A Strategic Management Paper

On
Premium Feeds Corporation

Submitted to:

Prof. Eliza Samonte

Submitted by:

Adrillana, Kevin Frederick

Bajado, Ahszie
Dres, Joana Rose
Lima, Via
Mendoza, Jessica
Ogania, Maria Concepcion
Rosales, Jelly Joy
Sibal, Anne Angel
Villadores, Kyla Shaine
BSBA FM 3A
I. EXECUTIVE SUMMARY

Premium Feeds Corporation is a type of feed manufacturing that refers to the process of
producing animal feed from raw agricultural products, Premium Feeds Corporation
producing livestock feed for hogs and poultry species for 40 years serving the feed
requirement of own farms as well as customer farms in nearby areas during its humble
beginnings until now Premium Feeds is producing more products for hogs and various
poultry species with current distributions in Luzon.

The old Premium Feeds Manufacturing Corporation (PFMC) was founded in 1980 by
Victor Uy, a businessman of Filipino-Chinese descent, as a feed manufacturing outfit. It
was put up out of his determination to produce quality and affordable feeds to satisfy
the growing animal nutrition demand of mostly backyard poultry and livestock raisers
who dominate the market back then. He began producing feeds in Barangay Santulan,
Malabon City, with less than fifty workers, some simple milling equipment, and a few
trucks for hauling, primarily for small-scale chicken and pig farmers looking for high-
quality, low-cost rations. Early 1990’s, Premium feeds Corporation started producing
feeds for their own poultry farm, paving the way to pursue continuous efforts to boost
farm performance through nutrition. PFMC’s move to improve its feed formulation,
upgrade operating system and increase output to produce other feed types were also
prompted by growing demand for quality nutrition .The continuous growth of Premium
Feeds Corporation was recognized by the animal and food industries with their various
business ventures in the fish and poultry market. When Victor Uy died in 1997, his son
Jerry Uy take over the family enterprise and each business unit is being run
independently by Jerry’s other siblings.

During early 2000’s the market became aggressively competitive, price was not just a
single factor in considered in animals feeds. As medium and large scale farms seek to
expand their market share, hog and poultry farmers have learned the value of farm
efficiency and competitive performance. At this time more feed millers come out from
local and international brands. Premium Feeds continues to improve in producing
affordable feeds by increasing its capabilities, which anchored by the company's core
values. During the time, Premium feed was tested when typhoon Ondoy hit Metro
Manila in September 26, 2009, placing its feed plant in Malabon under water for several
days that resulted to massive losses of the company. Premium Feeds Corporation had to
struggle for weeks to put the enterprise back in shape and to send a message of
assurance to clients, distributors and employees that the company will remain in
business and will prevail amid the adversity. After the tragedy the company's president
agreed to permanently close the Malabon plant and begin relocating the company to the
north, investing internally raised funds in the construction of a new facility in Pulilan
Bulacan.

By 2012, Premium Feeds Corporation started full operation of its new, fully automated
feed manufacturing facility and currently improving its core competencies. The plant
complex, which sits on a three-hectare piece of land that was recently acquired, features
three pellet mills that combine to form two production lines capable of producing 60
metric tons of feed per hour at any given time. Its massive output ability contrasts
sharply with the dismantled Malabon facility's 8-ton per hour production capability.

The business supplies livestock feed and nutrition for hogs, poultry, duck and quail
species. Officials said about 60 percent of the feed they produce consists of hog rations,
the other 40 percent for poultry feed that goes out from the plant, a big portion is made
for layers and ducks, the rest for broiler and quail. Since Premium Feed Corporation
producing livestock feed for hogs and poultry their target market are those animal raisers
and farmers, but because of a large number of backyard raisers are evolving into semi-
commercial farm owners and operators, the company sees this growing trend as
opportunity to serve and engage in all types of customers regardless of size. Premium
Feeds continues to manufacture affordable feeds, investing in efficiency, new
technology, and productive manpower to create the best goods, as promised by its
founder. From sourcing high-quality raw materials to implementing effective quality
management procedures until the final product reaches the market.
II. Business Objectives
a. Objectives/ Goals
Short term Objectives are:
 To achieve higher sales or improve the movement of quota.
 To hire new and more experiences employees.
 To Change the packaging to attract more customer.
 To conduct more activities for the growth of their employees.

Long term Objectives are:

 To be more profitable
 To improve disaster preparedness.
 To be one of the well known feed suppliers/company.
 To have more branches and plant feed manufacturing facility.

b. Vision/ Mission

Mission
To promote and uplift the Philippine livestock industry by developing competent
manpower and applying advanced technology.
Vision
To be the preferred animal feed company in the Philippines for providing high quality
products at the most affordable cost.

c. . Key to Success

 HONESTY – providing correct and factual information in all of our dealings and
communications whether verbal or written.
 LOYALTY – the foundation of our commitment and dedication to the noble goals
of the company
 RESPONSIBLE WORKING – valuing trust and accountability in every function and
position where quality and reliability is important
III. Internal Analysis
a. Organizational Chart

b. Business Function

 Sales and Marketing Department – represents the company's brand and drives
strategies to increase product awareness by observing the market, competitors,
and industry trends. The Sales and Marketing Manager's responsibilities include
generating unique sales plans, creating engaging advertisements, emails, and
promotional literature, developing pricing strategies, and meeting marketing
and sales human resource objectives.
 Production Department – is responsible for converting raw materials and other
inputs into finished goods or services. In between the processes of production,
the department works to improve the efficiency of the production or assembly
line so that it can meet the output targets set by company management and
ensures finished products offer consumers the best value and quality.
 Administration Department – Supervising the day-to-day operations of the
administrative department and staff members. Hiring, training, and evaluating
employees and taking corrective action when necessary. Working with the
accounting and management teams to set budgets, monitor spending, and
process payroll and other expenses.

c. Product and Services

Premium Feeds is dedicated to delivering high-quality feeds at the most

competitive prices, with a strong emphasis on quality to give consumers an
edge and the potential to increase profits. Thus, Premium feeds offer an
affordable price and it has a four-brand name namely, Piggy 1 st, Vantage,
Extreme and Fiesta. Prices are as follows:

PIGGY 1st

 Protect Booster Pellet with a weight of 25 kg is P2,255

 Protect Booster Pellet with a weight of 10 kg is P890
 Progress Pre-starter Pellet with a weight of 25 kg is P1,200;

VANTAGE (50 kg)

 Hog starter Pellet is P1,485

 Hog grower Pellet is P1,405
 Hog Finisher Pellet is P1,295
 Gestation Pellet is P1,240
 Lactation Pellet is P 1,365

EXTREME (50 kg)

 Hog starter Pellet is P1,405

 Hog grower Pellet is P1,330
 Hog Finisher Pellet is P1,235
 Gestation Pellet is P1,145
 Lactation Pellet is P 1,230
 FIESTA (50 kg)

 Hog Grower Pellet is P1,140

 Hog Finisher Pellet is P1,100
 Brood Sow Pellet is P1,120
 Brood Snow Mash is P1,105
 Lactation Pellet is P1,190

IV. External Analysis

a. PESTLE Analysis

Political

The Premium Feeds Corporation is a business manufacturing feeds for poultry and
farm animals meaning they should abide by the law, specifically regarding to
Republic Act No. 1556 and should strictly maintain following the rules to avoid
consequences. They should always check the latest updates on laws about
corporations since that are the form of their organization. Changes in the law will
affect the business directly and the business will always be interconnected with
the law, with or without amendments. Another political factor that could affect
the business is the possible change of the government from democratic to federal,
generally everything will be affected. The tax policies are also one of the political
factors that could affect the business with its changes throughout the next years.

Economic

Since Premium Feeds Corporation is already produce a lot of products that have
bigger influence in the inflation, interest rates, and etc. Inflation could affect the
 Premium Feeds Corporation since they are known as “businesses” that have a high
quality of feeds at the most affordable cost. Inflation can change the prices that
the Premium Feeds Corporation offers. It might give them a hint to raise their
products which can lead to a loss of customers that have a huge contribution in
their business. Another factor that might influence the Premium Feeds
Corporation is the interest rates, once the interest rates increases, the customer
could no longer spend money, instead they will be more focused on paying their
personal loans before anything else. It can reduce the ability of the customers to
buy products, with that the Premium Feeds Corporation may suffer not only losing
their potential customer, but losing their sales since it will decrease their
profitability. However, the possibility of loss can be seen as clear and
understandable. On the other hand, as a business that has a future and existed for
over 40 years already, they shouldn’t endure the possible factors that might affect
their business. Instead of looking into the negative side, try to see this factor as an
opportunity to earn more. The company should invest their excess cash in interest-
bearing accounts to make more money. This is one of the opportunities of
Premium Feeds Corporation to earn more because during the high interest rates,
businesses earn from these investments.

Social

Animal feeds play a leading role in the global food industry, enabling economic
production of products of animal origin throughout the world, since poultry
business are also common in the Philippines, the Premium feeds Corporation’s
target market are those animal raisers that can easily start running one even in
their own backyards especially in the provinces. Premium feed Corporation ensure
that their product is a safe feed enable farms to ensure food safety, reduce
production costs, maintain or increase food quality and consistency and enhance
animal health and welfare by providing adequate nutrition at every stage of
growth and production. They also obtained and maintained in a stable condition so
as to protect feed and feed ingredients from contamination by pests, or by
chemical, physical or microbiological contaminants or other objectionable
substances during production, handling, storage and transport. Feed should be in
good condition and meet generally accepted quality standards.

Technological
 With the dawn of a modern technological age, Premium Feeds Corporation is one
of the major players in terms of production, but due to the emergence of multi-
national company built with innovative technology in the Philippines, the Premium
Feeds Company should invest on its Research and Development on technology to
further improve its production and quality.

Legal

Premium Feeds Corporation is a huge company that has numerous employees. All
businesses, no matter how big or small, have different regulations that they need
to follow. Legal Factors that might affect the Industry, such as the Laws relating to
the wages of the employees, whenever the Law changes regarding the wages of
the employees, the Company needs to adapt to that changes. As well as the
Employment matters, and the working practices regulations, the Corporation has
to attend to any modifications of the Laws, in order to continue the operation of
the business, and to prevent violations. Other matters that are under the Legal
Factors are; the Management needs to make sure that Health and Safety Rules of
the workers/employees are always in line, the Company also needs to make sure
that the proper taxes of imported and exported products are paid appropriately.

Environment

The environmental factor that affects the premium feeds is the weather condition.
Philippines is a tropical country and it is located along the typhoon belt in the
pacific which makes it prone to stronger typhoons. There is an average of 20
typhoons that visited the Philippines annually and most of the regions are flooded
areas. The environment has a huge impact to the warehouses and production of
the premium feeds. When there's a flood their products can easily dissolve by
water and became unfit for animal consumption. The company should invest to
the development of their facilities, machinery and feed storage.

Statement of the Problem

As the number of feed manufacturing companies continue to increase, as a result, it would

be hard for the business to remain competitive in the market place because it may happen
that there will be a variety of choices available since it said that the price of feeds among
different feed companies are almost the same. Also one of the problems in Premium Feed
Corporation, their tactics and products are easily be copied or imitate by other feed
companies. Aside from that, we see that the company lacks in advertising their products,
and the price list of their products is not indicated on their website. As a result, their
 customers might find it hard to decide which products they should buy. Thus, the purpose of
this study is to know what are the competitive advantages, strategies, and techniques that
the premium feed corporation needed to considered and implement, and also what are the
advancement, development, and innovation that they need to improve to gain the attention
of the market place by its rivals.

Market Share

Market share is one of the most important objectives in Feed Manufacturing business like
Premium feed Corporation because without a large number of shares of the market, it is
nearly impossible to reach a large enough number of customers to promote the products
and services of the company and to build a large facility to create more enough products
that can reach the market. Today, a wide selection of Premium Feeds Corporation products
find their way in the market, notably in Northern and Central Luzon where the company has
strong presence. Through its network of distributors located in various strategic areas,
market coverage has reached far and wide, with some of its rations sold even in remote
places like Apayao. The company also serves commercial farms in Luzon through direct
placement.

Distribution Channel

Since Premium Feed Corporation is producing more products for swine and various poultry
species they have also current distribution in Luzon and some parts of Visayas, serving
backyard farms through trade distribution and commercial farms through direct placement.
Their current distribution channel is from inquiring to their website and they ask for your
specific location since their main plant facility is located in Pulilan, Bulacan.