In 2019, it was reported that there were about 1.42 million registered businesses in the Philippines.

With Philippines as part of the developing and emerging countries, it is an attractive choice for start-ups, SMEs,
and foreign corporations because of numerous areas for potential growth and development. Prior to COVID-
19, the business climate in the Philippines was forecasted to grow at around 6.4% in 2020. However, the
coronavirus unearthed the flimsiness of many businesses to adapt on the hurdles brought by unprecedented
circumstances like this. There were discussions in some of the classes that pointed out how most companies
were too used in preparing business continuity plans for already known events such as typhoon, earthquake,
fire, etc. The absence of a comprehensive scenario planning in many businesses had taught important lessons
on why there is a need to always prepare for any future disruption.
It is already well-known that the Philippines itself is aversive of the activities in the research and
development field. Many breakthrough projects were abandoned because of lack of support both by the public
and private sector. Because of this apparent lack of enthusiasm for scientific endeavor, it is no doubt why the
country is behind amongst its peers in the Southeast Asian region when it comes to innovation. In the business
setting, Philippine companies only started seeing the importance of innovation and growth when the pandemic
hit the country in 2020. The Philippine corporate setting, in one way or another, is slowly opening to the idea
of “innovate or die” because there is a constant need to move forward – and moving forward means accepting
that a transformation is bound to happen, and you must anticipate that. Also, this means that it is possible to
apply some of the innovation frameworks in Philippine businesses as they can already be seen in some of the
companies that embraced change to achieve growth.

Business Model Canvas: A Company Blueprint

In the Philippines, the business model canvas (BMC) is already a familiar framework and is being used
by some of the medium to large companies. An example of a large company that uses a business model canvas
is Jollibee Foods Corporation. It announced in May 2020 its plans of restructuring its business model as a
response to a safer and efficient service through changes in its key partners, key activities, key resources and
cost structure by building discreet “cloud kitchens.” Reynaldo Lugtu Jr. classified this in his article “Business
Mode Innovation” as a business configuration innovation or innovation in the company’s processes, structure
and partners to create value. Jollibee’s “cloud kitchen” (key resource) is said to exclude dine-in facilities and
will focus more on stronger delivery service (key activities) by partnering with logistics providers (key partners)
for a seamless order-to-delivery experience for the consumers. It had its own food delivery function, but it has
opened its doors to partner with other delivery apps such as GrabFood and FoodPanda.
Another example of a company that uses business model canvas is Gawad Kalinga Enchanted Farm
(GKEF), a non-profit organization. In a study conducted by Raymund Habaradas et al, BMC was found to be a
useful map in creating the following: 1) linkages between its host community for human and natural resources,
social entrepreneurs, interns, and volunteers; 2) channels of communication to have active discourse with
experts in social enterprise; and 3) strengthening relationship with its key partners and donors for continuous
support on the programs and services. Habaradas and his team described GKEF’s business model as a multilever
ecosystem that allowed social entrepreneurs to learn and build global Filipino brands that can have social and
environmental impact.

Dual Transformation: A Growing Phenomenon

One of the surprising things is discovering that dual transformation is a framework known and used by
several Philippine corporations. One of these companies is the Manila Water. It was said that the company
managed to identify strategic opportunities such as developing commercial wastewater solution and packaged
water (transformation A), thorough goal-setting and establishment of boundaries (transformation A and B),
and identified constrained market which was the non-East Zone businesses (transformation B) that contributed
to its transformation. A small team of dedicated members was created to manage the project and built plants
and expanded Manila Water’s home base to launch the commercial wastewater solution (capabilities link).
Another company that recently used dual transformation is Union Bank of the Philippines, Inc. It
created a financial technology unit called UBX that housed its technological expertise on financial service and
investment (capabilities link). It developed innovative approach to businesses by using e-business networking
platform and blockchain technology (transformation A) by considering providing end-to-end digital logistics
solution through partnerships (transformation B). UBX’s desire to be the best digital bank was achieved and it
continuously wants to pursue implementing services that are not offered by traditional banking and finance.

Blue Ocean Strategy: A Barely Existing Approach in the Philippines

The Blue Ocean Strategy is still an estranged concept in the Philippine corporate setting. Though there
were blogs that have asserted that Sun Cellular and Cebu Pacific Air were two of the successful companies that
used blue ocean, I believe that Sun Cellular was not able to manage to achieve that breakthrough in the
uncontested market space of low-cost unlimited text and calls they tried to pursue. Also, Cebu Pacific Air may
have experienced blue ocean upon the launch of its low-cost, no frills airfare in the 2000s. But the low-cost
airline industry in the Philippines is now becoming a red ocean with the presence of Air Asia and SkyJet which
gives the market more choices and leads to heightened competition among the airlines.

Analysis and Conclusion

The applicability of the innovation frameworks in the Philippine corporate setting lies in the dedication
that these companies have to maintain its leadership in their chosen industry. I believe that Business Model
Canvas and Dual Transformation are more conducive in the Philippines because of the demand for fast, secure
and reliable technological tools and systems. The Philippines is a consumption heavy economy and people are
usually looking for improvements to have an easier day-to-day activity rather than having new and unique
solutions to live. In the cases of UBX and Manila Water, they addressed issues that pertain to improving the
everyday lives of the people – reliable tools that eased doing bank transactions and safe commercial water
consumption, respectively. Due to this realization, I do not think Blue Ocean Strategy would work well in this
country because the Philippines is a market that thrives on competition, monopoly and imitation – which is in
contrast with blue ocean that look for new market space and has the differentiation component. Most large
companies are conglomerates or subsidiaries which makes it hard for start-ups or MSMEs to scale bigger
because eventually, these large companies would imitate or monopolize the emerging industry through
acquisition. As for the Sun Cellular, it had its potential - it had low-cost leadership and differentiation (unlimited
text and calls at an affordable price). However, it failed to bring a valuable experience to its users – it had weak
cellular signals and its unlimited call and text offering was meant for similar Sun subscribers when the market
was highly dominated with Globe and Smart subscribers.
As mentioned numerous times in class, innovation needs to be new and impactful. It does not
necessarily mean that it has to be a completely new technology or product – it can be a different but better
version of an existing product. There is always that want to become one of a kind, but it needs to be sustainable.
After all, what use is it to be different when no one wants to even know about you?

References:
https://business.inquirer.net/270942/number-of-registered-firms-in-ph-hits-1-
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investing-in-the-filipino
https://www.manilatimes.net/2020/05/28/business/columnists-business/business-model-
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https://businessmirror.com.ph/2019/08/02/the-philippines-as-innovation-achiever/
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