EXTERNAL AND INDUSTRY ANALYSIS

a. MACRO ENVIRONMENTAL ANALYSIS

1. Socio-Cultural Demographic Forces

1.1 Increase in number of Subdivisions

Based on Home trovit, there are 214 total of subdivisions here in Lipa City.

RELEVANCE: People living in subdivisions want their houses to look elegant

through installation of gates, glass doors, attractive windows and more. And it
is an OPPORTUNITY to Jusam because it will results to increase of number
of clients.

1.2 Increase in Number of Typhoon Disasters

Super typhoon Haima causes widespread destruction in Philippines wherein

houses are destroyed as communities take shelter from sustained winds of
more than 225km/h. (http:/pdrrmo.batangas.gov.ph/about-pdrrmo/history-of-
typhoons)

TYPHOONS THAT HIT THE BATANGAS

2006 2008 2009 2011 2012 2013 2014 2015
Caloy Frank Ondoy Dodong Ofel Maring Glenda Lando
Milenyo Peping Kabayan Yolanda Mario Nona
Reming Santi Pedring Ruby
LPA

RECORD OF DAMAGED HOUSES

2006-2011 2012 2013 2014 2015 TOTAL
Partially Damaged 10,113 28 2,588 28,112 6 40,847
Totally Damaged 15,902 50 6,343 4,406 1 26,702

RELEVANCE: Every year, almost 20 number of typhoons arrive here in the

Philippines that leaves destructions. Those destructions made by typhoons is
an OPPORTUNITY for Jusam because it will increase the number of people
who need to repair their houses like those gates or glass doors that was
broken during the typhoon.

1.3 Increasing number of establishment in Lipa City

RELEVANCE: A lot of establishments are built in Lipa City. As a result, it will

increase in number of their possible clients that will need installation of
glasses or aluminum or steel products that they need for their stores that
makes it an OPPORTUNITY for Jusam.

1.4 Increasing number of marriage

In 2016, Region IV-A recorded the highest number of registered marriages,

which accounted for 13.0 percent of the total marriages.
(https://psa.gov.ph/content/marriage-philippines-2016)

RELEVANCE: Everyday number of couples decided to marry increases. The

increase in number of marriage will result to increase in number of people
who wants to own their houses wherein they will install gates, doors and
windows. It is an OPPORTUNITY for Jusam in terms of possible clients.

1.5 Traffic

In unofficial survey in skyscrapercity forum, it is believed that Lipa City is

already ahead of Batangas City in terms of population and will continue to be
on top as the year passes by if growth rate in the past years will remain the
same or pattern will continue to increase. With the latest development on the
streets and highways, traffic today is still an issue and getting worse but
concentrated on commercialized areas of Lipa such as in the vicinity of SM,
Robinsons, poblacion, Puregold, Tambo, LIMA and Fiesta Mall.
(lipastatus.blogspot.com/2015/06/opinion-traffic-worsening-problem-in.html?
m=1)

RELEVANCE: Traffic today is still an issue and getting worse. It is a THREAT

for Jusam in terms of delivery. The delivery of product will be delayed due to
traffic that may result for the cancellation of the client and disappointment of
the customers. Aside from that, their sales will decreases.
 2. Political, Governmental, and Legal Forces

2.1 High crime rate

On crimes against persons, the Region IV-A recorded an average of 6, 394

incidents per year from 2014 to 2016. On prevalent crimes, physical injuries
recorded the highest with 10,045 or 23 percent of the total index crime in
2014 to 2016. On crime against property, there were 7,226 robberies and
12,648 thefts or 28.94 percent of the total index crime, respectively. (Source:
neda.gov.ph)

RELEVANCE: There is high crime rate here in Lipa City, that’s why most of
the people are afraid that some robbers will enter their houses. It’s becomes
an OPPORTUNITY for Jusam because people will be concerned for their
safety and protection so that eventually they want to install gates and iron
binds of windows.

3. Technological Forces

3.1 Technology

Technology has important effects on business operations. No matter the size

of enterprise, technology has both tangible and intangible benefits that will
help you make money and produce the results your customers demand.
(https://www.oksbdc.org>why-is-technology-important-in-business)

RELEVANCE: Every year there are new technologies or innovated

technologies introduced in public. The Jusam make sure that they will have
that. Those equipments make their production faster and easier which results
for more profit that they will gain. It is an OPPORTUNITY for Jusam because
as they maximize their production, they also maximize their profit.
 4. Economic Forces

4.1 Increase in income of consumers

President Rodrigo Duterte’s death squads may have killed democracy in the
Philippines but they haven’t killed the country’s vibrant economy, which is t
he world’s 10th fastest growing economy in the world in 2017 that’s
according to the World Bank. For 2017, Philippines’ economy is expected to
advance between 6.5 to 7.5 percent. GDP Annual Growth Rate in
Philippines averaged 3.68 percent from 1982 until 2017, reaching an all-
time high of 12.40 percent in the fourth quarter of 1988 and a record low of
-11.10 percent in the first quarter of 1985, according to Tradingeconomics.com

RELEVANCE: As the income of consumer increases their buying power also

increases and this is an OPPORTUNITY for the business. Consumers with
increased buying power may be possible client to Jusam Deco Steel Casting
Design in patronizing their products. It shall ensure more sales and increased
profit.

4.2 Increase in price of raw materials

According to the Philippine Statistics Authority (PSA), the country’s inflation

rate rose from 6.4% in August to 6.7% in September 2018. September’s
inflation rate is the highest in over 9 years. It was also the 9th consecutive
monthly inflation rate increase, which was started in January 2018.
(EXPLAINER: How inflation affects you)

RELEVANCE: Inflation leads to increase in price of oil which result to the

increase of price of raw materials and this is a THREAT for Jusam Deco Steel
Casting Design because the machineries used to produce metals uses oils
and when it happens the cost of production will increase and it may affect the
prices of the actual products and services.

4.3 Competitors

According to Porters Five Forces, under competitive rivalry, which looks at

the number and strength of the competitors, numbers of rivals, who are they
and how does the quality of product and services compare, markets with a lot
of rivals, there is a possibility that the suppliers and buyers can go elsewhere
if they feel that they are not getting a good deal from you. On the other hand,
where competitive rivalry is minimal, and no one else is doing what you do,
then you will likely have tremendous strength and healthy profits.

RELEVANCE: Competition can be intense, especially if several direct

competitors are about the same size and it always been a threat for every
business. If there are too many manufactures of the same product in the
same area, the competitions is going to be strong. Jusam Deco Steel Casting
Design has competitors of the same product also operating within Lipa, City,
Batangas. The competition is strong and it is a THREAT for the business
because it will affect the number of their customers and profit.

4.4 Power Interruption

A business depends on power each day to run its operations. But when the
power goes out, unplanned downtime can occur. Power outages can cause
long term damage to your equipment.

RELEVANCE: Electricity is very important for Jusam. Power interruptions

affects their production process because all their machineries uses electricity
to function. It is a THREAT to Jusam because they don’t have a generator
that’s why if there is power interruption their work will be pending and they will
not gain profit on that day.

4.5 Availability of Jobs in factory/mall

Most multinational investors in the Philippines pay above minimum wage.

More advanced industries, such as electronics firms, pay entry level and
legacy workers considerably more than minimum wage. The fast growing
business process outsourcing industry pays several times the minimum for
new hires but rejects around 90%b of applicants. Demand from new entrants
is often so high that pirating of workers has become an industry issue. For
such industries, market forces set wage rates. But for a large part of the
workforce and many exports firms the minimum wage is a critical business
cost. (www.investphilippines.info/arangkada/climat/business-costs)
RELEVANCE: Most of the people prefer to work for companies with higher
salary. Factories and malls offer different types of jobs. It is a THREAT for
Jusam because their workers may transfer to malls since it is more
comfortable to work there because the work in malls are easier and the work
place is air conditioned.