Presented to the Management and Organization Department

De La Salle University - Manila

Term 3, A.Y. 2020-2021

Strategy Analysis Report of

Webworx Design Studio Inc.

In partial fulfillment
of the course
In COBSTRM K37

Submitted by:
Calub, Janette Pauline M.
Chua, Jeraldine Nicole C.
Dela Cruz, Raven I.
Javier, Lyka Mari C.
Lim, Jose Dominick F.

Submitted to:
Ms. Geraldine Bernardo
Executive Summary
This strategic analysis report on Webworx Design Studio, Inc. was created not just in
compliance with the requirements of the course, but also as a means of supplementing the
operations and decision-making process of the company. This report was also created with the
intention to aid the company in its future endeavors through an in-depth analysis of both the
company’s external and internal environments, as well as in proposing strategies and
recommendations that the company may choose to implement in the future. Furthermore, this
paper was crafted in local terms, and is therefore especially relevant for decisions pertaining to
the Philippine website design and development industry.

The analysis on the external environment was performed through an extensive

background and overview of the local industry which was further supplemented by Porter’s Five
Forces and PESTLE analyses. Through this, some of the major opportunities and threats pervading
the local industry, as well as challenging market conditions which may hinder the growth and
profitability of industry members, were revealed and examined. With this, the Porters' Five
Forces analysis showed that the overall effect of the competitive forces in the local website
design and development industry ranges from moderate to high. Likewise, the PESTLE analysis
helped in providing a more comprehensive understanding on the different factors that currently
or may potentially affect website development companies. Furthermore, it is to note that all of
these were explored while taking into consideration the changes and effects brought about by
the COVID-19 pandemic. Nonetheless, all information derived from the external analysis was
incorporated by the group in crafting the recommended strategies and competitive assessments.

The analysis of the internal environment, on the other hand, presented a detailed
evaluation with proposed alterations to Webworx's vision statement, mission statement, and
core values. In addition, the company's internal management operations were carefully assessed
in which it was concluded that the company's current strategies and competitive advantages
were unsustainable in the long-run. It was also found that certain alterations must be made in
order to align the company's strategies with its long-term goals. Furthermore, a value chain
analysis made specific for Webworx, as well as a financial analysis on the company's most recent
financial statements, contributed in identifying the company's greatest strengths and
weaknesses. Through all of these assessments, the group was also able to determine the
obstacles that may potentially create difficulties or complications in achieving the direction the
company intends to take.

To further support the external and internal assessments conducted, a strategy analysis
was administered with the utilization of the IFE/EFE Matrix and the SWOT/TOWS Matrix. The
IFE/EFE Matrix was utilized in order to weigh the company's strengths, weaknesses,
opportunities, and threats wherein it was determined that it would be best for the company to
hold and maintain its current strategic position. However, the group suggests for the company
to make a few adjustments, especially in terms of their marketing and branding. Thus, in line with
this, the SWOT/TOWS analysis identified and consolidated the company's strengths and
weaknesses from the internal analysis, as well as the opportunities and threats that arise from

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the external environment. From this, the group formulated various potential strategies that the
company may employ, depending on which set of factors they choose to prioritize.

Overall, the group's recommendations and suggested strategies aim to address and
resolve Webworx's key strategic issues. With this, the paper gives emphasis on analyzing how the
company may utilize their strengths to take advantage of certain opportunities, especially during
the pandemic in which digital services are thriving. The devised strategies also focus on how the
company can avoid or minimize activities that may threaten their market position, and instead
highlight the company's competitive advantages that will allow them to further improve their
brand image and value, strengthen their market position, and enhance their financial
performance.

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 Table of Contents

Executive Summary 1

Introduction 4

External Environment Analysis 5

Definition and Overview of the Industry 5
External Analysis in the Macro-environment - PESTLE Analysis 14

Internal Environment Analysis 21

Company Background 21
Corporate Vision 21
Company's Mission 22
Core Values 25
Analysis of the company’s current strategies and present competitive advantages 28
Value Chain Analysis 31
Financial Analysis with Financial Ratios 34

Strategy Analysis 36
SWOT Analysis 36
EFE and IFE Matrix 41
Key Strategic Issues 43

SWOT/TOWS Matrix 44
Description of the Strategy Alternatives (SWOT/TOWS) 44
IE Matrix 49

Final Recommendation 49
Proposed strategic plan 49
Proposed competitive advantages 53

Annex 56

References 58

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I. Introduction
Webworx Design Studio Inc. first opened its website development and design
services to the public in 2018 and has had many notable clients such as Toyota, Nice Print
Photography, and Tom's World since then. Though it was profitable in the first two years
of operations, according to Managing Director Mr. Kelvier Canillo, it was only in 2020
when the company ultimately began to flourish. However, when the COVID-19 pandemic
spread to the Philippines, unanticipated problems arose, and adjustments had to be
made. Just like most businesses, the company was not safe from the negative effects and
implications of the pandemic.

Due to this, Webworx had to make a big adjustment shifting operations from the
office to the employees' homes. However, Webworx believes in prioritizing the health
and well-being of their staff. Thus, the employees were given work-from-home
allowances and continuous payroll despite the adverse economic conditions. They were
also provided with the proper tools, equipment, and furniture to efficiently conduct their
tasks. Through this, significant improvement in the company's workflow was observed
and the company's small team of eight was able to effectively perform their duties. Thus,
once the strict community lockdowns were lifted, the management decided to implement
a blended work arrangement wherein employees are given the freedom to choose
whether they want to come to the office or work from home.

Despite quickly adapting to the new normal, the Managing Director shared that
the company's current pain points have not yet been resolved. Some of these include the
lowly priced services of freelancers that pull market prices downwards, the limited
projects that the company can simultaneously take on given Webworx's small team of
eight, the insufficient revenue-generating activities to cover expenses, and the company's
lack of involvement in organizational concerns due to excessive outsourcing. Thus, the
group hopes to be able to help and to generate modern strategies and solutions that the
company can implement. Aside from the company's internal concerns, the Managing
Director also requested for a detailed research on the website development and design
industry. As such, the group aims to be able to provide an in-depth analysis of the industry
and a comprehensive internal analysis of the firm's current strategies and competitive
advantages.

Furthermore, this paper is geared towards helping Webworx achieve its goals and
objectives to serve the current and future needs of their market, while embodying the
mission and vision, and building the company’s identity towards promoting and executing
unique digital transformation. In hopes that this paper will help improve Webworx’s
internal and external operations, the group aims to showcase the efficient capabilities of
the company while incorporating the company's culture so as to instigate positive
implementation outcomes and stakeholder engagement that will benefit the company,
the customers, and the industry that they serve. Through this, the group aims for
Webworx to further highlight its competitive advantages as a website design and
development company that is committed to improving their goods and services.

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II. External Environment Analysis
A. Definition and Overview of the Industry
The subject company of the discussion is Webworx Design Studio Inc. which
emerged in 2018 as a website development company. Website development, according
to Techopedia (2020), involves tasks such as web designing, content development, and
network security structuring, among others. Web development companies aim to
conduct the necessary activities and configurations to create, manage, and sustain
websites for their respective clients. The objectives of these clients which can be
businesses, organizations, and individuals seek for their services to communicate their
brand and purpose to web users through online means such as thru websites.

With this, web development companies focus on checking the performance,

quality, and capacity of the websites that they build to ensure that they are able to
effectively and efficiently provide users with optimal experiences. This is done by
programming or coding and handling servers while observing the clients’ specifications.
This is considered to be part of the back-end development or the work done behind the
visuals. Whereas front-end development mainly focuses on the design aspect of the
website and all its functionalities. The combination of both is called full-stack
development (Techopedia, 2020).

It is detailed in the website of Webflow, which is the main partner of Webworx,

the general processes, factors, and objectives of conducting website development. As
such, the first and most important step is Goal Identification in which the end goal is
established. The target audience, the core purpose, the competition, and other relevant
information that would help set the direction for the website creation is covered in this
section. With this, there is a need for close collaboration between the web developers
and their clients.

The next step is Scope Definition wherein key goals for the project are organized
through a realistic timeline. This helps in keeping track of the tasks at hand and the
deadlines to be noted.

This is followed by a Sitemap and Wireframe Creation which serves as the

foundation on how the information gathered would be structured. The sitemap is like a
blueprint which details the relationships of the information between the various pages
and content elements. A wireframe, on the other hand, serves as a framework of how the
mentioned elements would be positioned visually. This helps in guiding developers for
the next steps and also to identify the potential gaps and issues that need to be
addressed.

After performing the previous steps, Content Creation is to be done which

primarily involves factors related to the content. It is emphasized that the content itself
(the writing) and how it is presented (the typography and structural elements) are what
engage the readers. In addition, ensuring that the website would appear in searches is as

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important for it to gain attention. This process is called search engine optimization or SEO
in which keywords and phrases to be included in the content must be aligned with what
the audience usually searches for.

The next procedure to be done is Website Designing in which the visual style is to
be transformed into reality. Adding visual elements that are of quality and professional-
looking while taking note of the clients’ branding, color choices, and logo could help to
effectively translate the intended message.

Testing the workability of the website is a vital step before presenting it to the
public. All the necessary links to the pages are checked to ensure that there are no errors
before finally launching the website. It must be noted that post-launching maintenance is
also a critical part of the process as there is a need to constantly find the balance between
form and function while considering new content and features. The preceding
information was listed by Meazy (2020) in which he also shared the tools he uses and
gave advice to interested developers and clients alike.

According to December (2020), due to the web’s dynamic nature, web

development tends to be a continuous process as it requires constant updates and
upgrades to keep up with the changing trends and technologies. This can be perceived as
an opportunity for this industry as the world continues to evolve digitally. Some of the
limitations mentioned which usually cannot be controlled by creators are the users’
behavior and the type of browsers that they use. While the factors that developers and
designers can maneuver are the interactive and dynamic quality, and multiple user roles
which they can use to their advantage.

It was highlighted previously that communication with clients and assessment

made as to how well-received a website is to the target audience play a crucial role in the
success of a project. There is a wide range of clients that web development can cater to.
The industries that they can serve are extensive which can be from retail, information
technology, education, advertising & marketing, legal services, financial services, medical
services, non-profit, telecommunications, to manufacturing companies, among others.
The market is not only limited to firms since individuals who would like to promote their
products or services on a large-scale can also reach out to web developers. This proves
that this specific industry has many opportunities as long as people realize the importance
of online presence in this rapidly changing world.

Furthermore, according to a common definition of web development, it may

encompass a basic single static page of plain text to more complex web-based
applications or web apps, and social media services. A detailed list of tasks which can be
considered part of web development may include web engineering, web designing, and
web server and network security configuration, to name a few (Coding Bootcamps, n.d.).
Among web experts, web development commonly pertains to coding, scripting,
and programming which are primarily not seen in websites as these form part of its

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foundation. In addition, web development may use Content Management Systems (CMS)
which is a tool that makes content changes convenient and accessible with chief technical
knowledge.

As also mentioned in the article, more established web development businesses

may consist of a hundred members which are mainly web developers. They observe
standard operating procedures for a smooth and fluid conduct of work. One example of
which is the Agile Methodologies which the management usually instills in the firm. Based
on an article by Altvater (2020), Agile Methodologies refer to practices that promote
communication within the organization as employees are trusted to perform their work
responsibly and provide solutions when problems arise. In this process, it is important
that all members understand the goals of the company so that they work independently
with minimal supervision. Whereas smaller companies may only entail a head developer,
and additional members who are assigned to perform related jobs such as graphic
designing and information systems servicing (Coding BootCamps, n.d.).

Taking into account the basic information on web development, it can be inferred
that this industry has a great potential to thrive and grow as time progresses. This can be
especially evident during the pandemic due to the proliferation of online transactions and
electronic commerce. This is supported by Lynkova (2021) who compiled relevant and
useful data and statistics connected to the industry. Based on the article, a website’s
design and loading speed play a big factor on the decision-making process of its visitors.
A product and/or service’s credibility can be determined by how users perceive the
website’s interface and processing (Web FX). Furthermore, Salesforce, which was a
source that was mentioned in the article said that 68% of consumers expect businesses
to increase their digital presence and capabilities since the lockdowns were implemented.
Thus, there is a growing need for innovation to keep customers engaged despite the
physical distance. Another point that must be noted is the rising number of mobile phone
users. According to Statista, a source cited by the article, 90 percent of approximately 4
billion mobile users prefer to browse the web using their mobile devices. This number of
people will continue to grow which means that the website development industry can
expect to remain in business for the foreseeable future.

The revenue generated by the industry based on a statistic in the United States is
estimated to be 40 billion dollars and is expected to increase in the coming years
(IBISWorld, 2020). In the Philippine setting, although there are no specific numbers on the
amount of revenues being garnered by web development companies, it can be deduced
from the number of internet users in the country that this industry is presented with
various opportunities. This number has now grown to approximately 82.3 million people
in 2021, accounting for more than half of the total population. Based on the trend, the
digital population is expected to grow to 90 million internet users by 2025. In addition,
this population mostly belongs to the age group of 16 years old and above (Statista
Research Department, 2021e).

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 It is undeniable that almost all services are now available online. The merchandise
value of the internet economy helped to boost industries because of their presence
online, making the marketing of the services and products much more accessible. Because
of this, some of the businesses in the Philippines continue to flourish through
digitalization (Statista Research Department, 2021d). The E-commerce market in the
internet economy had a gross merchandise value of approximately four billion US dollars
in 2020. This staggering amount is estimated to increase to 15 billion U.S. dollars by 2025
(Statista Research Department, 2021a).

As mentioned previously, mobile phones are prime devices that consumers use in
accessing the internet. Aside from communication, mobile devices have become part of
Filipinos’ lives to have access to information. As a matter of fact, the Philippines’ mobile
internet user penetration has reached 72.1 percent in 2020. It was forecasted that this
will grow to 77.1 percent by 2025 (Statista Research Department, 2021c).

The COVID-19 pandemic has truly changed how Filipinos conduct their daily lives
as consumers have spent more time online than before the lockdowns were mandated.
The average hours spent online during the pandemic was approximately five hours which
is an hour longer than the average four hours before the thrust of the global health issue
(Statista Research Department, 2021d). Indeed, the way businesses and/or individuals
communicate their brands has evolved through time, and websites have the capability to
capture people’s attention and interests. Hence, to ensure that they successfully present
and promote their products and services, a good and well-communicated website must
be secured. This makes the website development industry a viable business as they work
to create impactful media for various stakeholders.

Porter’s 5 Forces:
Competitive Force of Threat of New Entrants
Factor Description

Threat from Weak Brand Preference - High
Brand preference in the web design industry
is generally low. This is part of the reason
why there is an abundance of freelance
professionals in the industry with significant
influence. There are no principal brand
preference effects and customers prioritize
quality and price over other qualitative
factors.

Threat from Low Capital Requirement - High Web Design does not require a significant
amount of capital. The typical requirements
are computers and web design software
(Carmichael, 2021). With regards to the

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 availability of web building softwares, many
options remain free such as Wix.com and
WordPress, thus, the general capital
requirement for entering into the industry is
inexpensive.

Threat from Lack of Patents - High
Web Design softwares are external
companies and offer their services publicly
and globally. As such, the patents to certain
templates and design functionalities are
reserved for the service supplier and not to
the web developers.

Threat from Lack of Strong Network Effects -
Moderate
Networks and contacts are not necessarily
strong due to the lack of overall brand
preference in the industry, however, Sir
Canillo in our interview (2021) stated that
contacts through word-of-mouth is a notable
tool in attracting customers. As such,
network effects are present in the industry
albeit at a low degree.

Overall High

Competitive Force of the Bargaining Power of Buyers

Factor Description

Threat from Low Cost of Switching - There are plenty of competing web design
Moderate companies in the Philippines, with some
presenting themselves as individuals and
freelancers. Most firms revolve around the
same web design softwares and are nearly
identical in their services. Hence, there are no
significant costs of switching between brands
and/or substitutes.

Threat from Low Number of Buyers and Low
Buyer Demand - Low
According to Orange (2015), only 1% of all
SMEs in the Philippines have a website. With
the advent of a new technological era and
dependence on digital platforms, there is a
big market for web design firms. This
therefore decreases the overall bargaining
power of buyers as firms can handpick their

9
 preferred customers. Furthermore, buyer
demand continues to grow. The US Bureau of
Labor (n.d.) states that the industry is
growing at a much faster rate than all other
industries and employment is increasing
rapidly due to the newfound reliance on
digital platforms and e-commerce.

Threat from High Buyer Information - High
Web design firms own and manage their own
websites as it is a form of their portfolio to
show to customers. Therefore, information
on web design companies can readily be
gleaned from their respective websites
conveniently and free of cost. As such,
customers have almost absolute information
on all competing firms including their
company backgrounds.

Threat of Backward Integration - Low Backward Integration is unlikely for SMEs.

Though the capital requirements are
insignificant, it requires a particular expertise
to be effective at it. Thus, backward
integration is more common in large
corporations and companies with enough
capital to hire and maintain web developers
in their firm.

Overall Low

Competitive Force of Bargaining Power of Suppliers

Factor Description

Threat from Absence of Supplier Substitutes -
Moderate
According to Brown (2014), 70% of all
websites are created using web development
softwares, however a number of websites
were also created using manual programming
methods. Thus, manual programming is a
viable alternative or substitute for web
design softwares, however, it is more time-
consuming and costly overall as it would
require more labor hours and effort.
Pertaining to other inputs, skilled labor is also
an important factor to consider as according

10
 to Indeed Editorial Team (2021), an eye for
design and creativity are inherent customer
demands, as it is the actual value they are
paying for.

Threat from Suppliers Offering Differentiated
Inputs - High
The suppliers of web design softwares each
offer different kinds of inputs that incredibly
enhance the services being offered by web
design companies. These include hands-off
maintenance of servers as these will be
handled by the software operators, and ease
of design due to readily available design tools
and templates.

Threat from Switching Costs - High
Different web design softwares offer
different functionalities. Though service costs
widely vary from one supplier to the next, the
quality of service is also greatly affected. As
an example, while Wix.com and WordPress
are free to use, their quality is substandard as
compared to more expensive options like
WebFlow which promotes overall improved
customer experience. Hence, the
differentiation between suppliers makes for a
significant cost of switching.

Threat from Cost Savings from Suppliers - As previously mentioned, substitutes such as
High manual programming are more costly to
implement due to specialized requirements
not just in hiring professionals, but in the
software as well. Thus, web design softwares
that offers ease of design reduces the overall
cost of production due to time-savings.

Overall High

Competitive Force of Threat of Substitute Products

Factor Description

Threat from Available and Attractively Priced There are a plethora of attractively priced
Substitutes - High substitutes present in services that utilize
free-to-use web design softwares such as
Wix.com and WordPress (Billimoria, 2013).

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Threat from Buyer Perception - High
Threat from Low Switching Costs - High
Overall
Competitive Force of Rivalry
Factor
Threat from Number of Competitors - Low
Thus, buyers have the option to try their own
hand in creating their own websites for free.
There are also international options such as
Shopify and AppSumo, which are readily
available websites for the conduct of e-
commerce, as opposed to the building of an
entire website.
The rapid development of the trend for
digital platforms and websites lead certain
people to consider having websites as
essential for owning a business. Thus, buyer
perception is significantly influenced into
establishing websites, however, as there are
cheap substitutes, buyers often look to these
for a ‘quick fix’ (Canillo, 2021).
As previously mentioned, there are minimal
barriers to switching from web design brands
to substitutes such as freelancers and DIY
website design services due to the significant
difference in pricing. However, the outputs
are somewhat differentiated due to the
difference in expertise, and therefore the
quality of production, thus creating a
switching cost.
High
Description
There are a significant number of rival firms in
the country. This force mostly consists of
freelancers. Because the rivalry is directly
proportional to the number of competing firms,
there is high rivalry in the industry. However, as
freelancers and formally organized companies
are not of equal sizes, the competitive force of
rivalry in this regard is not overwhelmingly
powerful.
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Threat from Declining Buyer Demand - Low Kemp & Moey (2019) stated that e-commerce is
rapidly growing in the country. Because web
design and e-commerce are highly interrelated
industries, the demand for web design is likely
to grow in response as well. Because buyer
demand is growing, competition and rivalry is
lessened.

Threat from Low Switching Costs - Low
The costs to switch in between firms is generally
low due to significant differences in pricing.
Whereas the average in the country is from Php
40,000 to Php 150,000, certain firms charge
higher and thus switching costs in monetary
terms are generally low (Jaranilla, 2021).
However, qualitative factors such as time and
quality also widely differ, primarily
differentiated by their choice of web design
software. Thus, the overall cost of switching is
low.

Threat from Low Differentiation - High
Industry members share the same suppliers as
there are only a limited number of web design
softwares, with the most common being
Wix.com and WordPress due to their extremely
low cost. As industry members share the same
suppliers, their outputs are generally not so
differentiated, aside from their respective
value-adding services.

Threat from Diverse Competitors - Low
The local web design industry is not significantly
diverse as firms often share the same
advantages and disadvantages. As the shared
supplier pool is also a factor to consider in
measuring the diversity of competitors, it can be
concluded that the web design industry in the
Philippines is not necessarily diverse.

Overall Low

In conclusion, the collective effect of the five competitive forces is Moderate to

High. This means that industry members can expect to encounter difficulties in
experiencing profits given the current external environment of the market. The threat of
potential new entrants, as well as the high bargaining power of suppliers serve as
hindrances in the profitability of firms in the industry. More specifically, the competitive

13
force of substitute products is a significant roadblock as the market is especially sensitive
to price (Canillo, 2021). Thus, the critical element for success in the web design industry
is differentiation. Firms should prioritize the quality of their services, as well as invest in
exceptional value adding services to influence consumers into patronizing their products.
Because industry players and substitutes alike engage with similar suppliers, web design
firms should seek other specialized softwares to differentiate themselves in the market.
This would weaken the overall strength of substitute products as it would create
significant qualitative switching costs. Furthermore, this would also weaken the
bargaining power of suppliers as industry members would be seeking other suppliers as
an alternative, thus decreasing the overall collective impact of the five forces model of
competition, allowing for greater profitability for all firms in the web design industry.

B. External Analysis in the Macro-environment - PESTLE Analysis

Political
1. Digital Services Tax (DST)
As the COVID-19 pandemic continues in every part of the world, countries are
pushed to find new ways to receive revenue due to the global economy becoming slow
and supply chains collapsing. One of the ways countries found to protect their country
from economic crises is to enact digital services tax (Christensen, 2021). Some countries
have already taken it upon themselves to tax digital companies such as the case with
Singapore, Malaysia, among others (Digital taxes around the world, 2020). As such, this
situation may influence other countries to propose their own digital services tax which
could possibly increase the costs of digital businesses. Consequently, those in the industry
would need to be aware and understand the application of taxes in their digital services
and products in the countries that they operate in.

2. BSP Circular No. 1105, series of 2020 (Digital Bank Circular)

The Bangko Sentral ng Pilipinas has issued Circular No. 1105, Series of 2020 (Digital
Bank Circular) which authorized the addition of “Digital Banks” in the classification of
banks and provided its guidelines for existing banks who desired in converting into a
digital bank (V&A law, n.d.). There are many advantages of digital banking such as fast,
convenient, safe, and secure transactions which would support online businesses in
serving their customers (Tobias, 2021). With the addition of digital banking, it could lead
to online businesses adding it to their mode of payments in their websites. Therefore,
web developers may need to acquire the knowledge on the inner workings of integrating
the payment frameworks into clients and future clients’ websites thereby creating more
work and possibly furthering partnership.

3. The CHED Smart Campus Development Project

The Commission on Higher Education (CHED) had started the Smart Campus
Development Project which provided a maximum of twenty-five million pesos each to
State Universities and Colleges (SUCs) for the tools, equipment and others needed for
their shift to a smart campus (CHED, 2021). This can be an opportunity for web companies

14
to provide their services to these SUCs as they would need to create learning
management systems, smart classrooms, among others, to improve flexible learning.

Economic
1. Fluctuating currency rates
A country's economic performance greatly affects the fluctuation of currency
exchange rates. A weaker currency is a good indicator for exporting goods and services;
however, this makes imports more expensive. In July 2021, the Philippine Peso weakened
and experienced the most drastic one-week drop since the year 2013 (Sy, 2021). These
unpredictable fluctuations in the foreign exchange heavily affect the rates used in
providing goods and services to international clients. Moreover, currency rates play a
significant role in the industry especially when web developers secure country-specific
website domain names since this involves rules and pricing that vary depending on the
country (Practical Ecommerce, 2011).

2. The Percentage of Small and Medium Enterprises (SMEs) with Websites

According to the latest statistics published by the Department of Trade and
Industry dated 2019, 99.5% of all business enterprises in the country are composed of
MSMEs, amounting to a total of 995,745, of which 104,701 or 10.5% being small and
medium enterprises. As such, small and medium enterprises are a driving force in the
employment rates and the economy as a whole, and are therefore a dominating force in
the market. According to a market survey conducted by Orange (2015), only 1% of all
SMEs in the Philippines owns a website, with the remaining 99% serving as a potential
market for web development and design companies.

3. Less fresh graduates to enter the industry

In May 2020, the Commission on Higher Education (CHED) responded to the
COVID-19 global pandemic's effect on the curriculum of higher education institutions by
releasing guidelines for colleges and universities nationwide to follow. The advisory
stated that on-the-job training (OJT) and internship programs will be suspended until
community quarantine protocols are lifted. Consequently, this delayed some of the
students of batch 2020's graduation and entry to the workforce.

Social
1. Increase in the use of online platforms due to the COVID-19 pandemic
Due to strict protocols and safety precautions, the pandemic has caused a surge
in digital activities such as online shopping. Based on a survey conducted in 2020 by online
portal ShopBack, 64% of Filipino netizens revealed that the pandemic has caused them to
spend more time on online platforms. Likewise, 23% of the respondents found
themselves spending more time online shopping. It was also reported that 73.8% of the
survey's respondents spent a weekly average of more than an hour browsing through
different shopping websites and applications online (Llemit, 2021). Furthermore, a study
conducted by Visa in 2020 revealed that 77% of Filipino consumers believe that it is
necessary for local retailers to establish their online presence (Villanueva, 2020). In effect,

15
corporations have adapted to "the new normal" by investing in creating new digital
platforms to increase their sales and to keep up with the fast-changing business
environment (Amadora, 2020).

2. The Rise of Adoption to Technology

Inclination to using technology was underscored during the past year which makes
technological evolution a key asset in this present day. According to Borate (2021), this is
because by continuously transforming various technologies and improving online-based
services, adoption would be more apparent as certain functionalities would become
available for people’s convenience. This is especially true even after the pandemic ceases
as consumers who are individuals and businesses alike have already seen the significance
of staying updated with the latest trend in technology to continue and enhance their day-
to-day operations. Furthermore, this long-lasting impact would remain relevant despite
future challenges as adoption to technology has proven to be paramount with the current
health adversity.

3. Increasing Preference of Small Businesses to Have an Online Presence

An article by Saita (2021) compiled the relevant statistics on behavior of small
businesses in connection to having their own websites. It is said that some small business
owners have taken measures to adapt to the new reality the coronavirus has created.
Many of them have increased their online activities to reach out to their client base and
keep their business alive by selling their products and services online. More than half (51
percent) say that they have increased their interactions with their clients over the
Internet. Additionally, 36 percent of personal businesses that use online tools are now
making all their sales online. Among small businesses without a website, approximately
29 percent plan to build one in 2021. While 79 percent of entrepreneurs with a business
website expect to grow at least 25% in the next three to five years, compared to 64
percent of those without a site.

However, it is to be noted that there is still a portion of small business owners who
believe that they do not need a website to continue their operations. Based on the
statistics provided, approximately a third of small businesses: believe that they are too
small to have a website; prefer to use social media instead of having a website; believe
that their customers are not online; lack technical knowledge; and perceive it as not
relevant to their business or industry. While 11 percent do not see value in having a
website.

Technological
1. The Proliferation of Mobile Apps and Progressive Web Apps
According to Statista Research Department (2021b), more and more businesses
are investing in their own mobile applications as a means of easier access to and
communication with customers on mobile devices. In the Philippines, a total of 69.4% of
Filipinos used mobile apps instead of traditional websites in browsing for products and
services. The advent of mobile technology that is currently the pinnacle of accessibility

16
and convenience is therefore a threat to traditional web developers due to the growing
market preference for mobile platforms.

2. Search Engine Optimization (SEO)

According to Fouche (2019), a company’s website will not usually rank, or appear
on the top of web search results if it is not optimized for mobile platforms as web engines
prioritize websites that allow for mobile browsing. Web developers need to be familiar
with the technology that involves ranking websites in web browsing pages to ensure
maximum audience engagement and achieve being the first search result. As web engines
currently prioritize websites optimized for mobile platforms, it is now a challenge for web
developers to not only be skilled and aware of the rapidly evolving design trends and
softwares, but also to familiarize themselves with creating websites for mobile platforms.

3. Advancements in technology may be used to enhance transparency and security

of websites and mobile applications
The emergence of multiple technological developments such as blockchain
technology may be utilized by website development companies to improve transparency,
traceability, and security in their websites and mobile applications since this specific kind
of technology increases data protection and records information in a way that is difficult
to hack (Koksal, 2019). Moreover, according to Statista (2020), global organizations use
blockchain technology for multiple reasons such as accessing and sharing data, identity
protection, tracking and tracing, and the like.

4. Subscriptions to Video and Web Conferencing Tools

Due to the Covid-19 pandemic, businesses were forced to adapt a flexible work
model and assign their staff to work from home. As a result of the circumstances, there
has been a 500% increase in demand worldwide for video and web conference software
in 2020 (Sadler, 2020). Likewise, tech companies have been increasing their efforts in
acquiring video conferencing software to do their business operations (Hasson, 2020).
Currently, the most popular tool in the world is Zoom as it tops in 44 countries, second is
Microsoft Teams, a leading tool in 41 countries, and lastly Google Meet which tops in 21
countries that are mostly located in Southeast Asia (Brandl, 2021). All things considered,
it is vital for businesses to invest in video and web conference tools to communicate with
their workers and clients regardless of their location and to continue their operations.

Legal
1. Contracts with international clients
As stated by Bierens Law (2019), companies looking to expand their business
internationally need to have international lawyers to contract with international clients
as each country has its own laws, rules, and procedures. It is especially necessary in cases,
when either the company is disappointed with the performance of its clients or when
international clients are not satisfied with the delivery, quality or payment of a product
or service that the company has offered which ultimately leads to the termination of their
contract or possibly a lawsuit.

17
 2. Data Protection Laws
Certain laws such as Republic Act No. 10173 - Data Privacy Act of 2012 and
Republic Act No. 10175 - Cybercrime Prevention Act aim to protect consumers' rights,
privacy, and information especially in cyberspace. As such, website developers must take
these into consideration and must comply with these laws when creating websites and
online applications (ECCI, n.d.).

3. Intellectual Property Law (Copyright, Patents)

The Republic Act No. 8293, as amended by Republic Act No. 10372, or the
Intellectual Property Code of the Philippines probes that registering the local companies’
copyrights, trademarks, and patents is a state policy to effectively enforce the intellectual
property rights vital to the development of innovative and domestic creative pursuits, and
foreign investments and commercialization as technology transfers permit market access
for products and services (IPR Helpdesk, 2016).

4. Magna Carta for Micro, Small and Medium Enterprises

The Republic Act No. 9501 is the recognition of supporting and promoting the
growth and development of entrepreneurship in all productive sectors. This extends to
sole proprietorship, cooperative, partnership, and corporation whose total assets should
not exceed P3 million for micro, between P3 million and P15 million for small businesses,
and P15 million to P100 million for medium (GOVPH, 2008). MSMEs are big contributors
and valuable partners to large enterprises as suppliers and providers of support services.

5. Innovative Startup Act

Republic Act 11337 refers to the support of the government in the inception of an
enterprise that will help entrepreneurs build their innovative ideas into fruition. In the
initial stage of development of the innovative business, the government will provide
incentives and benefits to support the enterprise’s growth (Arayata, 2021). In order to
establish the enterprise, entrepreneurs must register their business along with their
research and development grants for prototype improvement and to strengthen their
intellectual property (IP).

6. E-Commerce Act
The Republic Act No. 8792 or the Electronic Commerce Act is focused on
facilitating domestic and international affairs in terms of contracts, dealings, transactions,
and other exchanges in the form of electronics and technology as a medium in order to
recognize and ensure the integrity of electronic documents to such activities.
Memorandum circulars require corporations, partnerships, associations, and individuals
to issue their certificates of registration, license, and authority by designating an official
and alternate email address for their transactions with SEC (Grant Thornton, 2020).

Environmental
1. Impact of websites' online carbon footprint

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 According to ClimateCare (2021), the world's digital energy consumption is equal
to that of the aviation industry's total carbon emission. On average, a website produces
1.76 grams of carbon dioxide per page view and a large attachment on an email can yield
up to 50 grams of carbon dioxide. In addition, 3.5% of the global carbon emissions come
from cloud services—a virtual server that website developers actively use and monitor
through online networks.

2. The use of renewable energy data centers

Statistics show that data centers in the United States of America emit around 150
million metric tons of carbon dioxide yearly (Gabrysiak, n.d.). This amount is alarming and
relevant because Asia's data center market is expected to exceed that of the United States
of America's over the next five years (De Dios, 2021). Moreover, international market
leaders such as Apple, Amazon, Facebook, Google, and Microsoft have already begun
shifting to renewable energy data centers.

Summary of PESTLE Analysis:

Factor Brief Summary

Political Countries may possibly be influenced into creating their own digital
services tax as a way to protect their country from experiencing an
economic crisis. This consequently raises the bar for digital businesses as
they need to be aware and understand the digital services tax (DST) of the
countries they do business in. Another factor would be the issuance of the
Digital Bank Circular which for the industry could bring about the
requirement of the knowledge of the payment framework that online
business could possibly request of them. Lastly, CHED’s project may be
utilized by the website design and development industry as the project
entails a need for the production of learning management systems, smart
classrooms, and many more that enhance flexible learning.

Economic Unpredictable exchange rates greatly affect the prices of the services
provided in the industry, specifically to international clients. Likewise, the
growing number of MSMEs provide more job opportunities to web
developers as more businesses adapt to the booming trend of e-commerce
and online lifestyles (Choudhury, 2020). However, contrastingly, the
COVID-19 pandemic has led to a continuously spiking percentage of
unemployment as hirings and internships are put into halt because of the
tough working conditions (Pinsker, 2020). Most companies have yet to
adjust to the new job market under the restricted conditions.

Social The aforementioned social factors provide opportunities for website

developers to enhance their work based on vital information. The impact
of websites greatly depends on the people using them as they are the main
target for such initiatives. Hence, developers and designers in the industry

19
 must realize the numerous social considerations in doing their projects
given the increase in the usage of digital platforms during the pandemic.
The rising adoption of technology is also a positive latitude for online-based
services such as website development because Internet users are becoming
more open to considering and learning more about the advancements in
technology. Lastly, small businesses are becoming accepting of the reality
that conducting business digitally is a practicable way to thrive in the
current and future market. By having sufficient knowledge and
understanding on these, one can create a well-projected website while
considering the design, user experience, and overall functionality in the
present circumstances.

Technological Technological innovations can be expected to continue affecting the

website design and development industry for as long as it continues to
occur. In the last decade alone, the industry experienced a sudden
explosive growth in demand. Moreover, the industry is highly responsive
to changes and innovations in the technological climate of the world.
Therefore, industry players must always be readily informed of changes in
technological trends and adapt their services accordingly. The trend of
mobile smartphones is arguably the biggest change in the last decade, and
such continues to challenge the website design and development industry
through several factors. As such, website design and development
companies need to constantly be on the lookout for further advancements
and developments in this field.

Legal Several legal factors can affect the industry in terms of the rights to design
work, the recognition of MSMEs, and the employment practices. Failure to
comply may result in fines, action taken by the regulators, customers, or
consumer protection bodies, and may consequently damage the business'
reputation. Therefore, in the excitement of being part of the knowledge
economy and the information age, website design and development
companies must take note of the legal considerations and aspects upon
building a website. Properly defined respective rights and obligations must
be suitably drafted in binding contracts that can add tremendous value
between companies and its clients.

Environmental Though websites lessen the amount of paper and print media that cause
pollution, the environmental impact of the website design and
development industry is more alarming than people think. Though the
effects cannot be directly or physically seen and felt, the internet
community's online carbon footprint and overall carbon emission reaches
over 830 millions tons per year (Powers, 2019). As such, the website design
and development industry's operations implicitly harm the environment,

20
 contribute to global warming, and continuously pose threats and negative
implications to Mother Nature.

III. Internal Environment Analysis

A. Company Background
Webworx Design Studio Inc. emerged in 2018 as a web development company
headed by Mr. Kelvier Canillo, its Managing Director, and under the direction of Mr.
Richard Prodigalidad, the company’s President and Chief Executive Officer. Webworx
focuses on providing curated digital solutions and crafting world-class web designs
catering to its high competency in User Experience, User Interface Design, and Website
Development as services that has continuously contributed to the company’s growth and
produced driven strategies and actionable insights that encouraged the company to
expand its endeavors locally. With the support from different organizations such as
LEENTech Network Solutions, Inc., StartUp Village, Bayan Academy, and Webflow which
Webworx is the only recognized company in Asia to use this, the company was able to
facilitate and conduct Webflow meetups garnering 3,000 students to join the design
event, as well as, opening its doors to train and transform design sprinters to digital
leaders in the industry. As of June 2019, the company began to accommodate
international clients to establish its global presence in countries such as the USA, Czech
Republic, Etonia, South Korea, Singapore, Australia, and New Zealand. With this global
reach, Webworx continuously taps on the website development industry to create more
opportunities, to capture more leads, and to provide value-added services that gratifies
the trust and satisfaction of their target audience.

B. Corporate Vision
Vision Statement:
"To become the prime Web Agency in Asia that provides innovative web solutions
that will digitally transform businesses to the next level."

Incorporating a strategic vision must constitute the company’s directional path

towards its future focus. In a fast-paced market, establishing the company’s position in
the industry will be determined as the organization’s capacity to fulfill its mission and
vision which caters to its stakeholders. An established strategic vision creates a greater
sense of significance, specifically answering the question “Where are we going and why?”
that serves as a bridge for standard of excellence between the company and the industry
articulating the standards of success. Nevertheless, an effective strategic vision must
contain a graphic, directional, focused, flexible, feasible, desirable, and easy to
communicate characteristics (Gamble, Thompson, & Peteraf, 2020). These attributes
contribute as a valuable managerial tool for decision making. Furthermore, the vision
statement of Webworx integrates its desired market position, but not entirely. The
statement contains effective elements that encompasses a general directional path and
motivational value, however, it is also overused and broad. These shortcomings fail to
convey how the company will strategically transform the digital landscape in the near

21
 future. With that, the group provided a comprehensive analysis of the company’s vision
statement and identified the effective elements integrated and the shortcomings that can
be amended:

Phrases from Vision Effective Elements / Comments /

Statement Shortcomings Recommendations

"To become the prime Graphic, directional, and It provides a direction as to

Web Agency in Asia…" forward looking where the company aims to
position itself in the future. It is
also challenging, and inspiring
as it takes its sight on the
whole of Asia.

"...that provides innovative Focused, feasible, and flexible It expresses how they serve
web solutions..." their clients through providing
innovative web solutions. It is
specific enough but there is still
room for improvement. With
this, the word innovative may
be replaced with the word
"contemporary" to avoid
repetitiveness.

"...that will digitally Too broad and is not It does not clearly state how
transform businesses to distinctive Webworx aims to transform
the next level." businesses to the next level.
With this, the phrase can be
changed into "...that will
digitally materialize businesses’
visions into reality." so that a
more concrete and vivid plan of
action is provided.

Recommended Vision Statement:

"To become the prime Web Agency in Asia that provides contemporary web solutions that will
digitally materialize businesses’ visions into reality."
C. Company's Mission
Mission Statement:
● Clients: To empower businesses by solving complex problems and
generating solutions with the use of design and web technology to achieve
their business goals.
● Team: To develop people, to gain more experience and understand the
business to deliver the best solutions to the client.

22
 ● Stakeholders: To create an international brand that will bring Philippines'
pride in the digital landscape.
● Community: To share our expertise and knowledge in the business of
design to ten million technopreneurs in the Philippines.
● Partners: To become better in customer experience then achieve 100%
satisfaction in terms of price, quality, and service excellence; and to build
fruitful long-term relationships among business partnerships.

Webworx's mission statement is very detailed and specific to the different

stakeholders of the company. It accurately depicts what a mission statement should be
as it contains all the elements that allow consumers to identify the company's business
and purpose. Each statement distinctly describes the company's mission to a specific set
of people and clearly answers the questions "Who are we? What do we do? Why are we
here?". Given the structure of Webworx's mission statement, it is easier and more
convenient to identify how the company was able to achieve its mission to its specific
stakeholders, especially when the management is conducting their annual company and
strategic analysis. Therefore, the group decided to retain the overall structure of the
company's mission statement. However, the group believes that some statements may
be worded in a more specific manner so as to better convey and explain the company's
mission to its different stakeholders and to the general public. As such, the group
provided a comprehensive analysis of the company’s individual mission statements and
identified the effective elements integrated and the shortcomings that can be further
improved:

Individual Mission Effective Elements / Comments /

Statements Shortcomings Recommendations

Clients: To empower Flexible but too wordy It expresses the company's

businesses by solving complex mission to aid its clients;
problems and generating however, it can be made more
solutions with the use of specific in terms of how the
design and web technology to company plans to assist
achieve their business goals. businesses in achieving their
goals. Moreover, it is too wordy
and can therefore be simplified
into a shorter yet more
concrete mission statement.

Team: To develop people, to
gain more experience and
understand the business to
deliver the best solutions to
the client.
Too broad, can be better
worded for coherence and
consistency
Its mission for the team may be
better explained by providing a
concrete course of action such
as proper training and
development which will help

23
 members of the organization
gain experience and develop
their skills and technical know-
how.

Stakeholders: To create an Graphic, focused, and It depicts the forward,

international brand that will directional directional, and concrete
bring Philippines' pride in the mission of the company to
digital landscape. create a well-recognized
international brand in the
industry. As such, this
statement may be retained as
is.

Community: To share our Directional, feasible, and It addresses what the company
expertise and knowledge in desirable does for the community and
the business of design to ten whom it specifically aims to
million technopreneurs in the assist. Furthermore, this
Philippines. mission appeals to the
company's Corporate Social
Responsibility initiatives so the
group recommends for this
statement to be retained as is.

Partners: To become better in Focused and directional but The first part of the statement,
customer experience then too wordy "To become better in customer
achieve 100% satisfaction in experience", is directed
terms of price, quality, and towards the clients rather than
service excellence; and to the partners. As such, this part
build fruitful long-term may be removed. On the other
relationships among business hand, the latter part of the
partnerships. sentence provides a more
detailed and graphic mission
for the company to its partners.
Thus, it may be retained but
rephrased so that readers can
better understand what the
company is trying to express.

Recommended Mission Statement:

● Clients: To assist businesses in achieving their goals by producing quality
services and generating innovative solutions through website design.
● Team: To hone the skills and expertise of the team through proper
training and development that will aid in delivering the best services to

24
 clients.
● Stakeholders: To create an international brand that will bring Philippines'
pride in the digital landscape.
● Community: To share our expertise and knowledge in the business of
design to ten million technopreneurs in the Philippines.
● Partners: To build fruitful long-term business partnerships that are focused
on achieving 100% satisfaction in terms of price, quality, and service
excellence.

D. Core Values
Core Values:
D - Deliver wow through service
R - Resourceful and open-minded
E - Empathic and passion-driven
A - Assertiveness and accountable
M - Makes work fun

A company’s core values serve as its guide in conducting its operations. This may
include its beliefs, principles, and behavioral conventions that they adhere to with regard
to accomplishing its mission and achieving its vision. Webworx decided to make their core
values easy to remember by using the acronym D.R.E.A.M. As the word implies, the
company aims to continually dream through the values that they have set. This is a
positive and impactful way to present and communicate their beliefs to their
stakeholders. Hence, the group decided to retain the acronym with several adjustments
in certain parts to further improve the way their core values can be translated.

The first letter which is D originally contains a vague statement with no core value
specifically mentioned. Hence, it is suggested that the company includes how they intend
to deliver service which can be rooted on integrity. The word integrity is used because it
was emphasized during the interview with the Managing Director that they appreciate
the value of their work and they make sure to provide their services with clear and
genuine intentions. While for the letter R, the words are considered appropriate to
become part of the company’s core values as they highlight how the company plans to
identify factors surrounding them and decide how they can deal with uncertainty. Being
resourceful and open-minded are considered to be pertinent especially with the dynamic
nature of the business. As for the letter E, it is fair to indicate the words empathic and
passion-driven in their set of core values as these can make their members know how the
company aims to promote productivity by keeping in mind the significance of empathy
and passion. This is also because it was underscored during the same interview that the
company was founded upon the determination of its members in creating meaningful
projects. The letter A includes the words assertiveness and accountable which can provide
a sense of guidance to the employees on how the company aims to conduct its business.
Being assertive can help them steer towards pushing the company to be in a better
market position. Moreover, being accountable for their actions must also be noted as this

25
 can demonstrate mutual trust and confidence which can be related to their previous core
values. A small alteration on the former word assertiveness may need to be done to make
it coherent with the word accountable which is an adjective. Lastly, the company can
further improve how they would communicate the core value for letter M as although its
message is straightforward and concise, it is suggested that the company details how their
work can be enjoyable. Thus, it was recommended that they alter it by stating how they
support work that is manageable and employee-friendly.

The following table presents the original core values being observed by Webworx
and the effective elements and/or shortcomings identified by the group in each. With the
analysis made, constructive comments and recommendations are provided as follows:

Core Values Effective Comments /

Elements/Shortcomings Recommendations

D - Deliver wow through "Wow" is vague Although the intent shows

service how Webworx aims to
exceed its customers'
expectations, the phrase can
be worded in a better way in
order to make it more
specific on how they would
want to deliver their service.
As such, the newly suggested
phrase for the letter D is to
“deliver service built on
integrity."

R - Resourceful and open- Focused The words used for this letter
minded are believed to be good to
apply in the business as it
provides a clear path on how
the company should manage
their operations. Ensuring
resourcefulness and open-
mindedness can help them in
making better decisions
about the utilization of their
resources even in difficult
situations.

E - Empathic and passion- Graphic and desirable The words empathic and
driven passion-driven have a way of
providing motivation to the

26
 members on how they should
treat their work and the
people around them. It can
inspire the employees to
contribute meaningfully in
their outputs as they can see
how the business also aims to
have a positive impact on
others.

A - Assertiveness and Directional, but the words The words can be kept as
accountable can be improved to be they promote mutual
consistent with each other confidence and
entrepreneurial mindset.
Instilling these values
provides a direction on how
they would want to conduct
their courses of action. The
only suggestion is to change
the word assertiveness to
assertive to become aligned
with the word accountable
which is an adjective.

M - Makes work fun Easy to communicate, but Although it can easily be

can be worded in a more understood, it is
specific manner recommended to provide
specific ways on how the
performance of tasks can be
considered enjoyable by
detailing that the company
“makes work manageable,
and employee-friendly.”

Recommended Core Values:

D - Deliver service built on integrity
R - Resourceful and open-minded
E - Empathic and passion-driven
A - Assertive and accountable
M - Makes work manageable, and employee-friendly

27
 E. Analysis of the company’s current strategies and present competitive
advantages
Business Model - Customer Value Proposition
The primary customers of Webworx are businesses with website development
needs that are located within Asia. These customers usually expect web developers to be
receptive to feedback, capable of effective time management, and sensitive to market
trends, on top of other usual expectations for a web development company such as
effective design skills and search engine optimization, among others (Indeed Editorial
Team, 2021). Clients are therefore looking to avoid low quality services, unresponsive
service teams, and outdated design. To address these concerns, Webworx puts absolute
importance and emphasis on the quality of their work. The company prides itself on its
good work ethics and is receptive and appreciative of customer feedback. Additionally,
the company provides such quality services at reasonable prices in the local and
international markets, as compared to the average pricing charge set in the industry for
similar services. The team of Webworx is also responsive to the design trends in the
market familiarizing themselves with the different design themes through exposure in
seminars.

Generic Competitive Strategy

Webworx currently employs a broad differentiation provider strategy. Since it is
essential for the company to adjust to the ever-changing demands of the market,
Webworx diversifies its range of products and services based on the wants and needs of
their clients. Moreover, the company does not target a specific niche in the market but
instead strategically appeals to a variety of consumers. With this, Webworx is able to cater
to clients with different budget ranges from all over the world and is subsequently able
to increase their market share despite being a start-up company established only in the
year 2018.

Company Strategies
On average, the company formulates strategies quarterly, which are monitored
through the usual means of tracking sheets. When strategies are not successfully
implemented or met, the company holds team meetings to re-evaluate the objective and
reassess whether the strategy can be salvaged through other means. With this, some of
the strategies that are being implemented by the company include building relationships
with freelance web developers, having partnerships with universities, implementing low
cost services on an international scale, and conducting continuous research and
development.

Webworx maintains relationships with freelance web developers to address

certain roadblocks such as those with regards to their limited workforce. As the company
is only composed of a small team of eight, certain projects may be understaffed. In such
circumstances, the company hires freelance web developers to aid in meeting the
objective and client demands. Similarly, Webworx builds rapport with local universities in
order to live out their mission of sharing their knowledge to young technopreneurs. With

28
this, Cavite State University partnered with Webworx in the conducting of IT or web
development classes and seminars. Through this, the company helps educate and train
students to become well versed in web design, free of charge. This enables the students
to become proficient freelancers if they so desire. Simultaneously, the company has been
able to establish a relationship with them, which the company can use to its advantage in
the long run. Similarly, the company can use its exposure in the university to scout for
students with considerable talent and desirable values, effectively serving as a pool for
potential recruits.

In order to compete with international competitors, Webworx strategically

charges significantly less for its services, as compared to the global standards. According
to Webworx's Managing Director, the company charges an average of 3,000 to 8,000 USD
for a unit of service, whereas the international minimum charge on average is 8,000 USD.
This gives the company an advantage in acquiring clients with less capital resources over
their competitors, and thus exposes the company to a greater pool of customers outside
the Philippines. Moreover, the company is able to sustain its lowly priced services because
of retainer fees that are paid on top of the company's fees for their services.

Lastly, Webworx makes sure to invest in continuous research and development to

keep up with current market trends and demands. The team attends seminars whenever
possible and conducts research as soon as a new fad arises. By doing this, Webworx is
able to stay updated with modern consumer trends and preferences and is able to
integrate these into their website designs. In effect, this leads to higher customer
satisfaction and better customer engagement and experience. Furthermore, this allows
the members of Webworx to obtain certificates and plaques that solidify their credibility
in the industry, using this to attract customers as well.

Analysis of Strategies
While it is important to build good rapport with the company's different
stakeholders, Webworx's current strategies are not sustainable for the company in the
long run since the benefits do not necessarily outweigh the costs by a big margin. In line
with this, it was mentioned by the Managing Director of Webworx that the primary long-
term goal of the company is to penetrate the Western market and to create a highly
esteemed brand in an international setting. However, it would be difficult to expand and
achieve this goal if the company is not earning enough revenues. Thus, having low cost
services would not be practical to continue in the long-term, as this may lead to lower
profits and could possibly even lead to losses in transactions with international clients
when the exchange rates are not favourable and are not used to their advantage.

In contrast, conducting continuous research and development is a good and

sustainable strategy for the company; however, this in itself would not be sufficient in
maximizing the company's performance and operations. In totality, Webworx's current
strategies are not sustainable enough for the company to achieve its long-term goals.
Thus, the group believes that the company should continuously adapt to the market and

29
innovate new products and services that would allow them to enhance their productivity
and financial returns. In line with this, Webworx must regularly assess, develop, and
further improve on their strategies and courses of action in order to meet the demands
of the market.

Competitive Advantages
To reiterate, Webworx also offers its services for lower prices as compared to
international competitors. This is one of the company's competitive advantages.
Moreover, despite being a small player in the industry, Webworx has been able to partner
up with local freelancers and universities as well as international organizations based in
Australia and the United States of America. With this, the company is able to upgrade its
technology and perform better services. Through this, Webworx is also able to gradually
expand their scope of services in terms of geographic coverage, making them one step
closer to their vision of becoming a globally recognized brand.

In line with this, the President and Founder of Webworx mentioned that one of
the main competitive advantages of the company is that it is the only service provider in
Asia that has been acknowledged by Webflow—an organization that provides the proper
tools and software for website building and hosting. Webworx is the only company in the
continent to have been approved to partner up with Webflow. With this, Webflow
recommends Webworx to clients from different countries, helping Webworx gain
publicity and recognition. This in itself not only gives the company a significant edge
against its competitors but also adds value to the company's overall brand.

Analysis of Competitive Advantages

Though Webworx's low prices give them a competitive advantage in the market,
it entails incurring an overall lower profit margin. In addition, from another perspective,
the company's prices may be considered high when compared to the prices that
substitutes like freelancers charge. Hence, Webworx's low prices cannot be considered as
sustainable competitive advantages of the company.

On the other hand, the company's local and international partnerships aid in
securing more market share in the industry. Its local partnerships with freelancers and
universities provide aspiring web developers with opportunities to grow and enhance
their skills. This way of training potential technopreneurs may prove to be one of the
company's competitive advantages in the long-run, as they may play a part in expanding
the company's reach and tapping into specific target markets in the local setting.
Moreover, its exclusive partnership with Webflow also gives the company leverage and
added brand value compared to its competitors. However, while being an exclusive
partner of Webflow in Asia gives the company great competitive advantage, it would be
insufficient to simply rely on word-of-mouth and market referrals to obtain new clients.
Moreover, looking at the bigger picture, the currently limited geographical and
technological scope of services that stem from Webworx's partnerships may not be
enough to sustain and to further develop the company's position in the market in the

30
long-run. Thus, the company must implement effective strategies that will allow them to
secure major competitive advantages in both the local and initernational industry.

F. Value Chain Analysis

Figure 1: Value Chain Analysis of Webworx Design Studio Inc.

The figure above displays the value chain analysis of Webworx Design Studio Inc.
The primary activities involved are inbound operations, operations, outbound logistics,
technological development and service. On the other hand, the supporting activities
consist of procurement, marketing and sales, human resources management and firm
infrastructure.

Primary Activities
a. Inbound Operations
As a start-up company, Webworx's team mainly focuses on website design and
development services. As such, the company mainly outsources the materials needed for
their operations. This includes Webflow—an essential tool that is actively used by the
company in launching websites, and the cloud server that stores data and information.
These materials or tools are used by their skilled web developers and designers in
developing websites for their clients. Additionally, these instruments are stored in
computer softwares and are internally managed by the company.

b. Operations
The discovery phase includes research on the client’s business, competitors'
analysis on the client’s rivals, meetings and approvals of the team’s plan and others.
Following the approval, the design phase starts as the team with the necessary data and
consent begin on the sitemap, User Interface Design, Website UI Kit, and Wireframe of
the product using tools such as Adobe Photoshop, Adobe Illustrator, and others. Next is

31
the development phase where the team develops the final product with a tool called
Webflow.

c. Outbound Logistics
After going through the process of agreement, discussion and planning, and
design and development, the projects created are finalized before transferring the
ownership to the clients. It requires the clients’ approval before Webworx can launch and
showcase the website to the Internet. This phase includes many services such as Search
Engine Optimization (SEO), deployment, hosting, and search marketing. Moreover, it is
dependent on the contract whether the clients would want to work on the necessary
updates themselves or if Webworx would still partake in the maintenance and support of
the website. In the case the clients choose to manage the contents of their own website,
they can do so using the Linus panel. While the latter would require Webworx to
continually provide services which can consequently lead to client retention and future
partnerships.

d. Technological Development
Webworx's technological development mainly revolves around its data servers
that store information and data needed in the company's daily operations. In line with
this, Webworx does not have any physical hardwares but instead makes use of Webflow
and the cloud server. As previously explained, these tools are very important softwares
that allow Webworx to bring quality outputs and services to their clients.

e. Service
As a customer-centered company, Webworx opens its services to their clients’
needs in web development. This includes website maintenance, access to domain and
hosting, website scripting, file transfer protocol and other concerns related to developing
a website. According to the Managing Director of Webworx, the company adapts to the
needs and wants of their clients and has been continuously utilizing the advancements in
technology to offer high quality customer service as well as exquisite and efficient
performances.

Support Activities
a. Procurement
Webworx is able to sustain progressive relationships with companies (e.g. mobile
and development, incubator, social development, and web design CMS platform
organizations) by continuously supporting them with local and international partnerships,
as well as, their subscriptions to softwares that is used in developing innovative and
curated websites.

b. Human Resource Management

Webworx’s human resource management is outsourced. Despite this, the
Managing Director takes part in the majority of the recruitment process such that he
personally conducts the final interview and trains the applicants during the probationary

32
period. Additionally, Webworx's employees are given medical cards, life insurance, and
training allowances. To implement an incentivized reward system, employees with
outstanding performances are given project bonuses. Furthermore, the Managing
Director makes an effort to cultivate a positive and encouraging work environment in
which collaboration and communication within the team are given utmost importance.

Webworx also prioritizes the well-being of their staff and employees. When the
COVID-19 pandemic hit the Philippines, the company provided its team with the proper
equipment, tables, and chairs in order for them to work efficiently and comfortably from
their own homes. In addition, they were also provided with psychological care in order to
promote mental health awareness, to reduce burnout, and to reduce their feelings of
stress and anxiety.

Aside from these, one of Webworx's value-adding activities is done through school
and organizational visits wherein they not only share their knowledge and advice to the
youth but also provide them with the opportunity to work with and in the company.
Webworx believes that in this way, they can instill the importance of creating meaningful
projects and make more people appreciate the value of providing quality work related to
website development. Through these free knowledge-sharing sessions, Webworx is able
to provide practical insights, provide direction, and promote career development. They
see the potential in honing young talents who could eventually become part of their
competent team. This is not only beneficial to the learning community but this can also
become an opportunity for the company to extend their brand to more people.

c. Marketing and Sales

The marketing and sales activities of Webworx are completely outsourced since
they do not have an established marketing and sales department to meet the market
objectives, generate prices and sales plan, and promote offered products and service.
However, the company is able to attain commissions and major projects through network
marketing and referrals, specifically sales and communications from their local and
international partnerships. Their former clients recommend them to another group of
clients depending on the services they provide, which gives them the leverage to take a
proactive approach in the market. The company’s outsourced marketing and sales labor
help them analyze the growing opportunities in the industry and the current trends of the
market they are catering their services to.

d. Company Infrastructure
Webworx's team consists of only eight members; however, the company regularly
outsources professionals in fields such as accounting, administration, legal, and finance
in order to ensure an effective and efficient flow of work in the workplace. Moreover,
given the safety precautions and health protocols brought about by the pandemic,
Webworx employees are given the freedom to choose whether they prefer physically
going to the company's office based in Tanza, Cavite City or whether they prefer working
at the comfort of their own homes.

33
 G. Financial Analysis with Financial Ratios
Due to time constraints and external limitations, the group was only able to
acquire one year of financial statements, hence no comparative analysis was presented.
In spite of this, Webworx provided their 2020 financial statements (Annex A) which are to
be analyzed using various financial ratios. This is performed in order to assess the
profitability, asset utilization, liquidity, and debt utilization of the company. It is to be
noted that certain ratios such as the Average Collection Period, Inventory Turnover, Fixed
Asset Turnover, Times Interest Earned, and Fixed Charge Coverage were not included in
the analysis as the accounts necessary for the calculations were not applicable with
Webworx. Nonetheless, examining the following ratios can be a helpful tool in identifying
the company’s financial status:

Figure 2: Financial Ratios based on the 2020 Financial Statements

a. Profitability Ratios
Profitability ratios assess how effectively and efficiently a company can generate
profits from its operations, and it is more attractive for investors when companies have
high profitability ratios. With this, the group assessed Webworx's profit margin, return on
assets, and return on equity for the year ended 2020.

Profit margin evaluates a company's financial returns from its sales in which a high
percentage would signify that the company's operations are efficient. With this, it was
calculated that the company's profit margin for the year was a negative 30 percent. This
was due to the net loss incurred for the year since the company's revenues were
insufficient to offset an excessive amount of costs and expenses.

Likewise, return on assets measures how well a company is able to generate

profits from its total assets. Thus, investors expect to see high return on assets on the
company's financial report. However, Webworx's return on assets amounted to a
negative 122 percent. To reiterate, the negative percentage is due to the company's net
loss. Moreover, this could have been a promising profitability ratio had it been a positive
percentage.

34
 Lastly, a company's return on equity shows how well a company is able to provide
its shareholders with financial returns. By dividing the net income by the shareholders’
equity, this ratio can be calculated. Although the calculation presented an extremely high
return on equity of 139 percent, this is not indicative of a good financial performance. The
primary reason why it resulted in a positive and surprisingly a high ratio is because
dividing two negative numbers produces a positive result. Therefore, dividing the net loss
for the year by the deficit in retained earnings gave rise to this outcome.

b. Asset Utilization Ratios

Asset Utilization Ratios aid in determining how well a company uses its assets in
generating revenues. Increasing ratios under this financial analysis may suggest that a
company is efficient in maximizing every peso unit of its assets in its operations. The first
ratio which is the receivables turnover represents the effectiveness of a company’s
collection policy in relation to their sales and accounts receivable. Since in over a course
of a year, only advances to employees which is a receivables account remain in the books
of Webworx, it is assumed that the company is able to collect the money owed by its
clients which explains the high turnover ratio of 139.43 times as presented above. As
confirmed with the Managing Director, all sales were collected in Cash and there are no
credit sales remaining as of 2020. Hence, the average collection period was not included
under the asset utilization ratios in Figure 2 above given that there is insufficient data to
calculate for a definitive finding.

Total asset turnover, on the other hand, denotes how efficiently a company
manages its resources, specifically assets in producing sales. This means that the higher
the ratio, the more efficient a firm is at generating revenues relative to the value of its
assets. The ratio of 4.09 times, which is greater than 1, may imply that the company is
able to induce revenues given the peso amounts of its assets. The result may also reveal
how fast Webworx manages to turn over their assets through sales. However, based on
the components of their assets, it is to be noted that they do not have fixed assets which
may amount to a large part in the case that they would have them in their books. This
may be one of the reasons why the amount of sales is relatively high in relation to only
current assets recorded in their statement of financial position.

c. Liquidity Ratios
Liquidity ratios determine a company's ability to pay its debt and obligations. One
of the most common liquidity ratios used is the current ratio which measures how a
company is able to cover its current liabilities with its current assets. The ideal figure is to
have a ratio of more than one (1) because such would indicate that the company's current
assets are more than enough to cover for its short-term obligations. With this, it can be
concluded that Webworx's current ratio of 0.53 times is unfavourable and may pose
threats to the company's financial standing.

d. Debt Utilization Ratios

35
 Debt utilization ratios may be utilized to analyze a company's capital structure
which consists of both debt and equity. Therefore, a debt-to-assets ratio was performed
to examine how much of Webworx's assets are funded by its debt. As seen above,
Webworx's debt-to-asset ratio was 188% which means that the company's debt is almost
twice as much as its total assets. This also means that Webworx relies heavily on its
liabilities to fund its current capital. As such, the company must strive to lower this
percentage in order to minimize the risks of not being able to manage their excessive
debts.

An optimal capital structure must also be identified that would lower the
company’s overall cost of capital since having large amounts of debt may consequently
increase the risks associated with complying with debt obligations. Mismanagement of
debt financing could adversely affect the business considering the volatility of markets.

An important note that needs to be taken into account is that ratios generated
based on financial statements for a single year does not completely demonstrate the real
status of the company. It may not be reliable to only look at these numbers in making a
conclusive evaluation or decision. There is an overriding need to look at the figures used
for the calculations and review them carefully with past financial statements and/or
industry ratios.

IV. Strategy Analysis

A. SWOT Analysis
Strengths
1. Only service provider in Asia that is recognized by Webflow
Being the only website development and design company in Asia to be formally
acknowledged by Webflow serves as one of Webworx's greatest strengths because it not
only allows the company to strengthen its brand value but also enables the company to
elevate their services as compared to their competitors. Webflow's exclusive partnership
with Webworx is explicitly seen in Webworx's official website and this implicitly proves to
consumers that Webworx is highly competent, which in turn allows the company to take
on more business opportunities through Webflow's market referrals.

2. Adaptable to international markets

Webworx's ability to cater to an international market despite being a relatively
new entrant to the industry proves how proficient, skilled, and qualified the company is.
This is also aligned with the company's vision of becoming a prime web agency in the
continent. Through this, Webworx adapts to international standards and showcases
Filipino talent in a global setting. Furthermore, this strength not only enables them to
further expand their geographical scope and stream of revenues, but also enables them
to gain new networks and connections which could help them potentially secure more
business partnerships.

3. Fosters a healthy working environment for staff and employees

36
 Webworx gives utmost importance to their staff and employees which is shown
by how they provide options for them to freely decide how they would want to conduct
their work during the pandemic. In addition, the current circumstances has made the
company further highlight the significance of taking care of its staff and employees'
mental health. Thus, the Managing Director mentioned how the company created a
program wherein they would routinely check on the employees by conducting one-on-
one consultations. Also, despite having a small team, they foster a healthy and productive
work environment for everyone to feel less pressure when doing projects.

4. Strong relationship with stakeholders

Webworx focuses on strengthening and building fruitful long-term relationships
with their stakeholders as these may benefit them in the long-run. Building great rapport
with the company's stakeholders allows the company to build trust and influence within
the organization. With this, the company is able to enforce better communication and
garner more engagement from their stakeholders whilst improving the company's overall
brand image.

5. Secured local and international partnerships

Webworx's wide network and effective strategies have allowed the company to
secure local partnerships with different schools and universities, scouting and training
potential web developers through seminars, interactive meetups, and website design
events. Aside from this, Webworx has partnered and collaborated with international
companies based in Australia and the United States of America that help them boost their
brand reputation, as well as their international sales.

6. Detailed routine check-ups and quarterly strategic assessments

This meticulous process allows Webworx to properly assess and monitor whether
the company was able to meet its goals and targets for the quarter. According to the
Managing Director, the company also establishes key performance indicators, regularly
asks its partners for business updates, and conducts strategic analysis that would
determine whether the company should continue its current strategies or employ new
ones. Moreover, routine check-ups with business partners and other stakeholders of the
company allows Webworx to not only build stronger relationships but also enables the
company to ensure that they are able to address the needs of their stakeholders.

Weaknesses
1. Lack of branding exposure and strategies
Compared to local substitutes such as freelancers and competitors such as other
website design and development firms, Webworx relatively charges their clients more.
This is because the company focuses on building quality outputs for their clients, altering
the company's offered services based on the client's taste and preferences. However,
Webworx's lack of effective branding strategies that encompass marketing and
advertising lead to consumers not being able to comprehend the real value of their brand.
Because they are unable to adequately showcase and advertise their strengths and

37
competitive advantages, consumers tend to perceive Webworx's prices as overpriced.

2. Limited workforce and number of employees

Though a united and competent team, Webworx's limited number of employees
inhibits the company from accepting multiple projects all at once. In effect, the company
would have no choice but to decline some business deals so as not to sacrifice the quality
and effort put into accepted projects. Because of this, Webworx is unable to maximize
business offers and opportunities thus decreasing the chances of having more revenues.

3. No definite sales and marketing planning

Though Webworx Design Studio Inc. and LEENTech Network Solutions Inc.—the
mother company, are entirely different and separate entities, Webworx may still avail of
shared services from LEENTech. Currently, the company benefits from its mother
company's sales and marketing departments. However, when there is excessive
workload, Webworx hires outside professionals from their respective fields. With this, it
can be concluded that Webworx does not have a proper sales and marketing department
of its own. Thus, the company not only incurs additional costs but also becomes less
hands-on with internal operations. In addition, though the company may use its
relationship with its mother company to its advantage, it may disrupt the internal
processes and workflow of both companies which may eventually cause problems to
management in the future. Both entities must also have marketing plans specifically
crafted for their company, thus the availed marketing services may not be as effective
since LEENTech's marketing plans may not necessarily be suitable to achieve Webworx's
target goals and performance. Consequently, Webworx currently has poor online
engagement and lacks brand exposure since there are no structured and detailed
marketing plans that are put into action. Moreover, regularly outsourcing different sales
and marketing agents would put the company at risk, as their confidential strategies and
information may be leaked to the public and/or to the company's competitors.

4. Lack of expertise in general and administrative functions

As previously mentioned, Webworx externally hires professionals related to
general and administrative concerns such as accounting, financial, and legal issues.
However, selecting highly competent individuals may sometimes be beyond the
company's control. With this, outputs produced by outsourced professionals may not be
at par with the company's standards. Thus, Webworx's lack of expertise in general and
administrative functions serves as one of the company's weaknesses which may lead to
organizational issues not being easily and quickly resolved.

5. Newcomer in the industry

Compared to its competitors, Webworx holds only four years of experience in the
industry. Thus, in an industry where skills, knowledge, and experience are highly
important, this serves as Webworx's weakness. Clients may favor other competitors with
more years, background, and technical know-how in the industry, even if they are more
expensive. Moreover, there may be a certain bias that relates how long a company has

38
been in the industry to its performance and skill level. Furthermore, since Webworx is a
small and relatively new company with low brand image in the global setting, the
company is unable to compete and match the prices of big, existing, and well-established
firms in the industry.

Opportunities
1. Rise of e-commerce and digital platforms
The rise in the use of smartphones, tablets, and desktops has contributed to the
growth of e-commerce. As more individuals consume information over these devices, it
generates web traffic progressively, driving mobile-responsive websites to provide an
optimal experience for the users across the board. With this, Webworx may optimize the
opportunity to be functional and create a flexible web solution that is responsive to its
clients and to its users. Additionally, the presence of digital platforms can be used as an
online promotional tool for Webworx to market their services to a more open platform
and market service, thus, getting more referrals and projects from local and international
clients.

2. Behavior of small businesses

In connection with a previous discussion on a potential market that Webworx can
cater to, the shifting perspective of a large percentage of small and medium businesses
may present a window of opportunity to the firm. By having more enterprises which are
seeking to transform their business digitally, there are higher chances for Webworx to
increase their rich portfolio of clients as they work with these businesses.

3. Integration of Smart Campus for schools and universities

This is an emerging trend where schools and universities use advanced network
infrastructures to provide leverage for their students and faculties with internet-
connected devices. The acceleration of smart technologies can be utilized by Webworx to
provide supportive and engaging experiences that will benefit students and educational
institutions. With this, it drives operational efficiency for all stakeholders while
recognizing the importance of flexible management systems supporting higher education
as the epicenter of activities.

4. Homogenous quality of service in the industry

With the homogenous services and commodities being offered in the website
industry, consumers would expect the same level of service in different price offers.
Webworx may use this opportunity to gain a competitive advantage by producing a
differentiated quality of service or changing the offers based on the desired prices. As
such, Webworx may differentiate and diversify their services in the industry and
subsequently target different consumer markets.

5. Exchange rates
The foreign exchange market has been experiencing major fluctuations in
currency exchange rates. Exchange rates can affect the website industry in such a way

39
that international transactions are denominated in different currencies, which can heavily
affect the costs, as well as the rates offered to international clients. Currently, Webworx
quotes the prices for international clients in Philippine Pesos. Thus, prices are fixed
regardless of the fluctuations in the market. However, the exchange rate policy in the
Philippines supports the floating exchange rate system, whereas the Bangko Sentral ng
Pilipinas (BSP) leaves the determination of exchange rates to the market forces. This is an
opportunity for Webworx to settle their prices in their contract subject to the
renegotiation of an exchange rate that is high and favourable for Webworx. Through this,
Webworx may focus on keeping the margins steady that will help the company grow its
volume and profits even with the fluctuations prevailing. Such that adjustments are
compensated for exchange rate losses, Webworx may seek additional risk reduction
strategies such as hedging. With this, in the view of Webworx as a service provider, a
weak peso is preferable since its receivables would have greater monetary value.
Contrastingly, in transactions with Webworx's international suppliers, a stronger peso
rate is preferable to decrease the monetary value of its debt and other payables.

Threats
1. Implementation of Data Protection & Intellectual Property Law
Data allows organizations or businesses to establish their benchmarks and store
information that can be used or accessed by the public. However, the website industry
highlights the gravity of data protection and intellectual property since these are
subjected to the rights of the consumers or the clients. Without the implementation of
data security measures, this may become a threat to brand reputation and future profits,
especially for Webworx who is garnering a market position both in local and international.

2. Online carbon footprint

The emergence of digital technologies also has its downsides. For a website
industry who overly uses these technologies to develop and design a website, the internet
is responsible for the greenhouse gas emissions due to electricity consumption. With this,
carbon footprint comes from a few different sources from the internet, whereas pollution
is growing and the amount of power consumed is not sustainable. This may affect
Webworx’s operations and services as the search engine, server, web browser, and
emailing are the biggest contributors to carbon footprint. As web designers and
developers, Webworx uses technologies and softwares to create and program designs
with specific interactive visualizations catered to enhance user experience. However, the
designs are streamlined as a virtual machine built from software that can affect the final
sustainability of the website. Thus, the more complex and complicated the website is, the
more it entails energy and generates electricity just to see the content, which results in a
greater impact on the environment sustainability.

3. Gradual decline of workforce due to the pandemic

The pandemic took a toll on the business landscape, especially on established and
small businesses leading to its gradual change in the workforce. Due to the
implementation of community quarantine protocols, job programs were put into halt. As

40
 much as the website industry needs the entrance of newly graduated students, this may
hinder Webworx from acquiring additional workforce.

4. Penetration of freelancers in the market

Websites are big investments of existing companies and businesses. Such that the
implementation and the unique concept means more on the developer’s work, there are
complications when it comes to the execution and demand. Freelancers offer their
services at a low price, which can heavily attract a high switching cost for clients. This may
put Webworx at disadvantage due to the freelancer’s active participation and
cooperation with their clients.

Summary of the SWOT Analysis:

Internal Strengths
1. Only service provider in Asia that
is recognized by Webflow
2. Adaptable to international
markets
3. Fosters a healthy working
environment for staff and
employees
4. Strong relationship with
stakeholders
5. Secured local and international
partnerships
6. Detailed routine check-ups and
quarterly strategic assessments
Weaknesses
1. Lack of branding exposure and
strategies
2. Limited workforce and number
of employees
3. No definite sales and marketing
planning
4. Lack of expertise in general and
administrative functions
5. Newcomer in the industry

External Opportunities Threats

1. Rise of e-commerce and digital
platforms
2. Behavior of small businesses
3. Integration of Smart Campus for
schools and universities
4. Homogenous quality of service
in the industry
5. Exchange rates
1. Implementation of Data
Protection & Intellectual
Property Law
2. Online carbon footprint
3. Gradual decline of workforce
due to the pandemic
4. Penetration of freelancers in the
market

B. EFE and IFE Matrix

EXTERNAL FACTOR EVALUATION MATRIX

OPPORTUNITIES

41
 Key External Factors Weight Rating Weighted Score

O1 Rise of e-commerce and digital platforms 0.2 4 0.8

O2 Behavior of small businesses 0.1 3 0.3

O3 Integration of Smart Campus for schools 0.1 4 0.4

and universities

O4 Homogenous quality of service in the 0.1 3 0.3

industry

O5 Exchange rates 0.1 3 0.3

THREATS

Key External Factors Weight Rating Weighted Score

T1 Implementation of Data Protection & 0.05 3 0.15

Intellectual Property Law

T2 Online carbon footprint 0.15 1 0.15

T3 Gradual decline of workforce due to the 0.05 2 0.1

pandemic

T4 Penetration of freelancers in the market 0.15 3 0.45

TOTAL 1.00 2.95

INTERNAL FACTOR EVALUATION MATRIX

STRENGTHS

Key Internal Factors Weight Rating Weighted Score

S1 Only service provider in Asia that is 0.1 4 0.4

recognized by Webflow

S2 Adaptable to international markets 0.08 4 0.32

S3 Fosters a healthy working environment for 0.08 4 0.32

staff and employees

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S4 Strong relationship with stakeholders 0.09 3 0.27

S5 Secured local and international 0.09 3 0.27

partnerships

S6 Detailed routine check-ups and quarterly 0.1 4 0.4

strategic assessments

WEAKNESSES

Key Internal Factors Weight Rating Weighted Score

W1 Lack of branding exposure and strategies 0.1 1 0.1

W2 Limited workforce and number of 0.1 1 0.1

employees

W3 No definite sales and marketing planning 0.09 1 0.09

W4 Lack of expertise in general and 0.08 2 0.16

administrative functions

W5 Newcomer in the industry 0.09 2 0.18

TOTAL 1.00 2.61

C. Key Strategic Issues

To provide a more detailed analysis on Webworx's key strategic issues, the
company's current problems are reiterated and further explained below:

1. Inexpensive substitutes
Freelancers are one of the company's threatening substitutes because their lowly
priced services pull market prices downwards. Because of this, consumers most often
think that website development companies like Webworx are overpriced. This
consequently causes clients to either negotiate and demand for lower prices, or opt for a
freelancer's services instead.

2. Limited working capacity

Webworx's team is composed of only eight employees. As such, there is a limited
amount of projects that the company can simultaneously take on. This puts them at a
great disadvantage because they are forced to turn down offers, adversely affecting their
company image. Moreover, their limited working capacity hampers the company from
realizing more profits—another problem that the company must address.

3. Insufficient revenue-generating activities to cover expenses

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 As seen in the company's 2020 financial statements (Annex A), Webworx had a
service revenue of Php1,185,138; however, their costs of service amounted to a
whopping Php1,009,292 which consisted of only the employees' salaries and wages, along
with contributions to SSS, Philhealth, and HDMF. In addition, the company also incurred
operating and administrative expenses that amounted to Php530,616. In effect, this left
the company with a net loss of Php 354,770. Based on this analysis, it can be seen that
the company does not generate enough revenue to cover its cost of service and operating
and administrative expenses.

4. Outsourcing leads to lack of involvement in organizational concerns

Though outsourcing may sometimes be more cost-efficient for the company,
continuous reliance on outsourcing professionals and materials needed for the company's
operations may hinder Webworx from having a smooth and efficient workflow as the
company becomes less hands-on in handling organizational concerns. With this, the
company may easily and consequently lose track of its goals and objectives which may
eventually lead to more problems associated with lack of transparency and partial loss of
control. If trouble arises from outsourcing, it may be difficult for Webworx to resolve
these issues due to the tedious process of contacting those involved. Furthermore, aside
from incurring additional costs, the company is prone to a reduction in quality control.
Since outsourced employees are more motivated by profit as compared to internal
employees who are driven by passion and service, their outputs may lack the standard
and quality that clients expect. It is also important to note that the values and the culture
ingrained in the company and its constituents may not necessarily be the same as those
that are upheld by outsourced employees which may thus affect their work and
performance.
V. SWOT/TOWS Matrix
A. Description of the Strategy Alternatives (SWOT/TOWS)
The table below presents the summary of the strategy alternatives proposed by the
group. Additionally, the following paragraphs will show a detailed description of each strategy
alternative.

Internal Strengths Internal Weaknesses

External Opportunities S-O Strategies W-O Strategies

S1.S5-O3.O4. Has credibility
to conduct webinars,
seminars, and training
programs
S2.S5-O2. Use international
connections to work on more
projects
S4.S5-O4. Leverage strong
stakeholder relationships to
W1-O1.O4 Focus on quality
to support high prices of
services among competitors
W2-O3. Create internship
programs to increase
workforce
W5-O1.O2. Work on
expanding the company's
portfolio to make up for the

44
 stand out in the industry and negative perception of clients
promote expansion on start-up companies
S2.S4-O1.O2. Take advantage
of the new normal by
working on more website
projects
S4-O5. Maximize
opportunities from exchange
rates to increase profits

External Threats S-T Strategies W-T Strategies

S6-T1.T3. Maximize strategic
assessments to prepare for
new laws
S4.S5-T4. Maximize local and
international connections to
advance against competitors
S5-T2. Work with partners on
reducing online carbon
footprint
W2.W3.W4-T3. Reinvent the
organization and augment
manpower
W3-T4. Improve sales and
marketing to compete with
new entrants and increase
market share
W5-T1.T3.T4. Be updated
with the present news and
issues to provide knowledge
and to prepare for
unexpected challenges as a
new company

Strength-Opportunities Strategies
1. Has credibility to conduct webinars, seminars, and training programs
In line with Webworx's mission to engage with the community, the company may
consider holding more webinars, seminars, and training programs that will not only allow
them to educate and hone the skills of young technopreneurs but also scout potential
interns, freelancers, partners, or employees that may help the company grow towards
achieving its vision—that is to be a prime web agency in Asia.

2. Use international connections to work on more projects

Given Webworx's international partnerships with Webflow, as well as Australian
and American agencies, the company may use these to its advantage by expanding the
scope of their market to these countries. Through this, Webworx will be able to
strengthen its relationships with international partners and boost company performance.

3. Leverage strong stakeholder relationships to stand out in the industry and

promote expansion

45
 Webworx prides itself on having solid foundations in its stakeholder relationships
locally and internationally. This strength could be used to their advantage in becoming
prominent in the industry. Since the website development sector mostly offers
homogeneous services, Webworx can maximize their reliable forms of partnerships to
venture to new markets and extend their reach by expanding geographically. In addition,
the trust from its stakeholders could help boost the company’s name recognition to more
prospective investors and clients alike.

4. Take advantage of the new normal by working on more website projects

Now more than ever, people spend most of their time on websites, social media,
and the internet. As such, Webworx must focus on creating websites that are accessible,
useful, and user-friendly that may or may not address concerns related to the pandemic.
Aside from building corporate social responsibility initiatives, these websites may be
utilized as a marketing strategy for the company to reach a wider audience and gain better
publicity. With this, they could focus its advertising and marketing efforts towards a
specific target market. As small and medium businesses gradually expand their operations
online, Webworx may aim to help these businesses expand their online presence through
effective website design that fit their needs and are aligned with their company image.

5. Maximize opportunities from exchange rates to increase profits

Since fluctuations in the exchange rate may be highly unpredictable, Webworx can
make use of this opportunity to maximize the equivalent value of their services. To
elaborate, Webworx can include in their contracts with international clients that they may
choose to delay receipt of payment when exchange rates are favourable to the company.
Alternatively, Webworx may choose to include renegotiations in their contracts if
currency fluctuations go over a +/-5% change. Through this way, Webworx will be able to
maximize their profit margins and potentially earn foreign exchange gains for their
services.

Strength-Threats Strategies
1. Maximize strategic assessments to prepare for new laws
To prepare for the possibility of new laws emerging internationally and locally,
Webworx may maximize their strategic assessments. Conducting these assessments will
enable Webworx to assess, monitor, and formulate strategies in response to new policies
or issues that may arise in the local and/or global setting.

2. Maximize local and international connections to advance against competitors

Similar-sized companies which offer similar services to similar sets of audiences
can be a barrier to Webworx in accumulating projects. Given their strength in having solid
partnerships which they have formed through time and good service, this could serve as
a great support to their initiatives in gaining more clients as compared to close
competitors. With the edge of Webworx on having established connections with local and
international players, they can excel in the industry. As a team that is trusted by multiple

46
firms, they could provide services of greater value and thus be the better choice for
clients.

3. Work with partners on reducing online carbon footprint

Since the digital industry requires electrical energy to run, there is a need to shift
to an efficient method of doing business. Investing in renewable energy could be one of
the many options but with the current status of Webworx, this initiative is still far-fetched.
Therefore, with their strong relationship with other organizations, they could come
together in achieving a greener online community for all. It is believed that starting small
could eventually make a big difference which can also contribute to Webworx’s corporate
social responsibility initiatives and sustainability agenda. By collaborating with people and
enterprises that have the same stance, not only could the company positively impact the
environment, but they could also be perceived as a good business partner.

Weaknesses-Opportunities Strategies
1. Focus on quality to support high prices of services among competitors
In order to justify their high prices, Webworx should focus on increasing the
quality and highlighting the value of their services internationally and locally. Citing the
Managing Director’s own perception on quality, it was stated that measuring the
improvement in the quality of their services can be difficult to quantify. Hence, possible
quality features that the company may focus on are the business, user, and functional
requirements. These are based on an article by the Usability.gov (n.d.) which detailed the
definition for each website requirement. It stated that targeting to achieve business
requirements helps address the client company’s objectives. While user requirements
pertain to the tasks that users aim to accomplish in a website. Lastly, the functional aspect
refers to the performance of the product itself which is subject for further development.

By successfully sharing the company’s endeavor in ensuring quality works to

clients, more people can realize the value in Webworx’s services. This could eventually
provide the company the leverage to set prices aligned with their services and increase
their profitability.

2. Create internship programs to increase workforce

Since the company may sometimes be short-handed and is therefore unable to
handle the workload, it is recommended to increase workforce through internship
programs. These internships will provide students with opportunities to grow and learn
more about the industry. This will also train them to become more responsible and will
give them the chance to hone and develop their hard and soft skills. In line with this, this
will simultaneously enable the company to increase its workforce and subsequently
accept more business offers and projects.

3. Work on expanding the company's portfolio to make up for the negative

perception of clients on start-up companies

47
 Given that clients can be hesitant at times to acquire services from start-up
companies as they are unsure of the quality of their services, Webworx may focus on
building its portfolio by working on more internal and external projects that will help the
company grow its brand and reputation in the industry. Exhibiting quality work and
expanding the brand's portfolio will boost Webworx's market position and thus counter
consumers' negative apprehensions against newcomers in the industry.

Weaknesses-Threats Strategies
1. Reinvent the organization and augment manpower
To address the company's limited working capacity, they may choose to reinvent
the organization and augment manpower. By doing so, Webworx may hire skilled
managerial employees to manage their outsourced activities and partners so that the
team is able to focus and cater to the needs and wants of their clients. Moreover, this is
to ensure that with the increasing outsourced activities and partners they would be able
to manage them effectively. In addition, it is important to augment manpower as it
addresses the weakness of the company in lacking experience and expertise in handling
general and administrative functions. Also, with the addition of these employees,
Webworx may be able to learn vital aspects that could provide the management a better
grasp and understanding which could lead to a smoother transition should they decide to
have their own general and administrative departments.

2. Improve sales and marketing to compete with new entrants and increase market
share
The improvement of sales and marketing plays a critical role in any business, and
Webworx must place their attention to these so as not to get left behind in the market.
By promoting the company’s brand, potential clients would know what they are capable
of offering which could drive them to work with Webworx. This could also raise the
chances of completing contracts and taking on more projects. Furthemore, effective
implementation of these essential activities can overall improve the company’s revenue
generation and enable them to compete with new entrants and increase their market
share.

3. Be updated with the present news and issues to prepare for unexpected
challenges as a new company
Though continuous research and development is already part of the company's
current strategies, it must be reiterated that it is of great importance for Webworx to stay
updated not only of new trends and consumer preferences but also of political, economic,
technological, legal, environmental changes, news, and issues that may either provide
new business opportunities or pose harmful threats to the company. This is highly crucial
and significant so that Webworx would be able to make a move before its competitors
which may in turn give the company great competitive advantage.

48
 B. IE Matrix
The Internal-External (IE) Matrix is a strategic management tool that is utilized in
analyzing the working conditions and strategic position of a business. Additionally, the IE
matrix is based on the weighted scores of the EFE and IFE matrix which are positioned on
the y-axis and x-axis respectively (MBA Knowledge Base, 2020). The cell in which the point
of the two values intersect would lead to the recommended strategy to be considered by
the business. These strategies are either to grow and build, to hold and maintain, or to
harvest and divest (Maxi-Pedia, n.d.).

With the scores obtained from the EFE and IFE which are 2.95 and 2.61
respectively, the following IE Matrix was created:

The point where both scores intersect landed in Cell V which suggests the hold
and maintain strategy. This strategy focuses on the market penetration and product
development which are the most commonly used strategy for the division. Therefore, the
group formulated recommendations and proposed a strategic plan that is in accordance
with the hold and maintain strategy.

VI. Final Recommendation

A. Proposed strategic plan
Based on the observed key strategic issues, results from the SWOT and IE Matrix,
the company may consider strengthening their relationship with their stakeholders and
partners, recruiting skilled managerial employees, and maximizing opportunities that
arise from different external factors. Additionally, the IE Matrix suggests for the company
to use the hold and maintain strategy which is a strategy that focuses on market

49
penetration and product development that could possibly be achieved by the
aforementioned courses of actions. Nevertheless, Webworx should overcome their
weaknesses in their lack of sales and marketing plans, lack of effective branding
strategies, and other concerns that were mentioned in the SWOT analysis to enable better
results in their financial standing and market position.

Based on the interviews conducted and the analysis of their value chain, most of
Webworx's primary and secondary operations are outsourced. The group surmised that
by continuing to have these vital activities outsourced, this may pose a threat to the
company as managing these departments is not part of the members’ line of work. The
lack of control may compromise their overall financial health and reputation in the case
that certain activities are not performed properly and effectively. Furthermore, it is
believed that in order for Webwork to successfully achieve the goals of enhancing
profitability and expanding brand awareness, the management must be hands-on with
the critical activities that involve their operational functionalities. However, upon
identifying the reasons for having such a decision, it is found that the company finds it
more cost-efficient to partner with external parties than have their own permanent
employees to conduct these activities. Thus, if Webworx believes that they could
minimize costs by outsourcing instead of having in-house departments, it is suggested
that they have their own employee/s who would supervise and ensure that outsourced
personnel are performing according to their standards. This is also to help the team
formulate strategies that resemble and meet the company’s vision, mission, and core
values since they are well-connected with the outsourced departments through their own
manager/s.

One of the pertinent issues that inhibit the business from taking on more projects
is the lack of members who can perform the job. Given that Webworx is still considered
to be a small company with a limited workforce, it is pertinent for them to have more
minds and hands that could cater and serve the needs of more clients. By directing their
time and attention to offering internship opportunities to talented students, they could
potentially hire these individuals to become part of their competitive team. Guiding
young talents could encourage the company to instill their core principles early and build
a strong organizational culture. Therefore, upon examining their current internal and
external situation and taking their future plans into consideration, it is recommended that
internship programs may be developed to attract interested and capable students to
experience the working environment that Webworx can offer. By gradually taking this
step towards increasing their workforce without being pressured to have full-time
employees, they could check first its viability if it could effectively provide them more
means to increase their revenues by taking on more website projects.

The website development industry has seen promising growth in the Philippines
as E-commerce sales and businesses transition to the online platform to operate. As
Webworx continues to penetrate the local and international market to create demand, it
is important to implement a strong sales and marketing strategy to establish their market

50
 presence. Integrating sales and marketing will allow Webworx to stay ahead of the
competition by having a clear inside-out perspective to understand their target market
from the client’s point of view. A clear mapping of the client’s journey is critical for
Webworx as they adopt an account-based approach to refine their strategy for growth.

Such that Webworx continuously taps different segments of clients, the company
can expand their services and operations to small and medium businesses to grow a client
base within that segment as these businesses are constantly bombarded with their selling
tactics through the utilization of digital marketing. Improving sales and marketing will
allow Webworx to be knowledgeable of the pain points and goals of their prospects and
clients, which may help them curate their services upon knowing their market’s personas.
With a clear understanding of how small and medium businesses are operating, Webworx
may conduct market penetration by revamping their marketing efforts, grow business
collaborations, and offer pricing opportunities to accumulate sales on their services on
the existing market. Through these, Webworx may secure new potential customers in
communicating the positive client experience that will give prospects a long-term
business boost. However, it is advised for the company to hire their own marketing team
when they are financially capable of doing so or if management believes that the benefits
they would derive from having their own marketing team will significantly improve their
market position and financial status despite the additional costs they will incur.

With all of these in mind, the group formulated a more detailed strategic business
action plan adapted from the Smartsheet Business Action Plan Template. This includes
specific tasks to be taken, parties that must initiate such tasks, a proposed time frame,
different factors to consider, potential challenges that may arise, and the ideally desired
outcomes. As such, the goals of the proposed business plan are to create strategies that
enhance profitability, increase market share, and uphold the company's mission, vision,
and core values; to formulate detailed and specific tasks in order to address the
company's key strategic issues; and to advance control on the vital areas of operations
specifically Webworx's outsourced activities, limited workforce, and lack of marketing
plans.

Proposed Strategic Action Plan adapted from Smartsheet Business Action Plan Template:
Tasks to be Party Proposed Factors to Potential Desired
Taken Responsible Time Consider Challenges Outcomes
Frame

A. Hire skilled Managing 3 months -Sufficient time -Building a -Accepted

managerial Director in where they good employer applicants
employees to collaboration could focus on brand must be able
supervise with properly -Finding the to help the
outsourced outsourced screening right team in
activities and HR experienced candidates creating a

51
partners and skilled -Hiring within more
managers who the given time connected
are capable of frame and efficient
understanding -Ensuring new conduct of
the company’s recruits will outsourced
operations and perform the services
adapting to its work properly -Managers
culture in an online must be able
-Periodic setup and may to ensure that
salaries of adjust if the the company
managers company remains cost-
decides to efficient with
conduct a face- their decisions
to-face office regarding
setup outsourcing

B. Open Managing 6 months -Whether they -Mitigating the -Prepare a

internship Director in would focus on spread of structured
opportunities collaboration college COVID-19 if internship
with students only internships are program
outsourced or accept held in a face- -Instill
HR voluntary/part- to-face setting company
time employees -Incurring mission,
-Whether to additional costs vision, and
have the if internships core values in
internships are paid accepted
done from -Having applicants
home or face- conflicts with -For interns to
to-face the internship gain an
-Whether to schedule and understanding
have paid students' class of the inner
internships or schedules workings of
voluntary the company
internships -Potentially
-Preferred hire interns as
courses that part-time/full-
are applicable time
to the employees
internship -Equally divide
-Schedule of work; to not
offering overwhelm
internships and interns with
the timeline of excessive

52
 the internship workload
program itself -Take on more
-Protocols and projects with
requirements the increased
for school- labor force,
required thus,
internships increasing
revenues

C. Devise a Hire own 5-12 -Data and -Deterring -Increased

marketing marketing months statistics on the business from market share
plan to team for target market acquiring of Webworx,
penetrate Webworx -Fast-changing services especially in
the target consumer because of high the small and
market (small trands and cost from medium
and medium preferences outsourcing enterprises
businesses) -Company's and derivative -Drive more
financial plans sales from
capability to integration new clients
hire its own -Having in-built and existing
marketing team inflexibilities partnerships
-Long-term brought by the -Established
vision and great internal and brand identity
communication external of Webworx
advantages manifestations as a leverage
(e.g. campaign of a system to bring new
and KPIs) operating tactics and
against the clients
changes
scrutinized by
the marketing
plan
-Identifying
factors that
could hinder
market
penetration

B. Proposed competitive advantages

Due to the current conditions, there is a limited chance to physically visit and
observe the company which could aid in the understanding of Webworx’s operations and
how they distinguish themselves in general. Therefore, the competitive advantages that

53
would be discussed are principally based on how the Managing Director perceives the
company and how the group analyzes its internal facets in comparison to their
competitors.

1. Small, but highly connected and skilled workforce

Webworx has a team of eight skilled workers that are able to put together high
quality projects for international and local clients. Although they are small in number,
they are able to coordinate quickly and efficiently, exchange information and knowledge,
and provide support for one another. In addition, it is easier for small teams to be united
and have good relationships with each other as opposed to large teams. This will allow
them to concentrate in heeding to their clients needs and wants and produce high quality
websites which can rival their competitors.

2. Attractive working environment due to having several benefits for employees and
staff
Aside from having several financial benefits which is a given in certain companies,
what is to be highlighted is the psychological support that the management provides for
its employees. They see the value of understanding the conditions of their members
which is believed to be important especially with the changes brought upon by the
pandemic. This serves to be a competitive advantage as employees will be encouraged to
stay with the company that cares for their well-being and goes beyond the conventional
employer-employee relationship.

3. Strong drive for promoting techno-entrepreneurship

As a technology-intensive company, Webworx instills the significance of
independence and self-growth while working in the company. The management ensures
to strengthen not only the technical skills of their employees but also their
entrepreneurial knowledge so as to help sustain the company. Webworx facilitates
prosperity among its members by urging them to look at opportunities in a different light
to help in product development or solution generation. Techno-entrepreneurship or
Technopreneurship in other literatures is a combination of having an entrepreneurial
mindset and technological dexterity which can build confidence in the team and become
the company’s competitive advantage.

4. Quality work, built on the company’s vision, mission, and core values
As much as it is important to set standards in doing their work, Webworx knows
the value of going back to their core principles as a website development company. It can
be observed that in every undertaking that they do, they ensure that aligning the
company’s vision, mission, and core values becomes an essential part of their decision
making process. This is vital as this could help set the direction for Webworx’s strategies
to successfully achieve their organizational goals.

5. Webflow-certified

54
 As mentioned by the Managing Director, they are the only company in the
Philippines that has been recognized as a professional partner of Webflow. As a partner,
Webflow is able to increase the company’s publicity and recognition by recommending
them to their clients. The partnership also gives the company leverage and added brand
value which provides them competitive advantage.

6. Secured local and international partnerships

As a relatively new company, Webworx has the edge among other firms as they
have already established solid relationships with clients and partners in the local and
international markets. By being an active key player in both arenas, there are higher
opportunities for the company to take on more projects and increase their brand
exposure. This is a competitive advantage as this allows them to showcase their ability
and credibility to work with various stakeholders.

7. Updated with advancements in software technologies which lessens the need for
hardware and physical equipment
As mentioned previously, the team in Webworx consists of small, yet talented
employees who are well-versed in performing the technical tasks assigned to them. With
their knowledge and expertise on the evolving technology, they have the capability to
identify which trends in the digital world would help propel the company. Moreover,
having the advantage of working with advanced and cost-friendly partner firms could aid
the company maximize their resources while minimizing operational costs.

55
VII. Annex
A. The 2020 Financial Statements of Webworx Design Studio Inc. are as follows:

56
B. Group picture with Webworx's President and Chief Executive Officer, Mr.
Richard Prodigalidad, and Managing Director, Mr. Kelvier Canillo

57
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