Business plan for Vanguard Corporation

For the period 1998-2020

Prepared by Francisco, Aldrianne T.

Table of Content Page

I. Executive Summary 1
a. Summary 1
b. The Market and Business 1
c. Core Service Offering 1
d. Revenues and Profitability 2
e. Management Team 2
II. Business Mission 4
a. Company Ownership/ Location 4
III. External Analysis 5
a. The Economy and Business Environment 5
b. Target Customer/ Market Dynamics 5
c. Competition 6
d. Competitor Grid 6
e. Market Size 7
IV. Internal Analysis 8
a. Our Product and Services 8
b. Past Major Project 8
c. Current Projects 9
d. Marketing 10
V. S.W.O.T Analysis 11
a. Strength 11
b. Weakness 11
c. Opportunities 11
d. Threats 11
VI. Strategies 12
a. Pricing Strategy 12
b. Sales Summary 12
c. Group Structure 14
d. Management Team/ HR 14
e. Key actions for the next 12 years 16
VII. Marketing Plan 17
a. Our Services 17
b. Marketing Communication 17
VIII. Finances 18
 EXECUTIVE SUMMARY

Summary

Vanguard Corporation mainly focuses on building pipelines that withstand and prevent any disaster.

Our Vision
“To be internationally known company for the strength and flexibility of our work”

Our Mission
“To be the company that will provide the best and most efficient way to do the job without comprompising the
quality of the products”

Goals
 To focus on building strong and flexible pipelines
 To increase the number of clients
 To strengthen the core activities
 To gain more connection
 To use new technology

Objectives
 Full compliance with international standards, specifications, and international law at the end of 2018
 Successfully build 3 structures that is able to withstand earthquake in the Philippines.
 Adapt new technology that will improve the efficiency of the project.

The market and business

The business focuses on the construction and maintenance of water and electrical pipelines that will supply water
and electricity. The target market are the government and industrial sectors. The government’s goal is to supply
the best way to supply water and have a proper drainage system that will prevent the flooding in some areas also,
the government should also supply the best way to transport electricity efficiently. The government or specially
the public works sector has the responsibility to provide solutions for the unstoppable flooding.

Core service offerings

Some pipelines were made to transport water and provide drainage system and some are used to serve as an
underground electrical line. Creating this pipelines lessens the amount of the overhead electrical powerlines and
also the posts needed. The lesser the overhead electrical line the lesser the concrete post used.

The maintenance and construction of pipelines is vastly known for the efficient and more strategic way of supplying
water and electricity source.

Revenues and profitability

The company is already gaining profit and revenue through building and maintaining structure that transports
resources. The in demand structures are the pipelines especially in the rural areas that suffers a lot of flooding.

Management team

Vanguard Corporation is an international company whose expertise in the construction of water and electricity
transporting structures.
Top 3 main shareholders of the company are:
 Aldrianne T. Francisco

He is a Filipino businessman, from the prominent Francisco Family. He is the Chairman of the Board of
Directors since 2018.

He also sits on boards of various international and local business and socio-civic organizations:

International:
 Chairman, Habitat for People Asia Pacific Capital Campaign Steering Committee
 Vice Chairman, Habitat for People International
 Member, The International Construction Society
 Member, World Energy Forum
 Member, ASEAN Engineers
 Member, World Presidents’ Organization

Local:
 Chairman, VC Foundation, Inc
 President, Philippine Institute of Civil Engineers
 Trustee, Energy Manila
 Trustee, Pilipinas Solar Foundation
 Trustee, National Contractor Organization

He graduated from Mapua University for his Bachelor’s Degree in construction management.

Don Aldrin E. Sabangan

He is a filipino magnate, investor, and philanthropist. He currently serves as Vice Chairman of the Board
of Directors since 2006.

He also sits on the boards of various international and local business and socio-civic organizations.

 Member, Grupo Corporation International Advisory Committee

 Chairman, EIMS Business School Asia-Pacific Advisory Board
 Chairman, Singapore Technology University Advisory Council in the Philippines
 Member, Singapore Technology University Board of Trustees
 Member, EIMS Global Advisory Council
 Member, DDD International Council
 Member, Business University of Tokyo Global Advisory Board
 Member, Board of Trustees of Construction Management Philippines

In the past, he held the following positions:

 Chairman, Asia Business Management Council

 Chairman, Malakanyangin Foundation
 Chairman, World Fund Philippine Advisory Council
 Philippine Representative, CAPE Business Advisory Council

Honors include World Economic Forum Global Leader for Tomorrow in 1998; Emerging Markets CEO of the year
in 1999); Philippine TOYM (Ten Outstanding Young Men) Award in 2005 and Management Association of the
Philippines Management Man of the Year Award in 2007.
 Christine Mary E. Fernandez

He is a Filipino investor. He currently serves as President and Chief Executive Officer (CEO) of the
Vanguard Corporation. He succeeded his father Lindo E. Fernandez in 2017.

He also sits on the boards of various international and local business and socio-civic organizations.

 Member, Solar Corporation International

 Chairman, Taiwan Business School Asia-Pacific Advisory Board
 Chairman, Taiwan Asia Business Management Council
 Chairman, Likas Foundation
 Chairman, Philippine Business Tactics Advisory Council
 Philippine Representative, Energy Resource Council

BUSINESS MISSION

The company’s mission is to be the best in providing an efficient, high-standard, well-fortified, safe, and secured
structures focusing on pipelines and water transporting structures worldwide. Structures built by the company are
efficient in a way that it will continuously provide enough energy based on the consumer’s demands, high standard
that the structure is quality assured and following the international standard for water and electrical transporting
structures, well-fortified that the structure can last through the time span its designed for and can stay upright
through typhoon or any calamity, safe and secured that it will not give negative impact to the environment around
it. The company’s target is to build structures that will supply water and electricity that will be more safe and
economical.

COMPANY OWNERSHIP/ LOCATION

VC was founded on 1998 in Manila Philippines. It started as a small contractor company in the Philippines whose
focused jobs were requiring small amounts of capital and small to medium buildings. Then CCC also focused on
more trainings and certifications to gain the experience and qualifications as a company. CCC owners
accumulated profits from investments and small projects to increase the income of the company. After 3 years,
the rapid growth of VC turned it into a general contractor company. As a general contractor, the company took a
lot of projects especially in commercial and residential structures. The company gained expertise and experience
in this short period.

In 2000, VC was recognized and became a part of a huge project in the Philippines. The Batanggas to Manila
pipeline was the first and biggest project of the company. After that, the company took interest on pipeline projects
to be as their own business field. But VC joined a lot of pipeline projects as subcontractor first on different
countries, aiming to get this field as their expertise and be its strength.

In 2010, VC officially turned into an international private corporation. The company then accepted clients who
planned to build pipelines on their industry as their own project and be the general contractor. The projects are
mostly wind turbines, solar powered panels and nuclear power plant.
 Now VC’s mission is to be the best in providing an efficient, high-standard, well-fortified, safe, and secured
structures focusing on pipelines worldwide.

The breadth and depth of her experience in the industry, both local and overseas, propelled VC to become the
leading construction corporation not only in the Philippines but also internationally. Today, his enduring legacy
remains to be the driving force in VC's continuing commitment to provide the highest standards in Construction
Project Management. VC was established to address the need for energy giving structures in the world. The main
office of the company is located at VC Tower BGC, Taguig, Philippines.

EXTERNAL ANALYSIS

The economy & business environment

Construction world has grown rapidly through time especially today where the government is more focused in
energy generating infrastructures in different areas in the country. Our company is undertaking business mostly
in Philippines and Asia and planning to expand to other parts of the world.

We will be concentrating in Asia that will provide us with the greatest margin, those clients desiring energy
generating structures. This is the fastest growing segment of all the clients requiring our services. The other
specialty that we can offer is the maintenance and operation of different energy generating structures..

Consumer demand for electricity is growing and with power plants producing low carbon emissions, these
energies represents the only way to generate significant amounts of base load power without increasing carbon
emissions. These powers enjoy several important economic advantages over competing technologies. It has a
proven track record of large-scale base load power generation as well as long plant lifetimes and therefore it
should remain part of the energy portfolio well into the future. There could even be an energy renaissance should
construction costs of plants be reduced significantly or, perhaps more likely, if a carbon tax is instituted.

Target Customers/ market dynamics

Industrial
The industrial sector are the most consumptive field of energy sources in a country, it includes facilities and
equipment used for manufacturing, agriculture, mining, and construction and could benefit a lot especially from a
massive producer of energy.

Government
The Government or specifically the public works sector has the responsibility to provide solutions for high
demands in water sources. It includes maintenance of the existing pipelines and installation of new pipes.

Residential
The residential sector depends on some factors including population in a certain area. As long as population
accumulates, the demand for basic needs such as electricity increases. It consists of villages, subdivisions,
condominiums and apartments.
Competition

TUBO is a US based pipeline company formed in 1998 from the TUBO pipes Corporation. It offers nuclear
products and services to utilities internationally, service and maintenance, instrumentation, control and design of
concrete pipelines.

Shing Shang Construction Company (SSCC) founded on January 1, 2008, is one of the four sectors of Shing
Shang. The company that creates a flexible pipeline that transports water and provide drainage system.

PAKECO Construction Company is a power plant design and engineering company in Philippines. It was
established in 1975 as a public enterprise. PAKECO engages in designing, engineering, and constructing
underground pipelines. They provide total integrated Engineering, procurement and construction (EPC) services.
It has designed and built a total of 27 pipelines using their own technology.
Competitor grid

Using the Gartner Magic Quadrant to further understand how we fit into the market of competitors in the field of
Energy Generating Structures Construction and Engineering Services.

PAKECO Vanguard
Construction Corporation
Company
Ability to Execute

TUBO Shing Shang

Construction
Company

Completeness of Vision

Shing Shang is an up and coming company in the industry of Pipeline Construction. They have the experience in
terms of construction but still considered to be a novice in Pipes Industry.

In terms of the oldest and most experienced company in our field, PAKECO is the most competitive. Although
they established well their name in the Industry of Pipes Construction, modern technology and methodology
surpass their conventional techniques.

Due to the infancy of Pipeline Construction in the recent decades, Weslinghouse hasn’t reach its pinnacle of
success and therefore out-shadowed by new companies with modernized and up to date methodology resulting
to a near Bankruptcy in the early 2000’s.

With the proper balance of modernized methodology and consideration of conventional expertise in Power Plant
Construction, we at VC have the capability to provide exceptional services that the transporting structures
construction market demands at greater execution in consideration with the vision of the patron.

Competitor PAKECO TUBO Shing Shang Vanguard

Water Pipeline XXX X X XXX

Electrical Pipeline XX X XX XXX
Water Pipeline X X X XX
(Concrete)
Water Pipeline X X X XX
(Aluminum)
Water Pipeline X X XX XXX
(PVC)
Gas Pipeline XX X XX XXX

X = Offers this service

XX = Strength
XXX = Major strength
Market size

-2 years Last year This year Next year

Pipeline Construction 3 14 20 19
Pipeline Maintenance 5 9 15 22
Pipeline Operation 8 10 12 15
Others 0 1 3 6

Market Analysis for 2007

Pipeline Construction Pipeline Maintenance

Pipeline Operation Others

INTERNAL ANALYSIS

Our products and services

The worldwide demand for energy continues to grow and our company aims for the customers trust us to provide
them construction services in a way no other company can match. VC designs, builds, operate and maintains
water and electricity pipes that uses cutting edge technology. VC expertise understand the complex compliance
requirements for bringing new pipeline construction, providing turn-around services.

The worldwide demand for water continues to grow and our company aims for the customers trust us to provide
them construction services in a way no other company can match. Our scope of delivery and services extends
from the design and construction planning, through the handling of all earthwork, stonework and finishing works,
to the turn-key construction of the pipelines.

As a leading company in the sector, we carry out selected Civil Engineering Construction projects for our clients
and as a result of our innovations, are continuously expanding our position as a technological leader. High
standards of quality, technological expertise and experience are what set us apart. The VC team has the capability
to ensure that more demanding projects are successfully implemented.
 Past Major Projects Highlights

Batangas-Manila Pipeline (2000)

A big pipeline was completed on Batangas, 52 kilometres west of Manila in the Philippines. It is located
on a 2.24 square kilometre government reservation at Malabu, Batangas. VC was one of its subcontractors in the
construction of the pipeline and it was the Philippines' only attempt at building a long pipeline.

Tagaytay-Cavite City Pipeline (2002)

A 37 kilometer underground electrical pipeline from Cavite City power plant to Tagaytay. It is located in
a government owned subdivision in the city of Cavite.

Current Major Project Highlights

Palawan-Batangas Pipeline (2017)

A 504 km water pipeline from Malampaya, Palawan deepwater field off the northwest coast of Palawan
to Tananga, Batangas. It started the flow of water Malampaya off Palawan Island on Sept. 2005.

Marketing

In this type of business, we are not just talking about finances which is a given requirement in doing a business
but also we are talking about risk and how clients will try to absorb this type of services. Due to this circumstances,
we need a high quality strategy to market our services.

The first major challenge in this type of business is on how to introduce services to our clients. The following are
some ways that will provide us simple yet effective marketing strategies.

• Social Media and Other Online Advertisements

Nowadays, almost every people in the continent are getting information through internet that’s why introducing
are services on social media’s and online advertisement is the first step to catch the attention of our clients.

• Seminars

Maybe some of the people have knowledge about different water sources providing structures but we all know
that the number of these people are very few compare to our target market. One way for the clients to absorb our
services is to give them enough information especially about the benefit of this type of services
• See It on Your Own Eyes Experience

Though we can provide enough information about our services to the clients, this is not enough to get their
attention. They have information but it is hard for them to create picture on how the products will work on actual
situation. That is why the company will provide exhibits on different prototype on how products will work on actual
scenario in such a way that people will fully understand the benefit of the products.

• Brochures and Referrals

This one is our stepping stone to fully maximize our connections to large market. We will provide them brochures
and ask for their referrals especially to those large companies. This will be a continual process so that the market
of our services will not get dull and vanish immediately.

SWOT ANALYSIS

Strengths

1. Long experience and in-depth knowledge on pipeline construction and water and electrical providing
structures.
2. Consists of top leaders and engineers around the world.
3. Consistent with project growth.
4. Has 17 international certification and construction firm awards.
5. Focused on innovations and technology that can be used in the structure.
6. Goal oriented and success driven company.
7. Projects are high-paying.

Weaknesses

1. The cost of our every project is slightly expensive compare to other construction projects though the
benefit will be a great deal in long-term.
2. Complexity of projects and location of areas.
3. We will be focusing on maintenance rather than construction after the construction demand drops.
4. High-priced expert employees
5. Long construction time

Opportunities

1. This industry is not a very common that is why there is less competitor.
2. The business will not only be in demand locally but globally.
3. Wide political and commercial connections inside and outside the Philippines

Threats

1. New and highly-cost project will make some industry or business will hesitate to take risk.
2. Government in some place may not allow to construct this type of structures and it will take a long legal
process.
3. The changes in customer’s preferences and different trends in the industry.
4. The changes in policies and regulation in building this kind of structure.
 STRATEGIES

Planning for a cost price of a project is complicated in construction business. As a contractor, we want to set the
values straight and negotiate to our clients but due to unforeseen events that may occur and causes any changes
on the values of the projects and services. For this, we give importance also on client’s trust and satisfaction with
our partnership on creating new structures on this field of business. But even if these things are important, we still
don’t waiver to ignore our company’s profit and interest for our benefit of the project. As we need to protect our
company’s future constitution and economy. This is why we set up five ways of pricing (as explained below). The
pricing strategy may depends on the client’s agreement upon planning the cost price of the project.

Pricing strategy

Profit Margin

 Fixed Price

The amount is fixed and cannot be changed. If any cost-savings occurred during the job, the construction
business will keep that as additional profits. If there are any cost overruns, the contractor will have to pay
for those.

 Cost plus Fixed Percent

The client pays the contractor an additional amount of money (as a percentage) in order to cover our
overhead costs. In order to use this effectively, the client will normally require a very strict method of
expense accounting.

 Cost plus Fee

The client will pay for all of the allowed expenses. Additionally, there is another payment for profit in the
end, regardless of how many expenses we’ve racked up in the process.

 Target Estimate

In this target estimate scheme, our target costs are set up early on in the project. Our company and our
client will agree to share the cost savings or overruns on an agreed-upon formula.

 GTD Max Cost

The contractor will set a maximum price for the construction job. If we exceed this price for whatever
reason, we will be responsible for the cost overruns.

Sales summary

-2 years Last year This year Next year

Power Plant Construction 2 5 8 15
Power Plant Maintenance 3 3 7 10
Power Plant Operation 5 5 7 9
Others 0 1 1 1
 Sales by year 2019's
40 Pipeline Operation Pipeline Maintenance
Pipeline Construction
35
30
25
20
15
10
5
0
2016 2017 2018 2019

Sales by month - planned for 2019

4.5

3.5

2.5

1.5

0.5

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Group structure

VC is comprises of leaders around the world and have the high skills and experience in construction and
business. Here is the organization chart:

Management Team/ HR

Board of
Directors

General
Manager

Technical Business
Project Purchasing Finance
Operation HR Manager Operation and
Manager Manager Manager
Manager Legal Manager

Materals
Marketing &
Section Chief Management Site Engineer Personnel Accountant
Sale Staff
Specialist

Necessities Structrural Insurance Advertisement

Documenter Cashier
Specialist Engineer Coordinator Administrator

Office
New Business
Site Engineer Cost Estimator Management
Staff
Assistant

Planning
Surveyor
Engineer

QA/QC
Civil Supervisor
Engineer

Safety
Project Manager

Construction project manager controls the time, cost and quality of construction projects. They plan and coordinate
all aspects of the construction process, including hiring contractors and working with engineers, architects and
vendors. A single manager might oversee an entire construction project, or multiple managers might oversee
specific aspects of a larger project.

Purchasing Manager

Interacts with stakeholders to develop, engage and lead supplier relationships for extracting the greatest value in
supplier quality, total cost effectiveness, enhanced service levels, risk management, sustainability, and innovation.
Manage the ongoing performance of our suppliers including objective setting and supplier evaluations where
warranted. Develops short-term and long-term category specific strategies that align with the company goals for
reducing costs and meeting financial expectation, while managing vendor relationships. Drive consolidation of
spend and seek out synergies across Business Units where applicable, by forming and leading cross-functional
strategic sourcing teams to develop and implement category/commodity strategies and to drive cost from
individual spend sub-categories; consults with senior management, and other subject matter experts to develop
alternative solutions; advises on options, risks, total cost of ownership, and business impacts.

Technical Operations Manager

Technical operations managers are key players in the successful operation the projects. Over the course
of his or her career, he is likely to work on and oversee a broad range of projects. He should have the skills in
the operation of energy giving structures and how to maintain it.

HR Manager

HR manager is responsible for the smooth and profitable operation of a company’s human resources department.
Typically, he supervises and provides consultation to management on strategic staffing plans, compensation,
benefits, training and development, budget, and labor relations. An HR director is also expected to take a
leadership role in developing a culture that enables employees to perform in accordance to a firm’s objectives.HR
directors can effectively plan, design, develop and evaluate human resource-related initiatives that support
organizational strategic goals. In addition, HR directors can lead performance management, talent assessment,
and effective labor relationships, including negotiating and administering labor agreements.

Finance Manager

Working alongside a business’ MD or CEO, the Finance Manager will not only be an exceptional accountant and
hands-on with company finances but will also be commercially aware, advising on the best path of growth for the
business. The role of the Finance Manaer has overall control and responsibility for all financial aspects of company
strategy and is expected to analyze figures and implement recommendations based on these findings, with the
most profitable outcomes. Often managing and leading a team through difficult periods including month end, year-
end and annual budgeting, he would have excellent communication skills with all levels of staff, often having to
work with various departments to help them plan and manage their own budgets.

Business Operations and Legal Manager

He is responsible for their organisation's business operations and marketing communications strategies as well
as overall branding and image. He is a senior role, often reporting directly to the General Manager and Board of
Directors. He develops annual marketing and business plans, create a calendar of campaigns and events, set the
marketing budget and analyse the market and competitors. He is also responsible with the legal aspects and work
hand by hand with our law firms partners and lawyers.
Key actions planned for the next 12 months

VC had already planned the main steps to follow to start the project. It usually takes 10 years on planning
and completely build a pipeline. This timeline is for the new specific project in 2019.

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Project
Acquisition
Planning
Approval
Realization
Financial
Models
Operational
Management
Construction
Punch
Listing
Turn Over
Maintenance

The Action Statement Cost Responsible Completion Date

Comply with international
standards, specifications,
and international law by
seminars and
accreditation
Build five new electrical
transporting structures
outside Philippines
Increase construction
productivity and reduce
the average time taken to
construct the structure
Optimum use of local and
international resources
Produce 3 new processes
and 1 new technology that
can be used in power
plants
15 M Php Business Operations and Legal December 28, 2018
Manager
980 B Php General Manager, Business June 1, 2028
Operations and Legal Manager,
Project Manager
5 M Php Project Manager, December 30, 2019
Procurement Manager
1 M Php General Manager, Finance Manager, December 18, 2018
Procurement manager, Project
Manager, Technical Operations
Mnager
20 M Php Business Operations and Legal July 6, 2020
Manager, Technical Operations
Manager
 MARKETING PLAN

Our Services

The worldwide demand foru underground pipeline continues to grow and our company aims for the customers
trust us to provide them construction services in a way no other company can match.

VC designs, builds, operate and maintains electrical and water transporting structures using a variety of materials
, including aluminum, concrete, copper and steel. VC expertise understand the complex compliance requirements
for bringing new pipeline construction on line, providing turn-around services.

Marketing Communications

Below is the budget for the local and international marketing communication strategy:

Communications programme Timing Cost in Php

VC marketing communication will be focusing on promoting pipelines

on industries that lacks energy.

Social Media and Other Online Advertisements At the start of a 500 K – 1 M

 Creating Group that promotes and explain pipelines specific project
 Sharing Facts about the product
Before the project 1M–3M
Seminars
initiation
 Invites active people and known individuals
 Discussing the futures need and innovations
Before and along 1M-5M
 Introduce the products
the making of the
See It on Your Own Eyes Experience project
 Creates prototypes
 Exhibits products
 Schedule trip to actual pipeline

Brochures and Referrals

 Create Attractive and informative Brochures
 Continues Referrals
 FINANCES

Refer to the attached file.