 4,477 establishments or 16.6 percent, followed by refreshment stands, kiosks
and counters with 3,772 establishments or 14.0 percent. So there a wide range of a
substitute product. Major Competitor of Tropical Hut are Jollibee, and McDonalds who
has a wide range on product offerings and product innovations and The new companies
entering in the food industry such as Subway who has offering a nutritious meals, S & R
New York Pizza Style has a product offerings of pizza.

4. Buyer/Consumer

Tropical hut core values is to be consistent in giving good service to our

customers, providing quality food and clean surroundings at all times. THFMI target
market are Families who are in the middle class and working class. Their target
consumers are those people who are looking for a quick service because of the busy
life style.
 5. Supplier

Tropical Hut main suppliers are MLM Food Inc, and Coca-cola company

6. Other Stakeholder

The other entities and groups generally termed as stakeholder and they
abilities to affect the organization. THFMI shareholders are they customers,
employees, suppliers and Government.

Internal Environment

Human Resource
1.1Number of Employees
Tropical Hut Hamburger currently have 501-1000 employees on their company as
of 2019.

1.2 Retirement Benefits

It is available in the form of refunds from the plan or reductions in future
contributions to the plan.
1.3 Employee Benefits
Tropical Hut Hamburger recognizes short-term employee benefits based on
contractual arrangements with employees.
- Tropical Hut gives their Regular Employee Benefits such as Dental, Education
Support, Loans, Medical, Miscellaneous allowance, parking, rice allowance,
leave benefit, Uniform, Vision.
Operations Management
Operations management can be explained as providing the finest service at the lowest
possible prices. This objective can only be achieved if each and every operation within
the organization is managed optimally. The various operations within an organization that
needs to be managed are financial operations, capital management and human resource
management. Operations management is concerned with the accurate management of
the various operation within any kind of organization so as to maximize results by
minimum use of resources. Thus, for any organization to perform successfully, it is
mandatory to strictly monitor the smooth functioning of the various operations within the
organization. Thus, in brief the role of operations management is to transform the input
into output in an efficiently manner.

The benefits of effective operations management:

- Improves the productivity of the organization.
- Minimizes the cost of the organizations.
- Helps in forecasting the various trends within the market.
- Avoids duplication of work.
- Helps in intelligent use of resources.
- Guides the company to provide excellent services and products.
- Helps in developing solutions for the various problems faced by the organization.
There are many operations within the organizations. The main operations within Tropical
Hut Hamburger are:
 Procurement of raw materials and machinery
 Production and Quality Maintenance
 Pricing
 Customer Service

Procurement of raw materials and machinery

 The main strategies used by Tropical Hut Hamburger have to maintain the
inventory is JIT, Just in Time. According to Modem, “JIT can be defined as a production
system to produce a kind of unit needed, at the time needed and in the quantities needed”
(W.Jedlicka, 2009). The idea behind this is to reduce the cost of inventory management.
This also helps in providing fresh food to the customers. This strategy is successful since
the mangers in the restaurants do a daily stock count at the end of the day to keep a track
of the available things and things that have to be ordered.
Production and Quality Maintenance
The kitchen crew is trained to produce the products by following a standard
protocol. Every product that is created in the Tropical Hut kitchen has to follow the protocol
so as to maintain the standard and quality of the products. Handling the production bin is
a very important task. Every item that is produced has a certain shelf life after which it is
declared to be unfit for consumption. Hence the food items are produced slowly on the
basis of demands. During the busy hours there is always a manger on the production bin
who manages the bin. It is only during this period that food is created a little in excess
based on the expected crowd of customers. This is a strategy used by the restaurant to
avoid long ques and to provide fresh food at a faster pace.
Pricing
The fact that Tropical Hut was making a good profit even during the time of
recession is a clear reflection of the fact that they have a well-developed pricing strategy.
They are one of the few restaurants that have a very well established 1£ menu as well.
This pound menu not only includes only one item it has a mix of all products that can be
bought. Thus, it is not only cheap but also provides variety for the customers to choose
from. Even the regular meals are priced rightly. Hence the customers do not hesitate.
Thus, in short one can surely say that dining at Topical Hut is not a good experience that
is not too heavy on the pockets.
Customer Service
This operation forms the base of the organization. The aim of the company is to
make the experience at the restaurant a unique one. This is only possible by providing
excellent customer service. The company trains the newly recruited employees for
providing excellent customer service. The crew members are asked to be sensitive to the
needs of the customers. Although they have a protocol to treat the customers the
employees are given the liberty to act according to the need of the situation. Especially in
the case of senior employees and mothers. The company strongly believes that only if a
customer is comfortable at the restaurant will they come back. Hence all measure is taken
by the store employees to make sure that the customers are completely satisfied when
they leave. They also have crew training program on a regular basis to upgrade the
service and to develop new skills. Regular meetings are conducted to deal with any issues
that are faced by the employees. The company also promotes the crew members to take
part in the various program that are conducted by the company. Thus, motivating the
employees. The company does annual appraisal in terms of salary as well as position
based on the employee’s performance.

Financial Stability
2015

Net sales revenue -6.79%▼

Total operating revenue -6.7%▼

Operating profit (EBIT) 46.87%▲

Net Profit (Loss) for the Period 31.19%▲

Total assets -9.41%▼

Total equity -23.12%▼

Operating Profit Margin (ROS) 0.91%▲

Net Profit Margin 0.75%▲

Return on Equity (ROE) 3.53%▲

Debt to Equity Ratio 7.06%▲

Quick Ratio -0.06%▼

Cash Ratio 0.01%▲

Company Performance

Marketing Strategy
Marketing Mix
Product and Price
TROPICAL HUT MENU

Sandwiches
Clubhouse 150.00
Cheese dog 95.00
Fish fillet 135.00
Tuna 120.00

Pasta
Spaghetti with chicken 125.00
Palabok with chicken 155.00
Spaghetti with regular drink 59.00

Burgers
Double Burger 175.00
Classic 165.00
Hawaiian Glee 135.00
Sili Burger 165.00
Rancho -Rancho 135.00
Tropical Cheeseburger 120.00
Regular Burger 85.00
Regular Cheeseburger 95.00

Chicken Unli Rice

1 pc. Fried Chicken (1 Rice) 79.00

(Unli Rice) 97.00

2pcs Fried Chicken (1 Rice) 145.00
Spring chicken (1 Rice) 159.00

(Unli Rice) 177.00

Chicken Family Meal

6pcs Chicken 405.00
8pcs Chicken 535.00

Rainy Savers
Spaghetti and Regular Soft drinks 59.00
1pc Burger Steak w/chicken Shanghai with regular Soft drinks 119.00
Hawaiian Glee 135.00
Beef Tapsilog w/ Chicken Soup 139.00

Fish Fillet w/Chicken Macaroni Salad 145.00

Spaghetti w/Chicken and regular soft drinks 149.00

Breakfast meal
Tapa 120.00
Daing na Bangus 149.00
Cornbeef 120.00
Longaniza 120.00
Tocino 120.00
Plain Hotcakes 65.00
Plain Hotcakes with Ham 85.00

All time favorites

Mais con Hielo 39.00
With scoop 49.00
Halo-halo with ice cream 49.00
1scoop 65.00
2scoops 75.00
Black Gulaman Float 59.00
Black Gulaman 35.00
Fresh Salad Mix 125.00
Tuna Green Salad Big 120.00
Small 85.00
Fruit Salad 65.00
Macaroni Salad 65.00
Chicken Sopas 40.00
French Fries
Large 58.00
Small 35.00

Promotions
 In the current time, Tropical Hut do have an existing promotions and
advertisement provided t the public. These promotions are available and seen around
metro-manila. The following are the examples of promotions done by te business:
Place and Distribution
Tropical Hut Food Market, INC. is located at #74 Elisco Rd. Barangay Kalawaan
Sur, Pasig City, Metro-Manila, Philippines. It currently has a total of 30 branches which
are the following:

Location Contact Number

Quezon City
Congressional 926.7789 / 926.7790
Cubao Romulo 913.3698 / 911.2999
New Farmers Plaza 911.1409 / 913.2256
Commonwealth 952.4664 / 931.2537
Panay 416.8901 / 372.4246 / 416.8918
Quezon Circle 924-3413
SM Fairview 419.2774
MDC100-libis 961.8248 / 961.8250

Makati City
Shaw cor. Pioneer St. 887.6394 / 844.6127 / 845.1242

San Juan
Shoppesville 721.1415 / 724.9926

Manila City
Escolta 241.4584 / 241.4570

Pasig City
Star City 831.8824 / 831.8729

Caloocan City
Monumento 359.6004 / 363.1750
Rizal
Q-Plaza-Cainta 645-0821 / 682.3002
Taytay 671.7534 / 658.5267
SM Taytay 571.8642
Ampid, San Mateo 998.8145 / 997.8034

Marikina
Riverbanks 475.3855 / 941.0045

Paranaque City
Bf Homes 807.5351 / 842.0924
SM Sucat 403.9557
Jaka Plaza 825.7057 / 8203277

Muntinlupa City
Alabang 775.0189 / 842.2846

Cavite
Waltermart - Sta.Rosa (049) 534.1713

Taguig City
FTI-TAGUIG 843.3513

Pampanga
Total- NLEX 0922-5068835

Task Environment

Governments
 Regulatory agencies are created by local government for the purpose of ensuring
that organizations operate within the enacted laws. These agencies have the power to
enforce laws in their respective fields and also introduce some of their own requirements
that can be legally enforced. These agencies are basically set up to protect the public
from certain business practices or to protect organizations from unfair competition.

Employees

Tropical Hut currently has. They have 501-1000 employees on their company as
of 2019.

Customers

Tropical Hut customer experience shows some deterioration as major operators

focus on technology and menu upgrades to meet changing consumer preferences.
Tropical Hut customers tend to be more price sensitive as well, and the industry sees a
weakening in guest perceptions of value.

Competitors

Competition is the basic element of a free enterprise system. The interests of both
the organization and the customers are better served when choices in the market are
available. Competition encourages progress and product-developments. It forces
organizations to be more innovative and productive

Tropical Hut has lot of competitors which has also a ready-to-eat comfort food.
These competitors are Jollibee, Mcdonald’s, Wendys and Burger King.

Target Market Profile

The Customer(s)
Demographics

Age - Generation

Generation X: 1960’s - 1980’s

Generation Y (Millennials): 1980 – 1990’s

Gender

Male and Female

Employment Status

Student, Working, Non-working,Retired

Market Competion
 Chapter 3

Situational Analysis

Situational Analysis is a systematic collection and evaluation of past and present

economic, political, social, and technological data, aimed at identification of internal and
external forces that may influence the organizations performance and choice of strategies
and assessment of the organizations current and future strengths, weaknesses
opportunities and threats. This chapter will discuss about the Situational Analysis and
TOWS Matrix that will possibly use to the recommendations in improving the performance
of Tropical Hut Food Market, Inc.

Strengths

S1. Wide variety of Product Line

Tropical Hut offers hamburgers in different sizes and different variety, TPFMI also
offers distinct Filipino breakfast meals, sandwiches, pasta, chicken unli rice, family savers
chicken, rainy savers such as burger steak with chicken shanghai, Hawaiian Glee with
chicken soup, fish fillet with chicken macaroni salad, spaghetti with chicken and All time
favorites such as Halo – halo with ice cream, Black gulaman float, fresh salad, tuna green
salad, fruit salad , macaroni salad, chicken sopas, and French fries.

S2. Established brand identity

Tropical Hut Hamburger is one of the oldest fast food joint in the Philippines. It
started in 1962 when the Que family had this idea of putting up a coffee shop within the
confines of their supermarket, thus Tropical Hut Hamburger was born. Many Filipinos still
consider Tropical Hut is the original burger in the Philippines. After 57 years, it remains
to be one of the juiciest, most satisfying burgers, not only for cooking technique but also
for the years of nostalgia you can taste.
S3. Capital Capability

As of 2015 THFMI, Gross profit margin increased by 0.91%, Net Profit Margin
increased in 0.75%, Return on Equity increased by 3.53% and Gross Profit of 190, 269,
544. Also as of 2015 THFMI Cash flow 45, 928, 376 increased by 48, 037, 314.

Weaknesses

W1. Lack of Marketing Strategy

Tropical hut have an existing Marketing Strategy. However, it is seen around metro
manila and on their branches. Lack of promotional strategy affect the level of brand
awareness in the market that led to Tropical hut weaken to reach their prospects and
target market. Also THFMI is lack on collaboration or partnership in online delivery
platforms to furtherly reach their target market.

W2. Lack of Distribution Channel

Tropical Hut has a total of 30 branches in the Philippines. 24 branches is located

in Metro Manila, 4 branches is located at Rizal, and there’s 1 branch each in Pampanga
and Cavite. Lack of distribution channel in Tropical Hut will lead to a downturn market that
affect the sales growth because the customer may switch to other brand that is more
accessible to them.

W3. Outdated Structural Design

Customers nowadays loves to take selfies or groupies while staying comfortable

inside the restaurant. So, that structural design and ambiance is really important in a Food
industry because it helps the organization to attract and acquire customers. However, the
structural design of Tropical Hut is outdated, old, and not consistently clean which do not
attract customers. Lack of renovations of structural design of Tropical Hut reduce the
attraction and desire of the customers.

W4. Process Oriented Research and Development

 Research and Development is the first stage in development process. It refers to
the activities of the companies undertake to innovate and introduce new products and
services. THFMI slow on introducing new products in the market, and the service they
offer is delivery. This weaken the sales growth and competitive advantage of the Tropical
Hut because other player in the industry is advance when it comes to product
development and wide offerings of services.

W5. Imitable Products

Tropical Hut Hamburger is the first established Hamburger Fast food industry in
the Philippines. However, the products they are offering like hamburgers, spaghetti,
chicken and etc. are easily to imitate by competitors example Jollibee, Mcdonalds,
Burger King and Wendy’s the major competitor of Tropical Hut who has a competitive
advantage in financial budget. Example Jollibee originally an ice cream parlor in 1975
and later on began to offer hamburgers, sandwiches and hot meals because of the
rapid growth of consumers in a fast food industry.

W6. Manufacturing Plant

THFMI doesn’t have a manufacturing plant. MLM Inc. is the supplier of THFMI
bread and processed meat. When it comes to beverages Coca-Cola Company is their
supplier that will cause higher expenses.

Opportunities

O1. E-Commerce

In today’s time people are tech savvy. Online platforms such websites, facebook,
twitter, Instagram

O2. Strategic Partnership

The THFMI are in the business of forgoing partnership with a high rising malls and
online delivery apps like lalamove, grab food, food panda and honestbee.
O3. Busy Life style

THFMI opportunity to grow based on the increasing tendency of consumers to buy

fast food instead of cooking at home. This tendency is also linked to busy lifestyles in
urban environments. These lifestyles increase consumers’ likelihood of dining in
restaurants like THFMI instead of cooking food at home.

O4. Increasing Market in Rural

The market or consumers are now more scattered in the Philippines and not only
in Metro Manila since some of the provinces are developing. Example of this is Visayas
and Mindanao Region specifically in Ilo-ilo , Cebu, Davao, Naga and Leyte the market
there is still growing and can be a big factor to the success of the firm.

Threats

T1. Government Regulations

Government policies towards issues such as trade or public health is a threat in Tropical
Hut because it can increase costs or impact on the operations of the organization. Trade
agreements can make it easier or harder for organization to undertake business activities
in certain areas, such as when there are differences in food standards between markets
within which the organization is operating. However, health issues, such as concerns
regarding obesity, also make business activities more expensive, especially if taxes on
fast foods are increased or certain ingredients are banned.

The regulatory context is a threat on the success of Tropical Hut business. Higher
levels of regulation can stifle business growth, whilst lower levels may enable businesses
to make more profit. Employment law regarding issues such as minimum wage, holiday
and sick pay may increase the costs for a business, but may also reduce recruitment
costs if staff feel that they are receiving the correct rate of pay and other benefits.

T2. Change in consumer preferrence and taste

The changing tastes of consumers can impact on Tropical Hut in terms of their
sales. The growth of the unlimited rice business has led Tropical Hut to provide an unli
rice partner with chicken offering in the menu alternative to Mang Inasal. Changing
tastes, such as the increased focus on health have required brands such as Tropical
Hut to cater to these or loose the sales. Changing customer demographics mean that
Tropical Hut needs to meet the changing demands such as the health and price
conscious nature of millennials. In order to sustain demand and to increase its sales,
Tropical Hut will need to adapt their menu choices accordingly to include low fat
choices. The continued concerns regarding obesity has also meant that Tropical Hut
has needed to provide healthier choices for all of its customers, and particularly
children.

T3 Train Law

Train law is a big threat not only to the firm but also to the other fast food chain. It
increases the excise tax being imposed on sweetened beverage and therefore, it also
increase the prices of the product. This will lead to decrease the number of consumers

T4 Substitute Product
Many substitute products for the burger in Tropical Hut are now in demand in the
market to ease the hunger of the consumers just like the shawarma and pizza. This
substitute product can steal the market of the firm.
TOWS Matrix
Strengths
Internal Factors S1 Wide Variety of Products
S2 Established Brand identity
S3 Capital Capability
External Factors
Opportunities SO
O1 E-Commerce S1O2 Build Partnership in
O2 Strategic Partnership online delivery and high rising
O3 Busy Lifestyle malls to furtherly reach the
O4 Increasing Market in wide range of market.
Rural S1O1O3 Use E-Commerce for
the convenience of
consumers. Introduce E-
Commerce to build brand
awareness also to introduce
those unfamiliar products
especially to those millennials.
S3O4 Use capital capability by
expanding to the developing
provinces.
Threats ST
T1 Government
S1S3T2 Use capital capability
Regulation
to develop a healthy and in
T2 Change in Customer
preference demand products to meet the
change of customer
T3 Train law
T4 Substitute Product preference.
S3T4 Use capital capability to
add new products like milktea,
different flavors of chicken and
additional flavor of patty like
fish fillet burger.
Weaknesses
W1 Lack of Marketing Strategy
W2 Lack Of Distribution
Channel
W3 Outdated Structural
W4 Process oriented research
& development
W5 Imitable Products
W6 Manufacturing Plant
WO
W1O1 Invest in E-commerce
platforms in social media to
promote the brand and
products to reduce the
expenses. Substitute in
traditional marketing Strategy.
W1O2 Look for distinguished
partner that will boost the sales
and help to become a market
leader.
W4W5O1 Take advantage to
E-commerce to capture market
preference, develop a product
that is more healthier than
other competitors to meet the
satisfaction of the customers.
W6O2 Build own
manufacturing plant by the
help of strategic partnership
investors.
WT
W3W4T1T4 Benchmark with
strong competitors.
W1T2 Reduce the productions to
lessen the expenses.
 Chapter 4

Alternative Courses of Action

An alternative Courses of Action is a possible strategy, or a plan open to a firm

in order in this chapter 4 we can determine different ways in which the problem can be
resolved.

ACA#1 Benchmark with strong competitors.

Advantages

 The benchmarking process helps to increase the competitive nature in different

companies working in the same field of business.
 Benchmarking also provides a sense of awareness regarding the maintenance of quality
in their field of work.

 The benchmarking process helps the company find out their key features and after
finding out the key features of their company, that company compares it with
another company to complete the picture. And if there are any filling to be needed,
then the company starts implementing creative ideas for the company.

 Most of the time while doing business and while running a successful company,
that company faces some strong competition from the rest of the companies. And
that competition helps the current company to maintain their position even better
in terms of their success rate of the company.

Therefore, as per the statement of the benchmarking process, it definitely

increases healthy competition among different companies.

 It is clear about benchmarking that it deals with those findings of the company and
another company which helps them find their position in the business market. And
if there are any chances or space available for improvement in the company
 activities, then the company needs to develop those improvements in the company
for the growth of the company in its own terms.

 One of the best possible advantages of benchmarking is that it can help all the
companies to identify their own essential activities that can improve the profits of
the company.

Disadvantages

 Most of the company compares their working environment with another company
which is earning quite well in a similar field of work. After finding out the reason for
the improved success rates, the company can incorporate those ideas of that
company to improve their productivity. And eventually, they stabilize their standard
to that one aspect, without its course of action.

 Most probably during the benchmarking process, the company finds out those
outputs which can need to be improved and developed for the sake of the overall
growth of the company. Hence, for that, the company needs to look into matters
which can increase their productivity along with their customer satisfaction.

 Most of the companies think that benchmarking helps them improve their company
position as it helped those successful companies to be in the top. But most of the
companies forget that those companies which made themselves to that top
position have earned their hard work.

ACA#2 Use E-Commerce for the convenience of the consumers. Introduce E-

Commerce in building brand awareness also to introduce those unfamiliar
products especially to those millennials.

Advantages

 Using e-commerce in business will eliminate geographical limitations, gaining

new customers with search engine visibility.
  It lower costs for maintenance and rent, and higher capacity for goods.

Disadvantages

 starting an e-commerce business include losing the personal touch of physical

retailers, delaying goods or services deliveries, and limiting availability of food
products as some goods cannot be sold online.
 Speaking of costs, there's a multiplicity of regulations and taxation that comes
with opening an e-commerce shop, and regulators are still not clear about the tax
implications of e-commerce transactions, which is especially true when the seller
and buyer are located in different territories.

ACA#3 Use capital capability by expanding to the developing provinces.

Advantages

 Reach out to a new group of customers. Although you already have a well-mined
customer base, there is always the opportunity to add new customers when you
expand, especially if that expansion of business involves the introduction of new
products and services.
 Economies of scale are another of the benefits of expanding into new markets
because when your business grows, vendors and suppliers are much more
incentivized to provide you with discounts because you’re ordering in larger
quantities.
 The advantages of business growth aren’t just limited to revenue diversification
because another of the benefits of expanding into new markets is the opportunity
for greater brand recognition. Branding is all about making sure that your
targeted audience associates specific qualities, ideas, and characteristics with
your product or service.
 Gives you the opportunity to offer a diverse range of products and services. In
doing so, you are able to diversify your revenue stream, which means that you
aren’t exclusively reliant on selling one core product or service.
Disadvantages
 Shortage of cash - you may need to borrow money to meet expansion costs, eg
buy new premises or equipment
 Compromised quality - increasing your production output may lead to a decline
in quality, which can lead to loss of customers or sales
 Loss of control - as your business grows, you may need to delegate management
duties or divide the workloads between different locations
 Increased capital requirements - a larger business means a larger workforce,
more facilities or equipment, and more investment
 Increased staff turnover - for example, if staff are given extra work, their morale
could drop, their productivity could decrease or they could leave your business