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SESSION 2

Company History

The first precursor company to 2GO Group Inc. began on May 26,

1949. Eventually, the Aboitiz Transport System was formed by, first, the

breakup of WG&A SuperFerry into SuperFerry and Carlos A. Gothong

Lines and then the merging of SuperFerry with Cebu Ferries and

SuperCat fast ferries to form the Aboitiz Transport System. In December

2010, the former major stockholders of the company, namely Aboitiz

Equity Ventures and Aboitiz and Company Inc. sold their shares to

Negros Navigation Co. Inc. (NENACO), for US$105 million. The equity

value included all the logistics and shipping businesses of the company,

except its interest in its joint ventures with the Jebsen Group of Norway.

At the same time, December 2010, Negros Navigation announced that

the China-Asean Investment Cooperation Fund acquired a controlling

stake in the company through an equity infusion.

The China-Asean Investment Cooperation Fund is a Netherlands-

based, private equity firm wholly owned and controlled by the

Government of the People's Republic of China. Because Negros

Navigation was a privately held firm the exact amount invested by the

Fund was not disclosed. In short, the mainland Chinese government set

up the China-Asean Investment Cooperation Fund, which then among

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other investments in the region took a controlling stake in Negros

Navigation, which in turn purchased SuperFerry and related brands and

re-branded itself 2GO Group. With the significant rate disparity between

airline and shipping fare prices, particularly during peak season, 2GO

Travel positioned itself as a more affordable alternative and maintained

its share in the total passenger market, in spite of the tough competition

from Low-Cost-Carriers. 2GO Travel established new domestic routes

and ports, opening up opportunities for aggressive entrance of passenger

traffic into Odiongan, Romblon from the port of Batangas. This new

service added passenger volume to the existing Batangas to Caticlan

route, with the added stop at Odiongan port.

The new ports of call Puerto Princesa and Coron in Palawan made

access easier to these beautiful island coves to domestic and foreign

tourists. In 2015, the Batangas-Romblon Roxas service captured most of

the route’s current RoRo traffic. The addition of a Masbate port of call to

the traditional Manila-Cebu-Ormoc service opened up a new market for

our passage business. After the launch of our new vessel, St. Francis

Xavier, we have returned service to the ports of Dumaguete, Zamboanga

and Tagbilaran. In this age of connectivity, 2GO Travel brings the

Philippine archipelago together by connectingnew ports, cities and other

destinations, through “TraveLink”, its improved, seamless land transfer

connectors. In partnership with local bus operators, Travelink provides

bus transfers as part of the passenger ticket. Passengers from the

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southernmost areas of Mindanao -- General Santos City, Cotabato City

and Davao City – are able to use our Cagayan De Oro service with bus

transfers from Cagayan De Oro Port. The access to the Batangas Caticlan

route from different parts of Manila via Cubao, Buendia and Alabang,

make for easier passenger booking and ticket buying from Manila,

inclusive of a bus transfer to the port of Batangas.

VISION

To be the best and biggest company in the transport and supply chain

industry providing memorable travel experiences, moving products and

catalyzing business growth in domestic and international markets.

MISSION

 Our business is to create memorable, fun filled and safe travel for

passengers and provide total supply chain solutions and excellent

services to clients building on our 180 years of existence.

 We delight our customers with innovative and technology driven services

while customizing to their needs and ensuring seamless operations.

 We connect the Philippines 7,100 islands to Asia and the world,

catalyzing business growth, promoting tourism and partnering in nation

building.

 We offer employees a rewarding working environment while delivering

value to our shareholders.

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BRAND CORE VALUES

 Corporate Governance

Commits to corporate values and accepted ethical and moral rules and

norms that apply inside and outside the organization.

 Integrity and Transparency

Doing the right things for the right reasons. Treating people fairly and

with respect.

 Teamwork

The ability to work in unison to achieve a common goal.

 Our People

Our people are the central movers of the organization.

 Innovation

Process by which new ideas for continuous improvement and

breakthroughs toward organizational effectiveness and efficiency are

promoted and institutionalized.

 Excellence

A talent or quality which is unusually good and surpasses ordinary

standards. It is also aimed for standard of performance

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2GO NEW BRAND PROMISE IS:

A passion to provide flexible solutions to help your business grow.

BRAND ATTRIBUTES

 FLEXIBLE

We always find the right solutions to meet our customers’ needs as their

businesses grow.

 KNOW-HOW

We draw on our industry experience & combine it with technology &

system knowledge to deliver accurate on-time solutions.

 INTEGRATED

We draw on our different in-house capabilities to satisfy our customers’

diverse needs.

A. External Analysis

A travel agency is a private retailer or public service that provides

travel and tourism related services to the public on behalf

of suppliers such as activities, airlines, car rentals, cruise

lines, hotels, railways, travel insurance, and package tours. In addition

to dealing with ordinary tourists, most travel agencies have a separate

department devoted to making travel arrangements for business

travellers; some travel agencies specialize in commercial and business

travel only. There are also travel agencies that serve as general sales
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agents for foreign travel companies, allowing them to

have offices in countries other than where their headquarters are

located. The modern travel agency first appeared in the second half of the

19th century with its root in 1758 as establishment of Cox & Kings

Ltd. In the year 1970, Cox & Kings the longest established travel

company centered its focus on its business of travel and tourism.

Lately Thomas Cook also established a chain of agencies in the last

quarter of the 19th century, in association with the Midland Railway.

They not only sold their own tours to the public, but in addition,

represented other tour companies. Other British pioneer travel agencies

were Dean & Dawson, the Polytechnic Touring Association, and the Co-

operative Wholesale Society. The oldest travel agency in the United States

is Brownell Travel; on 4 July 1887, Walter T. Brownell led ten travellers

on a European tour, setting sail from New York on the SS Devonia.

Travel agencies became more commonplace with the development of

commercial aviation, starting in the 1920s. Originally, travel agencies

largely catered to middle and upper class customers, but the post-war

boom in mass-market package holidays resulted in the proliferation of

travel agencies on the main streets of most British towns, catering to

a working class clientele looking for a convenient way to book overseas

beach holidays. A travel agency's main function is to act as an agent,

selling travel products and services on behalf of a supplier.

Consequently, unlike other retail businesses, they do not keep a stock in

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hand, unless they have pre-booked hotel rooms and/or cabins on a

cruise ship for a group travel event such as a wedding, honeymoon, or a

group event. A package holiday or a ticket is not purchased from a

supplier unless a customer requests that purchase. The holiday or ticket

is supplied to the agency at a discount. The profit is therefore the

difference between the advertised price which the customer pays and the

discounted price at which it is supplied to the agent. This is known as

the commission. In many countries, all individuals or companies that sell

tickets are required to be licensed as a travel agent. In some countries,

airlines have stopped giving commissions to travel agencies. Therefore,

travel agencies are now forced to charge a percentage premium or a

standard flat fee, per sale. However, some companies pay travel agencies

a set percentage for selling their product. Major tour companies can

afford to do this, because if they were to sell a thousand trips at a

cheaper rate, they would still come out better than if they sold a hundred

trips at a higher rate. This process benefits both parties. It is also

cheaper to offer commissions to travel agents rather than engage in

advertising and distribution campaigns without using agents. Other

commercial operations are undertaken, especially by the larger chains.

These can include the sale of in-house insurance, travel guide books,

and public transport timetables, car rentals, and the services of an on-

site bureau de change, dealing in the most popular holiday currencies.

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B. General Environment

1) Economic Development

2GO Group is moving businesses and the country forward. The

company has grown to be more than shipping. They’ve gone into

logistics, offering the whole suite of freight forwarding, import, export,

customs clearance and release, warehousing, multimodal transportation,

e-commerce, last mile deliveries, project logistics, and express deliveries

according to 2GO Shipping Chief Operating Officer Mark Matthew F.

Parco in Business World. In terms of shipping and logistics, I they have

covered almost everything, and on top of that, they take steps to being

one of the largest distribution companies. Mr. Parco shared that among

2GO’s product lines and solutions, shipping are the most matured in the

sense that the products and growth is there. At the company’s brand

structure, 2GO’s shipping operates under the brand names 2GO Travel

for passage business, and 2GO Freight for cargo business. 2GO Travel

is one of the largest sea travel providers in the Philippines that provide

comfortable and secured transport between major destinations across

the archipelago. Its ability to guarantee convenient and affordable sea

travel experience has helped 2GO be the preferred means of sea travel by

Filipinos. 2GO Travel moved a total of 4.5 million passengers, which

comprised the 90% of the total market share. 2GO has, played a critical

role in facilitating effective and efficient trade operations which is the

backbone of the country’s economic growth.  2GO is helping businesses,

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especially manufacturing and consumer goods companies, by

transporting their commodities around the country. In this manner, 2GO

has become part of every Filipinos’ lives. To adapt to the changing

landscape in the transport and logistics industry, 2GO is streamlining its

operations and is continuously seeking ways to improve its services.

Recently, the company unveiled the fully-furnished M/V St. Leo the

Great as part of its efforts to modernize its fleets. The passenger and

cargo vessel now boasts a world-class accommodation, modern features,

and various amenities that give passengers an exceptional sea-travel

experience.

2) Socio Cultural
Net income of Chelsea Logistics quadruples on 2GO acquisition.

The newly-listed logistics firm of Dennis Uy, Chelsea Logistics Holdings

Corporation, saw its net income quadruple to P405.7 million in the first 9

months of the year, after it acquired equity shares in the parent firm of

2GO Group Incorporated. The firm said in a statement that its net

income surged to P405.7 million for the first 9 months of the year, from

the P102.0 million it posted in the same period a year ago. Their

investments into better shipping and logistics continued to yield results

and create more value for their investors, business partners and other

stakeholders, Chelsea Logistics president and chief executive officer

Chryss Alfonsus Damuy said in a statement. In March, Chelsea Logistics

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acquired 28.15% indirect economic interest in 2GO Group and

subsequently took over its management.

3) Technological Developments

With the arrival of summer comes the influx of travellers at every

airport, terminal and harbour across the country, and with it the need

for heightened levels of security. Responding to this need, 2Go Travel

now employs the new, state-of-the-art AAR Fido Explosives Detector to

ensure passenger safety on board all of its ships. The equipment was

developed using proprietary technology by the Massachusetts Institute of

Technology (MIT) and will be used for the first time in the country. In

addition to the standard X-ray scanners and K-9 units that the company

utilizes, 2GO Travel’s new Fido detectors screen all boarding persons for

explosives and contraband substances for that added layer of safety.

Each machine also features a scan-shoot function that captures images

of all boarding passengers for proper manifest recording and to deter

criminal activities. Passenger safety is a commitment they take seriously

and with this newly acquired scanning technology, they hope to bring

peace of mind to all their valued travellers, especially during these peak

summer months. In addition, the company is also utilizing the

advantages of the Internet to efficiently reach its market and deliver

utmost convenience to its consumers. Innovation is there, they would not

grow if they will not match or surpass on whatever their competitors are
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offering. Those are the things they are looking into to help them maintain

them leadership in the market.

4) Political Aspect

The Securities and Exchange Commission (SEC) is investigating

the alleged discrepancy in book-keeping of leading logistics provider 2Go

Group Inc. unearthed by the new investor group now running the

company. The restatement of financial reports from 2015 to 2016 has

worried investors and cast the spotlight on the independent auditing

industry that thrives behind the scenes.

5) Environmental Aspect

2GO and TDFI CONTINUE MARINE CONSERVATION. Abiding to

its advocacy of marine conservation, 2GO Group Inc., the leading and

largest premier logistics provider in the Philippines, continues its

partnership with non-profit company Tuason Development Foundation

Inc. (TDFI) for its series of sea grass planting initiatives in the Davao

Gulf.2GO embodies a proud legacy of leadership and service built on 148

years of shipping logistics experience. And even now, its unique work

ethic remains unchanged, especially on its mission to give back to

mother-nature through its various corporate social responsibility

programs, where it puts an emphasis on environmental protection and

rehabilitation. The partnership between 2GO and TDFI was because it

both understood the need for marine conservation because of the

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consequences of urban development, pollution, illegal fishing methods

and overfishing. 

By rehabilitating these ecosystems they not only repair the

environment, but they bring back fish and wildlife to provide food for the

people again, and more importantly, sustainable means of income such

as eco-tourism and modern sustainable aquaculture. 2GO has chosen

these projects as part of their CSR because it directly contributes to the

very environment that their business relies on, said Harry Morris, TDFI

Program Director.

Recent studies have shown the importance of sea grass in

preserving the marine ecosystem especially on tropical areas like the

Philippines which boasts one of the world’s longest coastlines at over

36,000 kilometres. It is described as the “lungs of the sea” because a sea

grass can generate up to 10 litres of oxygen per day via

photosynthesis. The long term goals for both TDFI and 2GO are to

provide a complete and holistic approach to the rebuilding of the coastal

environment. This will cover both the physical environment and the

social aspect. The projects are designed to repair and rebuild the

environment back to its pristine state, and then protect it by proper

management, allowing nature and people to co-exist sustainably and

even to flourish. As the largest freight and passenger shipping line in the

country, 2GO relies on the sea because every large vessel on the sea

burns bunker fuel while operating their ships.

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6) Market Demand And Opportunities

From the early days of its integration, 2GO Group has risen to the

level of profitability. By 2013, coming from the year 2011, the company

attained a profit turnaround in excess of PhP.5 billion, all in the midst of

challenges that had beset the company in those days. Since that time,

the 2GO Group has positioned itself as a total logistics platform that

sports two major divisions, the first being the Shipping Group and the

other being the Logistics Group. Working under these divisions are

different strategic business units, successful in their own right, that

work together, drawing upon each other’s respective strengths. From

domestic supply chain demands to international product movement and

distribution, the 2GO Group is now the Philippines’ biggest source of

end-to-end logistics solutions. In truth, the 2GO Group’s success is one

too big to be contained.

7) Types Of Product And Services Offered

2GO Travel

2GO Travel is one of the largest, premier land/sea-travel providers

in the Philippines. The company offers a wide selection of hotel

accommodations/services, tours and events packages, with the ease of

land/sea travel. Born out of established brands such as Negros

Navigation, Superferry, Cebu Ferries, and Supercat, 2GO Travel has a

combined history of more than 148 years in travel industry. From the

sunny beaches of Boracay, to the iconic skylines of Manila, 2GO travel

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works with over 1,200 outlets nationwide, catering to various ports in

Luzon, Visayas, and Mindanao. By combining seamless travel

experience, with breath-taking destinations, and the luxury of hotel

accommodations, the company aims to redefine travel.

 Maximum of 8 passengers per transaction.

Passenger below 3 years old are considered INFANTS.

- Infants are charged P205/head and paid at the terminal.

- Maximum of 2 infants per adult is allowed.

 Meals and Linen inclusive:

- Number and availability of meals vary according to schedule

- Linen inclusive except for Jet Seater accommodation

8) Suppliers and Distributor

Materials, parts and suppliers are obtained mostly from the local

suppliers at competitive rates. Furl and lubes, the biggest operating

expense of the company is purchased from a major fuel provider.

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Items Or Services Major Supplier

Supplied

Fuel, diesel and  Petrilliam Blac Corporation

lubricants
Vessel repair and  SUMUYOSHI/Yamaguchi,Ken
drydocking 
Jersa Industrial and Marine
Corp.
 Swan and Concorde, Inc.
 Rurex Fabrication and Trading
Company

Vessel Co-loading  Caprotoc Corp

TerOps/CY Repair  Dakai Engineering Pte. Ltd.

 Chesteel Marine Industrial
Corp.
 IHI Turbo International Trade
Inc.

 Keppel Batangas Shipyard

Stevedoring and Arrastre  Manila North Harbour Port, Inc

Insurance  Pioneer Insurance and Surety

Corp.
 Steamship Mutual Management
Limited
 Philippine Charter Insurance,

Corp
Advertising  Sylvrphoenix Advertising and
Media Inc

C. Porter's Five Forces

The five forces that impact on the competitiveness which are

outlined in the Porter’s 1980 work are: the barriers to entry, threat of

substitutes, the bargaining power of the buyers and sellers, and the
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rivalry among existing competitors. In considering these factors in light

of the travel industry, the theory provides the best means for analysis.

1. Threat of Substitute Goods

In the travel industry there is usually higher chances to start a new

business and progress successfully. The firms appear in all price ranges,

with variations in the levels of service and the amenities. The constant

challenge will always be to get the customers to choose your services over

the competitor. With the technological advancements, the internet makes

the overall market to be more efficient while expanding the size of the

potential market and creating the new substitution threats. Given the

potency of this industry a superb strategic plan is vital. The threat is that

another firm chain may erode the customer base with a newly formulated

internet approach or the marketing campaign. According to Porter the

development of a value chain process analysis, supported by the

collaborative event management, the structuring and sharing of the

customer focused value chain data, powerfully enhances the

performance of the value chains and of the electronic commerce.

2. Bargaining Power of Customers

Business persons choosing a firm for business in travel industry are the

savvy customers and they are at par with the changes in the ability of

their customers. It has become very simple for the customers to go online
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and survey on the best firm that offers great services. They no longer

need the assistance from the travel agents, the corporate travel

consultants or the middle men of any kind to determine where they will

get their services. Porter’s model predicts the ability of the buyers

bargaining power to elimination the intermediaries. The tourists who are

the major consumers in the travel industry are more and more capable of

making use of the technological advancements in the means of

communication such as the internet to increase their bargaining power

thereby creating the fulfilment of Porter’s model. Due to the increased

bargaining power of the customers, they are finding internet businesses

websites which will negotiate or discover the bargains for them. These

processes shifts the bargaining power to the end user as it had been

predicted by the Porter model and these buyer freedom reduces the cost

of switching so that the loyalty to a single firm is a thing of the past

unless the particular firm uses its one time opportunity when the

customer sticks to the firm it deeply impress other customers with a very

unique and valuable differentiator.

3. The Rivalry Among Existing Competitors

The rivalry amongst the competitors in the travel industry is fierce. When

the potential customers learn about a hotel on line, the internet reduces

the differences amongst the competitors. Business people tend to seek

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the best prices for the best experience and the tendency is to reduce the

prices to a competitive level. This industry covers wide area so the

market is widened which increases the number of the competitors. For

example, someone who wants to spend the day in the historic site can

easily choose a tourist firm in the nearby town if the amenities or the

prices are low. The Variable and fixed costs can be different in the areas

which are more expensive to live.

4. Barriers to Entry

The initial investments in the travel industry create quite a barrier to the

entry but certain barriers to entering the tourism market are reduced by

the internet. The presence on many efficient communication channels

reduces the upstart marketing costs somewhat, and gives the new

competitors the access to the potential suppliers and the resources. Even

a starter in the industry can use the channels of large chains to

understand the key marketing concepts and the lures for the customers.

A vital barrier is the differentiation. A firm that can successfully

differential itself by the location, service, amenities or other quality has

the greatest potential to attract and keep the clients. Another barrier to

entry into business in the travel industry would be the expertise.

Unfortunately, in a mobile society employees can leave one firm chain to

work in another and they take that expertise in terms of the training

given or the experience with them. It is in the areas of expertise and of

differentiation that a firm can make the greatest impacts on its clients
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and thereby on the bottom line. Many established travel companies have

the synergies between their established business and business channels.

5. Bargaining Power Of The Supplier

This is not a substantial threat in the travel industry for it can have the

impacts especially in the area of the suppliers. The employees to the

firms are the major suppliers, the bargaining power of the labor supply is

higher when there are fewer people to fill service section of the industry,

and the firms can attract excellent staff and create a chance for providing

excellent and exceptional experiences to their clientele. As part of their

strategy all the firm chains should have section employee recruitment.

The other supplies that are needed by hotels are also easier to attain

through internet channels whether originated by the supplier or by the

hotel chain. With their products in the greater demand by greater

numbers of the firms the suppliers gain more measure of power by

competition for their offerings.

D. Roadmap

2go has developed a road map for launching the program to the newly

integrated 2GO.The road map will run its full course with the following

phases.
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i. Policy Creation

a) Revisit current ERM philosophy and framework

b) Validating if philosophy and frame will still be applicable

c) Establishing Risk Management Council who will drive ERM initiatives

ii. Concept Loading

a) Re-launching ERM philosophy and framework to all business units

b) Cascading ERM concepts to all team members

iii. Planning and Management

a) Creating Risk Register on a per business unit level

b) Validating if current identified risk and its treatment are still applicable

c) Identifying, assessing and treating new risks inherent to integration of

2GO

iv. Establish Business Continuity Management

a) Assessing the need for Business Continuity Program

b) Establishing business continuity plan for the top identified risk exposure

E. External Factor Evaluation Matrix

Opportunities WEIGHT RATING WEIGHTED

SCORE
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1. Profit potential of 0. 03 1 0. 03
a good advertising
campaign and
promoters
2. Development of 0.10 4 0.40
new technology
3. Increase in 0.10 3 0.30
tourism growth
4. Increase in loyal 0.06 2 0.12
customer
5. Pent up demand 0.07 2 0.14
for travel after
recession
Threats
1. New competitors 0.10 3 0.30
2. Threats of 0.10 3 0.30
terrorist attack
3. Growth of existing 0.10 4 0.40
competitors

4. Unpredictable 0.10 4 0.40

weather
5. Recession 0.10 4 0.40
TOTAL 0.86 2.79

SESSION 3
A. Internal Analysis
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2GO Group, Inc. is the largest fully integrated supply chain

enterprise and most complete end-to-end solutions provider in the

Philippines. The Group creates configurable solutions for nationwide

best-in class service levels. Through its customized, integrated, end-to-

end service provided at the most cost-efficient packages; 2GO Group

opens opportunities for its customers to pursue aggressive business

growth. 2GO Group addresses the needs of a growing Philippine economy

driven by consumption and inter-island trade. The Group’s growth is led

by these logistics and value–added services, with its shipping operations

providing a stable platform and sustainable competitive advantage. With

the largest and widest logistics infrastructure across the Philippines

linked seamlessly to over 150 countries, the Group’s highly integrated

supply chain platform enables national selling and merchandising for

modern trade and convenience retailing. This is achieved through the

broadest nationwide network of strategically located Forward Stock

Locations (FSL) and Cross docks facilities; the biggest sea cargo capacity

carried by a fleet of owned ROPAX and freighter vessels; a national bulk

transport network consisting of air, land and sea carriers; and the widest

cold chain delivery system and fleet of special bulk liquid carriers. The

distinct business units are managed and operated by highly competent

staff with years of experience in distribution, logistics, project

management and engineering services. The system is powered and

supported by integrated technology that measures product demand by

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branch, tracks orders through the supply chain from order taking to

fulfilment and maintains inventory data at all stocking points.

The Group offers an array of logistics and travel services through

its own successful brands 2GO Travel, 2GO Freight, 2GO Express,

SCVASI, ScanAsia, and 2GO Logistics. It maintains joint venture

partnerships with renowned global supply chain companies such as

Hapag-Lloyd and Hansa Meyer from Germany and The Kerry Logistics

Group from Hong Kong. By continuously innovating to provide solutions

that are relevant, sustainable and adaptive to a fast changing market,

the 2GO Group is the most favored last-mile fulfiller of the fast growing

Philippine e-commerce industry.

2GO Group, Inc.'s consolidated net income before tax as of December

31, 2016 is P1.95 million, 435.82 million or a substantial 29% higher

than last year. It's operating income grew by P726.88 million or a hefty

40% versus the same period last year. Management attributes this strong

performance to the sustained growth of all the business units within the

Group, coupled with maintaining its healthy cost-to-revenue ratio. The

significant growth is partly contributed by the revenues and income from

the Comelec project for the national elections which 2GO solely served in

2016. 2GO has further scaled its foothold as the largest fully integrated

supply chain enterprise and most complete end to end solutions in the

Philippines.
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The Group continues to tighten its hold on its cost and expenses. As a

result, the increase in to costs and expenses is lower than the increase in

revenues, leading to the improvement in margins. Cost of services and

cost of goods sold 15% and 12% respectively. On the other hand, General

and administrative expenses grew by 19% for an average of 15% increase

in costs and expenses. This is still lower than the 17% increase in

revenues, leading to higher operating margins. 2GO is still the country's

largest total end to end logistics solutions provider. It has consistently

grown and increased its market share in the logistics and supply chain

industry.

2GO Travel leads the Philippine inter-island sea travel market.

Formed through the union of Negros Navigation, Super Ferry, Cebu

Ferries and Super Cat, 2GO Travel provides a leisurely, low-cost,

comfortable and secure travel experience across the islands. Through

value-added offers and innovative marketing strategies utilizing both

traditional and social media, it continues to hold on to its dominant

position despite the tough competition from Low-Cost Carriers. 2GO

Travel has a fleet of six Large Ropax three medium-sized Ropax and six

high-speed vessels serving 4.2M passengers through 24 ports. In 2015,

revenues increased by PhP300 million – from PhP3.4 billion in 2014 to

PhP3.7 billion.

B. Internal Factor Evaluation

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Internal Strengths WEIGHT RATING WEIGHTED

SCORE
1. Largest travel industry in the 0. 05 2 0.10
market
2. Good reputation and image 0.10 4 0.40

3. Strong management team 0.10 4 0.40

4. Loyal employees 0.10 3 0.30

5. Accessibility 0.10 3 0.30

6. History of minimal service 0.10 3 0.30

complaints
Internal Weaknesses
1. Saturated market 0.07 1 0.07

2. Little diversification 0.10 1 0.10

3. Limited access to international 0.10 1 0.10
markets
TOTAL 0. 82 2. 07

C. Current Strategy Analysis

ACTION PLAN
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Program Title Key Objective Key Results Timeline

 “The Hub Create a Relocate the 1st week of
Renovation” restaurant restaurant and November
lounge ambience install bar 2015
to invite guest counter
 “USPH Create and Standardized November
CHECKLIST” define stricter checklist 2015
Housekeeping
and F&B critical
control points
 “Barista” Creation of new Standardization November
coffee menu of coffee drinks 2015
 “Handouts” Create and plan 90% Passing November
training mark on all 2015
handouts for trainings
trainings
 “Iconic Create a new Standardization 90% done to
Bartender” menu for drinks
of drinks fleet date
land based andand wide and
onboard the HUB
 “Bartending Staff/Crew Bartending December
101” Training Standards 2015
 “Service 360” Staff/Crew Grooming,
Training attitude or
personality,
hygiene,
interpersonal
communication
skills and
rapport
 Food and Create Manual Standardized 1st Quarter
Beverage for F&B F&B Manual 2016
Manual
 “TerOps Review, revise Standardized 2nd quarter
Manual” and Teminal of 2016
standardized Manual
terminal manual
 “Role Standardized Definition of 2nd Quarter
Description each role based the role of 2016
2GO 360” on rank description
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according to
company’s
mission and
goal
 “2GO 7101: To cruise the New experience Long term
Island Philippine Island of travel goal
Cruising”

Advertising Strategies

Recognizing the value of effective on-line marketing and booking,

the 2GO Travel website has been improved and enhanced through more

interesting write-ups, visuals of modernized vessel accommodations and

information regarding key destinations. Aggressive campaigns in popular

social media networks such as Facebook, Twitter and Instagram have

been utilized to ensure brand exposure in digital media. The 2GO Travel

Facebook page features all destinations served and things to do in the

areas. The page, updated hourly, also SHIPPING BUSINESS UNITS &

SUBSIDIARIES promotes current promotions and group travel packages

and serves as a venue where customers can inquire about rates and

packages and as an added customer service and booking channel. 2GO

Travel continues to improve services, amenities and facilities, to

strengthen its market position as the transportation service provider of

choice for affordable, comfortable and fun travel. Its vessels have been

refurbished, including the entertainment areas, dining areas, conference

facilities, spas and salons, and in some, ballrooms and similar amenities.

The Company maintains a fleet of 14 passenger-carrying vessels,

 28

including five large Ropax vessels, three medium-sized Ropax vessels and

six fast crafts. With aggressive marketing and substantial media

exposure, 2GO Travel will continue to drive the growth of the shipping

business of 2GO Group. The management continues to create more and

more efficient operations to improve profits that benefit the company’s

stakeholders, while continuing to provide the most extensive seafreight

service required in the archipelago.

D. Internal Strategic Issues

All of the firms in the travel industry can benefit from analysis

because of the applications that produce greater value in the value

chain; the industry is dominated by a few large companies. They have

the greatest market shares and in most cases they influence the

structure and shaping of the industry. The firm’s planning sector can

benefit from analysis. They usually aim at making the profit and are

usually commercial companies. When they fail to make a profit over a

long period of time they are likely to cease trading. These include the

parks, restaurants, tour operators and the travel agents. The Human

resources can be managed by the analysis as part of the overall strategy

as well as the provision for self service personnel and benefits, Value can

be increased by standardizing the firms across multiple locations,

forming knowledge directories, and allowing real time access to the

resources by the consumers. , every firm could benefit by controlling and

 29

forecasting systems with suppliers. These improvements can also lead to

greater profitability. Each type of firm needs to identify its unique

strengths and the target market and align its strategy to support their

identity, the firms’ chains choose to be low cost, or to command the

premium price. Distinguishing a firm from the competition becomes vital.

This can easily be enhanced by analysis, through the superior inputs,

through better training of the staff as part of the supplier or through the

better management. Differentiation adds value which makes it hard to

maintain the distinctive strategic positions of a firm because it eases

change to best practices and it improves the operational effectiveness.

These distinctions make the business more profitable. The firms in the

travel industry are fragmented. Therefore there is need for a strategy

which makes it easier for consumers from far and wider areas to learn

about the firms or to order for the services, the consumers must still

access the services. It is more likely for the profitability to be there for

when process is easy to transact and complete. The analysis points out

similar examples within the industries. Dealing directly is great for the

firms. Other than travel agencies who arranged hotel stays the tourism

business has always been a face to face business and this normally

sustains the economic value of the transactions. For all of the firms’

chains, the analysis complements rather than cannibalizing the

established ways of doing business.

SESSION 4
 30

Swot Analysis

2go Travel

STRENGTHS WEAKNESSES
 First to offer luxury cruise  Limited packages
locally  Seldom offers super sale
 On-board entertainment packages
 Accessibility of their
products
 Skilled Workforce

OPPORTUNITIES THREATS
 Innovation of new products  Other alternative for
and services offered transportation or
 Ability to develop new competitors
destinations  Season or Weather/
 Increase target market Fortuitous Events
 Development of low-cost
airlines

STRENGTHS

As 2GO Travel is the first to offer domestic luxury cruise and sea

travel experience in the Philippines, they arrange a variety of products

that would become their source of income for the company. A luxury

cruise typically consists of several on-board entertainments and

activities, plus package deals that are not just affordable, but also worth

the pay. These products can be accessed through the internet, in their

company website as well as through their thousands of ticketing offices

found all over the country.

WEAKNESSES
 31

2GO Travels weaknesses mentioned above are correlated. It is due

the limited packages they offer since their products prices vary

depending on the season, duration, type of accommodation, and other

factors affecting the price and how seldom they offer these packages.

OPPORTUNITIES

Since a luxury cruise is quite costly, 2GO Travel has the

opportunity to innovate new products and services to be offered that will

surely increase their revenue. Considering that the Philippines is an

island country and is filled with diverse flora and fauna and

undiscovered wonders, they could use these advantages to develop new

destinations through the creation of new packages that would involve

those destination. With the use of their advertisements through

magazines, social media, and radio, they could increase their target

market, thus more revenue.

THREATS

There are two critical threats that will affect the number of

passengers availing their products and services. Those are their

 32

competitors which could be other modes of transportation like air travel,

the weather and the season.

CONCLUSION

The company aims to be the best and biggest company in the

transport and supply chain industry providing memorable travel

experiences, moving products and catalyzing business growth in

domestic and international markets. The 2GO name embodies a proud

legacy of leadership and service built on 148 years of shipping and

logistics experience. Today their unique work ethic remains unchanged.

They have pioneered many innovations in the industry, including the

merging of the heritage Negros Navigation and ATS under the 2GO

brand.

2GO Express and 2GO Travel has high venture because it is the

only company to have a luxurious cruise locally. The group maintains

the largest and widest logistics infrastructure across the Philippines with

seamless links to over 150 countries. The group also maintains joint

venture partnerships with renowned global supply chain companies such

as Hapag Lloyd and Hansa Mayer from Germany and the Kerry Logistics

Group from Hong Kong.

Collectively, the group’s services include:

 International shipping

 International freight forwarding

 33

 Customs clearance

 Domestic shipping: Freight and Travel

 Warehousing

 Land Transport

 Express

 Projects

 XTrade

RECOMMENDATION

The company should continue to improve services, amenities and

facilities, to strengthen its market position as the transportation service

provider of choice for affordable, comfortable and fun travel. They must

continue also to provide the best in industry service for the transport and

forwarding requirements of corporations, local and foreign government

agencies, and the largest global express and logistics partners, by air,

land and sea.

SESSION 6
A. Prerequisites to Effective Strategy Implementation
 34

Implementation is the process that turns strategies and plans into

actions in order to accomplish strategic objectives and goals.

Implementing your strategic plan is as important, or even more

important, than your strategy. Critical actions move a strategic plan from

a document that sits on the shelf to actions that drive business growth.

Sadly, the majority of companies who have strategic plans fail to

implement them. 

A strategic plan provides a business with the roadmap it needs to pursue

a specific strategic direction and set of performance goals, deliver

customer value, and be successful. However, this is just a plan; it doesn’t

guarantee that the desired performance is reached any more than having

a roadmap guarantees the traveller arrives at the desired destination. For

those businesses that have a plan in place, wasting time and energy on

the planning process and then not implementing the plan is very

discouraging.  Although the topic of implementation may not be the most

exciting thing to talk about, it’s a fundamental business practice that’s

critical for any strategy to take hold. The strategic plan addresses

the what and why of activities, but implementation addresses

the who, where, when, and how. The fact is that both pieces are critical

to success. In fact, companies can gain competitive advantage through

implementation if done effectively.  In the following sections, you’ll

discover how to get support for your complete implementation plan and

how to avoid some common mistakes. As a business owner, executive, or

 35

department manager, your job entails making sure you’re set up for a

successful implementation. Before you start this process, evaluate your

strategic plan and how you may implement it by answering a few

questions to keep yourself in check.

Take a moment to honestly answer the following questions:

 How committed are you to implementing the plan to move your

company forward?

 How do you plan to communicate the plan throughout the

company?

 Are there sufficient people who have a buy-in to drive the plan

forward?

 How are you going to motivate your people?

 Have you identified internal processes that are key to driving the

plan forward?

 Are you going to commit money, resources, and time to support

the plan?

 What are the roadblocks to implementing and supporting the plan?

 How will you take available resources and achieve maximum

results with them?

 36

The Group creates configurable solutions for nationwide best-in

class service levels. Through its customized, integrated, end-to-end

service provided at the most cost-efficient packages, 2GO Group opens

opportunities for its customers to pursue aggressive business growth.

2GO Group addresses the needs of a growing Philippine economy driven

by consumption and inter-island trade. The Group’s growth is led by

these logistics and value–added services, with its shipping operations

providing a stable platform and sustainable competitive advantage. With

the largest and widest logistics infrastructure across the Philippines

linked seamlessly to over 150 countries, the Group’s highly integrated

supply chain platform enables national selling and merchandising for

modern trade and convenience retailing. This is achieved through the

broadest nationwide network of strategically located Forward Stock

Locations (FSL) and Crossdocks facilities; the biggest sea cargo capacity

carried by a fleet of owned ROPAX and freighter vessels; a national bulk

transport network consisting of air, land and sea carriers; and the widest

cold chain delivery system and fleet of special bulk liquid carriers. The

distinct business units are managed and operated by highly competent

staff with years of experience in distribution, logistics, project

management and engineering services. The system is powered and

supported by integrated technology that measures product demand by

branch, tracks orders through the supply chain from order taking to

fulfilment and maintains inventory data at all stocking points.

 37

B. Strategic Leadership

Leaders face the continuing challenge of how they can meet the

expectations of those who placed them there. Addressing these

expectations usually takes the form of strategic decisions and actions.

For a strategy to succeed, the leader must be able to adjust it as

conditions require. But leaders cannot learn enough, fast enough, and do

enough on their own to effectively adapt the strategy and then define,

shape and execute the organizational response. If leaders are to win they

must rely on the prepared minds of employees throughout the

organization to understand the strategic intent and then both carry out

the current strategy and adapt it in real time. The challenge is not only

producing a winning strategy at a point in time but getting employees

smart enough and motivated enough to execute the strategy and change

it as conditions change. This requires the leader to focus as much on the

process used to develop the strategy – the human dimension, as the

content of the strategy – the analytical dimension. To integrate both

dimensions into strategy making in a way that creates a winning

outcome and gets the whole organization understanding and committed

to this common agenda requires leaders who are clear about the strategic

capacity of each of their internal stakeholder groups and who have the

perspective and insights to lead in a way that incorporates both

dimensions as the strategy is developed. 

 38

By continuously innovating to provide solutions that are relevant,

sustainable and adaptive to a fast changing market, the 2GO Group is

the most favored last-mile fulfiller of the fast growing Philippine e-

commerce industry. The Group offers an array of logistics and travel

services through its own successful brands 2GO Travel, 2GO Freight,

2GO Express, SCVASI, Scan Asia, and 2GO Logistics. It maintains joint

venture partnerships with renowned global supply chain companies such

as Hapag-Lloyd and Hansa Meyer from Germany and The Kerry Logistics

Group from Hong Kong.

 39

C. Company Objective

VISION 2020

To be the best and biggest company in the transport and supply chain

industry providing memorable travel experiences, moving products and

catalyzing business growth 

in domestic and international markets.

 40

The 2GO name embodies a proud legacy of leadership and service built

on 149 years of shipping and logistics experience. Today their unique

work ethic remains unchanged. They have pioneered many innovations

in the industry, including the merging of the heritage Negros Navigation

and ATS under the 2GO brand. Today, 2GO Group Inc. is the largest,

premier logistics provider in the Philippines. The group owns and

operates successful brands such as 2GO Travel, 2GO Freight, 2GO

Express, and 2GO Logistics, offering an array of logistics and travel

services. The group maintains joint venture partnerships with renowned

global supply chain companies such as Hapag Lloyd and Hansa Mayer

from Germany and the Kerry Logistics Group from Hong Kong.

The group maintains the largest and widest logistics infrastructure

across the Philippines with seamless links to over 150 countries.

 Market Shares: Freight – 27%, Passage – 90%

 Key Operating Assets:

o Shipping: 26 Passenger & Freighter Vessels, 22 Port of Calls,

18,135 Containers

o Logistics: 2,014 Company-owned and subcontracted trucks,

599 Riders, 1,800 Branch Network, 67 Warehouses, 60,000 Pallet

Positions, 164,000 SQM

 41

D. Strategy Map

i. Element: CORPORATE SOCIAL RESPONSIBILITY

Strategic Objective: To give back to the people

PERSONS TIME PERFORMANCE

STRATEGIES ACTIVITIES
RESPONSIBLE FRAME INDICATORS
Every
15th Ensures a safe
Training on and work
President and
Pollution 30th environment for
Manager
Control day of all its
the employees
month
Aims to
General
Sea Grass replenish sea
Manager and Twice a
Conservatio grass meadows
Operations year
n in Philippine
Manager
waters
Serves as a
Extension buffer zone in
President,
and Outreach Mangrove coast lines
Manager and
Programs Rehabilitatio Twice a against
Chief
n Program year typhoons and
Operations
and Planting tidal waves and
officer
help control
pollution
Provides good
habitat for
marine and wild
Manager and animals,
Tree Chief Once a breeding ground
Planting Operations year for fish and
officer crustaceans
and nesting and
breeding place
for birds.
 42

ii. Element: BUILDING RELATIONSHIP

Strategic Objective: To build and strengthen the relationship between

the 2go and Partners or Clients

PERSONS TIME PERFORMANCE

STRATEGIES ACTIVITIES
RESPONSIBLE FRAME INDICATORS
Creating
President and Provides at the
configurable
Chief Every most cost-
solutions
Operations day efficient
for
officer packages
nationwide
Offers
Generating
accessibility to
opportunitie
customers to
s by Twice a
President pursue
Building opening year
aggressive
stronger more
business
relationship branches
growth.
between 2go Ensuring Addresses the
and clients that needs of a
President and Twice a
partners or growing
Manager month
clients are Philippine
satisfied economy driven
Enables national
Highly
General selling and
integrated
Manager and Every merchandising
supply
Sales month for modern trade
chain
Supervisor and convenience
platform retailing.
 43

iii. Element: INNOVATING THE COMPANY

Strategic Objective: To innovate and to continue being the largest,

premier logistics provider in the Philippines.

PERSONS TIME PERFORMANCE

STRATEGIES ACTIVITIES
RESPONSIBLE FRAME INDICATORS
Managed and
operated by
highly
Maintain
competent staff
Chief
with years of
its upright Twice a
experience in
Operations
distribution,
brand month
logistics, and
Manager
project
image
management
and services.

Innovation of System is
powered and
the company supported by
integrated
General technology that
measures product
Technology
demand by
Manager and Every
branch, tracks
Advancemen
orders through
Operations Year the supply chain
t
from order taking
Manager to fulfillment and
maintains
inventory data at
all stocking
points.

iv. Strategy Recommendation

 44

The group maintains the largest and widest logistics infrastructure

across the Philippines with seamless links to over 150 countries. The

group also maintains joint venture partnerships with renowned global

supply chain companies such as Hapag Lloyd and Hansa Mayer from

Germany and the Kerry Logistics Group from Hong Kong. The company

must continue to expand and enhance their services, amenities and

facilities, to strengthen its market position as the transportation service

provider of choice for affordable, comfortable and fun travel. They must

continue also to provide the best in industry service for the transport and

forwarding requirements of corporations, local and foreign government

agencies, and the largest global express and logistics partners, by air,

land and sea.

E. Departmental Plans
 45

To ensure a high standard of best practice for the Company and its

stakeholders, the Board should conduct itself with utmost honesty and

integrity in the discharge of its duties, functions and responsibilities

which include, among others, the following:

President

Corporate Portfolio
Plan Budget
Strategic
Decisions

Annual
Business Plan Work Unit
Report
Plan

i. Determine the Company’s strategic objectives, policies and procedures

that may guide and direct the activities of the Company and the means
 46

to attain the same as well as the mechanism for monitoring

management’s performance. While the management of the day-to-day

affairs of the Company is the responsibility of the management team, the

Board is, however, responsible for monitoring and overseeing

management action.

ii. Develop an in-depth understanding of the arenas in which the various

businesses play, and the range of external factors, opportunities and

risks, that each business may face.

iii. Oversee the development of and approve the Company’s business

objectives and strategy, and monitor their implementation, in order to

sustain the Company’s long-term viability and strength.

iv. Periodically seek and receive the perspectives and recommendations of

the Company’s senior leaders, through the CEO, on goals and strategies

going forward. Analyze and challenge those goals and strategies to

achieve mutual comfort in the proposed direction, or to encourage

reconsideration of aspects of that direction.

v. Raise with the Company’s senior leaders, through the CEO, ideas as to

possible redirection, or concerns over potential risks emerging from

external factor analysis until such time as mutual comfort is reached on

a revised direction, if appropriate.

vi. Adopt long-term goals and objectives for the Company, including the

formulated strategies necessary to achieve those objectives.

 47

vii. Consider and evaluate offers or ideas related to significant expansions of

existing business operations; mergers or acquisitions; joint ventures, or

other forms of significant cooperation with another corporation or

enterprise; divestitures or other form of significant investment. Seek and

obtain data and information necessary to making an informed decision

related to the particular offer or suggestion.

viii. Subsequent to the formal adoption of the goals and strategies, receive

from the Company’s senior leaders, through the CEO, periodic data and

information updates on progress, related to the pre-determined success

measures and timing. Review with the CEO, and as appropriate refer

back through him to the Company’s senior leader, any concerns and/or

suggestions for redirection.

ix. Review key matters impacting the external reputation and standing of

the Company and the 2GO name, including any perceived failure to

consistently adhere to corporate values, beliefs and standards of ethical

conduct. Decide on a remedial action that may need to be taken.

F. Balanced Scorecard
Area of Objectives Measure Time Primary
of Target Expectation Responsibility
Customers
 48

 Resolve service issues

 Achieve positive feedback
goals +5% 1 year Customer
 Expand sales to the satisfaction
global marketplace survey
 Increase customer
retention
Financial
 To increase revenue  +2% 5 years Action plan for
 To decrease expenses profitable growth
Operations
 Increase community
outreach
 Improve internal
communications 10 years
 Improve distributor 70% pass Technology
and/or supplier rate Improvement
relationships. program
 Increase efficiencies
through use of wireless
or virtual technology.
Employees
 Employ professionals
who create success for
customers
 Develop the leadership
abilities and potential of
our team For each 1 year
 Align incentives and staff major Training program
rewards with release for new offerings
performance and user interface
 Continually learn and
adopt current best
practices

SESSION 7

A. BUSINESS ETHICS
 49

Business ethics is the study of proper business policies and

practices regarding potentially controversial issues such as corporate

governance, insider trading, bribery, discrimination, corporate social

responsibility and fiduciary responsibilities. Law often guides business

ethics, while other times business ethics provide a basic framework that

businesses may follow to gain public acceptance.

Business ethics ensure that a certain required level of trust exists

between consumers and various forms of market participants with

businesses. For example, a portfolio manager must give the same

consideration to the portfolios of family members and small individual

investors. Such practices ensure the public receives fair treatment. The

concept of business ethics arose in the 1960s as companies became

more aware of a rising consumer-based society that showed concerns

regarding the environment, social causes and corporate responsibility.

Business ethics goes beyond just a moral code of right and wrong; it

attempts to reconcile what companies must do legally versus maintaining

a competitive advantage over other businesses. On the next page is the

actual code of business conduct of the said company.

 50

2GO GROUP, INC. (FORMERLY “ATS CONSOLIDATED

(ATSC), INC.”, also “ABOITIZ TRANSPORT SYSTEM CORPORATION )

CODE OF BUSINESS CONDUCT

INTRODUCTION
 51

Code of Business Conduct The 2GO Group, Inc. (Formerly “ATS

Consolidated (ATSC), Inc.”, also “Aboitiz Transport System Corporation)

Code of Business Conduct (the “Code”) is a statement of policies and

procedures of 2GO Group, Inc. for conducting its business in a legal and

ethical manner. The Code includes provisions from existing Corporate

Policies to provide an accessible reference for all employees. All policies

and procedures in the Code apply to all employees and Board of

Directors of 2GO Group, Inc., its divisions and affiliates. References to

employees in the Code include agents. The policy of the Company is to

prevent the occurrence of illegal and unethical behavior, to halt any

illegal or unethical behavior that may occur as soon as reasonably

possible after its discovery, and to discipline those who violate the Code,

including individuals responsible for the failure to exercise proper

supervision and oversight to detect and report a violation by their

subordinate employees. Discipline may, when appropriate, include

dismissal.

Guidance & Interpretation

 52

An employee who has a question regarding the applicability of

interpretation of the Code should utilize the procedure specified in the

section on page 7 entitled “IMPLEMENTATION OF THE CODE”.

Compliance with the Law

The employees of the Company and its Board of Directors shall comply

with the laws and highest standards of business ethics and conduct in

every area in which the Company does business.

Corporate Policy #1: Conflict of Interest each employee must avoid any

investment, interest, or association that interferes or might interfere with

the independent exercise of his or her own individual best judgment, and

with such employee’s obligation to perform his or her responsibilities in

the best interests of the Company. Specifically

1. All employees shall deal with all suppliers, customers and all other

persons doing business with the Company in a completely fair and

objective manner without favor or preference based upon personal

financial considerations.

2. Employees shall not accept from or give to any supplier, customer or

competitor any gift or entertainment except as permitted under “Gifts

and Entertainment” on page 5.

3. No employee shall do business with a close relative on behalf of the

Company, unless the transaction is on arms-length terms and is

disclosed, in writing, to the Corporate Compliance Officer of the

 53

Company who determines that the transaction is not inconsistent with

the purposes of this policy.

4. No employee shall, directly or indirectly, own any financial interest in

or hold any employment or managerial position with any firm or

corporation which is a competitor of or which does or seeks to do

business with the Company if such interest or position may influence

any decision that such employee might make in the performance of his

or her regular duties.

5. All employees have the affirmative duty to disclose to the corporate

officer responsible for their function the existence of any personal

material financial interest in or employment or managerial position with

any firm or corporation which is a competitor of or which seeks to do or

does business with the Company. Each corporate officer shall review

each such case with the Corporate Compliance Officer, and they shall

determine whether the existence of such interest or position is or may be

in conflict with this policy or otherwise detrimental to the best interest of

the Company or any of its operations. If it is determined that such

conflict or detrimental effect may occur, such steps as are necessary to

correct the situation will be immediately instituted.

 54

Policy on Accountability, Integrity and Vigilance (Whistleblowing

Policy)

A. Rationale and General Policy 2GO expects its directors, officers,

employees and contract workers to observe high standards of business

and personal ethics in the conduct of their duties and responsibilities at

all times, inside and outside the Company. As such, the Company’s

various stakeholders may use the PAIV to report questionable activity,

unethical conduct, fraud or any other malpractice. Everyone is expected

to help and work towards creating an environment where concerns can

be raised for possible violations of the Code of Business Conduct, policies

and laws so they can be resolved sooner than later.

B. Reporting Mandate It is the responsibility of all directors, officers,

employees and contract workers to comply with and to report violations

or suspected violations of the Code of Business Conduct, policies, or laws

in accordance with this policy.

C. Reporting in Good Faith Anyone filing a complaint concerning a

violation or suspected violation must be acting in good faith and have

reasonable grounds for believing the information disclosed indicates a

violation of the Code, policies, or law. Any allegations that prove not to be

substantiated and have been made maliciously or with knowledge that

they were false will be treated as a serious disciplinary offense. Any good

faith report, concern or complaint is fully protected by this policy, even if

the report, question or concern is, after investigation, not substantiated.

 55

D. No Retaliation Anyone who in good faith reports a violation of the

Code or policies, or law shall not be retaliated upon or suffer harassment

or adverse employment consequence.

E. The Escalation Process of Raising Concerns Violations or suspected

violations of Company policies can be escalated to any of the following:

1. The Head of HR

2. The Head of Corporate Compliance

3. The Head of Internal Audit Above heads shall acknowledge receipt of

complaints in writing within 24 hours from receipt of same.

F. Confidentiality Upon the request of the complainant, the Company will

use its best efforts to protect the confidentiality of the complainant for

any good faith report. Reports of violations or suspected violations will be

kept confidential to the extent possible, consistent with the need to

conduct an adequate investigation. Concerns raised anonymously shall

not be entertained.

G. Handling of Reported Violations

The Company’s Code of Business Conduct, and other relevant rules and

regulations, shall serve as guide in determining the penalties and

sanctions to be imposed by HR where violations are proven and validated

by the Head of Internal Audit. The principle of due process shall be

observed in the handling of all cases.

 56

B. Social Responsibility

2GO’s Corporate Social Responsibility (CSR) initiatives continue to

thrive because of the organization’s allegiance to fulfill this responsibility

for the sake of the community it serves in particular and the entire

country in general. The management’s unwavering support to CSR

initiatives, including a heightened employee volunteerism, is

characteristics of every CSR design and initiatives. The efforts were made

clearer on the tactical and operational implementation through the

Happy People Model launched by the Group’s Human Resources (HR)

providing guidance on how every task and program must be hinged in

the following elements:

Happy Body

Happy Brain

Happy Relax

Happy Soul

Happy Relax

Happy Pocket

Happy Society

HappyFamily
 57

Most of the CSR activities are still mainly focused on social advocacy,

education and environment protection and rehabilitation. The strong

partnership between the Labor Management Council and the Group’s HR

would always be the framework of programs which would have to do with

areas affecting these priority programs In support of the government’s

initiatives on environment protection, the Company has embarked on the

following activities:

• Training on Pollution Control. This is not mere compliance to

Occupational Safety & Health provisions, but ensuring a safe work

environment for all its employees.

• Sea Grass Conservation. This is a tie up with Tuason Development

Foundation, Inc. (TDFI) which aims to replenish sea grass meadows in

Philippine waters.

• Mangrove Rehabilitation Program. This is in partnership with General

Santos’ City Environment & Natural Resources Office.

• Mangrove Planting. These continuing programs aims to serve as a

buffer zone in coast lines against typhoons and tidal waves and help

control pollution by serving as a pollution sink, thereby buffering the

impact of silt and other pollutants from the terrestrial area. They are also

a good habitat for marine and wild animals, breeding ground for fish and

crustaceans and nesting and breeding place for birds. This is in

partnership with the city government of Zamboanga City.

 58

• Tree Planting in Batad, Iloilo City

• Tree Planting in Opol, Misamis Oriental.

This is in coordination with the Department of Environment & Natural

Resources. The Company continues to recognize the importance of

education for a better society. Their commitment to support the

Department of Education in its Brigada Eskwela program is displayed

through the participation of our employees in the following activities:

• Donation of new furniture sets and fire hydrants to Canduman

National High School, Central Visayas

• Provision of school supplies to Villakananga Elementary School

students in Butuan City. This is a tie-up with PNP CARAGA Region 13.

• Continued support to the Company’s adopted orphanage, Children’s

Joy Foundation, an NGO which supports neglected and abandoned

children. In the company’s pursuit of its mission to become more

responsible corporate citizens, 2GO’s yearly blood-letting activities were

participated in by their employees from different offices and sites in

support of the various programs of the Philippine Red Cross and the

Philippine Children’s Medical Center (PCMC) Pediatric Center. The

Company also allowed employees to attend the Standard First Aid &

Basic Life Support training which aims to educate and train them about

responding to first aid treatment and emergency life support in cases of

natural calamities or accidents not only in the work place, but also in

their communities. This training was put to test during one emergency
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situation which happened in one of our Supercat vessels. Using the

social media, the passengers commended and thanked the crew and

officers of the vessel who, despite suffering from minor injuries, remained

calm, helped and ensured the safety first of all its passengers. It was like

a drama in real life with a nurse crew performing a “TRIAGE” and

prioritizing the injured. The rapid response of their Cebu Crisis

Management Committee was emergency response efficiency in action.

They had outreach and feeding programs in Calapan City where they

provided the elderly people housed at the Aruga-Kapatid Foundation and

in Batad Iloilo City where we participated in the city government’s Great

Outdoor Camp Outreach Mission. The demonstrated commitment by the

company makes each employee proud to work for 2GO. Employees have

demonstrated increasing willingness and consciousness through their

participation in different CSR activities, not as a work obligation but a

demonstration of their sincere desire to help and contribute to the

society where they belong. 2GO continues to fulfill its responsibility in

providing its employees work-life balance and more opportunities for

community engagement.

C. Environmental Sustainability

2GO partners with TDFI for sea grass planting in Mindanao. Abiding to

its advocacy of marine conservation, 2GO Group Inc., the leading and

largest premier logistics provider in the Philippines, continues its

partnership with non-profit company Tuason Development Foundation

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Inc. (TDFI) for its series of sea grass planting initiatives in the Davao

Gulf. 2GO embodies a proud legacy of leadership and service built on

148 years of shipping logistics experience. And even now, its unique

work ethic remains unchanged, especially on its mission to give back to

mother-nature through its various corporate social responsibility

programs, where it puts an emphasis on environmental protection and

rehabilitation. The partnership between 2GO and TDFI was because it

both understood the need for marine conservation because of the

consequences of urban development, pollution, illegal fishing methods

and overfishing. By rehabilitating these ecosystems they not only repair

the environment, but they bring back fish and wildlife to provide food for

the people again, and more importantly, sustainable means of income

such as eco-tourism and modern sustainable aquaculture. 2GO has

chosen these projects as part of their CSR because it directly contributes

to the very environment that their business relies on. TDFI has planted

approximately 450 sq. meters of sea grass since December of 2016, to

which has already recorded a net growth of around 600 sq. meters – but

2GO envision a larger impact.

The initial 300 square meters of sea grass has been planted, which was

the starting point of the project. The next objective, which is to grow this

to 6000 square meters is still on going and is approximately 10%

complete after 4 months.  Although net growth rate is slightly slower

than expected, it is stable and increasing in speed, so the sea grass

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growth is proceeding well despite several setbacks like weather, grazing

by turtles before the sea grass is settled. With this current rate, they

should be able to achieve the 6000 square meters of sea grass by the end

of 2017 or early 2018. Recent studies have shown the importance of sea

grass in preserving the marine ecosystem especially on tropical areas like

the Philippines which boasts one of the world’s longest coastlines at over

36,000 kilometres. It is described as the “lungs of the sea” because a sea

grass can generate up to 10 litres of oxygen per day via photosynthesis. 

The long term goals for both TDFI and 2GO are to provide a complete

and holistic approach to the rebuilding of the coastal environment. This

will cover both the physical environment and the social aspect. The

projects are designed to repair and rebuild the environment back to its

pristine state, and then protect it by proper management, allowing

nature and people to co-exist sustainably and even to flourish. As the

largest freight and passenger shipping line in the country, 2GO relies on

the sea because every large vessel on the sea burns bunker fuel while

operating their ships. By funding these programs that TDFI are carrying

out with HIJO, 2GO are compensating the effect of their carbon dioxide

produced at sea, while the other benefits achieved, such as defense

against coastal erosion, livelihood programs and eco-tourism created by

these projects can be directly attributed to the support of 2GO.