San Miguel Corporation Case Analysis

I. INTRODUCTION:

A. SAN MIGUEL CORPORATION

Was founded on September 29, 1890. By DON ENRIQUE MARIA BARRETTON dE Y Caza. owner of
the brewey La Fabrica de Cerveza de San Miguel. Was authorize to brew beer in the Philippines
under a royal grant establishment located at No.6 Calzada de Malacanang Manila`s San Miguel
District. Inaugurate on October 4, 1890.

OUTSTANDING QUALITIES AND SUCCESSES

SMG stand as one of the richest and most profitable companies in the Philippines Country's most
recognized corporate brand. Having 30000 employees in 90 major facilities in the Philippines and
overseas. CHINA, Southeast Asia, Australia. SMC is the countries largest food,beverages, and
packaging company. Affiliates Brands Includes: Magnolia, Anchor, Coca-cola, Ginebra San Miguel,
Purefoods and Monterey.

COMPANY FAILURE:

The company was tottering under a P47.1 billion on debt, high fixed cost and weighted down by large-
scale expansion projects in China. Its three breweries in the said country were operating way below
capacity. To get much needed cash infusion, Cojuangco sold off SMC's 45 percent stake to Nestle
Philippines.

PRODUCTS:

Produces close to 300 products includes: B-meg Wilkins Viva Coca-cola Eight O'clock SMC 3 CORE
OF BUSINESS Beverages- "beer, hard liquor, soft drinks, bottled water and fruit juices. Food &Agri
business-"chicken, feeds, pork and beef" Process meats, dairy, oils & fats. Packaging- " glass, metal,
plastic paper products, flexible pouches & laminates.

B. Strategic Posture:

MISSION:

San Miguel Foundation, Inc. is committed to the empowerment of San Miguel host communities and
various stakeholders by harnessing corporate social responsibility among the various. San Miguel
business is pursuing mutually beneficial programs that lead to self-reliance and responsibility.
VISSION:

Fundamental and Historical Philosophy-Profit with Honor.

STRATEGIES:

San Miguel Corporation corporate strategy is to aimed capitalizing on new growth markets through
acquisitions and further enhancing its competitive position by improving synergies across existing
operational lines.

POLICIES:

Policy on security dealings Whistleblowing policy Cash dividend policy Policy on conflict of interest
Memo on Securities Dealing Policies

II. CORPORATE GOVERNANCE

A. BOARD OF DIRECTORS

EDUARDO M. COJUANGCO, Jr. Chairman and CEO

RAMON S. ANG ESTELITO P.MENDOZA President and COO Chairman,Nomination& Hearing

Committee

III. EXTERNAL ASSESSMENT

A. SOCIETAL ENVIRONMENT

ECONOMIC FORCES

-Asia has an emerging economy. Asia is widely known provide its cheap labor. When China and
Taiwan were admitted into the WTO in 2002. Beer could now be compled and expented to the two
countrie. The South Korea mostly brewed from rice. Only the Hites'svMax Prime brand contains 100%
barley malt.

San Miguel beer

TECHNOLOGICAL FORCES

-The rapid technological advancement will affect the San Miguel and also their prices will affected.

SOCIAL, CULTURAL AND NATURAL ENVIRONMENTAL FORCES

- The similar of the culture around Asia greatly affect San Miguel Corporation. SMC was the first
Filipino Company that publish an Environmental update in 1996,which wa received by local business
Community and Stockholders. The Uniqueness of SMC environment program is it deals focus on both
the external and internal environment. The Corporation not only takes care the natural environment
but also of its people.
POLITICAL FORCES

- Although Foreign beers are popular with in the country, the Thai government seek to shelter its
domestics breweries through the imposition of import duties, in addition, all imported bers must bear
an imported stickers on their bottle caps. As a result, Thai brewers stuck partnership deals with
western brewers such as SAN MIGUEL CORPORATION.

B. TASK ENVIRONMENT( INDUSTRY ANALYSIS )

COMPETITOR

- SMC is the leader in the beer industry in the Philippnes, its main rival is ASIA BREWERY, but the
competition is low.

THREAT OF NEW ENTRANTS - The beer industry in the Philippines is almost monopoly by San
Miguel Corporation.

THREAT OF SUBSTITUTE PRODUCTS - With Local and Multinational Company offering products
and campaining for follow lifestyle to Consumers. They can chat with each other during drink the beer
and something like peanuts,pork,& chicke.

BARGAINING POWER OF SUPPLIERS

- The Suppliers of the company hold a major role. Without it presence, the company could not
produce its product and basically, could not offer anything to customer. The suppliers of San Miguel
to each country are being standardized, thus, it could not purchase it locally unlessit has been
approved & has passed the company's standard.

BARGAINING POWER OF BUYERS

- San Miguel has a significantly high bargaining power to its customers due to the monopoly in the
Philippines. Now in the modern life, there is heavy pressure from life and work. As a result, the role of
the San Miguel beer generally provide one way to slow the pressure.

IV. INTERNAL ASSESSMENT

A. CORPORATE STRUCTURE

It is very diverse and it has its hard on many business which includes:

Beverages Food Packaging Other Business

B. CORPORATE CULTURE

San Miguel will be among the largest food, beverage and packaging companies in the Asia-Pacific.
We will carry into new markets our over a Century-Old tradition of quality and integrity. Consumers
will take pleasure in reaching for our products and services because they are the best value for
money. Our food and beverages brands will be in every household and every retail outlet. We will
meet our customer's everyday needs, delightning their every taste. Through our products and
services, every occasion to drink and eat will bring enjoyment-a Celebration.

C. CORPORATE RESOURCES

MARKETING- The SMC has a marketing team that study their product in the market. FINANCIAL-
The Financial Resources of the SMC comes from their Shareholders.

OPERATION AND LOGISTICS - The SMC has an Operating and Logistics Team that forecast their
salesnand demands and monitors the prices of their product.

RESEARCH AND DEVELOPMENT -The Research and Development of the SMC studies the
different reaction of the people to their product and they think of a new development to their product.

HUMAN RESOURCES - SMC strong social responsibility commitment contributes to better employee
retention, resulting to a considerable reduction in turnover and training cost. Employees normally
remain working with the corporation because of their feeling that SMC cares. Employee programs that
help reduce absenteeism actually save the Corporation money as they encourage increased in
productivity. On the home font, programs that address employee welfare instill a sense of pride in the
people for being part of SMC.

INFORMATION SYSTEMS

- SMC has a information system that will serve as a news to feeder for them.

V. ANALYSIS OF STRATEGIC FACTORS

A. SWOT ANALYSIS

STRENGTH:

It is known a leader in the beer business It is already Globally & Internationally known. It is
largevgroup of company. All things are being detailed. The company is diverse into not-allied
business. The company is strict with the quality of its product. The company implement strategic
planning.

WEAKNESS:

The company has large market sale. The company suffered from credit rating downfall. Dynamic
market environment. Losing its International assets. Their planning process is too long. Competition is
very tough. There are lots group of people to be involved.

OPPORTUNITIES:

New ventures for company. The company can merge into non-allied business. Successful diversion.
The company can engaged into more profit oriented business. Asian beer market were similar to the
Philippines beer market.

THREATS:

Competitors Wrong evaluation Asia brewery is selling cheaper beer. Large loss of money due to
credit rating downfall. Effective diversion plan.

B. TOWS/SWOT MATRIX

SAN MIGUEL CORPORATION Strength: -It is known a leader in the beer business. - Weakness:
Opportunities: SO Strategies: WO Strategies: Threats: ST Strategies: WT Strategies:

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