Business Plan - Universal Robina Corporation (2018)

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Business Plan - Universal Robina Corporation
Bachelor of Science in Management Accounting (Pontifical and Royal University of

Santo Tomas, The Catholic University of the Philippines)
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UNIVERSAL ROBINA CORPORATION
A Business Plan Presented to the

University of Santo Tomas
Alfredo M. Velayo – College of Accountancy
In Partial Fulfillment of the Requirement for the
Degree of Bachelor of Science in Management Accounting
By:
Balisnomo, Ma. Lynsel M.

Dela Peña, Jenica Anne S.
Josue, John Philippe P.
Ramos, Patricia Gail S.
Zubia, Raynielle Anthony P.
4MA9
Submitted to:
Mr. Gerardo M. Castro, MBA
May 2018

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CHAPTER 1: INTRODUCTION
Background of the Study
1. Nature of the Business
Universal Robina Corporation is the leading branded snack food and beverage company in the
Philippines. Their product lines include snacks, like chips, bakery goods such as biscuits and
cookies, and confectionaries under Jack n’ Jill like Nips, Cloud 9, and Wiggles, and instant cup
noodles by Nissin. For beverages, Universal Robina has Danone, Vitasoy, and C2, which is the
first ready-to-drink tea in the Philippines. Other than those beverages, they also manufacture
coffee mixes particularly, Great Taste, Blend 45, and Cream All.
Their megabrand, Jack n’ Jill, is in partnership with Japan’s biggest snack maker, Calbee, to
form Jack n’ Jill Calbee, which was then introduced to the Philippine market in the year 2014.
Jack n’ Jill Calbee is selling chips like the Jack n’ Jill Calbee Potato Chips, Jack n’ Jill Jagabee,
and Jack n’ Jill Calbee Pizza Potato. URC has been in the industry since 1954, and still continues
to be one of the leading players in the snack food market in the Philippines.
Some financial highlights follow:
2. Financial Highlights
In general, Universal Robina Corporation has increased their operations, as a result of the
company’s increase in their economic resources – assets, liabilities, and equity, which then
resulted to higher sales and profit.
Based on their financial highlights in their 2016 and 2015 annual report, their assets increased by
81.52% from 2014 to 2016, from Php 77.92B to Php 141.44B. Liabilities of the company also
increased by more than 200%, but despite, the company was still able to increase their equity
from Php 56.03B to 75.27B, equivalent to an increase of 34.33%.

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In terms of their net sales, URC has a total of Php 111.63B during their 2016 fiscal year ending
September 30, which is 20.84% higher than 2014 fiscal year amounting to Php 92.38B. The
increase in economic resources and sales also resulted to an increase in the company’s earnings
and book value per share, with an increase of 30.94% and 32.79%, respectively.
FY2015 SALES SPLIT FY2016 SALES SPLIT
AIG
CFG 8%
8% CFG
AIG BCFG
(Philippines)
BCFG
84%
Universal Robina Corporation is handling 3 sectors, namely, BCFG or the Branded Consumer
Food Groups, AIG or the Agro – Industrial Group, and CFG or the Commodity Food Groups.
The BCFG, or the Branded Consumer Food Groups, offers in this sector snack foods, beverages,
grocery and other food products, which is serving two divisions – Philippines and International,
and URC is the leading branded convenience food and beverage company here in the
Philippines. It is known in the production of products like Chippy, Nova, and other chips and
food snacks under Jack n’ Jill, and also Nissin and C2.

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The AIG, on the other hand, is focusing more on the production and distribution of animal feeds
and other products related to hogs and poultry farming. The Universal Corn Products, one of the
leading companies in animal feeds, Robichem, which offers high – quality health products for
animals, and Robina Farms, are the companies URC handles.
Lastly, the Commodity Food Groups. Under this sector, there are two divisions – URC Flour
Division and URC Sugar Division. The flour division is responsible for the production wheat
flour, which they sell to commercial and institutional companies, together with other flour –
milling by – products like wheat germ, bran, and pollard, and El Real, which is known for its
pastas like spaghetti and macaroni. The sugar division, on the other hand, provides sugar milling
and refining services, located in Luzon and Visayas.
As seen in the graph above, it can be seen that majority of the sales of URC is coming from its
BCFGs, with 84% last 2015 and 83% last 2016. The remaining share in the total net sales of the
company is from the Agro – Industrial Group, having 8% for both 2015 and 2016, and from the
Commodity Food Groups, with 8% last 2015 and 9% last 2016.
In terms of the financial ratios, Universal Robina Corporation’s overall performance has been
good, despite the decrease in their liquidity ratio by 0.20 from 1.90 in 2014 to 1.70 in 2016,
considering that they were able to obtain a good amount of funds for their projects through its
issuance of stocks. Also, having a good mix of its debt and equity enabled them to acquire for the
company a return on their investments.
In terms of solvency, which increased for the past three years, it showed that they are capable of
paying their debts and obligations, together with interests. Moreover, the company can still pay
off its creditors in the event it undergoes liquidation.
In terms of profitability ratios, URC’s operating margins have decreased by 0.8% from the
previous fiscal year, which indicated a low profit for the company. Despite this decrease, there
has been a notable increase in terms of their earnings per share, which became more enticing on
the part of the investors.

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3. Major Consumer Groups Served
Universal Robina Corporation’s array of products appeal to the masses particularly children and
adults. Since URC’s products are consumer goods, prices are kept at affordable levels to entice
consumers, and thus achieve high sales growth.
4. Other Relevant Information
The group conducted a survey involving a total of 103 individuals, from a cross section of
students from different colleges of the University of Santo Tomas, to determine their perception
of URC products and that of its competitors. The survey reveals that:
Universal Robina Corporation is at a very tight competition with Oishi and Nissin Monde, in
different food categories like baked goods, sweets, and salty snacks, as seen in the graph
presented below:
According to the respondents, Nissin – Monde lords over its competitors, URC and Oishi in the
biscuits and cookies category. Universal Robina Corporation, however, has managed to top the

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other categories, namely, drinks, chips, and sweets category. Besides that, URC also managed to
take the lead in the overall count, having a total of 638, or equivalent to 42%, of the total
responses.
Universal Robina Corporation also is currently expanding as its operations are already catering
in emerging markets like Myanmar, Laos, and Cambodia. Besides that, they also export their
products in different countries in Asia like Japan, Korea, and Middle East, and also in the US,
Europe, and West Africa. URC continues to expand, as it maintains its Filipino culture, truly
making them as one of the best companies, not only in the Philippines, but of the whole world.

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CHAPTER 2: VISION / MISSION / OBJECTIVES
MISSION
The mission statement of Universal Robina Corporation is indicated below:
“Universal Robina Corporation (URC) is one of the largest branded food product (2) companies
in the Philippines and has a growing presence (5) in other ASEAN markets (3).”
According to David’s framework. Universal Robina Corporation’s mission statement lacks the
following components, namely:
Customers
Considering that they are a manufacturing company of some unhealthy food products,
they do not value the health and the well – being of their customers, especially nowadays
where most of the people are more health – conscious.
Technology
They lack transparency, with regards to their manufacturing and production process.
Philosophy
The market in general is not knowledgeable on the culture, management style, and the
general philosophy of the company and the people who run it.
Concern for public image
As a manufacturing company of “junk foods,” the common notion of the public with
regards to their image is a negative one, when in fact they are much more than capable of

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cleansing their image through community development and corporate social

responsibility programs like the “Kariton Klasrum” and the “URC Learning Center.”
Concern for employees
The statement lacks the recognition of the hard work and effort of all their employees,
that has become a huge factor in the success of their business.
Ergo, we propose an improvement of the current mission statement of URC to wit:
“Universal Robina Corporation is one of the largest branded food product serving a huge
market throughout the ASEAN region (3), carrying a wide portfolio of delightful brands of
exceptional quality and value (2), equipped with efficient technological systems (4) and
motivated people (9), loved by all ages (1).
URC exemplifies its passion to win (6), to innovate (5), and to encourage people in ensuring its
competitive advantage (7). It uses its influence to aid its consumers through its humanitarian
programs, doing its responsibility as expected of its Filipino background. (8)”
VISION
Current vision statement of URC:
“URC's vision is to be the best Philippine food and beverage company, with a powerful presence
throughout the ASEAN region, carrying a wide portfolio of delightful brands of exceptional
quality and value, equipped with efficient systems and motivated people. We are committed in
making lives a truly fun experience.”

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A company’s vision is supposed to evoke powerful and compelling mental images to anyone
who reads it, whether he is a shareholder, employee, or a customer. It is also supposed to be
massively inspiring, overarching, and on a long – term basis.
Universal Robina Corporation’s vision statement, while impressively inspiring, proved to be
better suited as a mission statement rather than a vision statement.
It doesn’t appear to look into the future in a matter of years and vaguely described itself “to be
the best Philippine food and beverage company,” which lacks the motivation for their employees
to work and strive harder to achieve their vision. The vision statement seems to emphasize the
well – being of its employees but fail to mention about its social responsibilities outside the
company. In terms of the environmental aspect of the company, they lack the initiative to
promote a more environmental and eco – friendly way of producing their products.
The mission and vision are reconciliatory, in fact both statements emphasized the company’s
desire to be the best “Philippines food and beverage company in its ASEAN markets”. As stated
earlier, the vision failed to set a deadline for when it decides to fulfil its goal “to be the best”, but
making such a vague remark allowed for the vision statement to endure the changing times as it
remained to its root values.
Thus, we propose this revision for the company’s new vision statement:
“URC’s vision is to be the best Philippine food and beverage company throughout the ASEAN
region, through the use of its exceptional line of products, empowered employees, eco – friendly
processes, and loyal customers.
It aims to sustain its competitive advantage as a premier multinational company in Asia and
Oceania by embedding a sustainability program that ensures continued growth that is deeply
rooted in the Filipino values.”

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OBJECTIVES
• To be able to incorporate its value to win and the virtue of dynamism, integrity, and
courage
• To invest on healthier food products for health - conscious consumers, in line with the
increasing trend in healthy living effective within 3 years
• To adopt a more efficient way of production and other operations while considering its
effects on the environment within 2 years.
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CHAPTER 3: EXTERNAL ENVIRONMENT ANALYSIS
GENERAL ENVIRONMENT
Demographic
According to the FNRI or the Food and Nutrition Research Institute, the prevalence of
obesity and overweight in the Philippines has been steadily increasing in the last two
decades. Despite the increase in number of people shifting to a more healthy life,
majority of the Filipino population still finds it difficult to have a balanced diet due to the
limited variety of fruits and vegetables and high cost of fresh food in comparison to
processed snacks.
While junk foods are associated to obesity and chronic health conditions, majority of the
people, especially the masses, still opt to buy junk food over their healthy food
counterparts, because it is affordable, prepacked, and easily accessible, considering also
the fact that parents, especially the mothers, today are always on - the - go and have
limited time in preparing healthy meals for their families.
Also, considering the fact that the on-the-go lifestyle has been rapidly increasing, stress
and anxiety levels have increased as well, which causes the human body to consume
more energy, thus pushing people to eat food with high fat and sugar content. High levels
of anxiety also cause people to crave for sweets as a means of comfort.

Different organizations and business are continuously doing its best in addressing this
problem. Different kinds of strategies are being used by these businesses, like URC’s
introduction of Mang Juan Chicharon, which incorporates the healthy aspect in the food
products that people are used to eating. These strategies help in order to encourage
people, especially the families, in shifting to healthy food alternatives.
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Political – Legal
Currently, there have been amendments with regards to the existing taxation policies in
the Philippines, mostly known as TRAIN or the Tax Reform for Acceleration and
Inclusion. In this tax reform, incomes of Filipinos will be higher, resulting to higher
purchasing power. But, despite the increase in the take home pays of consumers, products
and other goods increased their prices, one of which is the SSBs or the sugar - sweetened
beverages. Under TRAIN, drinks containing caloric or non-caloric sweetener will
increase by Php 6 per liter under excise taxes, and Php 12 per liter on drinks containing
high-fructose corn syrup. 3-in-1 coffee and milk, however are tax exempted. With the
support of the Department of Health, as part of their campaign in raising awareness in the
health of the Filipinos, this train law helps encourage each and every consumer to
patronize healthier alternatives for consumption.
In line with this, the prices of their sugar-sweetened beverages will also increase; making
it less friendly to consumers, despite the increase in their take home pays. Because of
this, these consumers will tend to focus more on the necessities, which are also affected
by the train law.
According to RA 9994 which is the Expanded Senior Citizens Act, manufacturers,

wholesalers and retailers may agree on certain terms and conditions on how they are
going to divide the burden of the discounts given to senior citizens. Retailers will bear
30% of the 20% discount which they can claim as a tax deduction. However, if retailers
are granted 16% or more sales discount by manufacturers, manufacturers will no longer
share in the Senior Citizens discount because this large discount will be treated as the
share of the manufacturers. But if they offer less than 16% sales discounts to retailers,
they will shoulder the remaining 70% in the 20% discount claimed by senior citizens.
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Economic Development
The Philippine GDP for the 4th quarter of 2017 had risen to 6.6%, creating a grand total
of 6.7% GDP growth for the entire 2017 year. This is mainly due to a recovered
agriculture sector, high government consumption, and better imports and exports. This
affects the manufacturing industries as well; food manufacturers like URC in particular,
had seen a 2.9% GDP growth. This only shows that the Philippines is showing its
competitive growth in the South-Asian nations which may encourage future investors to
invest into URC. It may also result in expansions to different countries in the ASEAN
region that URC has yet to explore.
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The Consumer Price Index through the entire year of 2017 could only grow higher,
allowing for the CPI to grow to 153.8 Index Points on February of 2018. This high ratio
directly affected the inflation rate but even as prices rise, the CPI continues to climb. This
suggests that the purchasing power of buyers grew with the demand, while supply is not
able to cope with it, thus resulting to the spike in inflation rate. This will aid URC’s
profits, however, as it would have to alter its prices to take advantage of this spike in the
CPI.
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As mentioned, the CPI grew the inflation rate followed suit as it spiked to 4.5% on
February of 2018. According to the breakdown of inflation of prices, prices of heavily-
weighted food and non-alcoholic beverages increased at a faster 4.8 percent, after a 4.4
percent rise in the preceding month. URC should have increased their prices to take
advantage of the spike in inflation rate for the next months.
The unemployment rate for 2017 continued to lower which shows that job opportunities
are readily available in the country which is a good sign for the future employees of the
nation. Unfortunately, it spiked on the first quarter of 2018, and forecasts show the
possibility for the unemployment rate to go up to 5.5% for the second quarter. This may
prove to show that URC has opportunities to scout for talented employees.
Socio – Cultural Trends
Today, people are becoming more conscious of their health, and it has become a trend
here in the Philippines, which has increased the demand of healthier food products.
Currently, most, if not all, of the products Universal Robina Corporation that they have
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been producing and selling to the consumers has been unhealthy products like chips and
sweets – products health - conscious people tend to shy away from.
Sales of Universal Robina Corporation is at risk in this aspect since most of their
products do not cater to health – conscious individuals. Most, if not all, of their products
have high contents of sodium, saturated fats, and bad cholesterol, which is very unhealthy
and increases the risk of heart – related diseases. These products will not be patronized by
these individuals, which may result to lower profits.
Technological Trends
Demand for machine automation has been increasing, as part of their innovation and
transition from human labor capital. While human labor is abundant in different
industries, most companies want to establish a more efficient way in producing their
products, which is why they tend to invest more now in different equipment and
machineries that enhances their productivity.
Universal Robina Corporation is currently the sole company that has a certified BOPP
(Bi-axially Oriented Polypropylene) plant and equipment located in Batangas. This
machinery converts resin material into BOPP films that is used in packaging their
products, which helps prolong the life of their food products.
Environmental
One of the common issues of today is climate change, and it has been an issue with
regards sustaining the environment, especially for businesses, as they try to continue their
operations while being environmentally friendly at the same time. According to reports,
businesses have been a huge factor in climate change ever since the late 80’s, among
them are Shell and Chevron, who are said to be one of the top carbon - emitting fossil
fuel producers. Due to this, products from companies that use “environmental-friendly”
methods of production became a marketing tool to increase sales.
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In correlation with machine automation, it has been an issue with regards the wastes of
companies that these machineries produce. Waste mismanagement has negative effects in
the environment, which made the Philippine Congress to enact the Republic Act of 9003,
otherwise known as the Ecological Solid Waste Management Act of 2000.
However, due to the recent severity of climate change, the need for environmental-
friendly solutions had brought upon new laws and standards which companies must
adhere to. What used to be a marketing tool became a requisite for all manufacturers.
This sudden need for investing in new technology proved strenuous to companies that
have yet to invest in such technology but are forced into action in order to comply, thus
shaving of profits for the years that they began their investments.
URC had long since invested a technology that recycles their plastics and thus able to
reduce the waste they produce up to this day, which aids the environment and the
communities that are affected by them. They also get some incomes when they sell their
recycled plastic products.
Opportunities and Threats
Healthy living is increasingly being practiced by individuals, which is becoming a threat for the
company. Considering the fact that Universal Robina mostly offers products which are
unhealthy, people who are health - conscious will not be prioritizing them, and instead will look
for a different alternative that will satisfy their needs and wants. As of today, the competitors of
URC are able to produce additional products in their product line that may cater to these
consumers, like Oishi’s Smart C and Marty’s Cracklin’, Regent’s Snacku, and Nissin Monde’s
Dutch Mill, that increases its competition, especially with its personal products; C2 and Vitasoy.

That said, URC also joined the bandwagon with vegetable-based products like Chicharon ni
Mang Juan. Though the avenue of a healthy lifestyle poses a threat to the company, it also
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opened the opportunity to innovate on vegetable-based products which contains less fat and
sodium. Products which had less artificial flavorings and instead replaced by natural
preservatives are introduced into the market, people who yearned for a healthy lifestyle will
adore for such things.
Another threat for the company is the stereotypical judgements of consumers when it comes to
their products. Being one of the companies who mostly produces unhealthy food products, it will
be very hard to remove the notion that they are main producers of these unhealthy products,
despite the changes that they do in producing healthier products.
Besides the increasing trend of buying healthy food products, consumers are also patronizing on
- the - go meals and other trendy food products, without consideration of the price. In today’s
generation, we can see that both parents are working in the family, which lessens their time with
their kids. These parents, most especially the mothers who usually prepare meals for their family,
have no time to cook for their kids - the reason why they patronize these on - the - go meals,
since it provides convenience to them, and to other people who are always in the hurry. URC is
currently not exercising this practice in their production and other operations, which is why this
can be an opportunity for them, as they can diverse in this kind of industry, which may help them
to stay competitive in the industry.

With the intense rivalry in the industry, they are also facing the threat of substitute. Oishi and
Nissin Monde are one of the main competitors of URC which deals a big impact and greatly
affects their sales. It poses a threat on URC and its products on the food and beverage sector of
their market.
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INDUSTRY AND COMPETITOR ANALYSIS
Market Demand
Due to high demand in healthier alternatives, URC has significant amount of risk and its
likelihood is high, for they are not able to cater all of them because of their unhealthy
food products. Health – conscious consumers are patronizing more on options that satisfy
their needs when it comes to their health and wellness. Currently, most of their products
are composed of ingredients and other chemicals which are very harmful to the health of
the consumers. While some of their products are said to be healthy, consumer still do not
buy these products as there are still a few chemicals which are used in the production of
the product, and it is still not sufficient to maintain their market share in the industry.
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What URC needs to do in order to lower its risk through the production of healthier food
products, in order to cater health – conscious consumers, and at the same time maintain
its competitive advantage in the industry. Currently, the company is offering some
healthy food and beverages, like Vitasoy, Mang Juan, and C2.
Competition
Universal Robina Corporation is in a very tight competition with its competitors, like
Oishi and Nissin – Monde. With that, the company has a moderate amount of risk,
considering that these companies are continuously producing products in line with the
current trends, in order to stay competitive. Competition is definitely present within these
companies in the industry, but its likelihood is only medium to high, since consumers
may still patronize their products despite the advertisements and other promotions of its
competitors, one reason of which is its brand equity and customer loyalty that the
company has in the market.
What the company needs to do in order to address this concern is to increase its
capitalization in advertisements and to improve on its research and development in order
to adapt more to the trends that is occurring in the market, which they are currently doing.
Environmental Risk
Waste has been an issue for many businesses, especially manufacturing companies like
URC, as they produce wastes which are main contributors of pollution and a great factor
in what that society is experiencing right now – climate change, which makes it
significant for the company.
Other than investing in more environmentally – friendly machineries and equipment,

waste management and other practices are needed in order to lower the risk, and at the
same time be able help save the environment. Currently, the company is practicing waste
management, and it is also reuse plastics through its production of plastic pallets, which
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is another source of their income. URC is also the sole company to have a BOPP
(Biaxially Oriented Polypropylene) plant that is used in the packaging of their food
products.
PORTER’S FIVE FORCES
Threat of New Entrants – LOW
Considering that Universal Robina Corporation, as well as its competitors, have already
been established in the food and beverage industry, it will be very difficult for
newcomers to enter the industry and compete with these companies, as the cost of capital
would be very high.
Bargaining Power of Buyers – LOW to MODERATE (Consumers) / HIGH (Retailers)
For consumers, their bargaining power is low to moderate because they do not have the
power to ask for discount and lower prices as URC products are offered at their
distribution channels at a fixed price. However due to brand loyalty and preference, some
consumers may still avail their products.
In terms of retailers, they have high bargaining power because they have the ability to ask
for discounts by buying in bulk. The switching costs are also low along with the product
differentiation making it easier for retailers to go to URC's competitors for similar goods.
Bargaining Power of Suppliers – HIGH
In their industry, since they have similar products as their competitors, the materials they
use would also be similar thus making the bargaining power of the suppliers high.
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Threat of Substitutes – HIGH
Buyers are the main source of the company profits, and if they were not satisfied with
URC’s products due to its high price or subpar quality, they will tend to buy from its
competitors that offer similar products.
Intense Rivalry – HIGH
One of the things to consider knowing the intensity of competitive rivalry is the number
of competitors. Universal Robina Corporation's main competitors are Oishi and Nissin -
Monde, as they produce and sell similar products. Since these companies sell similar
products, the product differentiation is low, also for the switching cost, thus making the
intensity of competitive rivalry high.
Market size and growth
Market size and growth is essential in every company, as it helps them gain more profit.
Universal Robina Corporation has minimal effect in terms of its market size as the
company has already established a name in the industry, maintaining a fair amount of
sales and profit. The company’s main concern now is on how they will be able to grow
more in the industry, other than in maintaining their operations and other services.
Current buyers and suppliers
Due to the intense competition between Universal Robina Corporation and its
competitors, it has a huge effect when it comes to its customers, and also to its suppliers.
For consumers, one of the factors that consumers look into and consider when buying
products, other than the price and quality, is the promotion and other types of
advertisements of each company. With these, it has a huge effect in the consumers’
capacity to buy, since it can entice them to patronize their products instead of their
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competition, which results to a high threat in terms of substitutes, considering that URC’s
competitors are offering products of similar quality and price.
For the suppliers of the company, problems may occur during the process of acquiring
raw materials used in the production and selling of their products. One factor that may be
the cause is noncompliance with the conditions and other agreements made by the
supplier with the company itself. Another factor may be caused by the competitors, who
may offer favorable options for the suppliers. The bargaining power of suppliers is high,
which makes them powerful, giving them the privilege to choose on which of the
companies in the industry will they cater.
Technology Development
Technology makes things easier to get done with it, and in some cases makes it even
better and since it upgrades quickly, people have a lot of access to it. Because of this,
threat of substitute for Universal Robina is high. Technology has paved the way for
cheaper processes that other companies can do to manufacture their products. But even
though there are a lot substitutes in the market, threat of new entrants is still low. Being a
key player in the market still requires high capital because highly efficient machineries
are costly.
Since healthy living is the trend, technology also demands food manufacturers to
eliminate harmful ingredients from their products and to label them correctly. Due to this,
consumers have a low to moderate power because technology is within everyone’s reach
and bad reviews on social media can ruin a company’s reputation.
Industry Prices
Since there is a high intense rivalry with its URC’s competitors, especially Nissin Monde
and Oishi, who offers similar products, the company cannot sell their products at a higher
price, and is even forced to lower their prices, in order to attract more buyers. Also, with
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the emerging trend of living an on-the-go yet healthy lifestyle, Universal Robina’s threat
of substitute is high since they do not offer a healthier range of snacks and customers tend
to switch to healthier alternatives that is offered by the company’s competitors. Thus, it is
necessary to increase the promotion and advertising expense on its existing products,
which will help maintain their customers.
Critical success factors
In the food and beverage industry, one of its key factors to success is the ability to cope
with the market demand and the current leading food trends. Brand equity and customer
loyalty are other factors that would follow, which would lead a company to be at the top
of the industry. Universal Robina Corporation's brand equity is due to its existence since
1990s, and adults who patronized URC's products is continuously on their loyalty to the
brand to their children, which will then pass on to future generations. They are
immediately recognized by their market, that the first thing that would come to mind
when it comes to snacks would be one of their popular product line – Jack N' Jill. Their
product lines are one of the most known snacks in the country as they continue to
produce new products that would cater to the market's demand.
Another one key factor in this industry is the first move advantage. URC was the first to
produce a ready to drink tea, C2 Cool and Clean, in the beverage industry and was the
first to form a international partnership with Calbee which allowed them to expand to the
ASEAN region.
Distribution network involves the storage and transportation activities of company

inventories to wholesalers, retailers, and to its main consumers. For URC, its wide
distribution reach and efficiency of its inventory management is another key factor of its
success. From its manufacturing process up until its distribution to wholesalers and
retailers, the company keeps track and continuously monitors its inventory count, as to
prevent scraps, wastes, and other losses to be incurred.
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Universal Robina Corporation aims to achieve its objectives through the following
strategies:
- To be able to incorporate its value to win and the virtue of dynamism, integrity, and
courage
Integrity is important in a business, as it unites each and every member of the

organization despite their diverse personality, behavior, culture, and beliefs, which helps
increase the performance of the company, leading to an increase in their sales and profit.
Currently, Universal Robina promotes a healthy balance between their employees’ work
and life by offering them health and wellness programs. They arrange activities tailored
for their employees to reduce the stress they incur at work. The firm is constantly
providing their employees with learning and development opportunities to further
enhance their capabilities through the JG-ILED or the John Gokongwei Institute for
Leadership and Enterprise Development. JG-ILED aims to create an efficient
organization that will facilitate the intellectual and personal growth of all its employees.
The company also has their own Conflict of Interest Committee that oversees any
misconduct in the firm. They should ensure that the people involved in the committee are
not biased and are not receiving any personal benefit. They should also be stricter with
their policies about the receipts of gifts. They only allow the acceptance of gifts during
Christmas season but, if gifts are valued above P2000, it must be disclosed to the Conflict
of Interest Committee. The company should encourage its employees more to disclose
any violation or misconduct in the firm. They could offer incentives to employees who
are courageous enough to report to the committee.
• To invest on healthier food products for health - conscious consumers, in line with
the increasing trend in healthy living effective within 3 years
Since there is a growing trend of healthy living in the market, URC should take this
opportunity to develop their products to cater to the demand of their consumers, and
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should be treated more as an advantage rather than a threat. With its established healthy
food products like their biscuits from Jack n’ Jill, and their beverages like C2, Blued, and
Vitasoy that is currently being sold in the market, it gives them the edge as compared to
its competitors. Universal Robina Corporation should continue pursuing this segment in
order to increase their target market., thus be able to increase their sales.

They should also invest more on their Research and Development department for them to
discover different ways for them to produce healthier food and drinks. In line with this,
URC could also form partnerships with other companies who produce healthy snacks for
them to know what practices they could incorporate in their company to be successful in
this segment.
- To adopt a more efficient way of production and other operations while considering
its effects on the environment within 2 years.
URC should continue its waste management in order to lessen its impact on the
environment. One of the things that they are currently doing is that they make sure that
the raw materials they are using in the production of their products are from organizations
who are sustainable and undergoes audit on a regular basis. They are also turning the
manures of their chicken and hog in their farms into electricity, cutting the expenses that
they need for it. They are already practicing the 3Rs, reduce, reuse and recycle, and 2017,
they have started the process of capturing and liquefying the carbon dioxide that they
produce. They have also been recycling wastes of their business units, for example their
scrap plastics into saleable goods. URC should invest more in their research and
development to further improve their actions on saving the environment. They could do
so by turning the packaging of their products into recyclable materials.
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CHAPTER 4: INTERNAL ENVIRONMENT ANALYSIS
PORTER’S GENERIC VALUE CHAIN
Support Activities
Infrastructure / General Administration
For several years, Universal Robina Corporation has been one of the top performing
companies in the food industry. But, for the past 2016, it has been a big challenge as
different issues were faced by the company, which greatly affected the business as a
whole. One of its major challenge was the price competition in coffee and salty snacks,
which are considered to be one of their key categories in the business. This greatly
affected their sales as their sales growth increased slowly than they expected, having only
2% compared to the previous year (2015).

This may have been a big challenge for the company, but it surely did not stop them to
continue and improve on their operations and sales performance. Under the Finance and
Accounting Department, products are properly costed, its sales mix is well calculated,
and all the other aspects related are regularly being improved and enhanced, not only to
increase its sales, but also to lower its costs and other expenses, thus be able to increase
the company’s profitability.
This department, in collaboration with all the other departments, took advantage of the
problems and threats that it experienced during the past year, and used them as an
opportunity to improve on its performance in the industry, incorporating its value of
dynamism, courage, and its passion to win.
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Human Resource Development
The human resource department is an important component in any business as its purpose
is to maximize the productivity of the business through optimization of the viability of its
employees.

The policies given by the Department of Labor and Employment are where URC
anchored their own policies from. Last December 2003, after almost 50 years since its
start in the industry, Universal Robina released their own Code of Business Conduct. It
centers in the business practices that are vital in achieving world-class success while
keeping the highest standards of integrity.

Furthermore, the company constantly provides learning and development to its
employees through the John Gokongwei Institute for Leadership and Enterprise
Development. They also have courses to ensure that employees have a common
understanding on how this department works namely job evaluations, competency-based
systems, organization design and manpower planning, labor relations management,
performance management systems, and targeted selection-based interviewing.

Research & Development / Technology
Technology is always an important asset in today's technology - reliant world, thus

constant research and development is required to innovate and expand in the ever-
growing market of Asia.
Universal Robina Corporation has always been committed in exercising the best practices
in their operations. Since they are known internationally, they are able to benchmark the
cultures and techniques of other leading companies outside the country. URC plans to
allocate their future investments to sustainable farming, conservation of water, use of
renewable energy, science-based animal breeding, and recycling the company's wastes in
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order to attain an effective waste management.
Procurement
One of the important factors in a business is their resources. Universal Robina

Corporation prioritizes energy, water, environmental compliance, and waste as their
resources. In their sustainability program, they are enhancing their approach to a more
responsible resources management. This approach can be seen with the use of Bi - axially
Oriented Polypropylene or BOPP, which is environmental - friendly material that can be
found in their plant located in Batangas, wherein they use these in the packaging of their
food products. This does not only lowers cost of the company, but it also is beneficial to
environment.
Primary Activities
Inbound Logistics
Every manufacturing process begins with the input of raw materials. With supplies
coming in from reliable suppliers in the URC farms and their other suppliers, it is then
stored in designated warehouses before being sent into the company to begin operations.
URC assesses their suppliers responsibly and makes sure that they receive materials of
the best quality to be used in making their products. They also provide training with their
supplier to make sure that they meet the time constraints. URC also takes note of every
transaction they make with their suppliers and which product they use it in to enhance
and give importance to their traceability.
Operations
Quality is essential in every business, and for a food manufacturer like URC, it is the
factor that determines their success in the industry. At every stage of the production
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process, URC ensures their compliance to government-regulatory requirements. Ensuring

food safety is critical to responsible operations, and this vigilance in the manufacturing
process is what classifies each URC product as safe, of good quality and value, and thus,
a fun experience to be enjoyed.
Universal Robina not only complies to the regulatory requirements but rather applies the
best standards at work. These standards are based from their experience in serving
various markets in their multinational ventures. From their experience in key global
trends, they are effectively able to discern their target markets and formulate effective
strategies that will be able to react to the ever-changing demands of consumers.
URC likewise strives to be proactive in accomplishing top-of the-class standards, which

are based on their learnings as a multinational organization serving various markets. They
step up because they know about the changing requests of buyers for food and drink
organizations to have a clearer view on how they function, from item improvement and
sourcing, to assembling and distribution, and finally, correspondences from their
consumers.
Outbound Logistics
According to Chairman, James L. Go and Lance Y. Gokongwei, URC’s Chairman and

President / CEO, respectively, “We plan to further rationalize our route - to - market,
channel focus, and distribution strategy with the aim of improving our overall customer
engagement. We will continue to drive availability by expanding coverage as well as
monitor account productivity and profitability.”

With its key programs in the Philippines, in Asia, and in different parts of the world, in
terms of improving its distribution to the customers, URC aims to provide them a better
access in purchasing their affordable premium products.
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Sales and Marketing
As competition in the industry increases and URC’s competitors are now becoming a
threat to the company, it is continuously improving its products and services through
quality improvements. The company is also trying to invest in other parts of the snack
and nonalcoholic food segments that the company has not yet tapped into, with the help
of its partner companies such as Griffin’s, SBA, and Calbee. It is also looking to innovate
on its coffee segment in order to boost and reinforce it in the market.

URC also aims on improving on marketing and selling their products to the customers. It
started on creating programs that enhances their sales mix, pricing, and the optimization
of their cost - volume - profit scheme, which will improve their sales and at the same time
maintain, or even improve, their profitability in their food branded products.

After Sales Service
After-Sales Services are made available to customers after products have been sold.
These usually involves guarantees, warranties, upgrades, repair services, customer
support and services, and feedbacks from customers. It serves as a fundamental role in
customer satisfaction and retention. It helps generate loyal customers and increases brand
value.

One of the after-sales services provided by URC is their Customer Care Department.
Customers can send in their feedbacks about their products through their hotline 02-559-
8872 / Toll Free 1-800-10-872-2273, their email URC-CustomerCare@JGSummit.net or
through their department office located at the 42nd Floor, Robinsons Equitable Tower,
ADB Avenue, Ortigas Center, Pasig City.

However, last May 2016, the company was involved in an incident wherein they had to
recall their C2 Iced Tea and Rong Do (Red Dragon) drinks in Vietnam. The Ministry of
Health of Vietnam found that their products contains lead in excess of the amount
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allowed by their government which caused them to pay P12 million. Universal Robina
Corporation took in the recommendations of Vietnam’s Ministry of Health which were
improving warehousing practices, humidity control, and housekeeping. This goes to show
that URC is not just all about earning profit from its products that it is selling, but it is
about the customers being satisfied with their product. They consider remarks from other
people for the improvement of their products.
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MCKINSEY’S 7-S FRAMEWORK
Structure
Company Structure
Information is a vital part in business, and properly communicating it through the

company is a key to success. Universal Robina Corporation has divided their business
units and corporate center units in order to allow the management of profit-generating
activities to focus on their activities while the corporate side focuses on management of
the corporation’s other prospects.
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Organizational Chart
As seen above, URC organizes its different sectors in three focused groups:
• Branded Consumer Foods Group, composed of BCFG Domestic (including packaging)

and URC International, for the production and sale of snacks, beverage, and grocery
products;
• Agro-Industrial Group, composed of Universal Corn Products, Robina Farms, and

Robichem, for the production and sale of animal feeds, day-old chicks, hogs, and
veterinary medicine; and
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• Commodity Foods Group, with the Sugar and Flour divisions, for the production of flour
and sugar, and for sugar milling and refining services.
Staff
Employees are vital in every business and keeping them motivated is important as they
are the ones who keep the business running. Without them, progress within the
corporation will grind into a halt which places importance in employees' health and safety
in the workplace. This is reflective of URC’s policy that “putting people first will be the
key to our purposeful transformation.”
Universal Robina Corporation keeps their employees motivated by enhancing their stay
in the workplace by giving them decent workplace environments. Taking care of their
employees' health and livelihood is also in their list of concerns as they seek to enhance
their approach to community development based on measured social needs. Strict
compliance to health and safety regulations are continuously monitored and improved in
order to ensure the safety of their employees' wellbeing.
Skills
Each employee showcases a unique set of skills. They utilize these skills to aid the
corporation in its success, while it is the company's job to continually provide challenges
and training programs to aid in their employees' growth.
Universal Robina Corporation provides these opportunities for growth by engaging

regular performance conversations to inform and encourage employees about their
current performance and conducting career development programs that will enrich the
knowledge base of their employees not only within the realm of their workplace but with
the world of business as well.
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Strategy
Universal Robina Corporation has their corporate-wide sustainability strategy which they
call “Our Purposeful Transformation”. With the recent growth of URC as one of Asia and
Oceania's premiere food and beverages companies, they have recognize the need to
include sustainability as part of their core business strategy. To do this, it is necessary to
start in knowing oneself. Universal Robina Corporation had taken the first step by
analyzing their environmental, social, and governance (ESG) performance. They are
driven by their mission and empowered by their core values to strengthen their way of
operations in ensuring their long-term value and growth. This strategy includes five focus
areas namely Resources, People, Product, Supply Chain, and Economic. These pose
significant risk and opportunities that are the most important issues of the business.

These focus areas show their commitment to sustainability. They have key strategic
priorities that are their starting points in each focus area. As of now they, they are setting
their targets with 2019 as their announcement deadline. URC started with the first three
focus areas which are Resource, People, and Product by developing their performance
targets. They plan to determine the key performance indicators for responsible supplier
relationships and inclusive growth after they have addressed their most basic impacts.

Resources

Resources plays a vital role in the business and in the industry. This is why URC
made this as one of their focus area to show and put their commitment to. To
enhance their approach to a more responsible resources management is what they
ought to do regarding this area in their sustainability program. Under Resources
area, URC’s strategic priorities are energy, water, environmental compliance and
waste.

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People

No business can run without people. Thus, URC’s main objective in the People
area of their sustainability program is the enhancement of the lives of their
employees and communities. They do this by increasing and strictly monitoring
safety measures in order to ensure their employees’ safety while programs like the
“Kabalikat Program” and “Iskolar ni Juan” aims to enhance the livelihood of the
communities that rely on Universal Robina Corporation.

Product

Product is one of the key factor needed in URC’s mission to be the best Philippine
food and beverage company. In producing their products, they give importance to
the process and the quality of it. They ensure that each process and product is up
to the standards and is not in violation of the rules and regulations mandated by
law. To provide food and beverage that is of the best quality, safe and fun for
their consumers is their commitment in this focus area. Failure to conform with
the regulations may greatly affect their reputation so they continue to innovate
their products with regards to nutrition and food safety standards as the
government policies change.

Supply Chain

Suppliers are a necessity in every business, but establishing close ties to suppliers
is often the hardest part that every business must face. Universal Robina is able to
capitalize on this by assessing their suppliers responsibly, in order to receive
quality materials for the corporation to work with and meeting time constraints by
providing training to enhance supplier traceability.

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Economic

With the ever-changing movement in the world of business, it is important to
innovate and continuously improve in order to maintain or create advantages for
the company to use in order to get ahead. URC opted to focus on inclusive growth
and their plan of action to achieve this was to practice transparency and
accountability with their stakeholders. They also seek to improve their risk
management capabilities and to continue to innovate in order to attain new
advantages in the ever-growing and ever-competitive market. Their investors also
use ESG as a set of standards to screen investments in order to protect their
interests.

Style
Over the past year, Universal Robina has been known to be one of the most successful
players that have emerged in the Philippines, and is continuously growing in different
parts of the country, especially in the rural sector. The company aims to transform itself
as one of the country’s borderless multinational company, exercising innovation in its
products that it offers, not only in the Philippines, but in different parts of the globe, also
as part of their brand promise wherein they aim to delight its customers with “brands of
exceptional quality and value” to its products.

Key Focus Areas of Transformation

Identity

“From a corporate brand to a dynamic consumer brand.”
Universal Robina is known to the market as a well - known company in

the food industry offering different kinds of food products. But, it doesn’t
just want to be recognized as someone who produce or manufacture these
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famous snacks. URC also wants to be recognized with their high quality
products, that is loved by people of all ages.

Leadership

“From a visionary patriarch leadership to a team of entrepreneurial
leaders.”
URC began with the leadership of a father figure who looks after the
company as if it was his own child. Now, with the changing times,
entrepreneurial leaders are more important than ever. Not only are these
leaders working, but the employees and all the staff are also being
involved during the operations, especially during the decision process. It is
vital as this helps the business in achieving success. Being those obtaining
first – hand information with regards to the feedbacks and comments of
the customers, the employees have a key role, not only in the company’s
success, but also in its survival in the market.
Innovation

“From tactical product development to strategic innovation leadership.”
Innovation is important, as it differentiates the company’s products and

services to that of its competitors. Universal Robina does its best in
continuing to grow as business in the industry and in the society, which is
why they continue to make the necessary improvements and innovations
in order to enhance their production and operations, and the products
themselves. With the help of the company’s Research and Development
team, this practice contributes to the acquisition of URC’s competitive
edge and brand equity in the industry.

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Products

“From price fighter brands to multi – tiered mainstream and premium
segments.”
Back then, Universal Robina sells their products at a very low price in
order to attract and entice their customers in buying their products. Today,
due to its innovation and other improvements in terms of its production
and the quality of its products, the company can now sell their products at
a premium, but still maintain high sales, as a result of its established brand
name in the industry and in the market.

Presence

“From a leading local player to a dominant multinational with a strong
portfolio of brands.”
During the early operations, URC only operates and caters to the Filipino
people. With its continuous investments in different sectors, both local and
international, it can now generate sales and profit from its products and
services even outside the Philippines.
Systems
In terms of their supply chain management, URC commits in promoting better

relationship with its supplier and other partners, as they are vital for the business. The
company also makes sure that all the decisions that they are practicing in the workplace
are efficient in terms of managing the company's supplies and inventories that may lower
the probability of incurring losses, thus resulting to higher profits.
Since Robina Universal Corporation has a large and diverse food supply chain, they
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recognize the risks that are inherent in their entire organization. They commit themselves
into having responsible supplier relationship throughout their procurement practices and
decisions, enhancing traceability mechanisms for their tier 1 and tier 2 suppliers, risk
assessment within their supply chain, and improved supplier training.
Shared Values
Universal Robina Corporation has four core values that are incorporated with their
culture and work ethics and are being practiced by each and every member of the
organization - passion to win, dynamism, integrity, and courage:

Passion to Win: We build organizational capability by being entrepreneurial and
proactive, driven by a sense of urgency and purpose. We continuously challenge
ourselves to deliver world-class brands and consistently rally our people to strive
for excellence.
Every company wants to succeed, no matter the industry it is in. It does

everything that it can to achieve its goals and objectives, which in turn will be
beneficial on their part, in terms of increased customer loyalty and brand equity.
For URC, the management makes sure that their employees will produce quality
and world - class brand products to its consumers by bringing out the best in them
and continuously motivates each and every one of them in striving for excellence,
all driven by their sense of urgency and purpose.
Dynamism: We cultivate a culture of innovation and productive working

relationships. We continuously find ways to improve organizational and people
capabilities to meet constantly challenging consumer needs.
Along with challenging themselves to satisfy their customer needs is their

continuous innovation and improvement of their working relationships within and
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outside the organization, as well as in their organizational structure and

capabilities of their employees.
People have different personalities, beliefs, and cultures. Some may perceive this
as a disadvantage because of misunderstandings and disagreements when the
business is under the decision process. But for URC, these diverse cultures in the
organization proves to be an advantage for the company, as different opinions and
perspectives from different people can be taken into consideration, which help
improves its operations, thus increasing its sales and profit.
Integrity: We are guided by transparency, ethics, and fairness. We build the

business with honor and are committed to good governance. Our processes and
products meet the highest standards. We are credible in our dealings with both
internal and external stakeholders.
As URC works their way in providing the best products to its customers, they stay
committed to good governance, guided by honor, transparency, ethics, fairness,
and credibility. As an organization, its major objective is to meet the needs of the
shareholders, and also to maximize the value of their wealth and investments in
the business, which is why it is very important that transparency and honesty
should be practiced at all times.
Courage: We seize opportunities in building long-term, sustainable businesses.

We make tough people and business decisions to ensure competitive advantage.
Maintaining competitive advantage in the industry is important, which is why

organizations look out for different opportunities that it can invest on in order to
do so. When an opportunity comes an organization's way, it is all up to the
management whether or not they will seize this opportunity. The management
will be making the tough decision, as risks and other factors should be considered
in these kind of situations.
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FINANCIAL RATIOS
September 30, 2016* September 30, 2015* September 30, 2014*

Liquidity Ratios:
Current Ratio 1.70:1 2.30:1 1.90:1
Solvency Ratio:
Gearing Ratio 0.57:1 0.42:1 0.16:1
Debt to Equity 0.88:1 0.69:1 0.39:1
Asset to Equity 1.88:1 1.69:1 1.39:1
Profitability:
Operating Margin 15.1% 15.9% 15.3%
Earnings per share 6.94 5.68 5.30
Leverage:
Int. Rate Coverage 24.83 17.29 119.70
* URC is following a fiscal year ending at September
Universal Robina Corporation’s liquidity ratio shows that for the past three years, the company
has increased their liability, but not so much that it overturned their equity, which indicates that
their funds were mostly sourced from the issuance of their stocks.
The gearing ratio reflects the amount of equity required to pay all the outstanding debts of the
company. For the 2014 fiscal year, their gearing ratio of only 16%, showed that the company
was at a low risk and that it was highly probable that they would be able to pay off its debt.
However, for the year of 2016, the company experienced a higher risk, with 57% gearing ratio,
and an increase in the gearing ratio represented a higher debt – to – equity ratio.
In relation to the gearing ratio, the debt – to – equity ratio shows the relationship between the
contributed capital of shareholders and creditors, showing up to what extent that company’s
equity can pay off their obligations in the event that a liquidation occurs. In 2016, the company
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had a ratio of 88%, indicating the firm is increasing their liabilities to fund their projects
compared to their previous years.
The cumulative asset – to – equity ratio of Universal Robina Corporation for the past 3 years has
been more than 5, with 2016 having 1.88. This means that the company, having a good mix of its
debt and equity, has resulted to higher return on their borrowed capital, compared to its cost of
capital.
Their operating margin had dropped by 0.8% last 2016 compared to their 15.9% in the year
2015, which indicated an increase in their variable cost, resulting to the company earning less.
However, their earnings per share grew despite the decrease in their operating margin. Thus
making it more enticing to investors to purchase their shares since continuous improvement in
the EPS implies a continuous development in the company’s earning capacity.
The interest coverage ratio determines the ability of the entity to pay the interests incurred on
their outstanding debt, and based on their financial leverage ratio for the past 3 years, the
company has more than enough amount of earnings to pay its obligations, even in times of a
financial difficulty. However, from the year 2014 to 2015, their interest coverage ratio severely
dropped, which had been a concern, especially for the investors, for this had indicated the
possibility of the firm to have a problem in paying all of its debt. But during the year 2016, their
ratio increased, which indicated a higher probability that the company will be able to pay off its
debts compared to the previous year.
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HEAT MAP
Risk Assessment Heat Map

5
Malfunctioning /
Obsolesence
4
Theft
3
LIKELIHOOD
Health
2
Over/Underproduction
0
0 1 2 3 4 5
IMPACT
Malfunctioning / Obsolescence
Machineries and equipment only lasts for a few years due to depreciation, which slows
down their production and causes low output of their products. Its risk has a significant
effect and its likelihood high, which is why URC should take this into account during
their decision process.
What the company needs to do is to regularly monitor and assess on the usefulness of
their machineries, so as to maintain its aggressiveness when it comes to the company's
production process.
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Theft
Even with the training done by URC to their employees and despite the values that URC
are practicing, they still have a risk to theft, which is significant as to its impact and its
likelihood is from medium to high. Many factors may increase the possibility of theft,
one of which is compensation. Some employees may feel that what they are receiving is
not enough and not worth the effort and hardwork that they put in into their jobs.
Another factor may be in terms of financials. Employees usually are supporting their
families and help them in financing their expenses, and there are times that fortuitous
events may come their way, in which financial support is needed. Due to lack of money,
some employees resort to this activity to be able to compensate and alleviate this problem
that they are having.
What the company needs to do is to regularly monitor the operations of the company,
especially its financials. Internal control should be established through supervision and
regular checking of its accounts, so as to lower and prevent the threat of theft in the
company. This would also help in early detection whenever a theft occurs.
Health Risk
Health is important to every individual, both physically and mentally. But in some
circumstances, taking care of one’s health is being neglected because of the workload
given to the employees, which may result to a lower rate of productivity during work
hours, and may even result to employee absences.
This issue has a moderate impact for the company and its likelihood is medium, which is
why the company should make sure that their employees and staff are being given a fair
amount of workload and day - offs, so as to maintain their health, thus lowering the
possibility of absences and low productivity.
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Over/Underproduction
In line with the external risk on the demand of the products of URC in the market which
is significant and is most likely to happen, the production of its products is a big concern
also for the company, but its likelihood may be from low to medium only. The company
may produce more, or less, of what is expected to be needed in the market, which result
to inefficiency on their part.
What the company needs to do is to clearly assess on the demands in the market, so as to
control the production of its products. URC may also conduct a forecast about the
demands and take note of the seasonal trends to know the products that need more
production. This way, their products would not be wasted, thus lowering its risk of
incurring losses.
Strengths and Weaknesses
Generally speaking, Universal Robina Corporation executes their production process effectively
and efficiently. They were able to benchmark best practices and incorporate them to their
operations in locally and internationally that gave them the edge against their competitors.
Innovation has also been a huge factor in the company, as this enabled them to stand at a
premium, in terms of its products.
Despite having best practices, URC still experienced a major setback during the year 2016,
which has become a threat in the company’s operations. It had issues in terms of following the
government – mandated regulations with regards to the production of its products, which led to a
small percentage in its sales growth. It also experienced intense rivalry between its competitors,
leading to their implementation of their “purposeful transformation” sustainability program. This
served the company’s direction to retain their competitive edge and brand equity in the industry.
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In the analysis, the Human Resource Department and its Procurement are considered to be the
strengths of Universal Robina. Not only URC is able to produce competent employees in their
operations, but it also makes sure that its resources are well in line with its sustainability
program, which prioritizes the use of energy and water resources in their production, and at the
same time complying with environmental standards and regulations. Its Outbound Logistics and
After Sales Service is also a plus for the company, as it does its best in maintaining satisfaction
and retention of their customers, through its convenience and accessibility of their products,
while simultaneously giving them different kinds of warranties and customer support.

Despite being successful in these departments, there are still some that Universal Robina should
regularly monitor and assess, which are crucial in the operations of the company. Its Research
and Development / Technology, though performing well for the past years, should be always
taken into account, considering the sudden changes that occur in the environment from time to
time in terms of the demands and trends, which can greatly affect the company’s production and
sales.
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CHAPTER 5: STRATEGY FORMULATION AND RECOMMENDATION
STRATEGY FORMULATION
Strategic Objectives

1. To invest in the production of healthier food alternatives, in line with the emerging
trend in healthy living, within 3 years.
Healthy living has now been a trend in different parts of the world, including the
Philippines. More and more consumers are patronizing healthier food products, so as to
maintain good and proper health. URC, as of the moment, is producing a number of food
and beverage products, particularly Mang Juan Chicharon, and Vitasoy Drink. With these
products, it can be seen that it is still lacking the capacity to cater to these kinds of
consumers, which is why the company should invest more on producing healthier food
products, to be able to cater these individuals and at the same time improve on its sales.
2. To improve on its operations, especially in the production of its food products, so as

to be able to follow all the regulations set by the governments, both at home and
overseas.
In relation to its issue in Vietnam with regards the excess lead content that its products
contain, Universal Robina Corporation in the Philippines needs to make ensure that all
the rules and regulations mandated by the law, together with its personal quality standard
policy, should be followed and maintained strictly, so as to avoid any conflict and issue
and also to be able to ensure the good quality that the company is providing to its
customers. Constant maintenance of machineries is also an absolute necessity to avoid
any possible malfunctions.
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3. Improve on its waste management policy, in line with its objective on helping save
the environment.
URC is aiming to be a sustainable company, which is the reason why they developed a
program named “Our Purposeful Transformation”. It maximizes their resources while
minimizing their wastes. Since they have already started this phase, they should further
develop their practices by investing more in their research and development team to
enhance their current production systems, benchmarking other companies’ best practices
to give them more ideas on what they can do, and improving their sustainability program
by involving their customers in their efforts to also help in waste management. They
should improve their packaging by reducing the amount of materials used in them that are
harmful to the environment. Add to that, scraps and wastes should be reduced, so as to be
able to achieve its objective in saving the environment, as part of its sustainability
program.

Strategy Alternatives

1. Creating international partnerships with successful healthy food manufacturers
As a renowned manufacturer of salty snacks, chips, and sweets, the healthy lifestyle of
today will paint their products in a negative light. Establishing partnerships with well-
known healthy food manufacturers and releasing collaboration products will help boost
the company image and sales, improving on different departments of the company,
especially its research and development and operations / production.
2. Self-sufficiency plan
URC is a conglomerate that ranges from the production of snacks and beverages up to
agricultural development. They have the capability to be their own supplier or
incorporate a forward integration business strategy, which may drastically lower their
input costs.
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Aside from catering to the food and beverage sector in the industry, URC has Robina
Farms under their Agro-Industrial Group (AIG). Robina Farms is a premium supplier of
pork meat and eggs. One of their brand promise is “Robina-Raised”, in which they assure
to the consumers that they produce their meats and eggs through the best sustainable
“farm to fork” practices. This is directly managed by URC’s AIG, which shows that they
have better control over the quality of their produce, compared to their competitors who
still outsource animal rearing services and meats. One example of their practice is the use
of an infrared beak trimming instead of using the manual hot-blade beak trimming, which
causes pain to the chickens. They also made investments like slaughterhouse, meat-
cutting facility and cold storage plant for full integration of their farms and improvement
of their internal capabilities. They also produce feeds for both their farm animals and for
public distribution.
URC also has a BOPP plant in Batangas which produces their packaging for their food
products. Their machinery converts resin material into Bi-axially Oriented Polypropylene
films, which is an ideal material for storing and slowing the spoilage of their food
products. They also reduce waste by making more plastic pallets with the excess of their
plastic scraps which they can sell.
3. More international partnerships with successful snack and beverage manufacturers
With the success of the partnership with Calbee, Universal Robina should extend their
hands to offer partnerships with healthy-snack producers like Australia’s Nuts’ n' Co. and
other companies in the Asian region that mostly dealt with the sale of nuts, seeds, and
other organic based snacks.. Establishing a partnership with companies like Nuts’ n' Co.,
who supplies healthy food products, mostly macadamia nuts and purity oils, would help
URC in line with our proposed objective to invest more on healthy food alternative in
relation to the booming trend in healthy living. This would also help URC cater to a
larger market and strengthen their channel in Singapore since Nuts’ n' Co. sends supplies
there.
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Recommendations:
Production of foreign snacks “with a Filipino twist” in local markets to create a larger
share in the local and foreign market
Universal Robina had long begun this kind of thinking when they have entered the
Australian and New Zealand markets upon their acquisition of Griffin’s and Snack
Brands Australia. By purchasing foreign manufacturers, URC allows for improved
distribution in key geographical markets and it helps provides a strong and well-regarded
brand that will serve as a platform for future growth. If this option was not available,
URC will create factories in their target countries to create footholds in those areas, like
what they had done with URC Vietnam when C2 was introduced to the country.
The drawbacks for this plan is an increase in R&D costs in an effort to replicate the
flavors. It will also put a clear strain in the production cost since the product lines will be
costly to maintain. Another drawback would be the reluctance that foreign customers will
buy something that was out of their comfort zone, and seeing these snacks may make
them see URC as conceited enough to “better” the local flavor.
Provide more information with regards to its production through its improvement in its
commercials and other advertisements to the public
When it comes to the public, it has been a notion that Universal Robina produces
unhealthy products, which affects the sales and profit of the company. Despite their
efforts to provide different organic-based products such as Mang Juan’s Crackling in
their snack foods, and C2 and Vitasoy in their beverages to its customers, consumers still
think that they produce unhealthy products with regards to their image in the industry.
This greatly affects the decisions of the market, resulting to a decrease in their sales.
What URC needs to do is to emphasize their investment not only in the production of
healthy products, but also in its investment in healthier ingredients and materials in its
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current product line, in a form of an advertisement. Somewhat similar to commercials of

detergent products wherein the consumers are informed by health experts regarding its
shift to production of healthy food alternatives, URC may show parts of their production
process, ensuring its customers and enticing them to still consider a purchase, removing
its notion of “unhealthy food products.”
Joining the healthy snacks trend
According to recent studies by Mintel, a prominent global market intelligence agency,

“demand for more wholesome and nutritious options is rising” due to consumers
recognizing the need for a balanced diet. This can be taken advantage of due to having an
agro-industrial business sector which can supply the resources to be used for this strategy
to take place.
It will be costly to supply overseas consumers, however, since the majority of the supply
will be focused in the Philippines, it would be better for URC to start this project locally
first. For other countries, it is part of the researchers’ recommendations to create a
partnership with an international food company to also cater healthy food in countries
like Australia and Singapore. Once this project starts, URC could then continue the
production of these healthy food products and also supply to other countries they cater to.
STRATEGY RECOMMENDATION
Implementation of Recommendations

Partnership with Foreign Companies

Partnering with other companies not only helps the business in improving its operations,
especially in terms of the production, but it would also be helpful in developing its
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research and development. More ideas and different perspectives can be taken into
consideration, which will benefit the company - increasing its sales and profit.,

One Australian company named Nuts’ n' Co., who manufactures healthy food like nuts
and purity oils, is ideal for URC to have partnership with. Not only would it help them in
investing on healthy products but would also widen their market share in Australia and
also in Singapore, where the company also supplies their goods. Woodland Foods, a
company that prides itself as a “trusted specialty food ingredient provider”, is also a
prospect to make a partnership with due to their plethora of healthy food options which
can be used to create newer products that combined American origins with Filipino ones.

Improvement in the Company’s Marketing (Packaging / Infomercials)

One of the main objectives of Universal Robina is to clear the notion that Universal
Robina is a company that only produces junk foods. In order for this to be successful,
proliferation of information about their processes and the materials used should be done
in order to inform the public that they also offer alternative products besides those that
they are famously known for.

One thing that they could do is to improve on the packaging of URC’s products. Besides
improving them in terms of the design and investing in the use of BOPP, in order to
attract more customers, more information as to the manufacturing process would help in
educating the consumers on how these food products were manufactured. And since their
products are the last things that could influence their customer to continue patronizing
their products, it is important that they put the necessary information for customer
retention.

Another plan is providing infomercials to the public. As of today, Universal Robina has
already showed different styles of commercials that may help entice the market in
purchasing its products, but what is common to these advertisements are the use of
popular artists and different stories that people admire and can easily relate to. What they
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lack is the information relating to their products. Similar to some commercials of

pharmaceutical and detergent products, experts related to production can be hired. These
experts will be the one who will be informing the market as to URC’s production process,
thus providing to the consumers credibility and assurance with regards to the safety of
their products. This may help remove the market’s notion of the company as a
“manufacturer of unhealthy products.”

Investment in Use of Internet and Social Media

In relation to URC’s plan of improving its marketing aspect, URC should invest more in
using the Internet, which has become a part of the lifestyle of the people, besides
changing the packaging of their products and providing infomercials to the public.

In order for the plan to materialize, the company would be needing to increase its
manpower for their internet campaigns, as its usage has continuously been increasing for
the past years, especially in different social medias like Facebook, Twitter, and
Instagram. The advent of the digital age has allowed many innovations; one such case
would be the ease of sharing information on the World Wide Web. Through the years, the
internet has been the backbone of every business’ advertising campaigns, reducing the
costs of advertising being incurred by them. In accordance with this trend, capitalizing on
the populace’s intimacy with social media makes it easier in terms of offering the
company’s goods, through its eye-catching advertisements instead of relying heavily on
television and newspaper ads.

The people on the internet should create paraphernalias that are eye-catching and at the
same time informative about the company. Advertisements should also be creatively
done to entice more customers to watch it so that they will learn more about the
company.
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Open Doors to the Public (Educational Trips)

In addition to URC’s plan of developing its use of the internet and the social media, URC
should also consider opening its factory to the public. It will be open to different groups
of people, like families and friends. Another way to implement this is to offer educational
trips inside their factories to different schools in the Metro.

Since the company will be welcoming different people into their factories, including the
students, they should make sure that these locations will be safe and friendly to them. The
company should build a facility wherein tours and different interactive programs and
activities for the guests will be conducted, with its aim of enhancing their customer
relationship and providing the necessary education with regards their production and
other operations. This way, customers will be as to the materials used and the processes
made in producing the products, showing to them that URC is more than just a company
that manufactures junk food - removing the market’s stereotypical notion of the company
as an “unhealthy food manufacturer,” influencing them to still buy their products.

In line with this, the company would be needing additional investments as to the
machineries and equipment that are used in the production. Same as those found in the
present plant locations, these machineries will be used to produce the food products that
will cater to the health - conscious consumers, and will also be the ones who will be
featured and be seen by the guests who will be visiting the factory.
Management of External / Internal Risks

Risks are inherent in a business, and considering that Universal Robina is already a big
manufacturing company, with an already established name in the industry, these risks are always
present, and should always be taken into consideration by the company, in order to avoid
incurring losses and other expenses related to these risks.

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Demands change due to trends that suddenly occurs in the market, which also increases the
competition between the company and its competitors. To solve this, having their analysts probe
the situation using the scenario-based forecasting method will be a an effective tactic. By
identifying the key factors and drivers of the demand spikes and providing different scenarios
that may occur in the future based on them, it will allow them to react to the fluctuations in
demand and may allow them to compensate for inflexibility during operations. With that, URC
will be able to continuously assess the trends and activities of the market, especially the
consumers. This would help them to keep up with demands of the market, and at the same time
be able to stay in the competitive market, thus lowering the risk of over- and underproduction.

Climate change is now prevalent in our world, which then increases the concern of the people as
to taking care of the environment. URC had taken the initiative with their Bi-axially Oriented
Polypropylene film packages which is made from recycled resin, but further processes to lessen
their waste disposal cost is always welcome.

Starting small by reducing waste in the office by consolidating commonly used workplace
supplies then placing them in a centralized place to be reused will encourage employees to avoid
redundant purchases and thus lowering purchasing costs. Another method would be to avoid one-
time use utensils in the breakroom or cafeteria . Encouraging employees to bring their own
containers will reduce the need for containers that will be disposed after use.

In line with this, URC should strictly monitor the wastes that its machineries and equipment
produce, in compliance with its sustainability program, in order to minimize their waste disposal
costs and the damage done to the environment.

In relation to the company’s assets, constant monitoring of the company’s machineries and
equipment is necessary in order to maintain its production capacity, as these equipment have a
limited useful life and is subject to malfunctioning and obsolescence. Day to day checking of
equipment will prevent them from malfunctioning, and constant checking for newer and better
equipment will mitigate the risk of obsolescence.

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Every manufacturing company is susceptible to employee theft, and URC is no exemption.

Increasing the number of high quality security cameras in factories to avoid external and internal
theft is a viable option. Increasing the preventive measures such as surprise audits and
inspections would discourage would-be thieves in their tracks.

As a company that deals with large machines, the health of operators are placed at risk whenever
the machines emit heat and radiation that disbalances the chemicals that composes the human
body. That is why, safety precautions for all workers must continuously be monitored to avoid
lasting sickness from developing in the workers. Providing health card benefits and doing bi-
monthly check-ups will allow the company to keep track of their employees’ health and to
ensure that each one of them is in shape.

Consumer demand shifts very quickly and with the abundance of technological tools and
techniques in this modern age, it a necessity to invest in systems and people which can properly
prepare and predict how many units are to be produced, distributed and sold.

Required Resources

1. The strategy to build partnerships with foreign companies is to be followed, wherein the
services of an attorney would be needed in this instance. With that, the company will be
incurring legal fees, inclusive of the attorney’s fee, of about $3000 or approximately
Php515,000.. Once the deal is struck, preferably a 50-50 deal, production costs from the
joint products vary but the estimated value will be around millions. As of the moment, it
is recommended that the Universal Robina be in touch with the company Nuts’ n' Co. and
offer a partnership deal with them. The company is still looking to make deals with other
companies, that the business has not tapped into.
2. Further improvement and additional funding on the company’s research and development
is needed for its strategies, considering the diverse culture of different countries that
Universal Robina caters and will be catering to. It is estimated that it will be incurring a
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total of approximately Php 50,000,000, considering the extensive research it will be

needing in order to materialize its plan on certain locations.
Since this strategy is based on integrating Filipino culture with the locals, constant
communication is required to make the strategy succeed. This cost on the company’s
research and development will be including the salaries of the people that the business
will be needing, in order to provide customer intimacy in these foreign communities.
3. Universal Robina Corporation would be incurring a total of 7,118,414,000, which would

include the following purposes:
a. Use of social medias like Facebook, Twitter, and Instagram, and also YouTube,
which will help increase the exposure of URC’s investment in healthy products
b. Production of an infomercial (information commercial), promoting and at the

same time providing them the right information as to the production and URC’s
products themselves
In implementing its use of the internet and social media, additional staff, preferably
someone inclined to producing advertisements in social medias, will be hired, which
would then incur salary expense with a total of Php 2,500,000 per advertising sales agent
for the whole year.
For the infomercials, the company would need to hire an expert who will be featured in
the advertisement, together with a celebrity, and also staff members who will be behind
the camera such as the directors, producers, script writers and editors thus increasing its
advertising and salary expenses of approximately Php 1.85M (P500,000 for the endorser,
P500,000 for the director, another P500,000 for the crew and their equipments and an
additional P350,000 for the hired expert.
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4. To be able to fully implement URC’s plan on opening up its factory to the public, the
company would be needing an additional capital for its investment in constructing the
facility, wherein the tour and other activities will be conducted. According to previous
articles published, the company has set aside a total of Php 7.81 billion for its site
development and construction plan last 2016, which was used as the basis of the group in
calculating the capital needed for this project, and also the expenses to be incurred in its
implementation.
For the machineries and equipment, the company is projecting to be needing a total of
Php 60,072,500 for the factory plant, where the educational trips will be conducted, and
an estimate of Php 16,330,345.04 for its machineries and equipment, both for the factory
and the general administration of the business.
URC would also be needing additional staff who will guide and entertain the visitors
around the factory. It is estimated that a total of 100 employees will be needed for this
plant site, thus resulting to an increase of approximately P1,375,600 in its monthly
salaries expense, having a total of Php 25,425,710, which also includes the salaries of the
management and all the other staff of the company. Other expenses like utilities, supplies,
and depreciation would also be incurred, resulting from the its use of different materials
and machineries for the said location, and it is estimated to be incurring a total of Php 1
556 400, Php 27 392.64, and Php 3 862 537.67 for this project, respectively.
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5 - Year Financial Projection

Presented here is the financial projection for the next five years, which shows the movement of
income between forecasts from before and after the recommendation is implemented:
STATEMENT OF COMPREHENSIVE INCOME

(Before Implementation) 2017
BCF Group 101,254,313,815

AI Group 9,607,019,092
CF Group 12,009,272,278
Sales 122,870,605,185 100%
Cost of Sales 80,730,289,942.42 65.70%
Gross Profit 42,140,315,242.24 34.30%
Selling and Distribution Costs 18,045,555,349.49 14.69%

General and Administrative Expenses 4,730,996,512.93 3.85%
Operating Income 19,363,763,379.83 15.76%
Net Foreign Exchange Gains (Losses) (4,511,115,700.64) -3.67%
Finance Costs (1,159,478,651.78) -0.94%
Market Valuation Gain (Loss) on FiAL at FVPL (723,743,613.06) -0.59%
Equity in Net Income (Loss) of Joint Ventures (374,585,381.49) -0.30%

Finance Revenue 206,972,660.83 0.17%
Impairment Loss (48,443,465.69) -0.04%

Other Income (net) 698,445,686.45 0.57%
Income Before Tax 13,451,814,914.45 10.95%

Provision for Income Tax 3,901,665,967.77 3.18%
Net Income 9,550,148,946.68 7.77%
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BCF Group 115,935,553,133
AI Group 9,963,927,933
CF Group 14,481,689,934
Sales 140,381,171,000 100%
Cost of Sales 103,334,771,126.30 73.61%
Gross Profit 37,046,399,873.52 26.39%
Net Foreign Exchange Gains (Losses) 2,842,002,891.40 2.02%
Finance Costs (162,327,011.25) -0.12%
Finance Revenue 70,370,704.68 0.05%
Impairment Loss (40,208,076.52) -0.03%
Other Income (net) 859,088,194.33 0.61%
Net Income 21,605,884,666.64 15.39%

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BCF Group 129,783,423,093

AI Group 10,418,073,044
CF Group 17,424,834,381
Sales 157,626,330,518 100.00%
Cost of Sales 121,408,022,596.28 77.02%
Gross Profit 36,218,307,921.71 22.98%
Finance Costs (110,885,581.38) -0.07%

Impairment Loss 18,302,716.43 0.01%
Other Income (net) 1,170,078,120.68 0.74%
Net Income 22,016,894,503.56 13.97%

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BCF Group 146,933,921,501

AI Group 10,848,926,582
CF Group 20,989,139,920
Sales 178,771,988,003 100.00%
Cost of Sales 145,301,121,443.23 81.28%
Gross Profit 33,470,866,559.75 18.72%

Finance Costs 247,263,757.93 0.14%
Market Valuation Gain (Loss) on FiAL at FVPL 160,222,547.78 0.09%
Finance Revenue (6,589,679.57) 0.00%

Other Income (net) 1,491,264,564.81 0.83%
Net Income 24,565,525,978.21 13.74%
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BCF Group 165,414,960,353

AI Group 11,320,480,644
CF Group 25,268,667,558
Sales 202,004,108,555 100.00%
Cost of Sales 170,409,155,228.62 84.36%
Gross Profit 31,594,953,326.34 15.64%

Finance Costs 245,508,185.25 0.12%
Equity in Net Income (Loss) of Joint Ventures 298,073,540.25 0.15%
Finance Revenue (2,483,650.23) 0.00%

Other Income (net) 1,738,068,850.28 0.86%
Net Income 22,983,169,226.94 11.38%
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(After Implementation) 2017
BCF Group 101,254,313,815

AI Group 9,607,019,092
CF Group 12,009,272,278
Sales 122,870,605,185 100%
Cost of Sales 80,730,289,942.42 65.70%
Gross Profit 42,140,315,242.24 34.30%

Net Foreign Exchange Gains (Losses) (4,511,115,700.64) -3.67%
Finance Costs (1,159,478,651.78) -0.94%

Finance Revenue 206,972,660.83 0.17%
Impairment Loss (48,443,465.69) -0.04%

Other Income (net) 698,445,686.45 0.57%

Net Income 9,550,148,946.68 7.77%
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BCF Group 120,998,268,824

AI Group 9,963,927,933
CF Group 14,481,689,934
Sales 145,443,886,691 100%
Cost of Sales 106,852,286,735.43 73.47%
Gross Profit 38,591,599,955.13 26.53%
Finance Costs (162,327,011.25) -0.11%

Impairment Loss (40,208,076.52) -0.03%

Other Income (net) 859,088,194.33 0.59%
Net Income 15,949,506,707.95 10.97%
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BCF Group 150,476,537,332

AI Group 10,418,073,044
CF Group 17,424,834,381
Sales 178,319,444,758 100.00%
Cost of Sales 134,087,566,060.21 75.20%
Gross Profit 44,231,878,697.42 24.80%
Finance Costs (110,885,581.38) -0.06%

Other Income (net) 1,170,078,120.68 0.66%
Net Income 18,351,718,801.27 10.29%
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BCF Group 198,488,656,600

AI Group 10,848,926,582
CF Group 20,989,139,920
Sales 230,326,723,103 100.00%
Cost of Sales 171,401,205,076.92 74.42%
Gross Profit 58,925,518,025.66 25.58%

Finance Costs 247,263,757.93 0.11%
Finance Revenue (6,589,679.57) 0.00%

Other Income (net) 1,491,264,564.81 0.65%
Net Income 33,302,642,169.78 14.46%
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BCF Group 274,071,351,019

AI Group 11,320,480,644
CF Group 25,268,667,558
Sales 310,660,499,221 100.00%
Cost of Sales 201,019,333,314.21 64.71%
Gross Profit 117,105,536,481.27 37.70%

Finance Costs 245,508,185.25 0.08%
Equity in Net Income (Loss) of Joint Ventures 298,073,540.25 0.10%
Finance Revenue (2,483,650.23) 0.00%

Other Income (net) 1,738,068,850.28 0.56%
Net Income 85,995,706,352.67 27.68%
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In the forecasts before the implementation, we see that the profits fluctuate before dropping
significantly during 2021. The reason for this was the emerging healthy way of living which
abhors the URC’s well-known brand of snacks, which would cause the sales portion of the
Branded Consumer Foods Group, the one responsible for snack production and distribution, to
dive down.
Universal Robina’s investment in different acquisitions last 2017 caused them to disburse a large
amount of money, which affected their total income in a decreasing manner compared to their
2016 income. With this, the proposed recommendations will take effect in 2018, in consideration
of all the acquisitions that they have done in the past year. Possible revenues and operating
expenses from these acquisitions are embedded in the projected financial statements, together
with the expected profits from the proposed recommendations.
In the following years, after the plan is implemented, we see a steady rise in profits due to the
introduction of healthier options in URC’s growing product line.
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In relation to the forecasting of profits, the following tables present the comparison between
before and after the recommendations were implemented.
STATEMENT OF FINANCIAL POSITION (Before) 2017

ASSETS
Current Assets
Cash and cash equivalents 18,585,237,602.93
Financial assets at fair value through profit or loss 448,754,667.89
Receivables 17,250,319,014.33
Inventories 21,370,089,177.40
Biological assets 1,248,935,956.49
Other current assets 1,240,890,154.15
60,144,226,573.19
Noncurrent Assets
Property, plant and equipment 51,315,334,844.49

Available-for-sale financial assets 48,229,990.00
Biological assets 504,756,912.13
Goodwill 39,938,380,764.60
Intangible assets 8,338,658,760.94
Investment in joint ventures 398,930,670.38

Investment properties 57,489,006.61
Deferred tax assets 1,060,534,713.02
Other noncurrent assets 1,278,191,290.68
102,940,506,952.85
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TOTAL ASSETS 163,084,733,526.04

LIABILITIES
Current Liabilities
Accounts payable and other accrued liabilities 21,224,430,053.25
Short-term debts 6,771,809,597.66
Trust receipts payable 5,355,943,273.15
Income tax payable 2,121,398,963.83
35,473,581,887.89
Noncurrent Liabilities
Long-term debts 37,102,570,023.76
Deferred tax liabilities 3,192,809,554.58
Other noncurrent liabilities 527,089,379.51
40,822,468,957.85
76,296,050,845.74
EQUITY
Equity attributable to equity holders of the parent
Paid-up capital 26,615,600,695.58
Retained earnings 65,601,958,689.10
Other comprehensive income 590,688,364.87
Equity reserve (5,852,012,764.97)
Treasury shares (393,331,167.39)
86,562,903,817.20
Equity attributable to non-controlling interests 225,778,863.10
86,788,682,680.30
74

lOMoARcPSD|3751990
TOTAL LIABILITIES AND EQUITY 163,084,733,526.04

ASSETS
Current Assets
Receivables 19,889,617,823.53
Inventories 24,639,712,821.54
69,346,293,238.89
Noncurrent Assets
Goodwill 46,048,953,021.59
118,690,404,516.64
TOTAL ASSETS 188,036,697,755.52
75

lOMoARcPSD|3751990
LIABILITIES
Current Liabilities
40,901,039,916.74
Long-term debts 42,779,263,237.40
47,068,306,708.40
87,969,346,625.14
EQUITY
Paid-up capital 30,687,787,602.00
Equity reserve (6,747,370,718.00)
99,807,028,101.23
100,067,351,130.38
76

lOMoARcPSD|3751990

ASSETS
Current Assets
Receivables 22,932,729,350.53
Inventories 28,409,588,883.24
79,956,276,104.44
Noncurrent Assets
Goodwill 53,094,442,833.89
136,850,036,407.68
TOTAL ASSETS 216,806,312,512.12
77

lOMoARcPSD|3751990
LIABILITIES
Current Liabilities
47,158,899,024.00
Long-term debts 49,324,490,512.72
54,269,757,634.79
101,428,656,658.79
EQUITY
Paid-up capital 35,383,019,105.11
Equity reserve (7,779,718,437.86)
115,077,503,400.72
115,377,655,853.33
78

lOMoARcPSD|3751990

ASSETS
Current Assets
Receivables 26,441,436,941.16
Inventories 32,756,255,982.37
92,189,586,348.42
Noncurrent Assets
Goodwill 61,217,892,587.47
157,788,091,978.06
TOTAL ASSETS
79

lOMoARcPSD|3751990
249,977,678,326.47
LIABILITIES
Current Liabilities
54,374,210,574.67
Long-term debts 56,871,137,561.16
62,573,030,552.91
116,947,241,127.58
EQUITY
Paid-up capital 40,796,621,028.19
Equity reserve (8,970,015,358.85)
132,684,361,421.03
133,030,437,198.89
80

lOMoARcPSD|3751990

ASSETS
Current Assets
Receivables 30,486,976,793.15
Inventories 37,767,963,147.68
106,294,593,059.72
Noncurrent Assets
Goodwill 70,584,230,153.36
181,929,670,050.70
TOTAL ASSETS
81

lOMoARcPSD|3751990
288,224,263,110.42
LIABILITIES
Current Liabilities
62,693,464,792.60
Long-term debts 65,572,421,608.02
72,146,704,227.51
134,840,169,020.10
EQUITY
Paid-up capital 47,038,504,045.50
Other comprehensive income 1,043,940,257.39
Equity reserve (10,342,427,708.76)
152,985,068,718.45
153,384,094,090.32
82

lOMoARcPSD|3751990

STATEMENT OF FINANCIAL POSITION (After) 2017
ASSETS
Current Assets

Receivables 17,250,319,014.33
Inventories 21,370,089,177.40
60,144,226,573.19
Noncurrent Assets 0.48

Goodwill 39,938,380,764.60
102,940,506,952.85
TOTAL ASSETS 163,084,733,526.04

83

lOMoARcPSD|3751990

LIABILITIES
Current Liabilities
35,473,581,887.89
Long-term debts 37,102,570,023.76

40,822,468,957.85
76,296,050,845.74
EQUITY
Paid-up capital 26,615,600,695.58

Equity reserve (5,852,012,764.97)
86,562,903,817.20
86,788,682,680.30
84

lOMoARcPSD|3751990

ASSETS
Current Assets

Receivables 26,365,115,070.15
Inventories 24,639,712,821.54
83,637,683,680.39
Noncurrent Assets

Goodwill 46,048,953,021.59

118,766,807,361.68
TOTAL ASSETS 202,404,491,042.06
85

lOMoARcPSD|3751990

LIABILITIES
Current Liabilities
40,958,342,050.52
Long-term debts 42,779,263,237.40

47,068,306,708.40
88,026,648,758.92
EQUITY
Paid-up capital 30,687,787,602.00
Equity reserve (6,747,370,718.00)
114,117,519,254.00
114,377,842,283.15
TOTAL LIABILITIES AND EQUITY
86

lOMoARcPSD|3751990
202,404,491,042.07
ASSETS
Current Assets
Financial assets at fair value through profit/loss 596,578,494.28
Receivables 34,130,256,733.30
Inventories 28,409,588,883.24
104,680,169,852.35
Noncurrent Assets
Goodwill 53,094,442,833.89
136,938,128,888.01
TOTAL ASSETS 241,618,298,740.36
87

lOMoARcPSD|3751990
LIABILITIES
Current Liabilities
47,224,968,384.25
Long-term debts 49,324,490,512.72
54,269,757,634.79
101,494,726,019.04
EQUITY
Equity attributable to equity holders of parent
Paid-up capital 35,383,019,105.11
Equity reserve (7,779,718,437.86)
139,823,420,268.72
140,123,572,721.33
TOTAL LIABILITIES AND EQUITY
88

lOMoARcPSD|3751990
241,618,298,740.36
ASSETS
Current Assets

Receivables 49,967,003,577.01
Inventories 32,756,255,982.37
144,154,396,201.14
Noncurrent Assets

Goodwill 61,217,892,587.47

157,889,662,607.88
TOTAL ASSETS 302,044,058,809.02
89

lOMoARcPSD|3751990
LIABILITIES
Current Liabilities
54,450,388,547.04
Long-term debts 56,871,137,561.16

62,573,030,552.91
117,023,419,099.95
EQUITY
Paid-up capital 40,796,621,028.19
Equity reserve (8,970,015,358.85)
184,674,563,931.21
185,020,639,709.07
90

lOMoARcPSD|3751990

ASSETS
Current Assets

Receivables 75,913,494,625.92
Inventories 37,767,963,147.68
206,655,409,983.72
Noncurrent Assets

Goodwill 70,584,230,153.36

182,046,780,986.88
TOTAL ASSETS 388,702,190,970.61
91

lOMoARcPSD|3751990
LIABILITIES
Current Liabilities
62,781,297,994.73
Long-term debts 65,572,421,608.02

72,146,704,227.51
134,928,002,222.24
EQUITY
Equity attributable to to equity holders of the
parent
Paid-up capital 47,038,504,045.50
Equity reserve (10,342,427,708.76)
253,375,163,376.49
253,774,188,748.36
92

lOMoARcPSD|3751990

References:
GMA News Online. (2016, June 08). Vietnam fines URC P12M for lead content of beverage
products. Retrieved April 23, 2018, from
http://www.gmanetwork.com/news/money/content/569247/vietnam-fines-urc-p12m-for-
lead-content-of-beverage-products/story/
Universal Robina Corporation. (n.d.). Retrieved April 23, 2018, from

http://www.www2.urc.com.ph/
Universal Robina. (n.d.). Retrieved from http://www2.urc.com.ph/
Let's Chat Snacks. (n.d.). Go East, Young Man: Snacking Trends Surge in Asia. Retrieved May
9, 2018, from https://www.letschatsnacks.com/go-east-young-man-snacking-trends-
surge-in-asia-1
Woodland Foods - Over 1,500 specialty dried food ingredients including organic and gluten-free
food. (n.d.). Retrieved May 9, 2018, from https://woodlandfoods.com/company/about-us/
Supply and Demand Risk Management in Turbulent Times. (n.d.). Retrieved May 9, 2018, from
https://www.sdcexec.com/home/article/10269464/supply-and-demand-risk-management-
in-turbulent-times
Dubos, M., Arkin, A., &Domski, M. (2015, April 02). 5 ways to reduce waste and costs on your
company's campus. Retrieved May 9, 2018, from https://www.greenbiz.com/article/5-
ways-reduce-waste-and-costs-your-campus
How to Deal with Employee Theft. (2016, December 14). Retrieved May 9, 2018, from
http://www.cpvmfg.com/blog/how-to-deal-with-employee-theft/
Aland, M. (2017, November 28). Local &National TV Advertising Costs &How to Advertise.
Retrieved May 9, 2018, from https://fitsmallbusiness.com/tv-advertising/
Online Ads | The Philippine Reporter. (n.d.). Retrieved May 7, 2018, from
http://philippinereporter.com/online-ads/
What It Costs: Ad Prices From TV's Biggest Buys to the Smallest Screens. (2015, April 06).
Retrieved May 7, 2018, from http://adage.com/article/news/costs-ad-prices-tv-mobile-
billboards/297928/
Acharon, M. (2014, March 12). Advertising rates. Retrieved May 9, 2018, from
https://www.slideshare.net/ZeusAcharon/advertising-rates?next_slideshow=1
Koon, S. (2017, June 16). How much does it cost to produce a video or television commercial?
Retrieved May 9, 2018, from http://pikewoodcreative.com/how-much-does-it-cost/
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Cicero, R. (2016, February 24). How much money do commercial and music video directors
make? Retrieved May 7, 2018, from https://www.quora.com/How-much-money-do-
commercial-and-music-video-directors-make

94

Business Plan - Universal Robina Corporation (2018)

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lOMoARcPSD|3751990

Business Plan - Universal Robina Corporation

Bachelor of Science in Management Accounting (Pontifical and Royal University of

StuDocu is not sponsored or endorsed by any college or university

UNIVERSAL ROBINA CORPORATION

A Business Plan Presented to the

Balisnomo, Ma. Lynsel M.

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1. Nature of the Business

Some financial highlights follow:

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FY2015 SALES SPLIT FY2016 SALES SPLIT

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3. Major Consumer Groups Served

4. Other Relevant Information

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CHAPTER 2: VISION / MISSION / OBJECTIVES

The mission statement of Universal Robina Corporation is indicated below:

Concern for public image

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cleansing their image through community development and corporate social

Concern for employees

Ergo, we propose an improvement of the current mission statement of URC to wit:

Current vision statement of URC:

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CHAPTER 3: EXTERNAL ENVIRONMENT ANALYSIS

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According to RA 9994 which is the Expanded Senior Citizens Act, manufacturers,

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Socio – Cultural Trends

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Opportunities and Threats

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INDUSTRY AND COMPETITOR ANALYSIS

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Other than investing in more environmentally – friendly machineries and equipment,

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PORTER’S FIVE FORCES

Threat of New Entrants – LOW

Bargaining Power of Buyers – LOW to MODERATE (Consumers) / HIGH (Retailers)

Bargaining Power of Suppliers – HIGH

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Threat of Substitutes – HIGH

Intense Rivalry – HIGH

Market size and growth

Current buyers and suppliers

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Critical success factors

Distribution network involves the storage and transportation activities of company

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Integrity is important in a business, as it unites each and every member of the

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CHAPTER 4: INTERNAL ENVIRONMENT ANALYSIS

PORTER’S GENERIC VALUE CHAIN