CHAPTER I

EXECUTIVE SUMMARY

Objective

Our objective is to serve consumers with the best quality assortment of great-tasting

bakery and related food and beverage products, with world-class manufacturing facilities

and an efficient nationwide distribution network, thereby providing a fair return on

shareholder investments

Vision

Their vision is to become the premier company in the baking industry and the related

food and beverage industry, known and emulated for our best quality products that

delight the consumer. It is the pride of every employee, investor, trade partner and

stakeholder.

CHAPTER II

COMPANY SUMMARY

History

Gardenia's roots go back to Singapore where, in 1978, it began as a humble in-store

bakery. Increasing demand led to the opening of Gardenia's first-commercial bakery at

Pandan Loop in March 1983. Gardenia has since been the market leader in Singapore and

has expanded its operations in Asia to countries such as Malaysia and Thailand with the

latest in the Gardenia chain of bakeries here in the Philippines. It all began in 1997, QAF

Limited through Gardenia International Pte. Ltd. established Gardenia Bakeries

Philippines Inc. and started construction of its bakery plant in Laguna International

Industrial Park (LIIP), Biñan, Laguna. Gardenia Philippines started its operations in 1998

with the state-of-the-art bread factory rated as one of the most modern large scale bread

manufacturing facility in the country. Its major, highly-automated equipment come from

the best bakery equipment suppliers from Germany, Holland, UK and USA making it the

leading manufacturing company in the Philippines. Over the years, Gardenia has gained

wide acceptance and is now considered as the most widely distributed loaf brand,

reaching many parts of the country.

Gardenia has been awarded with International Organization for Standardization ISO

9001: 2000 certifications from 2003 to 2009 and has now upgraded to ISO 9001:2008 in

compliance with Quality Management System.

The facility features advanced equipment that adheres to globally-accepted baking

industry standards. Its advanced dough making and proofing system ensures the right

structure and consistency in the texture of breads. It uses one of the world’s most

technologically-advanced and environment-friendly large-scale ovens that can utilize

compressed natural gas as an alternative to LPG. A new pan handling system that uses

robotic pan-feeding and stacking equipment allows the baking pans to be stored

automatically and vice-versa.

Essentially, the plant uses state-of-the-art machines imported from Germany, the

Netherlands, Japan and the US. This attests to the plant’s exceptional quality and world-

class superiority, which serves as a testament to GBPI’s leadership in the bread-

manufacturing industry, and further cements the company’s stature as a top bread-maker.

The plant also adheres to current Good Manufacturing Practices (cGMP), and follows the

highest globally-accepted food quality and safety standards through the International

Organization for Standardization (ISO) and Hazard Analysis and Critical Control Points

(HACCP).

Also, the plant’s advanced equipment and the kind of ingredients it uses enables Gardenia

to produce baked bread following a unique baking process. From ingredient preparation to

mixing, to the make-up process and oven baking, to the bread depinning and cooling, and

finally, to the automated slicing and packaging, each step is closely monitored.

Internal Aspect Operation Production Aspect Started at production level of 2,000 loaves

per day in 1998, Gardenia has since enjoyed an unprecedented growth in both sales and

market share. The continued patronage of the market and weak competition has allowed

it to expand its production to at present of 6,000 loaves per day and product line to more

than 30 products. Gardenia’s main value proposition is its product quality and superior
taste, tapping the need of market on ensuring freshness, reliability and availability,

allowing the company to peg its products slightly higher than the other players. Capital-

Intensive (method of production) Since Gardenia is in the industry of bread-making, to

continue their high quality standard in their process of Capital-Intensive, they require a

relatively high level of capital investment compared to the labor cost. Take note that for

them to maintain their high quality standard of bread making, they use machines that

came from other countries. These processes are more likely to be highly automated and

to be used to produce on a large scale. All of their machines are functioning 24-hours a

day. As to their equipments and machines maintenance, if it happens that a machine

failure occurs, they will make sure that it will be fix as soon as possible by ‘engineering’.

Marketing Aspect Every consumer has different needs and wants, so Gardenia supplies

many variety of bread in order to meet the demand of the consumer in order to satisfy

them. Demand is a principle that the consumer willing to pay for the price and also desire

to buy the goods and services. Consumers are very delicate when it comes to the food

purchasing. Especially in the Philippines, they want their breads to be fresh in the oven.

Knowing this, Gardenia Bakeries Philippines Inc. thought of how to ensure their market in

the country whenever purchasing their product. Marketing Communications (Promotion)

Strategy • Integrated Creative Message Strategy - ‘So good… you can even eat it on its

own’ or ‘masarap kahit walang palaman’ • Media Advertisements (Radio and TV) • Sales

and Promotional • Educational Tours Distribution Channel Gardenia Philippines

pioneered a unique distribution system, ensuring that only fresh breads will reach

consumers every day. It strictly follows its international policy of keeping only fresh

stocks on the store shelves. Delivery vans leave the production plant as early as 4 o’clock

in the morning to distribute the products in specific locations nationwide as soon as it is

produce from the factory. Gardenia Philippines always replace unsold breads with their

freshly baked premium quality breads and other products. Gardenia conducts extensive

mass distribution of their product through Retail Stores, Supermarkets, direct selling and

grocery stores. Sponsorship in events helps the company to distribute and promote their

product by this new channel. Products of Gardenia are mostly available nationwide,

because of its availability in the channel power. External Aspect Political/Legal Factors

Government rules and regulations affect Gardenia’s operation because of it has to cope

with the changes imposed by the Government. These rules will help Gardenia improve its

business operation but also it could have negative impact on it since the government has

control over the products and its price. Gardenia is expected to comply with the

requirements ordered by the government. Taxation policy affects the production costs of

Gardenia. The price of Gardenia breads depends on the price of its raw materials and

higher taxes on these raw materials indicates an increase in price in production costs of

Gardenia which is also an indication of an increase in the price of Gardenia products.

Economic Key economic indicators include interest rates, gross domestic, retail price

index, unemployment rates and exchange rates. Philippines provide a growing market for
premium food product. Economy growth, and especially employment in services sector

jobs, is driving demand for more convenient and prepared foods. Gardenia believes that

the Gardenia’s success is brought regarding by the dedication and commitment of each

member of the Gardenia family. These dedications are leading Gardenia to be the no1 in

bread industry. During global economic crisis, the industry had a flat growth but Gardenia

continue to grow by two to four percent. Gardenia should continue encouraging and

providing more opportunities for employment while making Gardenia bread more widely

available conveniently to customer. Due to changes in economic factors such as increase

in interest rates could affect demand of customer for Gardenia products and this could

be an opportunity for the substitute products which might have negative impact on

Gardenia’s operation and profit. Socio-Cultural Factors Rapid growth of population in the

Philippines is an indication of growth of potential customers of Gardenia which could

increase the demand for its products. Socio-cultural forces will affect the values, beliefs,

and lifestyles of a society. Over the past few years, rising levels of obesity, heart disease,

and diabetes in the Philippines have rapidly increased consumer interest in healthy and

nutritionally food and government interest in promoting healthier eating and lifestyles.

Breakfast is important for people for having healthier. According to the Philippine

Association of Flour Millers Inc. (PAMFIL) said that 85 percent of Filipinos’ prefer to eat

bread instead of rice for their breakfast. Consumers are willing to pay anything that will

make healthy and fit. Technological Developments in technology lead to new products
and services and improve how they are produced and delivered to the end user. As the

top-bread maker and leader of bread manufacturing industry, Gardenia using state-of-

the art-bread manufacturing plant is capable making 6000 loaves of bread per hour or

nearly 150000 loaves per day. It is the equipment whereby almost untouched by human

hands. Therefore, it ensures providing safe and best quality of bread product. New baking

tools and equipments will help enhance/speed up Gardenia’s production. The

development of internet is an opportunity for Gardenia to promote its products online

and enhance its brand image. Gardenia could enhance its website and maximize the use

of social media to offer online services and reach new potential market. This will help

Gardenia increase its market share and influence customer purchasing decisions. Plant

Location and Design Location, as almost every business treats it, is one of the most

essential parts of a business. Every firm must use location planning techniques. Location

planning is a key success in any business. For some, getting the right location can make

difference between success and failure. There are lots of different factors considered in

choosing the right location for a business such as labor, land/building, transport and

communication links, natural resources, customers, language, image and competitors.

Labor Gardenia hired employees both from inside and outside the vicinity. They hire

employees who are living nearby the company to ensure that they will always be on time

when it comes to working. How about those who live outside the vicinity? Gardenia

provides a free shuttle service for those employees who are living far from the site. This is
a way to keep the willingness of these employees to work for Gardenia. Another thing,

Gardenia is located inside the Laguna International Industrial Park (LIIP), a center for

industrial needs. This thing gives convenience to Gardenia in acquiring additional needed

machines like conveyors and its maintenance. Also, it is accessible in Metro-Manila. It is

only 12 kilometers from the Metro-Manila boundary, 25 kilometers from Makati and 30

kilometers from the Manila International Airport. Land/Building Gardenia is said to be the

Philippines’ finest and biggest bread factory, thus, they need wide space for its operation.

Good thing is that, they are located in a space where they can operate conveniently. They

are also far from residential area because as a factory, one requisite is that they will

produce fumes and other chemicals which can harm people of the community.