I.

Title of the Case: Royal Printing and Packaging Company

II. Problems Encountered:
a. Who is the founder and former manager of the Royal Printing and Packaging
Company
b. Where did he turned over the management of the Royal Printing and Packaging
Company?
c. What is the estimated average growth rate of basic school textbooks for the year
1988-1992?
d. Where did the company depend after they lost all their small job orders and Large
Commercial Bank client?
e. What Jose Baltazar discovered after he went back to his office to work again that
made him really disappointed?
f. How Jose Baltazar wants to solve the company’s conflicts and problems?
III. Summary of the Case:

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Mr. Ricardo Baltazar, a 68 year old man, discussed the current condition of the

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company he managed since 1962 to his recently graduated son, Jose, after handling over

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the supervision and managerial position of the said company to him. During their
conversation, Mr. Baltazar states that Jose, his son, is so lucky to manage and supervise a

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company that has no substantial liabilities. He also mentioned the current condition of the
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machineries as well as how he bought all of them from the market. For, example the
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German brand of machineries which he verified that its life span last forever. He also
stated that the exchange rate before was low, being P6 to $1, that’s why he was able to
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purchased Heidelberg Offset Kord for only P380,000 compared to its current exchange
rate which is roughly P20 to $1 where the purchased price of the said machine was
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P1.2M.
The company accepts all types of printing duties, whether it is a large or small
printing duties, during its preliminary years. But later on, due to the company’s
development, Mr. Ricardo was able to establish a strong connection to its fixed set of
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customers, which is a few multinational drug companies, and a Large Commercial Bank,
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that’s why because of these institutional clients, the company had decided to drop all of
their small job orders. But recently, the company lost its client bank leading them to
depend only on the drug companies.
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When Jose went to work following that day, he noticed that the sales of the
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company haven’t been reached P1 million since its establishment 25 years ago. He was
very disappointed that the total operating expenses is too high while the Net income was
too low. For example in 1988, the total operating expenses or production cost was
P809,000 but the net income was only P91,000. He discussed this issue to his father on
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the same day. He told him that they can generate a net income of P192,000 if they will
sell the Heidelger machine, but his father refused to do that. That’s why he went back to
work to create a plan for the current year. This is the birth of his study on Printing
Association Industry.

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 Printing Association Industry has three (3) components. First is the Market Trends
where he discussed the prospects of the printing industry for the next ten years. For
example, due to the restoration of democratic processes, lots of candidates, whether it is
from local or national election, will hire printing companies to print their campaign
materials such as tarpaulin, posters, and pamphlets. This way, political stability and
economic recovery will be achieved. Another example is the expected expand of demand
of basic school textbooks where the estimated average growth rate for the year 1988-
1992 was at 2.7%.
Next is the Competition where he discussed that the country has an estimated
printing establishment of 3,700 where 2,700 of that was primarily located Metro Manila.
He also mentioned that in 1987, there are fifteen (15) Board of Investments (BOI)-
registered firms whose companies they are serving was exporting their products.
Lastly, the Industry Practices. It says here that the total cost of production that the
paper comprise was 70% which came from the eternal suppliers. The 3% cash discount
will be granted by these suppliers if they will be able to pay the total issued price within 7

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days, and the credit term is 30 days.

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IV. Solution:

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a. The founder and the former manager of the Royal Printing and Packaging

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Company was Mr. Ricardo Baltazar.
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b. He turned over the management of the Royal Printing and Packaging Company to
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his newly graduated son, Jose.
c. The estimated average growth of basic school textbooks for the period 1988-1992
was 2.7%.
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d. The incident led the company to depend only on the drug companies which are
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the Multinational Drug Companies.

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e. He was very disappointed because he noticed, while reading the financial

statements of the company, that its sales haven’t been reached P1 Million after
being in the industry for more than 25 years. He was also very disappointed
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because the total operating expenses or cost of production was too high giving
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low net income

f. Jose Baltazar suggested that if they will sell the Heidelberg machine they will at
least generate a net income of P192,000. But his father denied his suggestion
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leading him to go back to his work and plan for the current year. This led him to
his study on Printing Association Industry which highlights the importance of
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printing industry for the next decade.

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