SampleFullPaperforaBusinessPlanProposalLOKAL LOCA

De La Salle University
Ramon V. Del Rosario

College of Business
AY 2019-2020
LOKAL LOCA
A Business Plan
In partial fulfillment
of the course
In Practical Research 2
Submitted by:
Go, Cassandra Justine
Gonzales, Mary Mikanel
ABM 12-F
Submitted to:
Mr. Jose Rommel Era
TABLE OF CONTENTS
List of Figures………………………...….…………...……………………………...………….. 10
List of Tables……………..…………….…………...…………………………………………... 13
Executive Summary…......…………………………………....………………………………..... 18
Business Model Canvas.....…………………..………..………………….……...……………… 20
Chapter 1: The Management and Organization..…….………...…………………………...... 21
1.1 Company Name and Logo.…………...………………………………………..…….... 21
1.1.1 Company Name.………………………………………...………………………….. 21
1.1.2 Brand Name…………………………………………………………………………22
1.1.3 Company Logo…………..……………………………...…………………………... 22
1.1.4 Brand Logo……....……………………………………...…………………….…….. 24
1.2 Company’s Vision, Mission, and Objectives.……...…………………...………………………. 24
1.2.1 Vision.………………………………………...…………………………………….. 24
1.2.2 Mission.………………..………………………………...…………………..……… 25
1.2.3 Company Objectives.………………………………………...……………………... 27
1.2.3.1 Organizational Objectives.………………………………………...……… 27
1.2.3.2 Functional Objectives.………………………………………...………….. 28
1.3 Management Team.………………………………………...……………………..…………... 32
1.3.1 Roles and Responsibilities.………………………………………...…………….….. 34
1.3.2 Organizational Chart.………………………………………...……………………... 50
1.4 Compensation and Ownership…………………………..………...………………………….. 50
1.4.1 Ownership.………………………………………...………………………………...50
2
1.4.2 Capitalization………………………………………...……………………………... 53
1.4.3 Compensation………………………………………...……………………………. 53
1.5 Board of Directors/Advisory Council………………………………………...………………. 55
1.6 Infrastructure (External Management Support)………………………………………......…… 60
1.7 Contracts and Franchise Agreement ………………………………………...…….…………. 60
1.7.1 Employee Contract………………………………………...………………………... 60
1.7.2 Suppliers Contract………………………………………...………………………….71
1.7.3 Lease Contract………………………………………...……………………………. 72
Chapter 2: The Product……...………………………………………………………………...... 80
2.1 Purpose of the Product………..……………....…………………………………………….…80
2.1.1 Product Description.………………………………………...………………………80
2.1.2 Product Usages & Benefits………………………………………...……………….. 80
2.1.3 Reason for Choice of Product………………………………………...…………….. 81
2.2 Unique Features of the Product……………………………………………………………….. 82
2.2.1 Unique Features of Tala……………………………...……………………………... 82
2.2.2 Product Differentiation from Other Similar Products…………………………....…..84
2.3 Stage Development………………………………...………………………………………..... 86
2.3.1 Idea Generation Development………………………………………...……………. 86
2.4 Related Products and Spin-Offs………………………………………...……………………..88
2.4.1 Purpose of Proposed Related Products and Spin-Offs………………………………88
2.4.2 List of Proposed Related Products and Spin-Offs……………………..…………….89
2.5 Future Research and Development………………………………………..…………………..93
2.5.1 Future Research and Development for Tala ……………………………………….. 93
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2.5.2 Future Research and Development for Proposed Related Products and Spin-Offs..... 94
2.6 Trademarks, Patents, Copyrights, Licenses, and Royalties…………………………………...... 94
2.6.1 Trademarks……….....…………………………………...…………………………...94
2.6.2 Patents……………………………………………...………………………………..96
2.7 Government Approvals……….…………………………………...…………………………..97
2.8 Product Limitations………………………………………...…………………………......…..100
2.9 Product Liability………………………………………...…………………………………….101
2.10 Production.…………………………….…………...……………………...………………...103
2.10.1 Value Creation for the Customer………………………………………...………....103
2.10.2 The Input-Process-Output Model (IPO Model) for Lokal Loca.…………………..103
2.10.2.1 The IPO Model for Value Creation……………..………………………..103
2.10.2.2 Identification of Desired Outcomes for an Effective Production
Strategy…………...…………………………...………………………….104
2.10.2.3 Identification of Production Inputs to Achieve Desired Outcomes……...1
2.10.2.3.1 The 4Ms of Production Inputs………………………………....105
2.10.2.3.1.1 Manpower (Labor Requirements).....................................105
2.10.2.3.1.2 Materials (Raw Materials)...................................................106
2.10.2.3.1.3 Machineries (Machines, Tools, & Equipment)...............108
2.10.2.3.1.4 Methods................................................................................109
2.10.2.4 The Input-Process-Output Model for Tala......................................................111
2.10.3 Production Process Flowchart............................................................................................117
2.10.4 Production Cost.…………………………….…………...……………..…………118
2.10.4.1 Production Cost per Unit ……………………………………………… 118
2.10.4.2 Percentage (%) Allocation for Lost Items ………………………………..119
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2.11 Facilities.…………………………….…………...…………………...……………………..119
2.11.1 Plant Location.…………………………….…………...………………………….119
2.11.2 Building Facilities and Utilities.…………………………….…………...…..……...120
2.11.3 Plant Layout.…………………………….…………...……………………………121
2.12 Supply Chain Management.…..……….…………...………………………………………...122
2.12.1 Identification of Key Suppliers.…………………………….…………...…………122
2.12.1.1 Primary Suppliers.…………………………….…………...……………..122
2.12.1.2 Secondary Suppliers.…………………………….…………...…………124
2.12.2 Supplier Specifications.…………………………….…………...……….……....... 125
2.12.3 Inventory Management.…………………………….…………...………………....126
2.13 Environmental Factors.…………………………….…………...……………………...…....126
2.13.1 Positive Effects.…………………………….…………...…………………………126
2.13.2 Negative Effects.…………………………….…………...……………...………...127
Chapter 3: The Marketing Plan.…………………………….…………...……………………..128
3.1 Macro-Environmental Analysis (PESTLE Analysis)………………....……………………...... 128
3.2 Industry Profile…………....……………………….…………...……………………………..144
3.2.1 Current Size……………...……………….…………...……………....…………….144
3.2.2 Growth Potential…………………………….…………...…………...…………….146
3.2.3 Geographic Locations…………………………….…………...…………....……….147
3.2.4 Industry Trends…………………………….…………...…………………...…….. 147
3.2.5 Seasonality Factors…………………………….…………...……………………….148
3.2.6 Profit/Sales Characteristics…………………………….…………...…………....….148
3.2.7 Industry Distribution Channels…………………………….……………….......…...150
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3.2.8 Basis of Competition…………………………….…………...………………....…...152
3.3 Competition Profile…………………..…………………….…………...…………...………..153
3.3.1 Direct Competitors…………………………….…………...……………...………..153
3.3.2 Indirect Competitors…………………………….…………...……………………...157
3.4 Customer Profile…………………………….…………...………………………………........158
3.4.1 Demographic Profile…………………………….…………...……………………..158
3.4.2 Psychographic Profile…………………………….…………...…………………… 158
3.4.3 Geographic Profile…………………………….…………...……………...………..159
3.4.4 Behavioral Profile…………………………….…………...……………………….. 160
3.5 Target Market Profile…………………………….…………...…………………………….....161
3.5.1 Primary Target Market Profile…………………………….…………...……………161
3.5.2 Secondary Target Market Profile…………………………….…………...…………162
3.6 Pricing Profile…………………………….…………...……………………………………....162
3.7 Gross Margin on Products/Services…………………………….…………...………………...164
3.8 Break-Even Analysis…………………………….…………...……………………………….167
3.8.1 Potential Demand Analysis…………………………….…………...……………….168
3.8.2 Sales Forecast with Assumptions…………………………….…………...…………170
3.9 Market Penetration…………………………….…………...……………………………...….172
3.9.1 Distribution Channels…………………………….…………...…………………….173
3.9.2 Sales Representatives…………………………….…………...……………………..175
3.9.3 Direct-Sales Force…………………………….…………...………………………...175
3.9.4 Direct Mail/Telemarketing………………………………………...………………..176
3.9.5 Corporate Giveaways…………………………….…………...…………………….177
3.10 Advertising and Promotion…………………………….…………...………………………..178
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3.10.1 Branding Bible………………………….……………….…………...…………….178
3.10.2 Online Advertising Strategy…………………………….…………...…………….180
3.10.2.1 Social Media Accounts…………………………….…………...………..180
3.10.3 Offline Advertising Strategy…………………………….…………...……………187
3.10.3.1 Tradeshows/Bazaars…………………………….…………...……….....187
3.10.3.2 Advertising Materials/Posters…………………………….……………..188
3.11 Packaging and Labeling…………………………….…………...…………………………...190
3.12 Service and Warranties…………………………….…………...…………………………….193
3.13 Trade Shows…………………………….…………...………………………...…………….194
3.14 Future Markets…………………………….…………...………………………………...….197
3.15 Public Relations..………………………….…………...…………………………………….197
Chapter 4: The Operating and Control System…………..………….…………...……….…...199
4.1 Administrative Policies, Procedures, and Controls…………………………….……………...199
4.1.1 Receiving Orders…………………………….…………...…………………………199
4.1.2 Billing the Customers…………………………….…………...…………………….200
4.1.3 Paying the Suppliers…………………………….…………...……………………...200
4.1.4 Collecting the Accounts Receivable…………………………….…………...……...201
4.1.5 Reporting to Management…………………………….…………...………………...201
4.1.6 Staff Development…………………………….…………...………………………..201
4.1.7 Inventory Control…………………………….…………...………………………202
4.1.8 Handling Warranties and Returns…………………………….…………...………...202
4.1.9 Monitoring the Company Budgets………………………….…………...……….. 203
4.1.10 Security Systems…………………………….…………...………………………...204
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4.2 Documents and Paper Flow…………………………….…………...………………………...204
4.3 Planning Chart…………………………….…………...………………………………...…...205
4.3.1 Product/Service Development…………………………….…………...………....205
4.3.2 Manufacturing…………………………….…………...………………………….207
4.3.3 Financial Requirements…………………………….…………...…………………..209
4.3.4 Marketing Flowchart…………………………….…………...……………………...210
4.3.5 Market Penetration…………………………….…………...……………………….210
4.3.6 Management and Infrastructure…………………………….…………...…………..211
4.4 Risk Analysis…………………………….…………...……………………………………….214
4.4.1 Industry Analysis (Porter’s 5 Forces of Competition)……………………………....214
4.4.1.1 Threat of Substitutes…………………………….…………...……….…...214
4.4.1.2 Threat of New Entrants…………………………….…………...………....215
4.4.1.3 Rivalry Among Existing Firms……………………………………...…….217
4.4.1.4 Bargaining Power of Suppliers…………………………….……………...218
4.4.1.5 Bargaining Power of Buyers…………………………….…………...……219
4.4.2 SWOT Analysis…………………………….…………...…………………………..220
Chapter 5: The Financial Plan…………..…………………….…….…………...……..……...225
5.1 Sales Projections…………………………….…………...…………………………………....225
5.2 Income Projections…………………………….…………...…………………………..…….226
5.3 Cash Requirements…………………………….…………...…………………………...……227
5.4 Sources of Financing…………………………….…………......……………………………..227
5.5 Attached Financial Projections…………………………….…………...……………………..228
5.5.1 Income Statement for Two Years…………………………….…………...………....228
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5.5.2 Balance Sheet for Two Years…………………………….…………...……………..229
5.5.3 Ratio Analysis…………………………….…………...…………………………….236
Appendices……………..…………….………...........…………………………………………....239
Appendices……………..……………………...........…………………………………………....266
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LIST OF FIGURES
Business Model Canvas
Figure A (Business Model Canvas)……………………….............................. 20
CHAPTER I: The Management and Organization
Figure 1.1.3 (Company Logo)………………………................................. 23
Figure 1.1.4 (Brand Logo)………………………....................................... 24
Figure 1.3.2 (Organizational Chart)………………………....................... 50
CHAPTER II: The Product
Figure 2.2.1A (Phone Case) ……………………………..………………...83
Figure 2.2.1B (Black Wallet Phone Case) ………………………..………...83
Figure 2.2.1C (Card Slot Flap Phone Case) ……………………..………....83
Figure 2.2.1D (Woven Fabric) ……………………………..………..….....84
Figure 2.2.2A (Yakan Phone Case) …………………………..…..………..84
Figure 2.2.2B (Lazada Happon Phone Case) …………………...…..……...85
Figure 2.2.2C (Shopee Leather Wallet with Metal Ring Case for iPhone 6-8/
6-8+/ X/ XS/ XS Max) …………………………………………...……...86
Figure 2.3.1 (Idea Generation Development)……………………………...88
Figure 2.4.2A (T’nalak Cloth) ……………………………..………….…...89
Figure 2.4.2B (Card Holder) ………………….……………..……..……...90
Figure 2.4.2C (Multifunctional Phone Case) ………………...……..……...90
Figure 2.4.2D (Phone Strap) ……………………………..……………......90
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Figure 2.4.2E (Phone wristlet) …………………………...……..…..……...91
Figure2.4.2F (Felt Eyewear Cases) ………………………..………..……...91
Figure2.4.2G (Hard Shell Eyewear Cases) ………………………………...92
Figure2.4.2H (Popsocket) ……………………………………...…..……...92
Figure 2.6.1.2 (Company Logo).. …………....…………………………..... 96
Figure 2.6.1.4 (Brand Logo)……………………………………………….96
Figure 2.10.2.1 (The IPO Model for Value Creation)……………………...104
Figure 2.10.3 (Production Process Flowchart) …………………………...117
Figure 2.11.3 (Plant Layout) ……………………………..…………….....121
CHAPTER III: The Marketing Plan
Figure 3.1A (GDP growth rate)…………………………………..……….132
Figure 3.1B (Inflation rate)…………………….………………..………...133
Figure 3.2.1.1 (Domestic Retail Expenditure in
the Philippines 2018 for Luxury Consumer Electronics)…………………145
Figure 3.2.1.2 (Chart of Domestic vs. International Expenditure in the
Philippines 2018 for Luxury Consumer Electronics)……………..………145
Figure 3.2.7 (Distribution Channel) ………………………………………157
Figure 3.9.1.1 (Distribution Channels for the company) ……..……….......173
Figure 3.10.1A (2.13cm x 3cm logo) …………………………..…..……...178
Figure 3.10.1B (2.79cm x 3.94cm logo) ……………………………....…..178
Figure 3.10. 1C (4.14cm x 5.82cm logo) ………………………..…….…...179
Figure 3.10.1D (Arima Madurai Extra Bold)……………………………...179
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Figure 3.10.1E (Company Color Palette) ………………………..…...…...180
Figure 3.10.1F (Instagram Interface) ……………………………………...181
Figure 3.10.1G (Instagram Story Banner) ……………………..……...........182
Figure 3.10.1H (Tone of Branding)………………………..……….…..….183
Figure 3.10.1I (Bianca Gan) ……………………………..…………...…...185
Figure 3.10.1J (Justricia) …………………………….……………..……...186
Figure 3.10.1K (Ella and China Gatchalian) ………………………….…...186
Figure 3.10.1L (Sample Banners) ………………………………….……...188
CHAPTER IV: The Operating and Control System
Figure 4.3.1A……………………………..……...212
Figure 4.3.1B……………………………..……...212
Figure 4.3.1C ……………………………..……...212
Figure 4.3.1D……………………………..……...212
Figure 4.3.1E……………………………..……...212
Figure 4.3.1F……………………………..……...212
Figure 4.3.4 (Marketing Flowchart) ……………………………..……...210
Figure 4.3.6 (Organizational Chart) ……………………………..……...212
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LIST OF TABLES
CHAPTER I: The Management and Organization
Table 1.2.2 (SMART Analysis)………………………………….……….... 25
Table 1.2.3.2 (Functional Objectives)……………………………..………. 29
Table 1.3.1 (Job Descriptions and Responsibilties)……..…………………. 34
Table 1.4.1 (Business Owner’s Information)……………...………………. 52
Table 1.4.2 (Business Owner’s Share) .………………………...…………. 53
Table 1.4.3.1 (Business Owner’s Percentage Share in Profits)...……..……. 54
Table 1.4.3.2 (Employee’s Compensation)...………………………...……. 54
Table 1.5 (Advisory Council Members)...……………………….…...……. 56
CHAPTER II: The Product
Table 2.2.1 (Unique Product Feature)………….………………………......82
Table 2.2.2 (Product Differentiation) ………….………………………......84
Table 2.4.2 (List of Proposed Related Products and Spin-Offs) …............... 92
Table 2.10.2.2 (Identification of Desired Outcomes for an Effective
Production Strategy) ………………………..…………...............................104
Table 2.10.2.3.1.1 (Manpower (Labor Requirements)) …...............................105
Table 2.10.2.3.1.2 (Materials (Raw Materials))...................................................106
Table 2.10.2.3.1.3 (Machineries (Machines, Tools, & Equipment)…............108
Table 2.10.2.3.1.4 (Methods) …………………...............................................110
Table 2.10.2.4.1 (Procurement) …………………...........................................112
13
Table 2.10.2.4.2 (Assembly) ………………….................................................114
Table 2.10.2.4.3 (Logistics) …………………..................................................115
Table 2.10.2.4.4 (Packaging and Labelling) ……………................................117
Table 2.10.4.1 (Production Cost per Unit) …………......................................118
Table 2.10.4.2 (Percentage (%) Allocation for Lost Item) …….....................119
Table 2.11.2 (Building Facilities and Utilities) ……………............................121
Table 2.12.1.1 (Primary Suppliers) ………………….....................................123
Table 2.12.1.2 (Secondary Suppliers) …………………….............................125
CHAPTER III: The Marketing Plan
Table 3.2.8 (Basis of Competition)………………………..............................153
Table 3.3.1A (Marketing Mix for Competition) ………..…..………....…...154
Table 3.3.1B (Implication of Hinangan Yakan to Lokal Loca) ………..…..155
Table 3.3.1C (Marketing Mix of Lokal Loca) ………………….….….…...156
Table 3.3.1D (Strategy Formulation for Lokal Loca) ………..…..….…......157
Table 3.4.1 (Geographic Profile) ………..………………………………...158
Table 3.4.3 (Geographic Profile) ………..…..……………………….…...159
Table 3.5.1 (Demographics and Target Market Table) ………..…..……...161
Table 3.5.2 (Secondary Target Market Profile) ………………..…..……...162
Table 3.6A (Variables Needed in Computing the Selling Price of Tala) …...163
Table 3.6B (Computation for the Profit per Product of Tala) ………..…....164
Table 3.6C (Computation for the Selling Price of Tala) ………..…..……...164
Table 3.7A (Direct Cost per Unit for Tala) ………..…..……………..…...165
Table 3.7B (Mark-up Rate for Tala) ………………………………………166
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Table 3.7C (Gross Margin for Tala) ………..…..………………………...166
Table 3.8A (Variables needed for computing the Break-Even for Tala) …...167
Table 3.8B (Break-Even Analysis for Tala) ………..…..………...................167
Table 3.8.1.1A (Formula for Potential Demand or Market Potential using
Chain Ratio Method) …………………………………………..…..……….…...169
Table 3.8.1.1B (Potential Demand or Market Potential Computation for
Lokal Loca) ………………………………………………..…………….……...169
Table 3.8.2A (Sales Forecast for the 1st year of Operations of Lokal Loca)
………………………………………………………………..…..……...171
Table 3.8.2B (Sales Forecast for the 2nd year of Operations of Lokal Loca)
………………………………………………………………..…..……...172
Table 3.9.1.2 (Logistics Strategy) ……………………………..………......174
Table 3.11A (Current Packaging and Labelling) …………………..……...190
Table 3.11B (Future Packaging and Labelling) …………………....……...192
Table 3.13 (Trade Shows) ……………………………..………………....196
CHAPTER IV: The Operating and Control System
Table 4.1.7A (Inventory Control Masterlist)………...…………................. 202
Table 4.1.7B (Daily Inventory Card) ……………………………...……...202
Table 4.3.1 (Product Development) ……………………………....……...205
Table 4.3.2 (Manufacturing) ………………………………….…..……...207
Table 4.3.3 (Financial Requirements) ……………………………..……...209
Table 4.3.5 (Market Penetration) ……………………………...…..……...211
Table 4.3.6 (Advisory Council) …………………………………....……...213
15
Table 4.4.1.1 (Threats of Substitutes) ……………………………..……...215
Table 4.4.1.2 (Threats of New Entrants) …………………………………216
Table 4.4.1.3 (Rivalry of Players) …………………………………………217
Table 4.4.1.4 (Bargaining Power of Suppliers) ……………..………..……218
Table 4.4.1.5 (Bargaining Power of Buyers) ………………………..…..…219
Table 4.4.2 (SWOT Analysis) …………….………………………….…...220
CHAPTER V: The Financial Plan
Table 5.1A (Lokal Loca Ltd. Yearly Sales Forecast for August 2020 and 2021)
……..……….…………..………….…………...……………...…….…...225
Table 5.1B (Sales Forecast for the 1st year of Operations of Lokal Loca)
…………..………….…………...…………………………..…………...225
Table 5.1C (Sales Forecast for the 2nd year of Operations of Lokal Loca)
…………..………….…………...…………………………..…………...225
Table 5.2 (Income Projections for Year-End August 2020 and 2021)
…………..………….…………...…………………………..…………...226
Table 5.3 (Cash Requirements - Start-up Expenses……...................……...227
Table 5.4 (Sources of Financing) …………..………………..…………...228
Table 5.5.1A (Lokal Loca Ltd. Income Statement for the Year Ended August
31, 2020) )…………………..……………………………………...…… 228
Table 5.5.1B (Lokal Loca Ltd. Income Statement for the Year Ended August
31, 2021) )…………………..……………………………………...…… 229
Table 5.5.2A (Lokal Loca Ltd. Statement of Financial Position For the Year
Ended August 31, 2020) )…………………..……………………….…… 229
16
Table 5.5.2B (Lokal Loca Ltd. Statement of Financial Position For the Year
Ended August 31, 2021) )………………….…..………………………… 230
Table 5.5.2C (Lokal Loca Ltd. Statement of Changes in Owners’ Equity For
the Year Ended August 31, 2020) )…………………..……..…………… 231
Table 5.5.2D (Lokal Loca Ltd. Statement of Changes in Owners’ Equity For
the Year Ended August 31, 2021) )…………………..………………..… 232
Table 5.5.2E (Lokal Loca Ltd. Statement of Cash Flows For the Year Ended
August 31, 2020) )……………………………..………………………… 232
Table 5.5.2F (Lokal Loca Ltd. Statement of Cash Flows For the Year Ended
August 31, 2021) )……………………………..………………………… 233
Table 5.5.2G (Lokal Loca Ltd. Notes to Financial Statements For the Year
Ended August 31, 2020) )…………………..…….……………………… 235
Table 5.5.2H (Lokal Loca Ltd. Notes to Financial Statements For the Year
Ended August 31, 2021) )…………………..…………….……………… 235
Table 5.5.3 (Ratio Analysis)…………………..………..………………… 236
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EXECUTIVE SUMMARY
Weaving together culture and innovation, Lokal Loca is a business that not only highlights the
crafts of its country of origin, the Philippines, but also supports the artisans of such crafts. This for-
profit organization does so by donating a portion of the proceeds to these craftspeople. In the case of
the company’s Tala product, the workers and weavers of the TADECO Livelihood and Training
Center–makers of the T’nalak fabric, one of the main raw materials of the product–will be receiving
the benefactions from Lokal Loca. This business is run by Cassandra Go and Mikanel Gonzales, who
aside from working towards achieving their company objectives, aspire to defy the odds of being a
two-woman company in a predominantly male industry.
Lokal Loca’s first and main product is a multifunctional phone case that can also store cash,
cards, and small trinkets. This idea came to mind once the company founders realized the hassle of
having to carry multiple items in one hand was an inconvenience common to other people as well.
Aside from its multifunctionality, the design of the Tala case is a huge part of the product since it
upholds and showcases the rich culture of the indigenous T’boli tribe of the Philippines through the
usage of hand-woven Abaca fibers, the T’nalak cloth. In order to create this product, the business
follows an input-process-output model that allows for a smooth production process as outlined in the
second chapter of this business plan. In addition, the company is looking into growing their product
lines and delving further into future research and development for the organization and its
merchandise. In all things, Lokal Loca considers customer valuation and satisfaction as its topmost
priority.
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As a key player in driving sales, Lokal Loca pays close attention to its marketing strategies and
the internal and external factors that may affect the business with regards to its sales especially in a
growing industry. In fact, the organization will not cease once its academic purposes have been fulfilled
and will continue to operate thereafter. Hence, Lokal Loca will be participating in different bazaars
outside the university where its products may be sold and promotions for the company and its
products will be made through online and offline sources such as word of mouth and advertisements
placed on online platforms.
Aside from marketing, the business has also made financial projections such as sales forecasts
and financial statements to help identify its possible performance in terms of numbers. The business
projects Php 248,600.00 in sales for the first year of operations and Php 265,650.00 for the second.
Net income for the former would amount to Php 86,693.76 and Php 96,495.03 for the latter.
Overall, this business plan encompasses the drive and passion of the company founders,
embarking on this business venture with the hopes of providing customers and beneficiaries a means
to a better lifestyle.
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BUSINESS MODEL CANVAS
Key Partners Key Activities Value Customer Customer

Proposition Relationships Segments
TADECO Manufacturing of
Livelihood and T’nalak Cloth
Multifunctionality Word of mouth, 15-21 years old
Training Center: and accessibility in online platforms
Revenue streams:
Indigenous weaving one and advertising All genders
Online platforms and
material: T’nalak, word of mouth strategies
supplying and Inconvenience of Students,
manufacturing of bringing multiple commuters and
Tala case Key Resources items for on-the-go Channels people on-the-go
people
Alibaba Supplier: T’nalak Cloth Direct distribution Trendsetters and
Hard shell phone channel online influencers
case Hard shell phone
case
Cost Structure Revenue Streams
Capital and Advertising 350 pesos

Supplier Profitability of Tala Cases through 100% mark-up
Manufacturer Social Responsibility
Figure A (Business Model Canvas)
20
CHAPTER 1: THE MANAGEMENT AND ORGANIZATION
1.1 Company Name and Logo
1.1.1 Company Name
The company name, Lokal Loca, was created to highlight certain aspects of the
company and its objectives that make the company unique. First, the term Lokal stems from
the fact that the people who created the company are all citizens of the Philippines and the
change of the English word “local” to lokal not only highlights the history of the Philippines
under the Spanish rule that brought changes to the words that are presently used but also
highlights the love and passion of the company to promote the indigenous community by
showcasing local products, services, materials, and its workers as said in the word’s definition
(Merriam Webster Dictionary, n.d. & Filipino, n.d.). The name itself also mirrors the target
market and base of operations in the country. Furthermore, it shows a portion of the
company’s mission statement which is to help support the local community in the country the
company is based in whether that is at the start or later on when the company expands locally
and globally. The second word in the company name, Loca, is a Spanish word that means
“crazy female” which is the female counterpart of the Spanish term “loco” for males (Spanish
Central, n.d. & The Free Dictionary, n.d.). This is to highlight the fact that the company was
created by female partnership with each member having a unique skill set and “crazy”
personalities that aim to spread the same color and joy in their individual lives to the lives of
others. It also highlights the strength of the creators as it is a partnership working on a
supposedly five-man job.
21
Overall, the company name highlights both the business objectives and also
symbolises the roots of which it came from and how it started as a mere idea. The words Lokal
and Loca put together is love and passion of the history and culture of the country of origin
as well as the ones who made it and the wish of bringing the same joy, light, and love to the
local communities.
1.1.2 Brand Name
The brand name, on the other hand, Tala, was acquired from the tribe weavers of
T’boli. They are called the “dreamweavers”, given the fact that the craft of weaving is more
than just a skill. The whole process of creating a T’nalak cloth, from the beginning up until
the post-process is considered as a spiritual undertaking. The designs may look similar but in
reality they differ because every weave executed is seen in each weaver’s dreams, therefore,
executed.
Since dreams and stars are correlated, the company owners took a grip in maintaining
the Filipino culture in the company. Hence, the translation of stars in Filipino which is Tala,
now the known brand name. Aside from this, the word Tala can also be seen in “T’nalak”
which is the fabric used in the phone case.
1.1.3 Company Logo
To further support the creation and purpose of the company, the company logo (refer
to the provided image below) symbolizes three main aspects of the company while also
22
providing benefits in marketing, exposure of the business to the public, and serving as a
symbol to the company’s internal and external stakeholders.
Figure 1.1.3 (Company Logo)
The company logo stands out with its bold colors yet minimalistic design. The usage
of these colors are to signify the aim of the company to benefit the local community which is
further supported by the company name as stated in the company background portion. The
colors of the logo represent the country where the company was created and its first official
base of operations, the Philippines. Below each letter “o” in Lokal Loca, a yellow dot is present
which completes the colors of the Philipine flag. Not only does it represent the sun in the
country’s flag, but it is also a symbolization of the dawn; signifying a new beginning and a
new day and as the company will move forward, every day the company will do its best to
fulfill its vision while also following its objectives and goals.
23
1.1.4 Brand Logo
Figure 1.1.4 (Brand Logo)
Consequently, the brand logo was made not only to show the dreamweavers’ culture
but also to create a distinct identification linking both T’nalak cloth and Lokal Loca’s product.
The colors gray and yellow represent both the stars and the dreamweavers of the T’boli tribe.
Given that T'nalak has great significance for the T'Boli. According to its tradition, the designs
have been passed down through generations and come to the best weavers in dreams, brought
to them by their ancestors. The T'Boli believe that the T'nalak is infused with spiritual meaning,
and as such there are a variety of traditions surrounding its production and use.
1.2 Company’s Vision, Mission, and Objectives
1.2.1 Vision
“Weaving innovation and accessibility into every person’s hands”
24
Lokal Loca aims to provide accessibility and innovation into every person’s hands
whether it may be in the form of but not limited to a product or service. It aims to fulfill the
vision set by continuously offering fresh ideas that will transform the lives of every
shareholder, may it be the customers, the suppliers or the owners.
1.2.2 Mission
“To weave innovation and accessibility into every person’s hands by providing
creative, innovative and bold ideas in the form of a product or service of high-quality
to the company’s clients and customers while also providing an opportunity for the
local community.”
Organizational Mission
Specific To promote cultural appreciation on T’boli’s
weaved cloth called T’nalak while gaining
profitability
To give a certain percentage of sales to the
dreamweavers as an additional income from the
livelihood program they work for
Measurable To sell 1 000 units of Tala Cases in one operating
cycle (one working year)
25
Attainable To provide an innovative compact product while
maintaining a high quality standard
To provide beneficial opportunities to local
community through jobs, profit and art
recognition
Realistic To fulfill the partial requirements in the course of
Practical Research 2
Time-Bound To be able to start selling Tala Cases on the first
week of September
To be able to earn at least 10 000 by December
2019*
*Conservatism principle is applied
Table 1.2.2 (SMART Analysis)
The mission of Lokal Loca is in relation to the vision statement set for the company
of weaving innovation and accessibility into every person’s hands. The mission statement
shows the main steps that the company will be taking in order to achieve its vision. These
steps would include providing innovative and bold ideas in the form of a product or service
while also maintaining a high quality standard. The second step is giving beneficial
opportunities for the local community whether that may be more recognition, jobs, profit, and
26
the like. This supports the company’s vision of bringing color and joy into people’s lives and
that is not limited to just the company and the customers alone.
1.2.3 Company Objectives
1.2.3.1 Organizational Objectives
Lokal Loca envisions to be an organization that pushes the boundaries of
creativity and design while still promoting locality all throughout. This objective entails
the vision of the company itself and shows a glimpse of the true meaning of Lokal
Loca.
In addition to the company's background, the company has created company
objectives in order to help guide the company and its internal stakeholders while also
setting standards that the company, as a whole, wishes to meet. To provide a closer
look, here are the company objectives:
1. To increase company profitability for its stakeholders while also providing
high quality and affordable products to its customers
2. To operate business effectively by having employees who can help the
company in implementing decisions while maintaining productivity, efficiency
and healthy employee relations.
27
3. To provide a quality customer service by reducing distribution time and
reduction of frequency on complaints while improving response on client
inquiries and feedbacks
4. To be an established brand when it comes to promoting local cultural
appreciation in the digital era
These objectives serves as a guide for future standards and rules that will be
set for the company. Not only that, it helps the company focus on what is needed to
be done.
1.2.3.2 Functional Objectives
Lokal Loca believes that it is important to establish its company objectives in
its business plan in order to help the company and its internal stakeholders be
reminded of what is the desired achievement and standard. With that said, these are
the objectives the company aims to achieve in order to get closer to achieving the
mission and vision set.
28
Period Marketing Operations Finance Human
Resources
1st month of To improve To have a To effectively To recruit
Business product quality manage costs compelling
Operations awareness by operations that employees in
being aggressive can give better To have an helping the
on advertising products appropriate company in its
strategies financial start-up phase
To suffice the leverage
To establish a capital while To support
positive identity lowering costs To balance the employees in their
in the industry budget (Assets professional
To produce = Liabilities + development skills
reliable product Owner’s
Equity)
3rd month of To increase To have a To effectively To ensure
Business business sales by quality manage costs compliance on
Operations 8-10% operations that administrative
can give better To generate policies both in
To furthermore products high level of the business and
establish a return of the course
29
positive identity To give a investment To practice
in the industry potential faster ratio transparent
delivery of reporting
To improve products while To have a
internal saving costs strong financial To improve
communications To produce health by productivity in
within the reliable product generating a cross-functional
company high level of departments
To reduce 5% Gross Profit
on error rates Margin ratio
6th month of To increase To provide a To continually To ensure
Business business sales by quality manage costs compliance on
Operations 10% operations that administrative
can give better To policies both in
To continuously products furthermore the business and
establish a diversify the course
positive identity To give a revenue
in the industry potential faster streams To practice
delivery of transparent
To target more products while To yield a high reporting
customers, the saving costs overall
external market profitability by
having a high
30
(outside DLSU) To reduce waste net profit
by 20% by 5% margin ratio
To reduce 10% To maximize
on error rates shareholder
investment by
having a high
return on
equity ratio
1st year of To increase To reduce cost To continually To maintain
Business business sales by by 8% manage costs alignment across
Operations 12% organizational
To reduce waste To departments
To continuously by 10% furthermore
establish a diversify To develop
positive identity Reduce 15% on revenue leadership abilities
in the industry error rates streams to unleash the full
potential of the
To launch new To invest in To invest in team
producs by Total Quality appreciable
conducting Management assets, Create a customer
market survey equipment and and employee
research machineries database
31
To improve the
To enhance plant location Review employee
customer and have a safe performance over
relationships workplace the first operating
both online and cycle
offline platforms
Table 1.2.3.2 (Functional Objectives)
Note: Company objectives can be subject to change over time depending on various factors.
1.3 Management Team
1.3.1 Roles and Responsibilities
Name: Cassandra Justine Cruz Go
Age: 18
Gender: Female
City / Place Of Residence: Taft Avenue, Metro Manila
Contact Information
Cellphone #: +639228721711
Email: cassandra_go@dlsu.edu.ph
Company Role: Chief of Finance and Sales Officer, Partner,
Shareholder, Co-Founder
32
Education Background
• Studied in Stella Maris Academy of Davao from Nursery until Grade 10
• Currently studying in De La Salle University-Manila in Grade 11 in the ABM strand
Name: Mary Mikanel Sarmiento Gonzales
Age: 17
Gender: Female
City / Place Of Residence: Baliuag, Bulacan
Contact Information
Cellphone #: +639957568125
Email: mary_mikanel_gonzales@dlsu.edu.ph
Company Role: Chief Marketing Officer, Chief of Production
Partner, Shareholder, Founder
Education Background
• Studied in St. Mary’s College of Baliuag from Nursery until Grade 10
• Currently studying in De La Salle University-Manila in Grade 11 in the ABM strand
33
1.3. Management Team
1.3.1 Roles and Responsibilities
Name of Role Job Description Job Responsibilities
General Manager usually the executive who is in • In charge of leading the
charge of creating and company into new and greater
executing the long-term goals heights
and objectives of the company
while also helping the • Must be the one to set the
company focus on company’s focus with its
accomplishing the company’s mission-vision and both general
mission and vision. However, and time-specific company
since Lokal Loca is a small objectives
company, therefore the
manager will be heading the • Coordinates with the executive
company in developing and officers using scheduled
implementing strategies that meetings, progress reports,
will benefit the company’s financial statements, revenue
growth and improving the charts, and other forms of
company’s product and service business-related communication
for its customers and clients in order to strategize potential
(Kenton, 2019). changes that can lead to the
34
benefit of the company and its
stakeholders
• Leads the creation,
development, and
implementation of systems,
strategies, ventures, and the like
that will benefit the company’s
identity, public exposure,
revenue, and the like
• Will make final decision on any
proposed strategies and changes
made to the company keeping
in mind the goals, objectives,
and mission-vision of the
company
• Makes sure that the company is
following the laws and codes set
by the Philippine government
and adhering to the
requirements and standards
35
• Oversees all company
departments and advises on
changes and strategies during
company meetings (Kenton,
2019)
Marketing Manager In general, the head of • In charge of handling and
marketing will be handling the overseeing the marketing
marketing department of the department
company. This department will
handle the marketing and • Spearheads the marketing and
advertising ventures, projects, advertising initiatives
and initiatives that will benefit
the company’s image as well as • Researches on potential
promote its products and/or marketing strategies that are also
services. This department is up-to-date with current trends
crucial due to the fact that it is and fit the company’s identity
basically the bridge between the and propose them during
shareholders, specifically company meetings
customers and clients, and the
business itself. The head of • Ensures that the different
marketing is the one materials used in marketing and
spearheading the initiatives of advertising are in accordance to
36
the marketing department and the laws and codes set by the
is in charge of promoting the government of the Philippines
company and its product
and/or services • In charge of displaying plans
(Chief Marketing Officer accompanied with budget
(CMO) Job Description, n.d.). required and coordinate with
the respective executives
• Identifies marketing and
advertising opportunities, both
online and offline
• Ensures that the company’s
image is in compliance with the
mission-vision
• Provide feasible yet creative
solutions to expand the
company’s public image and
exposure to its market
• In charge of providing a
professional yet pleasing image
37
of the company to clients,
customers, investors, suppliers,
and other stakeholders
• Aid in presenting the company
to other stakeholders (Chief
Marketing Officer (CMO) Job
Description, n.d.)
Sales Officer The head of sales is the • In charge of handling and
company executive that will be overseeing the company’s sales
handling the profits and sales department
of the company. The person in
this position will be working • Must track the company’s sales
closely with the financial and propose changes that can
department and operations further benefit the company’s
department in ensuring that profit while also keeping in
the company is giving up-to- mind the company’s mission-
date sales data. For Lokal vision and objectives
Loca, the head of sales will
also be working on the floor • Must coordinate with the other
and will most likely be in executive officers and present
charge of counting the profits monthly sales data during
made by the company’s sales company meetings
38
(Sales executive: Job
description, n.d.)
• Must ensure that the sales made
by the company outweighs the
expenses and liabilities and that
profit is generated
• Must ensure that the sales of the
company and how it was made
is also following the laws and
codes established by the
Philippines
• In charge of identifying the
company’s peaks and lowest
sales points and propose ideas
on how to minimize loss and yet
still provide high quality
products and/or services to the
company’s customers and
clients
• Check which changes made
boosted sales and which ones
39
decreased sales and
communicate with the
respective departments on the
data
• Must ensure that the company’s
sales goals are being met
monthly and annually (Sales
executive: Job description, n.d.)
Operations Manager The head of operations will be • In charge of overseeing and
handling and overseeing the managing daily operations of
day-to-day operations of the the company both internally and
company as well as manage the externally
company’s internal systems
and management processes. • Must provide progress reports
This job is more closely related every 2 weeks and present the
to majority of the departments data during company meetings
as every department has its
own operations. For Lokal • Will communicate and
Loca, the head of operations coordinate with the other
will be the manager in a sense executive officers on the
that the head of operations will operations and provide
40
be in charge of overseeing the necessary data that will impact
departments and their progress the respective departments and
reports (Chief Operating the company as a whole for the
Officer (COO), n.d. & CEO
Bloomenthal, 2019)
• Will relay, announce, and
manage the implementation of
new policies and changes
approved by the CEO
• Provide and propose new
systems, processes, and other
ideas that will improve the
speed, efficiency, and quality of
the operations of the
company (Chief Operating
Officer (COO), n.d. &
Bloomenthal, 2019)
Purchasing Officer in charge of ensuring that the • In charge of overseeing and
purchasing and production of handling the production of the
the product or the creation of company’s product, Tala and
the service being promoted by any other future products
the business is in compliance and/or services
41
with the standards set by both
the company and the

• Is in charge of finding potential
Philippine government. This
suppliers and production lines
job is crucial as it is in charge
or companies alongside the
of the department where the
other executive officers
final product or service will be
created, developed, and

• Ensure that the product is up to
finalized
standard with the company’s
vision as well as the standards
set by laws and codes of the
Philippines
• Must find feasible yet high
quality materials and suppliers
• Must be able to give a concise
process on how the product was
made later on once details are
finalized
• Ensure that the production
process is done with high
42
quality service and materials and
that each step is done correctly
• Negotiate with suppliers and
production companies on the
cost and expenses
• Must be aware of the company’s
mission-vision and objectives
while finalizing and coming up
with steps to the production
process
• Coordinate with the financial
officer on the feasibility of the
production and its cost
• Coordinate with the other
executives on the main and
backup suppliers as well as the
manufacturer of the company’s
product("Chief Production
Officer – Job description", n.d.)
43
Laborers A person who works in The laborers perform variety of tasks
manual and technical area of such as assembly of packaging which
the small-hold company, Local includes the following:
Loka. As a starting company, 1. Stamping
the workers are still limited to 2. cutting stickers
avoid unnecessary costs. 3. and actual pasting of
stickers based on the
phone model and case
cover
Finance Manager The chief or head of finance is • In charge of handling and
the company executive in overseeing the overall finances
charge of heading the financial of the company including
department and is handling the recording of transactions and in
company’s financial ensuring that the company’s
records,books, and accounts. financial records, accounts, and
This job is very important as statements are up-to-date with
the financial aspect of the the various transactions being
company is in charge of made by the company
recording every transaction
made by the company. Not • In charge of managing and
only that, the head of finance tracking the company’s assets,
is also in charge of inspecting expenses, liabilities, equity
44
the financial records to make
sure that the company’s • Must identify what aspect of the
actions are legally recorded finances can be further
and also search for possible improved and should be able to
changes that can be made to propose strategies in said
benefit the company in improvement
general. For Lokal Loca, the
head of finance will have a • Coordinate with the other
more hands-on role in the executive officers and the
company as compared to advisory council on the
finance executives in large company’s current status, more
companies (Grant & Kenton, specifically in the financial
2019) department
• Must ensure that the company’s
financial transactions are in
accordance with Philippine
government policies and laws
• Must provide financial reports
and updates every 2 weeks or
will report immediately to the
CEO should there be any
45
emergencies that will affect the
company (Grant & Kenton,
2019)
• Handles the budget allowance
of every department in the
company and can make
necessary cut backs or
additional funds as long as it is
approved by the CEO (Grant
& Kenton, 2019)
Accountant The accountant ensures the • Provides financial. Information
efficient financial operation of to the company through
of Lokal Loca. These are gathering of data
shown through financial
statements and records. She • Documents financial
also analyzes budgets, returns, transactions by entering account
tax and returns. information.
• Substantiates financial
transactions by auditing
documents.
46
• Prepares payments by verifying
documentation, and requesting
disbursements.
• Complies with federal, state, and
local financial legal requirements
by studying existing and new
legislation, enforcing adherence
to requirements, and advising
management on needed actions.
Cashier Cashier ensures that prices per • Accommodates customers by
unit and specified quantities answering questions and
are accurate. Moreover, she providing recommendations
collects payments, further
explain the item and it’s • Operates cash register
benefits, cater questions and
process refunds and/or • Accepts payments and ensures
exchanges. prices and quantities are
accurate
• Packaging of Tala cases
47
• Maintaining clean workspace
• Following store/bazaar
procedures regarding sales,
ingress and egress
Human Resource Manager As head of human resources, • In charge of overseeing as well
one is tasked to handle the as handling the human
welfare, recruitment, and resources division and all HR-
training of the employees of related activities
the company. Furthermore,
the task of handling the • Handles any personnel-related
manpower of the company services like hiring, training,
while also taking into account compensation packages and
the company’s expense and salaries
profit balance will lie on the
shoulders of the head of • Aid in the creation of new
human resources("How to policies and changes that will
Become a Human Resource benefit the welfare and rights of
Assistant", n.d. & Human the employees as written in the
Resources: job description, Labor Code of the Philippines
n.d.)
48
• Ensure that employees are
working to reach company goals
and objectives
• Provide basic training to all
employees and can request for
additional training should it be
necessary
• Will determine if any company-
related events are feasible in
terms of manpower or human
resources
Coordinate with the other executive
officers on coming up with new
strategies and changes in the HR
department that can also benefit the
company as a whole ("How to Become
a Human Resource Assistant", n.d. &
Human Resources: job description, n.d.)
Table 1.3.1 (Job Descriptions and Responsibilities)
49
1.3.2 Organizational Chart
Figure 1.3.2 (Organizational Chart)
1.4 Compensation and Ownership
1.4.1 Ownership
In terms of ownership, Lokal Loca is a partnership. The Philippine Civil Code provides
for a definition of a partnership as follows:
Art. 1767. By the contract of partnership two or more persons bind themselves to
contribute money, property, or industry to a common fund, with the intention of dividing the
profits among themselves.
50
Partnerships are required to be registered with the Securities and Exchange
Commission [SEC]. Registration is done by filing the Articles of Partnership with the SEC.
The Articles of Partnership set forth all the terms and conditions mutually agreed by the
partners thereto.
More specifically, the documents required are as follows:
1. Proposed Articles of Partnership;
2. Name Verification Slip;
3. Bank Certificate of Deposit;
4. Alien Certificate of Registration, Special Investors Resident Visa or proof of other
types of visa [in case of foreigner];
5. Proof of Inward Remittance [in case of non-resident aliens].
It bears noting that corporations are not allowed by law to become partners in
a partnership.
Partners, liability:
As a general rule, the liability of partners in a partnership organization
is unlimited in the sense that the partnership creditors may run after them for
any and all of their assets and property in payment of the partnership debts.
Should one of the partners defray all liabilities of the partnership, he is entitled
to be reimbursed by the other partners for their respective shares therein.
51
In the case, however, of limited partnerships, the law allows the limitation of
the liability of certain partners to the extent of the amount contributed to the
partnership.
Partnership, dissolution:
Philippine law allows the dissolution of partnership for any reason,
provided such dissolution does not amount to a breach of contract or is
prejudicial to third parties. The death of a partner or the unauthorized transfer
of ownership of his share in the partnership [in case there is a limitation to this
effect] results in the dissolution thereof. In other words, any change in the
composition of the partnership, unless so allowed, will result in the dissolution
thereof. Consequently, the remaining partners may form a new partnership
with less or more partners.
Name Citizenship Address Contact Number
Go, Cassandra Justine Filipino 2402 Manila (0922) 872 1711
Cruz Residences Tower 1,
Taft Avenue, Malate
Manila
Gonzales, Mary Filipino 2558 Green (0995) 756 8125
Mikanel Sarmiento Residences, Taft
52
Avenue, Malate,
Manila
Table 1.4.1 (Business Owner’s Information)
1.4.2 Capitalization
Lokal Loca’s capitalization will be funded through the financial assistance of
the parents of each partner. Having Php 7 500 each, 50% of the company will be
owned correspondingly. Therefore, the initial capital of the company would be Php
15 000.
Name of Business Percentage of Amount in Pesos
Owner Share/Ownership
Go, Cassandra Justine 50% Php 10 000
Cruz
Gonzales, Mary 50% Php 10 000
Mikanel Sarmiento
Table 1.4.2 (Business Owner’s Share)
1.4.3 Compensation
1.4.3.1 Profit-Sharing Among the Business Owners
Since the ownership among the partnership is equally divided, therefore 50%
of the ownership and profitability will be applied as well. Based on the net profit
computed, each will be receiving Php 220 719, with the total of Php 441 438
53
Name of Business Percentage of Share Amount in Pesos
Owner in Profits
Go, Cassandra Justine 50% Php 220 719
Cruz
Gonzales, Mary 50% Php 220 719
Mikanel Sarmiento
Table 1.4.3.1 (Business Owner’s Percentage Share in Profits)
1.4.3.2 Compensation of Employees
As a start-up business, the company will be giving a compensation (either in
cash or non-cash payment) in exchange in the work given. However, since Lokal
Loca is a partnership company most of the employees seen are both the owners.
Position Compensation per Compensation per
week month
General Manager 125 500
Marketing Manager 75 300
Operations Manager 75 300
Finance Manager 75 300
Human Resource 75 300
Manager
Sales Officer 43.75 175
54
Purchasing Officer 43.75 175
Accountant 43.75 175
Cashier 43.75 175
Laborers 31.25 125
Table 1.4.3.2 (Employees’ Compensation)
1.5 Board of Directors/Advisory Council
Lokal Loca wishes to provide and expose local and creative innovations to the world while
also fulfilling the duties and responsibilities of a social enterprise. These duties and responsibilities
also include legal, marketing, operations, finance, and product aspects of the business that not only
affects the stakeholders but the company itself. In order to ensure that the company is meeting the
standards set as well as expanding and growing continuously, an advisory council would be placed.
The purpose of the advisory council is to provide information and advice to the queries and concerns
of the company while also providing advice on all aspects of the business which are but not limited to
operations, marketing, and finance. The council will be composed of 10 members. Each member has
a different set of skills, experiences, backgrounds, and thinking that will be able to contribute to the
growth and prosperity of not just the business itself but also the creators of the company. Listed below
are the advisory council members and a brief profiling on each of them.
Name of Advisory Council Member Information
Ms. Camille Go City of Residence: Manila
Contact Number: +639499929930
Email: camillego91@yahoo.com
55
Capt. Ronald Go City of Residence: Davao
Email: topgone85@yahoo.com
Ms. Patricia Zuluaga City of Residence: Laguna
Email: zuluaga.pic@gmail.com
Sir Patrick Hariramani City of Residence: Bulacan / Quezon City
Email: patrick.hariramani@dlsu.edu.ph
Mrs. Nerlie Gonzales City of Residence: Baliuag, Bulacan
Email: kalamilksoap@gmail.com
Mr. Michael Tom Jim Gonzales City of Residence: Baliuag, Bulacan
Email: michaeltomjim@yahoo.com
Mr. Jose Rommel Era City of Residence: Quezon City
Contact Number:
Email: jose.rommel.era@dlsu.edu.ph
Table 1.5 (Advisory Council Members)
56
1. Ms. Camille Go
Ms. Go graduated from De La Salle University - Manila with a Bachelor of Science degree in
Commerce, majoring in Advertising Management. She began her career in Workshop One, Inc. back
in 2012 as a project coordinator. Since then, she had moved to other companies such as Ace Saatchi
& Saatchi Advertising, Inc., Publicis Manila, Inc. and is currently working in DDB Group Philippines
as a Senior Account Manager. Her expertise in the field of marketing and advertising will surely aid
the business in its upcoming projects and operations.
2. Capt. Ronald Go
A pilot by profession yet an entrepreneur by heart, Capt. Go qualifies as one of the ideal
candidates for Lokal Loca’s advisory council. His expertise and knowledge in the field of business and
management will definitely assist the company in all of its operations. Capt. Go graduated from the
Philippine Military Academy in 1985 with Magna Cum Laude honors. After ten years of service in the
Philippine Air Force, he resigned. He is currently connected with Anflocor/TADECO as the General
Manager of Davao Agritech, Inc. He has been the Vice President for Professional Service & Ventures
Cluster of the Davao City Chamber of Commerce and Industry, Inc. in 2014-2015, Vice President for
Industry in 2016, and President of the Davao City Chamber of Commerce & Industry, Inc. in 2017.
Outside the Chamber, Ronald Go is an entrepreneur by heart. He currently owns Ecotrans Car
Rentals, R & S Cargo Corp., Ecohaulers, Inc., and Ecofreight, Inc. — all involving logistics and cargo
forwarding services. Aside from this, Capt. Go is also affiliated with different civic organizations in
the Philippines. In 2009-2010, he was the President of Rotary Club of East Davao — wherein he was
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awarded as the "Most Outstanding President". He is also a member of the Philippine National Police
Regional Office XI Advisory Council.
3. Ms. Patricia Zuluaga
A senior high school graduate of Colegio San Agustin - Biñan, Ms. Zuluaga is currently in her
first year of college in De La Salle University - Manila. She is selected as a member of this advisory
council to serve as the voice of reason of the current generation. The business can benefit from her
valuable suggestions and recommendations to any decisions made by the company.
4. Sir Patrick Hariramani
Mr. Hariramani currently owns several businesses and also works at De La Salle University as
a professor in both college and senior high school classes. His various connections combined with
years of experience in different businesses will help the company when it comes to how a business
works, solutions, negotiations, contacts, and the like.
5. Mrs. Nerlie Gonzales
Mrs. Gonzales had own several companies before her current one, Kala Milk Soap Enterprise.
She was a graduate of BS in Accountancy but did not furthermore practiced her course. She ventured
different businesses to generate income such as managing the financial sales of the Gonzalez Rice
Mill, Yla’s Place- a bakeshop, buy and sell of designer and branded items until Kala Milk Soap was
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born. Continuing her passion for fashion she still buys and sells items on instagram as her hobby.
However, for her mainstream business she established is a social enterprise that supports farmers of
Baliuag, Bulacan.
6. Mr. Michael Tom Jim Gonzales
Mr. Gonzales on the other hand finished a degree in Computer Studies. Opposing his course,
his heart falls in to Agriculture and it’s dynamics. Therefore despite his lack of knowledge in different
agricultural entities he still pursued his passion on the greens and wilds by exerting extra effort in
attending short courses, seminars and trainings. He owns Agriventa Enterprise, a small company that
focuses on different agricultural fields such as farming equipment, rare fruits, livestock and more. He
also founded several cooperative and organization to help farmers share their knowledge and
discovery on the industry. He believes that “Farmers feed the world. Without them, we cannot live to
full potential.” That is why his advocacy on helping farmers are always linked in creating products in
his business.
7. Mr. Jose Rommel Era
Mr. Era currently works at De La Salle University as a professor in both college and senior
high school classes under the Decision Science and Innovation Department of Ramon V Del
Rosario, College of Business. As a Lasallian graduate of BS Business Management, he garnered an
honorable mention award as he graduated on March of 2007. He managed to enter different fields
such as consultancy which is his present contractual (project based) work, education whereas he is
the lecturer and a part-time faculty of Ateneo de Manila University Department of Quantitative
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Methods and Information Technology as well as Department of Decision Sciences and Innovation
in De La Salle University and banks.
1.6 Infrastructure (External Management Support)
In the event that the owners of the Lokal Loca organization are unable to attend to business
obligations due to personal reasons, the company will request assistance and external management
support from the appointed members of the advisory council found in section 1.5.
1.7 Contracts and Franchise Agreements
1.7.1 Employee Contract
DATE:
TO: (Employee)
FROM: Lokal Loca Management
RE: EMPLOYMENT AGREEMENT
This AGREEMENT is entered and effective on (Date), at the City of Manila, Metro Manila,
by and between: _____________, a corporation duly organized and registered under the laws
of the Philippines, with principal address at 2558 Green Residences, Taft Avenue, Malate,
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Manila, represented by Cassandra Justine Go which holds the following position: Human
Resource Manager and Co-Owner hereinafter referred to as the EMPLOYER
-AND-
________________, Filipino, of legal age, (single/married), and with postal address at
____________________, hereinafter referred to as PROBATIONARY EMPLOYEE
WITNESSETH:
WHEREAS, the EMPLOYER is engaged in the business of the following
nature: Retail and Merchandising
WHEREAS, the PROBATIONARY EMPLOYEE has qualified in the pre-employment
requirements of the EMPLOYER
WHEREAS, the EMPLOYER hereby offers and the PROBATIONARY EMPLOYEE
hereby accepts the probationary employment in the following rank and file position: Cashier.
NOW THEREFORE, in consideration of the foregoing, the parties hereby agrees as follows:
• PERIOD OF PROBATIONARY EMPLOYMENT
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The probationary period of the PROBATIONARY EMPLOYEE shall be for a period not
longer than six (6) months starting from the first day of the work of the PROBATIONARY
EMPLOYEE.
• DUTIES AND RESPONSIBILITIES
The PROBATIONARY EMPLOYEE shall perform the following duties and responsibilities:
• Welcoming customers, answering their questions, helping them locate items, and providing
advice or recommendations.
• Operating scanners, scales, cash registers, and other electronics.
• Balancing the cash register and generating reports for credit and debit sales.
• Accepting payments, ensuring all prices and quantities are accurate and proving a receipt to
every customer.
• Processing refunds and exchanges, resolving complaints.
• Bagging or wrapping purchases to ensure safe transport.
• Following all store procedures regarding coupons, gift cards, or the purchase of specific
items, such as alcohol or cigarettes.
• Maintaining a clean workspace.
• EVALUATION
The PROBATIONARY EMPLOYEE acknowledges and understands the regularization of
employment with the EMPLOYER is conditioned on satisfactorily meeting the standards set
forth by the corporation.
The standards upon which the EMPLOYEE will be evaluated on has likewise been explained
to the EMPLOYEE by the EMPLOYER at the time of engagement.
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The PROBATIONARY EMPLOYEE shall be evaluated by the immediate manager of the
PROBATIONARY EMPLOYEE.
• REGULARIZATION
By or before the end of the six (6) month period, the PROBATIONARY EMPLOYEE shall
acquire regular status upon evaluation and recommendation of the immediate manager of the
PROBATIONARY EMPLOYEE.
Upon regularization, the PROBATIONARY EMPLOYEE shall be entitled to all company
benefits and privileges enjoyed by all regular employees of similar rand and tenure.
• COMPENSATION
The PROBATIONARY EMPLOYEE shall be paid a gross rate of one hundred seventy
five pesos (PHP 175) per month, subject to government-mandated deductions to be borne
by the employee, every 15 and 30 of the month.
For the payroll period of 15 of the month, attendance cut-off shall be until the 12 of the said
month. While for the payroll period of 30 of the month, the cut-off shall be from the 28 of
the month until the last day.
The salary of the PROBATIONARY EMPLOYEE shall be deducted an amount representing
her contribution to social legislation benefits such as Social Security System (SSS), Pag-ibig
and Philhealth.
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The EMPLOYER may, at its discretion, grant bonuses, allowances, or benefits not defined in
this contract. Such exercise of discretion shall not be considered as established practice or
precedent and shall not be demandable under this Employment Agreement or any
other written or unwritten agreement.
The compensation and benefits are customized for each employee. Thus, the
PROBATIONARY EMPLOYEE undertakes to treat with strict confidentiality his
compensation and benefits information. He shall refrain from discussing with anyone whether
connected with the EMPLOYER or not. Violation of this prohibition shall be considered as
a ground for disciplinary action.
COMPENSATION PACKAGE
• THIRTEENTH MONTH PAY
The PROBATIONARY EMPLOYEE is entitled to Thirteenth Month Pay provided she has
served at least one (1) month of service. The EMPLOYER will pay the mandatory Thirteenth
(13 th ) Month Pay before 24 December of each Calendar Year.
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• MANDATORY BENEFITS
Benefits that are mandated by law shall be paid or provided by the EMPLOYER only when
mandated and applicable to the EMPLOYEE, according to the law, such as but not limited
to the following:
• Holiday Pay
• Premium Pay
• Overtime Pay
• Night differential
• Maternity or Paternity Leave
• LEAVE BENEFITS
Upon regularization of the PROBATIONARY EMPLOYEE, he/she will be entitled to 15
days of Vacation Leave and 8 days of Sick Leave.
• WORK HOURS
The PROBATIONARY EMPLOYEE shall work with the following schedule:
Monday Tuesday Wednesday Thursday Friday
Cashier 8:00-12:00 8:00-12:00 8:00-12:00 8:00-12:00 8:00-12:00
12:00-1:00 12:00-1:00 12:00-1:00 12:00-1:00 12:00-1:00
BREAK BREAK BREAK BREAK BREAK
1:00-4:00 1:00-4:00 1:00-4:00 1:00-4:00 1:00-4:00
The work schedule may be changed by the EMPLOYER or its management as it may deem
necessary to meet its operational requirements.
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The PROBATIONARY EMPLOYEE may be required to work more than his regular work
schedule due to the demands of the business or the requirements of the EMPLOYER. The
EMPLOYEE will be entitled to overtime pay using the rates prescribed by law only if the
extended hours rendered were MANDATED by the organization.
• PLACE OF WORK
The primary place of work of the PROBATIONARY EMPLOYEE shall be in:
2402 Manila Residence Tower 1, Taft Avenue, Malate, Manila
The PROBATIONARY EMPLOYE may be transferred or assigned to other locations as may
be required by the needs of the EMPLOYER
The PROBATIONARY EMPLOYEE may be required to travel from time to time.
• COMPANY RULES AND REGULATIONS
The PROBATIONARY EMPLOYEE shall follow all company rules and regulations, written
or otherwise. All existing and future company rules and regulations shall be deemed
incorporated in this AGREEMENT.
It shall be the duty and responsibility of the PROBATIONARY EMPLOYEE to be aware of
and comply with the EMPLOYER’s rules and regulations.
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• NON-COMPETE CLAUSE
The PROBATIONARY EMPLOYEE shall not engage or be involved in a local or foreign
firm that is involved in a similar business as the EMPLOYER for a period of one (1) year
starting from the date of separation or termination without the written consent of the
EMPLOYER.
The PROBATIONARY EMPLOYEE shall not, during the same period directly or indirectly
solicit to provide or provide, without the prior written consent of the EMPLOYER, any
professional services for anyone who is a client of the EMPLOYER.
If the PROBATIONARY EMPLOYEE would be in the future be directed by any
governmental agency or judicial forum or court or asked to testify in any proceeding
concerning any matter learned in the course of services provided to or on behalf of the
EMPLOYER, he shall notify the latter before making any disclosure at least ten (10) days prior
to date of testimony, hearing or disclosure.
In case of violation, the PROBATIONARY EMPLOYEE agrees to compensate the
EMPLOYER an amount that will be established by the EMPLOYER depending on the
liquidated damage.
• TERMINATION OF PROBATIONARY EMPLOYMENT
The EMPLOYER may terminate the probationary employment prior to the expiration of the
probationary period upon failure of the PROBATIONARY EMPLOYEE to satisfactorily
meet the standards provided in this AGREEMENT or for any of the just or authorized causes
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provided by law, including analogous causes specified in the company rules and regulation
policy.
The PROBATIONARY EMPLOYEE may be dismissed from service for just causes found
under Article 297 of the Labor code, as amended and other applicable provisions of the law.
The employment may likewise be terminated for authorized cause under Articles 298 and
Article 299 of the Labor Code, as amended or any other relevant provisions.
Employment may likewise be validly terminated if the business operation has ceased on
account of a law, rules or regulations ordering the cessation of the company.
The employment may likewise be suspended due to causes arising for lack of raw materials,
lack of customer order, declining sales, among others as determined by the management.
• RESIGNATION OF THE PROBATIONARY EMPLOYEE
The PROBATIONARY EMPLOYEE shall give a written notice of their intention to resign
from their employment at least thirty (30) days prior to the effective date of their resignation.
• NON-DISCLOSURE
The PROBATIONARY EMPLOYEE shall not divulge to any third party any part of this
AGREEMENT, including salaries and other renumerations unless legally required by th law,
statute or any competent authority.
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• CONFIDENTIALITY
The PROBATIONARY EMPLOYEE understands and acknowledges that all records,
documents and other information, written or otherwise, are confidential and shall not be
disclosed during and after employment with EMPLOYER.
The term “confidential information” shall include all information, whether written or oral, that
is not known by, or not generally available to, the public at large and that concerns the
business, activities, financial affairs, trade secrets, technology of the EMPLOYER or otherwise
relates to the EMPLOYER, in any manner whatsoever, its customers, clients, supplier and
other businesses or entities, with whom the EMPLOYER does business which may come to
the possession of the PROBATIONARY EMPLOYEE during the tenure of employer in
whatever manner or reason.
The PROBATIONARY EMPLOYEE undertakes not to make copies or duplicates of any
confidential information or other sensitive property or materials mentioned, including but not
limited to keys, access cards, flash drives, electronic files programs, databases regardless of
storage location, photographs or such other proprietary information relating to the
EMPLOYER’s business. Failure of the PROBATIONARY EMPLOYEE to submit,
turnover, or return the company property falling under confidential information, as demanded
in writing, within five (5) days therefrom, shall be deemed as violation of the confidentiality
clause.
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In case of violation, the PROBATIONARY EMPLOYEE agrees to compensate the
EMPLOYER an amount that will be established by the EMPLOYER depending on the
liquidated damage.
The PROBATIONARY EMPLOYEE authorizes the EMPLOYER to apply whatever salary
earned or accruing to him as compensation for the violation and to withhold any amount
pending actual application.
This AGREEMENT represents the entire agreement between the EMPLOYER and the
PROBATIONARY EMPLOYEE and supersedes all prior negotiations, representations,
agreements, either oral or written.
IN WITNESS WHEREOF, the parties have hereunto affixed their signature
on the date and place first stated above.
Employer:
______________________________
Cassndra Justine C. Go
Human Resource Manager and Business Co-Owner
Employee:
______________________________
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Employees Name and Signature
______________________________
Date and Time
1.7.2 Suppliers Contract
Lokal Loca
Client Accreditation Form
Organizational Details
Business Name TADECO Livelihood and Training Center
Business Address Pearl Farm Marina – Guest House, Lizada
Drive, Maharlika Highway, Lanang, Davao
City
Line of Business Retail and Merchandising
Point of Contact and Details
1) Name of Contact Juvy Fernandez
Position General Manager
Mobile 0917 311 7249
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Document Requirements
1) BIR certificate of registration (BIR form 2303)
2) Business registration papers;
Partnership- SEC Articles of Partnership and By-laws and statement of Joint
Solidarity
3) Latest SEC General Information Sheet
4) Income Tax Return for the last 3 years
5) Mayor’s or Business Permit (office and factory/warehouse, if any)
1.7.3 Lease Contract
LEASE CONTRACT
KNOW ALL MEN BY THESE PRESENTS:
This Contract of Lease made and entered into this _______________, 2019 in MANILA,
PHILIPPINES by and between:
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RONALD ANTHONY C. GO, Filipino, of legal age, single, with postal address at #Unit
2402 Manila Residences Tower 1, Taft Avenue, Malate, Manila, hereinafter referred to
as the “PROPERTY MANAGER-LESSOR” or simply “LESSOR”;
-and-
CASSANDRA JUSTINE C. GO of LOKAL LOCA, Filipino, of legal age, single with a
Philippine based company, with postal address #Unit 2402 Manila Residences Tower 1, Taft
Avenue, Malate, Manila, hereinafter referred to as the “LESSEE.”
WITNESSETH THAT:
WHEREAS, the LESSOR is the property manager of the residential unit on a parcel of land
situated at #Unit 2402 Manila Residences Tower 1, Taft Avenue, Malate, Manila, with
an area of Thirty Two (32) square meters, hereinafter referred to as the “LEASED
PREMISE”: Unit No. : 2402
WHEREAS, the LESSEE desires to lease the above-mentioned LEASED PREMISE, and
the PROPERTY MANAGER - LESSOR is willing to lease the same unto the LESSEE.
As declared and agreed, usage of the premises will be as a company headquarters, subject to
the following terms and conditions hereinafter specified.
NOW THEREFORE, for and in consideration of the foregoing and mutual covenants
herein contained, the parties herein and hereby agrees as follows:
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1. PERIOD OF LEASE – This lease shall be for a period of ONE (1) YEAR from September
1, 2019 TO August 30, 2019, renewable thereafter under such terms and conditions that
maybe agreed upon by both parties. The LESSEE must signify its intention to extend the
lease by written notice thereof to the PROPERTY MANAGER – LESSOR at least SIXTY
(60) DAYS PRIOR TO THE EXPIRATION OF THIS CONTRACT.
2. AMOUNT OF RENT – The parties herein agree that the basic monthly rental of the
LEASED PREMISES shall be FIVE HUNDRED PESOS (Php 500.00) Philippine
Currency.
Payment shall be made within the FIRST FIVE (5) DAYS OF THE MONTH (1ST TO
5TH DAY). In the event of failure to pay within the first five days of the month, A
SURCHARGE OF 5% PER MONTH shall be charged by the PROPERTY MANAGER
- LESSOR as penalty due to its delay. In case of renewal of the contract, the above rental rate
shall be subject to negotiation and mutual agreement of both parties.
3. UTILITIES – All utility expenses such as water, electricity, telephone, cable, etc., shall be for
the account of the LESSEE.
4. USE OF PREMISES – The LEASED PREMISES shall be for company headquarters
use only. It is understood that the same cannot be used as a dwelling place by the LESSEE
or any of his/her guest/visitor/customer/worker or by anybody.
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5. SUBLEASE – The subject premises may NOT be subleased/assigned. Violation of this
provision will warrant termination of the contract.
6. FIRE HAZARD AND OBNOXIOUS SUBSTANCES – The LESSEE shall not keep,
deposit or store in the LEASED PREMISES any obnoxious substances or inflammable
materials that might constitute fire hazard.
7. FIRE EXTINGUISHER – The LESSEE is required to provide a fire extinguisher fully-
charged and functional for the duration of the lease. This fire extinguisher must always be
available for inspection by the PROPERTY MANAGER - LESSOR or a representative of
the Fire Safety Department.
8. IMPROVEMENTS – The LESSEE shall not make any changes, alterations and
improvements in the LEASED PREMISES without the WRITTEN CONSENT of the
PROPERTY MANAGER - LESSOR.
However, any major alterations or improvements made or introduced by the LESSEE in the
LEASED PREMISES with the written consent of the LESSOR shall, upon termination of
this contract, automatically inure to the benefit of the said premises and BECOME THE
PROPERTY of the PROPERTY MANAGER - LESSOR without any obligation on the
latter’s part to pay or refund its value or cost at the same time to the LESSEE.
9. SANITATION AND REPAIRS - The LESSEE shall keep the property clean and in good
condition. The LESSEE shall be responsible for the minor repairs (amounting to FIVE
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THOUSAND PESOS (PhP 2,000.00) AND BELOW). The PROPERTY MANAGER
- LESSOR shall be responsible for major repairs (ABOVE TWO THOUSAND PESOS)
to be made on the premises provided the LESSEE shall notify the PROPERTY
MANAGER - LESSOR in advance within a reasonable time and specifying and describing
such major repairs to be made on the water, electrical and sewage installations caused by
ordinary wear and tear. However, repairs that are DUE TO THE FAULT OR
NEGLIGENCE OF THE LESSEE, her guests and visitors, whether minor or major, shall
be for the account of the LESSEE.
10. INSPECTION OF PREMISES – The PROPERTY MANAGER - LESSOR shall
maintain the LEASED PREMISES in good condition and for such purpose the
PROPERTY MANAGER - LESSOR reserves the right at reasonable times with prior
notice to enter and inspect the premises and to make the necessary repairs thereof. Further,
in case the PROPERTY MANAGER - LESSOR should have a prospective buyer of the
unit, the LESSEE shall allow the prospective buyer to inspect the leased premises provided
the PROPERTY MANAGER - LESSOR gives prior notice to the LESSEE.
11. SALE, TRANSFER AND MORTGAGE – in the event of sale, transfer, mortgage or any
encumbrance of the LEASED PREMISES or any existing sale, transfer, mortgage of the
same, the PROPERTY MANAGER - LESSOR shall respect all the terms and conditions
of this contract.
12. THIRD PARTY LIABILITY – The LESSEE shall hold the PROPERTY MANAGER -
LESSOR free and harmless from any damage or liability or responsibility to any person or
76
property arising out of a consequence of the use of the LEASED PREMISES by the
LESSEE, its agents, employees, or guests. When such damage or liability caused to LEASED
PREMISES by fortuitous events or acts of God, such as typhoon, earthquake, flood, etc.,
which are beyond the control of the PROPERTY MANAGER - LESSOR, the later shall
not be liable to the LESSEE or to any THIRD PERSON/PARTY
13. RETURN OF THE LEASED PREMISES - Upon termination of this contract, unless it
has been renewed or extended, it is understood that the LESSEE should clear or make full
accounting of liabilities of all bills and accountabilities pertaining to or for the restoration of
premises to its original condition, before LESSEE may totally be cleared to vacate the
LEASED PREMISES. The LEASED PREMISES shall be turned over by the LESSEE
to the PROPERTY MANAGER - LESSOR in a clean and orderly manner.
14. PENAL PROVISION – The LESSEE agrees that all covenants and agreements herein
contained shall be deemed conditions as well as covenants and that if default or breach be made
of any such covenants and conditions, that this lease, at the discretion of the PROPERTY
MANAGER - LESSOR maybe terminated and cancelled forthwith and the LESSEE shall be
liable for any and all damages, actual and consequential including all costs of litigation proceedings
resulting from such default or termination.
Any and all suits, cases, or litigations arising out of this agreement, including but not limited to
recovery of possessions of the LEASED PREMISES, or any amount due, or for any breach
thereof, shall be filed with or brought before the courts of competent jurisdiction in MANILA
CITY.
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IN WITNESS WHEREOF, the parties have hereunto set their hands at the place and date first
above written.
_______________________________ __________________________
RONALD ANTHONY C. GO CASSANDRA JUSTINE C. GO
Lessor Lessee
ACKNOWLEDGEMENT
REPUBLIC OF THE PHILIPPINES
MANILA CITY, S.S.
BEFORE ME, this____ day of ______________ 2019 in Manila City personally appeared:
Ronald Anthony Go
and
Cassandra Justine Go
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All known to me and to me known to be the same persons who executed the foregoing
instrument and they acknowledged to me that the same is their free and voluntary act and
deed.
This instrument refers to a contract of lease consisting of five (5) including this page
where on the acknowledged is written and signed by the parties and their instrumental
witnesses on each and every page thereof.
WITNESS MY HAND AND SEAL on the date and place first above written.
NOTARY PUBLIC
Doc. No. _____
Page No. _____
Book No. _____
Series of 2019.
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CHAPTER 2: THE PRODUCT
2.1 Purpose of the Product
2.1.1 Product Description
Lokal Loca’s product is a multifunctional phone case that not only encases specific
phone models, but it also stores cash, cards, coins and small trinkets too. Aside from its
versatility, the phone case also upholds the rich culture of indigenous T’boli tribe in the
Philippines through the usage of hand-woven T’nalak cloth, made of Abaca fibers, as base
material. The product also reflects the company’s vision of weaving innovation and
accessibility into every person’s hands because of its multifunctionality.
2.1.2 Product Usages & Benefits
Firstly, the Tala phone case finds purpose in providing convenience, accessibility and
maximization of use for people being that the product is both a wallet and a phone case
molded into one. As mentioned above, the product aims to provide convenience. This is done
by eliminating the hassle of bringing multiple things, especially for customers on-the-go. For
example, instead of having to carry a phone in one hand, a wallet and perhaps a coin purse in
the other, the multifunctional phone case solves this problem by taking these items and
combining them into one. Under those circumstances, the product’s claims of convenience
ring true. Not only will users benefit from the product’s convenience, but also from its
accessibility. It saves the user the trouble of having to go through multiple objects just to find
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a specific item. With Lokal Loca’s product, all of one’s basic necessities can be found in a
single location; making every user’s life much easier especially in lessening the amount of items
being carried on a daily basis. Given these points, Lokal Loca’s Tala phone case proves that
style does not have to be sacrificed for convenience.
Not only do the users benefit from this product but also do the makers. A percentage
of the profits circles back to the workers and weavers of the TADECO Livelihood and
Training Center which will be further discussed in section 3.15.
2.1.3 Reason for Choice of Product
The creators of the company based the product on the common issue that a lot of
people, especially students, have a lot of essential items to carry (i.e. mobile phone, wallet, card
holder, etc…) and as a result, the user is inconvenienced. It was then that the idea to make a
phone case that had a wallet and card holder was formed. This was based on various products
that contained similar features but were expensive. The company founders then decided to
make a product that people can carry around with one of today’s most essential items, which
is the mobile phone, that also had multiple features and purposes that all people can use,
hence, the wallet and card holder. Knowing this product could become a necessity to most
mobile phone users, Lokal Loca decided to embark on this business venture in the hopes of
generating profit while providing a solution to the aforementioned issue in a stylish and
purposeful manner.
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2.2 Unique Features of the Product
2.2.1 Unique Features of Tala
Not only is the product a phone case, but it is also a card holder and a wallet all at
once. The product will have a compartment much like a zipped wallet with a base underneath
to provide more sturdiness. It only covers the back portion of the phone allowing the user to
be able to avoid bulkiness at the front; making the front portion of the phone much more
accessible in comparison to phone cases with flaps that cover the front. Not only that, it covers
only the mid-section of the phone, allowing for a more universal feature since there are varying
camera positions for different phones. The design of the phone case is going to be minimalistic
and simple in order to provide universality to all genders, however, the design will be made
out of indigenous woven material to further advance the company’s mission-vision through
these unique and stylistic designs. Here are the following product features accompanied with
descriptions to provide more information with regards to the product and its unique
characteristics.
Product Features Description
Phone Case • Serves as a base for the woven design to provide more
security and structure
• Material will be sourced from online
wholesalers/retailers such as suppliers from
Alibaba.com
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• Wallet and cardholder dimensions will not exceed
Figure 2.2.1A (Phone Case)
Wallet-like compartment • Zipped style
• Capable of holding a maximum of 15 folded bills
• May also store coins
Figure 2.2.1B (Black Wallet Phone Case)
Multiple Card Slots • Discount cards, gift cards, debit and credit cards,
rewards cards, etc…
• Maximum of 3 cards for the case
Figure 2.2.1C (Card Slot Flap Phone Case)
Locally woven design • Fashion statement for the user
• Using thin but sturdy woven material
• To provide financial support for the local community
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• To showcase the indigenous textiles of the Philippines
Figure 2.2.1D (Woven Fabric)
Table 2.2.1 (Unique Product Feature)
2.2.2 Product Differentiation From Other Similar Products
The table below enumerates the certain characteristics each potential competitor has
and the differences Lokal Loca’s product has with each one and vice versa.
Company Characteristics
Hinangan Yakan • Yakan is the specific indigenous woven material
used for the phone case
• Priced at Php 750
• Located at Basilan, Zamboanga Peninsula and
Online Store (instagram; @hininganyakan)
• Sold and promoted through online
advertisement, online selling on social media
platforms and promotion of localization
Figure 2.2.2A (Yakan Phone Case)
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• As compared to Lokal Loca’s phone case, the
Hinangan Yakan only makes use of Yakan
material and does not include a compartment
for money
Lazada: Happon Case for Android • Happon Case for OnePlus 6T Case Full
Protection PU Leather Folding Stand
Shockproof Wallet Type Phone Protector Black
• Priced at Php 396
• Sold and promoted through online
advertisements and Lazada (Online Shopping
Platform)
• Use of leather material

Figure 2.2.2B (Lazada Happon Phone Case)
• The Happon Case makes use of leather material
in contrast to Lokal Loca’s phone case which
uses locally woven material
• This case also includes a flap that can serve as a
stand for the phone
Shoppee: Leather Wallet with Metal • Leather Wallet with Metal Ring Case for iPhone
Ring Case for iPhone 6-8/ 6-8+/ X/ 6-8/ 6-8+/ X/ XS/ XS Max
XS/ XS Max • Priced at Php 266
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• Promoted through online advertisements and
sold through Shopee (Online Shopping
Platform)
• Has a zipped wallet like the Lokal Loca phone
case but does not have card slots
• Made with leather unlike the woven material of

Figure 2.2.2C
the Lokal Loca phone case
(Shopee Leather Wallet with Metal Ring Case
• Has a keyring attached to the case
for iPhone 6-8/ 6-8+/ X/ XS/ XS Max)
Table 2.2.2 (Product Differentiation)
2.3 Stage Development
2.3.1 Idea Generation Development
The history of Tala began with the conceptualization of solving a specific need of the
market. One particular problem that the company took notice of was that a lot of people,
especially students, had a lot of essential items (e.g. mobile phone, wallet, coin purse, card
holder) to carry around. Even then, the creators found themselves struggling in the same
situation, thus propelling the idea forward. It was then that the idea to make a phone case that
had a wallet and card holder was formed. This idea was based on various existing products in
the market that contained similar features but were a bit pricey. The company founders then
decided to make a product that people could carry around with one of today’s most essential
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items, which is the mobile phone, that also had multiple features and purposes that all people
could benefit from, hence, the wallet and card holder.
The first product design began with a simple leather phone case that also had wallet
and card holder functions. During this time, the company was deciding whether or not to opt
for a flap for the phone case or to just have a zipped compartment instead. Aside from this,
the team had the initial idea of retailing the products from a supplier on Alibaba.com.
Soon after, focus group discussions were held for Practical Research 1. During one of
the meetings, a member suggested the idea of utilizing locally woven textiles to enhance the
uniqueness of the product. Seeing as this was a viable improvement to the product, the
company took this major feature into account for further product development. The company
then set on keeping this suggestion as a final component of the product. The idea of
multifunctionality between the phone case, wallet and card compartments tied together with
the nationalistic design of the indigenous fabric is what the company knows ands presents
today as the Tala phone case.
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Figure 2.3.1 (Idea Generation Development)
2.4 Related Products and Spin-Offs
2.4.1 Purpose of Proposed Related Products and Spin-Offs
The company founders of Lokal Loca have proposed a few related products and spin-
offs in order to guarantee the succession of the business. Such products will aid in the
profitability of the business by performing as additional sources of revenue and continually
attracting customers to patronize the business and its products. These products will also
strengthen the Lokal Loca product line and brand image, potentially penetrating new market
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segments based on each product’s features. In addition, excess raw materials may be salvaged
in producing the new products.
2.4.2 List of Proposed Related Products and Spin-Offs
As business progresses for Lokal Loca, the company founders have envisioned a few
product spin-offs or additions for a possible product line. These additions will continue to
reflect the image of Lokal Loca and its cause. Listed below are the possible related products
of the company:
Proposed Product Description Product Illustration
Product
Phone cases • A version of the Tala phone
designed with case but with different
other Filipino Filipino weaves used for
weaves design
Figure 2.4.2A (T’nalak Cloth)
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Card holder • A small flat case primarily
used to store debit and credit
cards, identification cards,
rewards cards and the like
• Decorated with indigenous
woven material for a more
unique design
Figure 2.4.2B (Card Holder)
Phone • Phone straps made out of
strap/wristlet locally woven textiles for a
more secure grip on the
phone
• May also be worn on the
wrist as an alternative way to
carry the phone
Figure 2.4.2C (Multifunctional Phone Case)
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Figure 2.4.2D (Phone Strap)
Figure 2.4.2E (Phone wristlet)
Eyewear cases • Eyewear, accessories or
article cases made out of
indigenous woven textiles
Figure2.4.2F (Felt Eyewear Cases)
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Figure2.4.2G (Hard Shell Eyewear Cases)
Phone grip/mount • Phone accessory that acts as
both a phone grip and
mount
• Will be designed with locally
woven textiles
Figure2.4.2H (Popsocket)
Table 2.4.2 (List of Proposed Related Products and Spin-Offs)
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2.5 Future Research and Development
2.5.1 Future Research and Development for Tala
As for future research and development of the Tala phone case, the company will be
conducting future market surveys during the course of the business to discover customer
needs and wants as the market evolves with time. During business operations, the company
will be providing customers with customer feedback forms in order to get customer insights
and suggestions for further development of the phone case. As much as possible, the company
would like to take into consideration the ideas of their valuable customers. Possible product
developments could be tweaks in the design, functionalities, available case sizes or units, and
the like.
In terms of Lokal Loca’s own plans, the company hopes of improving the product in
any way possible, of course through attainable and agreeable means. Currently, the research
team plans on delving into the possibility of making the product more durable, such as creating
waterproof and shockproof Tala cases. Aside from addressing concerns regarding durability,
the company would like to address environmental concerns such as the use of plastic for the
phone case bases, which will be discussed later on in section 2.13.1. Use of recycled plastic for
the phone case may be an area of research for this issue such as finding a supplier and
incorporating it into the manufacturing process. Another area for development would be
finding other effective and efficient manufacturers for the production of the cases and possibly
the procurement of better quality raw materials, ideally at a lower cost.
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2.5.2 Future Research and Development for Proposed Related Products and Spin-
Offs
Similar to the company’s plans for the development of the Tala phone cases, market
research will be done to gather information from customer insights based on the proposed
product spin-offs. This measure will help the company in determining which products to best
put out in the market and how to further develop other product concepts in the areas of
design, functionality, quality, along with others. Efforts for research and development for
these proposed related products will also be put into the different operational processes and
innovations that can be incorporated with the production of these products.
2.6 Trademarks, Patents, Copyrights, Licenses, and Royalties
2.6.1 Trademarks
A company trademark can be protected if through Republic Act 8293, otherwise
known as the Intellectual Property Code, provides the legal framework for intellectual property
protection in the Philippines. It came into effect on January 1, 1998.
Moreover, Republic Act No. 10372, entitled ‘An Act Amending Certain Provisions of
Republic Act No. 8293, otherwise known as the ‘Intellectual Property Code of the Philippines’,
and for other purposes’ (2013) also protects a company’s intellectual property code. This is in
accordance to effective communication to the public or communicate to the public’ means
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any communication to the public, including broadcasting, rebroadcasting, retransmitting by
cable, broadcasting and retransmitting by satellite, and includes the making of a work available
to the public by wire or wireless means in such a way that members of the public may access
these works from a place and time individually chosen by them.
The period of protection is ten (10) years from the date of issuance and is renewable
for a period of ten (10) years at a time.
A Declaration of Actual Use (DAU) is to be submitted to IPOPHL according to the
following schedule:
1. Within three (3) years from the filing of the trademark application or within 3 years from
the international registration date or subsequent designation date.
2. Within one (1) year from the fifth (5th) anniversary of the registration of the mark or
within 1 year from the 5th anniversary of the statement of grant of protection.
3. Within one (1) year from the fifth (5th) anniversary of each renewal.
4. As per Rule 204 of IPOPHL MC No. 17-010, a DAU must be submitted for renewed
registrations within one (1) year from the date of renewal of the registration. This
requirement only applies for registered marks due for renewal on 01 January 2017 and
onwards, regardless of the filing date of the Request for Renewal.
2.6.1.1 Company Name
Lokal Loca Ltd.
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2.6.1.2 Company Logo
Figure 2.6.1.2 (Company Logo)
2.6.1.3 Brand Name
Tala Cases
2.6.1.4 Brand Logo
Figure 2.6.1.4 (Brand Logo)
2.6.2 Patents
Patentable inventions are any technical solution of a problem in any field of human
activity that is new, involves an inventive step, and is industrially applicable. It may be, or
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may relate to, a product, process or any improvement of thereof. (Federis Intelllectual
Property Law, 2013)
1. An invention is considered new if it does not form part of a prior art.
2. An invention involves an inventive step if, having regard to a prior art, it is not
obvious to a person skilled in the art at the time of the filing date or priority date
of the application claiming the invention.
3. An invention that can be produced and used in any industry shall be industrially
applicable
Therefore, Local Loca’s brand Tala will not be able to meet the requirements of patenting in the
Philippines.
2.7 Government Approvals
As stated in Chapter 1.4.1 Lokal Loca’s ownership is through partnership. Therefore,
Article of Partnership will be applied in the Securities and Exchange Commission which is
attached in Appendix C.
For the legal operation of Lokal Loca, business permit is required. Given the fact that it is
the most important prerequisite in starting a business in the Philippines, securing the permit from
the Mayor’s office can only be done if the business is registered in the Securities and Exchange
Commission for partnership.
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However in acquiring a business permit (Appendix D) there are different requirements and
registrations needed; attached below are the following:
1. Baranggay Clearance (Appendix E)
Barangay clearance is an important document one must have so they
can process their business and other personal transactions and even when applying for
a job in the Philippines. It’s some kind of identification documents to certify that you
are really living in that particular barangay and it is issued by the barangay hall. Usually
it is valid for 1 year. The processing time depends on the number of people applying
for the same clearance. But it will certainly be released within a day.
2. Certificate of SEC Registration Articles of Partnership (Appendix F)
SEC registration takes 10 to 15 working days upon submission of complete
documentary requirements, provided there are no holidays during this time period.
• Name Reservation and Payment Form
• Notarized Articles of Incorporation and By-laws
• Treasurer’s Affidavit
• Bank Certificate of Deposit or Proof of Inward Remittance
3. Lease Contact (Appendix G)
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4. SSS Certification (Appendix H)
SSS Certification is a necessity for personal registration of business as an
employer and your workers as employees. This office will issue an SSS number for
your business, for yourself, as well as for your workers.
5. Community Tax Certificate – CEDULA (Appendix I)
Community Tax Certificate (CTC) or a Cedula is a document issued by the Philippine
government to individuals and corporations upon payment of the community tax.
In addition to initial requirements, accomplishment of registration to Bureau of Internal
Revenue (Appendix J) is also a need in establishing a business. To apply, several requirements
must be complied to, such as the following:
Documentary Requirements
• Photocopy of SEC Certificate of Incorporation; or
• Photocopy Certificate of Recording (in case of partnership); or
• Photocopy of License to Do Business in the Philippines (in case of foreign corporation);
• Articles of Partnerships
• Photocopy of Mayor’s Business Permit; or
• Duly received Application for Mayor’s Business Permit, if the former is still in process with the LGU;
• New sets of permanently bound books of accounts;
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• Proof of Payment of Annual Registration Fee (ARF)(not applicable to those exempt from the
imposition of ARF);
• BIR Form No. 1906;
• Final & clear sample of Principal Receipts/ Invoices;
2.8 Product Limitations
A few potential limitations to the product would include size, bulkiness, durability, and
availability of supply. Despite the strengths of a flourishing mobile phone industry, resulting in a
growing market, the variety of mobile phone units also presents a concern for the product as the
company is not yet fully capable of producing a wide range of phone case sizes for the Tala case since
not all phones have the same dimensions. However, the company is currently researching on the
common phone sizes as well as searching for a solution to implement into Tala so that it may cater to
different markets (i.e. users of different brands of mobile phones) and widen its scope. Moving onto
bulkiness, past focus group discussion participants brought up their concern that due to the
multipurpose features, the product may become bulky, therefore ruining the customer’s perception of
the product’s convenience. To address this, the company is ensuring that the final product does not
hassle the user by using material that is not too thick, only including features that are necessary, and
is compact. For durability, some focus group discussion participants and market survey respondents
have raised concerns of whether the Tala case was waterproof or shockproof. The company has taken
this matter into consideration and has included it for future research and development. Finally, the
availability of supply is also a pressing concern since the company has only one supplier as of the
moment. However, proper scheduling of production and delivery may mitigate this problem.
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2.9 Product/Service Liability
The provisions of the New Civil Code on conditions and warranties shall control all contracts of
sales with terms, conditions and warranties. Under Article 1561, a seller has the full responsibility of
ensuring the items being sold has no hidden defects. However, a vendor or seller may not be held
liable in cases of defects those which are clearly visible upon inspection of the product bought.
All products are available both online and through bazaars. These products may have limited
quantities and are subject to return or exchange only according to our Return Policy.
Lokal Loca reserve the right, but are not obligated, to limit the sales of Tala cases to any person,
geographic region or jurisdiction. This right may be exercised on a case-by-case basis. The company
reserves the right to limit the quantities of any products the company offer. All descriptions of
products or product pricing are subject to change at any time without notice, at the sole discretion of
Lokal Loca. Thus, the company reserve the right to discontinue any product at any time.
The company do not warrant that the quality of any products, services, information, or other
material purchased or obtained by you will meet your expectations.
The company doesn’t guarantee, represent or warrant that your use of Tala cases will be
uninterrupted, timely, secure or error-free. However the customer have the right to expressly agree
the use of, or inability to use, the product is at your sole risk. The products handed to the end users
through the service are provided 'as is' and 'as available' for your use, without any representation,
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warranties or conditions of any kind, either express or implied, including all implied warranties or
conditions of merchantability, merchantable quality, fitness for a particular purpose, durability, title,
and non-infringement.
In no case shall Lokal Loca, management, officers, employees, affiliates, agents, contractors,
interns, suppliers, service providers or licensors be liable for any injury, loss, claim, or any direct,
indirect, incidental, punitive, special, or consequential damages of any kind, including, without
limitation lost profits, lost revenue, lost savings, loss of data, replacement costs, or any similar
damages, whether based in contract, tort (including negligence), strict liability or otherwise, arising
from the company’s use of products procured, or for any other claim related in any way to use of the
product, including, but not limited to, any errors or omissions in any loss or damage of any kind
incurred as a result of the use of the product posted, transmitted, or otherwise made available via the
service, even if advised of their possibility. Because some states or jurisdictions do not allow the
exclusion or the limitation of liability for consequential or incidental damages, in such states or
jurisdictions, our liability shall be limited to the maximum extent permitted by law.
Return Policy
All sales are final, unless defects are seen within 24 hours of purchase. The company do not
offer refunds nor exchanges beyond 24 hours, nor do we allow cancellations and returns. Lokal Loca
reserves the right to refuse any returns beyond the given period.
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2.10 Production
2.10.1 Value Creation for the Customer
The creators, as customers themselves, want a product that delivers the utmost
benefits and value for money against all possible alternatives in the market. Lokal Loca aims
to provide such customer satisfaction through the Tala phone case. The phone case will enable
the user to experience convenience and accessibility through its multifunctionality. The
customer, especially those on-the-go, will find themselves unhassled as they go about their
daily routines due to their use of the Tala case. Customers will be patronizing a high quality
item dressed with nationalistic design and purpose wherein they can store their mobile phone
and other valuable items such as their cash and cards. The Lokal Loca client is given first
priority henceforth, customer value is to be established through supplying customers the best
value for their money and tight-knit customer relationships.
2.10.2 The Input-Process-Output Model (IPO Model) for Lokal Loca
2.10.2.1 The IPO Model for Value Creation
To deliver the promises of the Tala phone case, Lokal Loca has laid out the
blueprints for proper execution of the production plan. Such customer value can be
achieved through a transformative process of converting the company’s inputs into
outputs with each input having been deliberately included in order to attain the
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company’s desired outcomes. Lokal Loca’s IPO model can be seen in Figure 2.10.2.1
which will also be further discussed from sections 2.10.2.2 to 2.10.2.4.
Figure 2.10.2.1 (The IPO Model for Value Creation)
2.10.2.2 Identification of Desired Outcomes for an Effective Production
Strategy
Desired Outcomes for an Effective & Efficient Production Strategy
Quality Cost Delivery Flexibility
• Ideal standards for Low production/ • Fast and dependable • Ability to execute
the product are met operating costs delivery new product
in terms of design resulting in high profit • Reliable operation designs, tweaks
and quality margins (effective, efficient, error- and features
• Use of high quality High productivity free production process)
raw materials Low inventory • Quick response time
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• Reliable and • Hassle-free
attractive design communication
• Zero product defects
Table 2.10.2.2 (Identification of Desired Outcomes for an Effective Production Strategy)
2.10.2.3 Identification of Production Inputs to Achieve Desired Outcomes
2.10.2.3.1 The 4Ms of Production Inputs
2.10.2.3.1.1 Manpower (Labor Requirements)
List of Manpower (Labor Requirements for the Production of Tala
Manpower Requirement Skill Requirements
Suppliers/Manufacturers • Easy to communicate and negotiate with
• Able to provide the company’s requests
• Quick response and delivery time
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Weavers of native textiles • Excellent weaving and sewing skills
• Highly competent
• High productivity
• Minimal production time
• Have an eye for spotting defects in fabric
• Easy to work and communicate with
Delivery men • Fast delivery time
• Easy to communicate with
• Deliver the items securely
Table 2.10.2.3.1.1 (Manpower (Labor Requirements))
2.10.2.3.1.2 Materials (Raw Materials)
List of Raw Material Requirements for the Production of Tala
Name of How the raw material Raw Material Specifications Raw Material Illustrations
Raw will be used
Material
Hard shell • Product base for the • Caters iPhone models (6, 6s,
phone case woven material and 7, 8, 6+, 6s+, 7+, 8+, X, XR,
money compartment XS, XS Max)
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• Select Samsung units will Figure 2.10.2.3.1.2A
also be catered and android
phones that share the same
common size
Figure 2.10.2.3.1.2B
Figure 2.10.2.3.1.2C
T’nalak • Used as primary • Traditional colors: blue,
fabric design for the phone purple, white and red*
case and cash • Will serve as the
compartment cardholder/wallet material as
well Figure 2.10.2.3.1.2D
*Colors may be subject to
change
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Figure 2.10.2.3.1.2E
Table 2.10.2.3.1.2 (Materials (Raw Materials))
2.10.2.3.1.3 Machineries (Machines, Tools, & Equipment)
List of Machineries, Tools & Equipment Requirements for the Production of Tala
Name of Machine, Tool, Machine, Tool, or Equipment Machine, Tool, or Equipment
or Equipment Specifications Illustration
Back strap loom N/A
Figure 2.10.2.3.1.3A
Table 2.10.2.3.1.3 (Machineries (Machines, Tools, & Equipment))
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2.10.2.3.1.4 Methods
List of Operational Methods for the Production of Tala
Operational Description of Operational Method Illustration of Operational Method
Method
Step 1: Acquisition of supplies needed for the
Procurement production of the Tala phone case
Process
Figure 2.10.2.3.1.4A
Step 2: Assembly In this step, raw materials outsourced
Process from step 1 will be used to make the case
which will be done by the manufacturer
Figure 2.10.2.3.1.4B
Figure 2.10.2.3.1.4C
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Step 3: Logistics Final product will be shipped to the base
Process city of operations (Manila, Philippines)
Figure 2.10.2.3.1.4D
Step 4: Packaging Final products will be packaged and
and Labeling labelled once items have arrived
Process
Figure 2.10.2.3.1.4E
Figure 2.10.2.3.1.4F
Table 2.10.2.3.1.4 (Methods)
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2.10.2.4 The Input-Process-Output Model for Tala
Step 1: Procurement Process
Production Inputs Conversion Process Production Output
(Resources)
• Man Step 1: Submission of purchase Smooth-flowing
• Suppliers order to supplier through procurement process of
• Manufacturer Alibaba.com mobile phone case bases
• Delivery men • Purchase order of phone and packaging supplies
• Materials cases and packaging
• N/A supplies
• Purchase order • Specify number, size and
Machineries color of items
• N/A • Indicate billing and delivery
• Computer information
• Methods
Step 2: Pay supplier for inventory
• Contacting, negotiating
• Pay via card/online/bank
and ordering with and
deposit
from suppliers and
manufacturers Step 3: Have items delivered to
respective locations
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• Phone cases will be
delivered directly to the
manufacturing facility
• Production time will be
lessened if sent straight to
the phone case
manufacturer
• Delivery address in step 1
must be the TADECO
Livelihood and Training
Center
• Packaging supplies will be
shipped to Manila (base of
operations)
• Date and time of delivery
must be scheduled (regular
schedule of delivery)
Table 2.10.2.4.1 (Procurement)
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Step 2: Assembly Process
(Resources)
• Man Step 1: Receive package from High quality, multifunctional and
• Suppliers phone case supplier nationalistic Tala phone case
• Manufacturer • Manufacturing facility that has met the design, function
• Workers and will receive and secure and quality standards from the
weavers contents of package idea generation phase
• Delivery men from the phone case
• Materials supplier
• T’nalak material • Check package for any
• Machineries product defects
• Back strap loom

Step 2: Weave T’nalak fabric
• Methods
• Native weavers and
• Specific techniques
workers weave the abaca
used in weaving the
fibers on back strap
T’nalak fabric
loom
• Dye fabric via Ikat style,
used in producing
use of beeswax and
the phone case and
natural pigments
wallet
• Add nut oil for shine
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Step 3: Produce wallet and
card holder
• Using material from step
4, the wallet and card
holder will be formed
Step 4: Attach woven material,
wallet and card holder onto
phone case
• Use the clear phone case
as the product base
• The indigenous fabric
will be adhered to the
phone case
• Then, the wallet and card
holder will be attached to
new phone case
Table 2.10.2.4.2 (Assembly)
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Step 3: Logistics Process
(Resources)
• Man Step 1: Packaging supplies will Smooth-flowing logistics
• Delivery men be received process of delivering and
• Materials • After packaging supplies receiving the final phone
• N/A have been shipped to the cases and packaging
• Machineries Philippines, the creators will supplies
• N/A be receiving the supplies
• Methods • Schedule and place of
• Coordinating delivery will be established
operations between
Step 2: Final products will be
suppliers and
sent to Manila
manufacturers
• Manufacturer will have the
finished phone cases
shipped to Manila
• Schedule and place of
delivery will be established
Step 3: Inventory and quality
control
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• Inventory count must be
done in order to check
completion of package
contents
• Inspection of products for
any defects must be done
for quality control
Table 2.10.2.4.3 (Logistics)
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Step 4: Packaging and Labeling
Production Inputs (Resources) Conversion Process Production Output
• Man Step 1: Packaging Individually packaged and
• Company employees • Insert phone cases labelled Tala phone cases
• Materials into individual ready for selling and
• Craft resealable stand-up packaging distribution
pouch
Step 2: Labeling
• Stickers
• Packaged items will be
• Machineries
stamped with the
• Stamping tools
Lokal Loca logo
• Methods
• Stickers indicating the
• Products will be
phone unit will be
individually packed into
stuck onto the
specific packaging for
packaging
Lokal Loca
Table 2.10.2.4.4 (Packaging and Labelling)
2.10.3 Production Process Flowchart
Payment Productio
Submissi of Inventory
on of Supplies Freight Weave n of Packagin and Sell to
purchase and In T'nalak phone g of Tala Quality end users
order Fabric case and cases Control
Freight waller
In
Figure 2.10.3 (Production Process Flowchart)
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2.10.4 Production Cost
2.10.4.1 Production Cost per Unit
Direct Material Requirement per Unit Cost Cost per Unit
T’nalak cloth and wallet 250 Php 14,500.00 Php 58.00
Hard plastic phone case 250 Php 10,000.00 Php 40.00
Craft resealable stand-up pouch 300 Php 1,950.00 Php 6.50
Logo stamp 1000 Php 300.00 Php 0.30
Sticker 1000 Php 500.00 Php 0.50
Total Direct Material Cost Php 105.30
Table 2.10.4.1 (Production Cost per Unit)
Over the course of each production cycle, 250 units of phone cases will be
produced, therefore requiring 250 units of both the hard plastic phone case and the
T’nalak cloth and wallet. As for packaging, a purchase of 300 pouches will be made
for 250 Tala cases, sparing 50 extra cases contingent upon any loss or damage to the
packaging. Logo stamps and stickers will be considered as prepaid purchases
(expenses), acquiring 1000 pieces, each with their own respective prices that will be
spread out per accounting period based on the usage of the items. For example, 250
logo stamps and 260 stickers were used during an accounting period therefore,
expenses for this accounting period would equate to Php 75.00 for the logo stamps
and Php 130.00 for the stickers. In turn, Php 225.00 worth of logo stamps and Php
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370.00 worth of stickers would be left for the next accounting period unless additional
purchases are made.
2.10.4.2 Percentage (%) Allocation for Lost Items
Order 10% Allocation for Lost Cost per Additional Cost per New Cost per
Quantity Items Unit Unit Unit
100 units 10 units Php 105.30 Php 10.53 Php 115.83

Table 2.10.4.2 (Percentage (%) Allocation for Lost Item)
In the case that items may be lost due to mishaps in inventory, delivery, or
shoplifting incidents, the company will allot a certain percentage for the cost of
production per unit. The business will be allocating 10% for every 250 units in
production. Specifically, 250 units of the Tala case will be produced, in which 10% or
25 items will be allocated for lost items. Since each item costs Php 105.30, per item
costs will be raised to Php 115.83 due to the additional Php 10.53 to compensate for
the lost goods.
2.11 Facilities
2.11.1 Plant Location
The Lokal Loca headquarters will be situated in The Manila Residences Tower 1 along
Taft Avenue, Malate, Manila. Cassandra Justine Go will be leasing this unit for the use of Lokal
Loca company meetings and product assembly and packaging as evidenced by a contract. This
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location is most convenient and accessible for the head office to meet and work in since the
company founders live nearby. It is also conveniently located within the metro so business
services and establishments are at a close distance. Getting from point to point, or from the
main office to a certain destination and vice-versa, is not difficult either since public
transportation is readily available. Aside from this, there is also adequate space for the storage
of Lokal Loca products and packages. However, The Manila Residences does not allow the
receival of packages for unit owners in their absence whereas Green Residences permits that
packages may be left in the lobby until received by the owners themselves, thus allowing the
company to receive packages at any given time without having to worry about being physically
present in the building once the packages arrive. Hence, packages from the suppliers will be
sent to Green Residences and then transferred to The Manila Residences for product assembly
and packaging.
2.11.2 Building Facilities and Utilities
Facilities Purpose
Office area • Individual working spaces for each department of the business
• Conducive working space for each team to meet, plan, and
assess business operations
Meeting room • This room shall be used solely for the purpose of conducting
Lokal Loca company meetings
Storage space • Packages from suppliers will be stored in this space for
safekeeping
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Product assembly and • Product inventory and quality checking/control
packaging area • Products will be individually packaged and labelled here
Office pantry or dining • For the purpose of office breaks (e.g. lunch breaks)
area
Comfort rooms • A space for company employees to tend to personal matters
Table 2.11.2 (Building Facilities and Utilities)
2.11.3 Plant Layout
Figure 2.11.3 (Plant Layout)
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2.12 Supply Chain Management
2.12.1 Identification of Key Suppliers
2.12.1.1 Primary Suppliers
Primary Suppliers
Supplier Reasons for Choosing Involvement of Chosen Supplier
Particular Supplier
TADECO Livelihood • Produces the needed • TADECO Livelihood and
and Training Center indigenous textiles Training Center will be given the
• Manufacturer of the phone cases (product base) and
Address: 8105 Panabo, product from then will attach the woven
Davao • Able to supply raw material and money compartment
Contact No.: (084) 822- materials for the to the phone case
0531 production of the woven • Act as both a manufacturer and
fabric and wallet (e.g. supplier
woven material, adhesive,
zipper)
• Direct relation to the
supplier
• Supplier provides another
source of income for
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workers (banana plantation
workers and their families)
including lumad weavers
Hangzhou Beneme • Low cost supplier of craft • Acts as primary supplier for
Trading Co., Ltd. pillow box packaging packaging
• Obtainable minimum
Ms. Emiee Zhang order: 500 pcs
• Only supplier who
Address: Huahe Road, provides customizable
Jinggan District, packaging good for Tala
Hangzhou, Zhejiang, Cases
Mainland China
(outsourced from
Alibaba)
Contact No.:
13738121509
Table 2.12.1.1 (Primary Suppliers)
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2.12.1.2 Secondary Suppliers
Secondary Suppliers
Supplier Reasons for Choosing Particular Involvement of Chosen Supplier
Supplier
There is no secondary supplier
for the T’nalak production.
There is also no secondary
supplier for manufacturer since
TADECO Livelihood and
Training Center both supplies
and manufactures Tala Cases
Shanghai Cholyn Packing • Cheap but not the lowest • Acts as a contingency plan, or
Products Co., Ltd supplier of kraft pillow box secondary supplier for
packaging packaging
Address: Shanghai, Mainland
China (outsourced from Alibaba) • Minimum order: 1000 pcs is too
Contact No.: inquiries and much for the start-up capital of
transactions are only restricted the company
through Alibaba.com
• Although they don’t provide
direct customization of the
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packaging, they are one of the
few suppliers who has this
specific unique packaging
Table 2.12.1.2 (Secondary Suppliers)
2.12.2 Supplier Specifications
Responsible Supplier Role
The supplier must provide all needed raw materials and finished output as outlined in
Purchase Order (PO), drawings, and/or specifications
Compliance Date
Full compliance is expected one month upon issuance of Purchase Order
Process Risk Assessment
When required by the quality management team of Lokal Loca, the supplier will perform a
risk assessment of its manufacturing and quality assurance processes to evaluate the
effectiveness of these processes to consistently produce the component. Failure Modes &
Effects Analysis (FMEA) is one example of an accepted process risk assessment format.
Product Safety Risk Assessment
When required by the quality management team of Lokal Loca the supplier must perform a
safety risk assessment for any supplier designed product in accordance with the principles
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defined by ISO 12100, safety of machinery, risk assessment and risk reduction, and provide
residual risk information.
2.12.3 Inventory Management
Lokal Loca’s inventory management is a systematic approach in obtaining, storing, and
profiting both from raw materials and finished goods. As a part of your supply chain, inventory
management includes aspects such as controlling purchases, maintaining the storage of
inventory, controlling the amount of product for sale, and order fulfillment.
Since the company is considered as a small-to-medium businesses (SMBs), Lokal Loca
will just use Microsoft Excel and manual tallying in keeping track of inventory databases and
make decisions about ordering.
Further discussion on managing the company’s inventory will be on Chapter 4.
2.13 Environmental Factors
2.13.1 Positive Effects
Lokal Loca incorporates the Philippine Abaca (i.e. Abaca fibers), a natural and
biodegradable raw material, in the production of the Tala phone case. This sustainable leaf
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fiber is found in the woven T’nalak fabric used as a major feature of the product. Aside from
the biodegradable factor this natural fiber, less pollution during production is also achieved.
2.13.2 Negative Effects
Negative effects of the Tala product include the use of plastic, specifically
Polycarbonate Plastic for the product base. Once the product has been disposed of, it will
reach the landfills and take a hundred years or more to fully degrade. Through the course of
its decomposal, greenhouse gases (e.g. methane and ethylene) are emitted and toxic
chemicals such as Bisphenol A are released into the atmosphere, damaging the Earth’s ozone
layer and resulting in higher temperatures around the globe. As mentioned in section 2.5.1,
areas for future research and development will be looked into such as the use of recycled
plastic material for the phone case bases.
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Chapter 3: THE MARKETING PLAN
3.1 Macro-Environmental Analysis (PESTLE Analysis)
I. Political
A business depends on several factors to thrive, grow, and create revenue. Different services
and products have been created to not only meet the needs of the people but also to generate profit
and to help businesses succeed in its goals and objectives. With that in mind, different business owners
have used various ways to ensure that their business is relevant and is able to meet the needs of the
company and its stakeholders. One way is to look at the external factors that could possibly affect the
business positively or negatively and one of those factors is the political landscape in which the
business will be in. This refers to the different policies and laws set by the government of the area the
business plans to target or set up in. In the case of Lokal Loca, the location of operations as well as
the area of the company’s target market is the Philippines, specifically Metro Manila. With this comes
the different policies and areas of the political landscape that can affect the business operations,
expenses, revenues, and such. As stated previously, there are certain policies and laws that will affect
the business and will also need to be followed, therefore these aspects of the political environment
shall be discussed in the paper.
The first policy that will be discussed in this portion of the paper is the Tax Reform Act of
1997 (Republic Act No.8424). This act is also known as the National Internal Revenue Code of 1997
and shows the taxing process of the Philippines. Some of its contents include the tax on individuals,
gross income, payment of tax, and the like. For the business, the Tax Reform Act of 1997 will affect
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mainly the taxes of the business on wages, salary, revenue, expenses, and such since all spending and
earnings will have tax. This is important to consider as taxes are applied in many areas in the business
that involve income and expense. From supplies to the overall product, there would need to be
changes to pricing in order to make sure that the business still receives net income or revenue. For
example, the sale of goods is required to have a VAT or value-added tax of 10% of the gross selling
price which must be paid by the seller according to Section 106-A. This will greatly affect the business
as the business is in the retail industry, specifically gadget accessories. This law would affect the final
selling price and will greatly increase it which must be considered when the final price for the product
is chosen (Tax Reform Act of 1997).
Another policy that affects taxations is Republic Act No. 10963 otherwise known as the
TRAIN Law or the Tax Reform for Acceleration and Inclusion (TRAIN) Act. Established in 2017 by
the Congress of the Philippines, it was created to amend certain sections of the previously established
Republic Act No.8424 which is known as the Tax Reform Act of 1997 in order to create better
equilibrium to increase disposable income as well as to improve the internal revenue system in the
Philippines. Such amends include lessening the personal income tax and the increasing of taxes on
specific products and services like petroleum products, tobacco products, and the like (Abrea, 2018).
This will affect the business especially when it comes to the personal income tax since it will be
lessened which will affect the owner’s equity or future capital for the business. If there would be more
capital, there can be major changes to production and design since there is more funds for the business
to explore and improve the internal systems and processes, product quality, and the like. Though it
does not have a direct effect on the gadget accessories industry, it does affect the taxes of the
businesses in that industry including Lokal Loca (Tax Reform for Acceleration and Inclusion Act).
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Another important area of government policies that have to be considered and taken into
account would be government policies that are focused on the stakeholders of the business such as
the Republic Act No. 7394 otherwise known as the Consumer Act of the Philippines. This act follows
the state policy of “protecting the interests of the consumer, promote his general welfare and to
establish standards of conduct for business and industry”(Consumer Act of the Philippines,1992). It
contains various rules and laws that cover different aspects of businesses with the purpose of
protecting the consumer’s rights, health, and interests as well as protecting the businesses. This act
must be considered as it is very important in the gadget accessories industry since it does affect the
micro and macro aspects of the industry including raw materials,design,packaging, and the like
(Consumer Act of the Philippines,1992).
Another known policy that focuses on the stakeholders is the Labor Code of the Philippines
which focuses on promoting jobs opportunities as well as protecting the rights of the employees. In
terms of setting up a business and proposing one, it is important to understand these rights and rules
when it comes to employees as to not only respect those people but to also protect the identity of the
business and its stakeholders which will be followed by Lokal Loca. Not only that, since the gadget
accessories industry does use labor to create the products as well as collect raw materials, this code
affects the pay and the treatment of the employees within the industry (Labor Code of the
Philippines).
Furthermore, since Lokal Loca is a micro business enterprise, it can use the Barangay Micro
Business Enterprise Act of 2002 (R.A. 9501) which gives the micro business tax exemption for
income. Provided that the employees of the company are still given the same benefits as regular
employees like health benefits, It also allows the micro business from being under the minimum wage
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law. This will greatly benefit the business in terms of finances and profit since there is less laws as well
as taxes to account for. This also affect the industry that Lokal Loca will be in since there are various
businesses that also are considered micro business enterprises and can further benefit the economy
and profit of the industry (Barangay Micro Business Enterprise Act of 2002).
Another important area that has been considered is the ideas that will be formed to further
create uniqueness to the product, therefore, the use of Republic Act No. 8293 or the Intellectual
Property Code of the Philippines is useful for the business to keep its ideas. To give a brief
background, the Intellectual Property Code of the Philippines is an acknowledgement and
implementation of the intellectual property rights of any person, group, businesses, and other entities.
This allows businesses to provide goods or services while still remaining ethical in its business practices
and will be followed by Lokal Loca (Intellectual Property Code of the Philippines).
The mentioned policies and acts will aid the business in conducting ethical and legally correct
practices as well as serve as a guide to what needs to be accounted for and what can be utilized by the
business. However, given the fact that there will be upcoming general elections happening in May
2019 and depending on who will take office, business policies may change which will affect businesses
including Lokal Loca.
II. Economical
Though the political aspect is important to consider, there is another factor that is as important
to be taken into account which is the economical aspect. The economy is important to consider since
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it will be affecting cost, revenues, expenses, and other financial areas that can affect different industries
and the businesses in it. Since Lokal Loca
The economy of the Philippines is currently growing with an estimated GDP growth rate of
6.7% for the year 2019, according to the Asian Development Bank (Table 1). However, recent reports
have stated that the economy is slowing down for the year. The economy will slow down from the
estimated 6.4% in GDP growth to a 6.3%,according to ASEAN+3 Macroeconomic Research Office
(AMRO) (Cigaral, 2019). Furthermore, the inflation rate as of February 2019 decreased to a 3.8%
compared to a 4.4% last year, according to a chart made by Trading Economics (Table 2). This can
mean a higher unemployment rate that can lead to a slowdown in the production of goods and
services. In terms of Lokal Loca, supplies and manpower might start to become less due to the
lowering of inflation as well as GDP growth. Though this estimate can be changed, it is important to
know some scenarios that the business has to overcome.
Figure 3.1A (GDP growth rate)
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Figure 3.1B (Inflation rate)
Though this is happening to the country’s GDP growth, according to HSBC Chief Market
Strategist Cheuk Wan Fan, private consumption is said to further increase this year due to the
projected stability of the Philippine peso (Cigaral, 2019). Not only that, there is an increase in overall
consumer spending in the last quarter of 2018 which amounted to 1791823.92 PHP Million, according
to a chart made by Trading Economics. This is good for businesses as there may be a potential increase
in the consumption of services and goods by customers. This can affect the gadget accessories industry
as well since these pieces of information can affect the pricing of raw materials which can lead to an
increase or decrease of supply cost then will lead into a domino effect all leading up to the selling price
of the product which can increase or decrease and business revenues or losses.
III. Social
The gadget accessories industry has been growing for the past few years with the rise and
creation of new phones of different shapes and sizes allowing businesses to be creative and have a
wide range of selecting the target market. Gadget accessories are used to highlight and accompany
gadgets like one of the most used and one of the most popular forms of gadget: mobile phones.
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Mobile phones are now being used to replace traditional ways of doing tasks by offering online
applications and programs that will allow the user to complete tasks in less time and less effort. The
market for mobile phones is always expanding and accompanying it are gadget accessories. Different
trends have been created and developed depending on the preferences of the consumers. Such trends
would include phone cases and design trends. It is said that this year, phone case designs that are
geometric pattern cases,wallet phone cases, minimalistic cases,branded cases, custom made phone
cases, and cases that are shockproof or waterproof (popculturetees,n.d.). Not only that, majority of
digital people are now coming from Generation Z meaning people born “from mid-1990s to the late
2000s” who are also considered people that were born with digital technologies and devices. Since
Generation Z is one of the important markets in the phone industry, they are also an important target
market since they are technically also today’s youth. With that in mind, several phone case designs
have been designed over the years to cater to the current trends, characteristics, and preferences of
the youth. An article made by Inc. states that when it comes to marketing and selling a product, it is
important to consider adding “human elements” and make your a strong call to action. This is
important to consider as Gen Z people are the main users of phones and purchase various gadget
accessories to highlight and style the phone. The gadget accessories industry is affected since the
people buying the accessories do have unique characteristics and preferences and therefore, should be
met in order to keep the industry going (Heitzman,n.d.).
IV. Technological
In this digital age, it is important for a business to consider the rate of technological innovation
that may affect their operations. Based on the current development rate of technology, businesses run
by technology could be fully operational within the next few years. In the past decade, this aspect has
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often been overlooked by companies which in turn have failed to progress with the current trends
(Team FME, 2013). Such businesses have been left in the dust by organizations who have taken into
account the possible impacts of technological advances to their businesses and have taken advantage
of these opportunities.
One factor to be recognized could be the possibility of technological advances within the next
few years. This pertains to the rate of change of a product and the industry. So to speak, the gadget
accessories industry could face numerous changes and developments within its lifetime, causing an
unstable future for Lokal Loca’s products. For example, the growing production rate of various
smartphone models may hugely impact a business in the gadget accessories sector. As the business is
unable to cater to all current types of smartphone models, the growing production rate of new and
varying smartphone units definitely adds to the portion of the market the company fails to
accommodate. In line with the increasing production of a variety of smartphone units, older models
begin to depreciate and eventually become obsolete. Due to the product’s obsolescence risk, in which
a product is no longer competitive in the market, the company will then have to adapt to the latest
models and get rid of older ones. The organization also faces the uncertainty of whether the gadget
accessories industry could still be thriving at a certain period in the lifespan of the company. Although
the question might be far-fetched, it is important to ask such questions in order to prepare for
situations in the unforeseeable future.
The business also concerns itself with production efficiency or automated processes. This
refers to the improvement of production technologies; dealing with manufacturing operations rather
than the retailing process. Automated production lines allow companies to replace the labor force with
fully equipped machinery in performing skilled tasks and at the same time eliminating human error
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from the equation. In the future, the production of the phone case and wallet could be fully driven by
technology, where humans are unnecessary in producing goods.
Posing another challenge to the technological aspect of the business is internet connectivity.
The rapid growth of the internet’s influence on businesses has magnified online retailing platforms
and networking capabilities due to its convenience and reliability (“Global Mobile Phone Accessories”,
2019). This has allowed businesses to branch out and extend its reach to a wider audience and
streamline their workflow (Team FME, 2013). At the same time, the internet provides an alternative
distribution channel and another way of interacting with their customers. With the emergence of
online stores, customers are given a wider range of mobile phone accessories to choose and buy from
with just a single tap of their finger. However, the internet may also pose as a threat to the business
since competitors may also take advantage of this strategy.
V. Environmental
Today’s economy has begun to highlight the importance of running businesses that are as
environmentally friendly as possible. They have recently come to the forefront of business operations
due to the dangers of climate change, global warming, pollution, increased carbon footprint, and the
like (“Marketing Theories”, n.d.). With the rising significance of sustainable companies, organizations
must monitor such factors that could possibly affect business operations. Moreover, the general move
towards more environmentally friendly products and processes has affected demand patterns and
creating business opportunities (Oxford University Press, 2011). Such factors will be discussed below,
those particularly affecting the gadget accessories industry.
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Firstly, certain laws and policies governing environmental issues may affect business ventures
and must be observed by the company. The gadget accessories industry falls under the following
environmental legislations.
The first law to be discussed is the Republic Act No. 6969, otherwise known as the Toxic
Substances, Hazardous and Nuclear Waste Control Act of 1990. This act prohibits any use,
manufacture, sale or disposal of chemical substances that may harm the environment. It also restricts
the disposal of nuclear and hazardous wastes into Philippine territory for whatever purpose (Toxic
Substances, Hazardous and Nuclear Waste Control Act, 1990). This law affects businesses involved
in the manufacturing scene, including the gadget accessories industry. As production goes on for Lokal
Loca’s products, it is important to be mindful of the waste and byproducts created in the process. Any
harmful substance created in the process must be treated and disposed of properly.
Along with proper waste management comes in the Ecological Solid Waste Management Act
of 2000 (R.A. 9003). Republic Act No. 9003 states the adoption of a program that ensures the
protection of public health and environment, utilization of environmentally-sound methods, proper
waste segregation, reduction and minimization measures and the like. The act also mentions the
encouragement of greater private sector participation in solid waste management (Ecological Solid
Waste Management Act, 2000). Hence, a manufacturing company should be responsible for the waste
their company produces and must take actions to properly and responsibly eliminate their waste. In
light of proper waste management, the Presidential Decree No. 825 provides penalty for improper
disposal of garbage and other forms of uncleanliness (Presidential Decree No. 825, 1975).
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Another environmental policy that must be observed is the Philippine Clean Air Act of 1999
(R.A. 8749). This law focuses on providing a comprehensive air pollution control policy to attain a
balanced and healthful ecology and to promote the protection of the global environment to attain
sustainable development. As stated in the act, “a clean and healthy environment is for the good of all
and should therefore be the concern of all” (Philippine Clean Air Act, 1999). The fumes and smoke
released by factories should be controlled and dealt with responsibly. If so, the chemicals released into
the air must be reduced as well to protect the environment and to avoid any damages.
Additionally, Republic Act No. 9275 or the Philippine Clean Water Act of 2004 also concerns
manufacturing industries and the gadget accessories industry itself. The policy provides a
comprehensive water quality management for the country. As mentioned in the act, “the State shall
pursue a policy of economic growth in a manner consistent with the protection, preservation and
revival of the quality of our fresh, brackish and marine waters” (Philippine Clean Water Act, 2004).
Together with the Presidential Decree No. 979 governing marine pollution, there is an urgent need to
prevent, mitigate or eliminate increasing damages to marine resources as a result of pollution and
henceforth require the best practices to improve disposal processes (Presidential Decree No. 979,
1976). The industry is also affected by this law since protection of Philippine waters must be observed
therefore, any waste disposal from factories to the water sources of the Philippines must be avoided.
Overall, the Presidential Decree No. 1151, also known as the Philippine Environment Policy
governs most of these laws since it focuses on creating, developing, maintaining and improving
conditions under which man and nature may live in harmony (Presidential Decree No. 1151, 1977).
In the same fashion, the Republic Act No. 3931 issues a national policy “to maintain reasonable
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standards of purity for the waters and air of the country with their utilization for domestic, agricultural,
industrial and other legitimate purposes” (Republic Act No. 3931, 1964).
Moving on to the second point, consumers have the right to be informed of the products they
are sold as per Republic Act No. 7394, otherwise known as The Consumer Act of the Philippines.
Users have the right to be educated and knowledgeable of the items they are purchasing since this
affects the consumer’s welfare. As for Lokal Loca’s product, woven cloth will be incorporated for
design and biodegradable plastic will be used to construct its shell and for the packaging of the item,
paper bags will be used to distribute the product to the users. The woven material to be used for the
phone case will be sourced from the Cordillera Administrative Region (CAR). Also, another important
factor to consider in the environmental aspect is the availability of resources for production.
Aside from the manufacturing processes that the product undergoes, it is important to
remember environmental factors that may also affect the retailing operations. Geographical location
is important when selling products. This determines the market demand of a specific area and its
accessibility. WIth this in mind, businesses should strategically plan where they are located. In 2016,
Asia-Pacific dominated the global mobile phone accessories market by contributing a market share of
70.6% in terms of volume. Asia’s large population base, along with cost competitive smartphones, has
accelerated the growth of the mobile phone accessories market in the region (“Global Mobile Phone
Accessories”, 2019). According to the International Data Corporation (2018), smartphone shipments
to the Philippines reached 7.8 million units for the first half of 2018, posting a 5.6% growth year over
year. Lokal Loca will situate itself in De La Salle University, catering to on-the-go university students
who seek convenience in their products. Aside from the offline distribution channel, Lokal Loca will
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also be advertising their business online and will be selling their products via social media platforms
(e.g. Instagram) as well.
Finally, over the last few years, there has been a gradual movement for sustainability and
Corporate Social Responsibility (CSR), also known as corporate citizenship. This business model
allows the company to function as a social enterprise through economic, social, environmental and
ethical practices. Thus, the company operates in a manner that enhances society and the environment
as opposed to harming it. Through Lokal Loca’s use of local and eco-friendly materials, the business
practices sustainability and functions as a social enterprise by donating a portion of the proceeds to
their local suppliers.
VI. Legal
To ensure that an organization functions properly and accordingly, regulatory bodies have
been established. These have been set up to monitor an organization’s operations in accordance to
legislations related to the business. This is where the legal factors come in. Legal factors also decide
whether a business may sell or not, affect costs, and so on. One of these legalities would include
registering a business.
In starting up a business, a set of requirements and papers are needed to be filed and processed
to register the business. The Lokal Loca brand will be registering as a corporation. Mentioned
previously, the Corporation Code of the Philippines states that a Corporation is an “artificial being
created by operation of law, having the right of succession and the powers, attributes and properties
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expressly authorized by law or incident to its existence” (Corporation Code of the Philippines). The
following steps are required in order for the brand to become a legal business:
1. Verify business name with the Securities and Exchange Commission (SEC). This part is
essential and at the core of putting up a business. Registry of the business name
establishes the legality of the business and guarantees the right to legal use in operating
the business. Verification of the business name will allow you to check the availability
of the chosen name. It is important that no other company has a similar or exact same
name so that any copyright issues may be avoided.
2. Draft and execute the articles of incorporation and bylaws by incorporators. Articles of
incorporation and by-laws are a corporation’s official documents for organizing,
governing and operating. Articles of incorporation create and organize the corporation
while by-laws establish internal rules for operating in which the corporation must
follow. Corporate bylaws also set in detail the roles of board members and officers.
3. Deposit the cash collected from subscription.
4. File articles of incorporation and bylaws with SEC. Incorporation is a legal process done,
therefore, filing bylaws and articles of incorporation certifies the incorporation of the
business.
5. Register the business name with the Department of Trade and Industry (DTI). Registering the
business name with the DTI enables the business to get various documents and
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permits in order for your business to go on full operation as well as to ensure the
business names will not be used by others.
6. Secure a barangay permit in the place where business is located. This is renewable every year.
A barangay permit is one of the identification documents needed for any business.
Both permits in numbers 6 and 7 guarantee that the business is a community-friendly
establishment that adheres to the ordinances and standards of the local government
unit concerned.
7. Apply for a business permit in the municipality where the business is located. Securing a business
permit allows the company to conduct business within the government’s geographical
jurisdiction. This authorizes the company to run their business. This permit is
renewable every year.
8. Register the business with the Bureau of Internal Revenue (BIR). Registering with the Bureau
of Internal Revenue gives a business the authority to print official receipts and
invoices, formally register the Tax Identification Number (TIN) provided, and register
books of accounts. This requires an annual registration fee.
9. Register the business with the SSS, PhilHealth, and HDMF. The Philippine Labor Code
requires an employer to provide their employees SSS, PhilHealth and HDMF benefits.
(Rabo, Tugas, & Salendrez, 2016, p.29)
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As mentioned above, regulatory bodies are present in governing businesses and their
operations. One of them is the Labor Code of the Philippines, also mentioned previously in the
Political factor. The Labor Code protects and promotes the welfare of employees regardless of sex or
race. As a legal entity, the business must observe proper treatment towards employees. Proper
observation of employee rights, proper compensation, and equal work opportunities must be given to
employees. Correspondingly, the Senate Bill No. 1271 or the Anti-Discrimination Act prohibits
discrimination on the basis of sexual orientation, gender identity or expression, age, class, status,
ethnicity, color, disability, religious and political beliefs. (Anti-Discrimination Act, 2016). Recently, an
act strengthening the compliance to occupational safety and health standards has been passed. This
act is the Occupational Safety and Health law or Republic Act No. 11058, ensuring a safe and healthful
workplace by affording employees full protection against hazards in their work environment
(Occupational Safety and Health Law, 2018).
Aside from the employees, customers also have their own equal rights. Similarly, the
Consumer Act of the Philippines (R.A. 9374) protects and promotes the welfare of customers. This
also protects consumers from hazards to health and safety and deceptive advertisements. Thus,
businesses must provide full information of the product to the consumers and must comply with such
regulations. Not to mention, advertisements released, packing and branding used by the entity must
follow the rules of the Advertising Standards Council.
Another policy would be the Philippine Competition Law (R.A. 10667). This law promotes
and protects competitive market and enhances economic efficiency and fair trade (Philippine
Competition Law, 2015). As a competitor in the market, Lokal Loca and the rest of the gadget industry
fall under the governance of this law.
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Lastly, the Intellectual Property Code of the Philippines, Republic Act No. 8293, protects and
grants the rights to one’s idea. This is important in a business to protect its own innovations from
exploitation The gadget accessories industry is governed by this law due to the manufacturing of
authentic ideas into profitable products.
3.2 Industry Profile
3.2.1 Current size
The mobile phone accessories industry has become a worldwide market reaching
different regions including Asia, Europe, and North America. The current size of the market
is very large with many companies such as Apple Inc., Samsung Electronics, Sony
Corporation, Panasonic Corporation, and many more entities competing in the industry’s
market (Mobile Phone Accessories Market - Global Industry Analysis, Size, Share, Growth,
Trends, and Forecast 2016 - 2024, n.d.). As of 2016, the global mobile phone accessories
industry is said to be about 60.64 billion dollars with an estimate of reaching $107.3 billion in
2022 (TekRevue Contributor, 2019). In terms of the consumer market size, the amount of
expenditure in the Philippines alone. reached 97% last year in 2018 as seen in the figures
below.
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Figure 3.2.1.1 (Domestic Retail Expenditure in the Philippines 2018 for Luxury Consumer Electronics)
Figure 3.2.1.2 (Chart of Domestic vs. International Expenditure in the Philippines 2018 for Luxury
Consumer Electronics)
This is significant statistical data due to the fact that the mobile phone accessories
industry generally supports the mobile phone industry. This means that the size of the mobile
phone accessories currently is not only due to innovation of the accessories itself but also the
innovations happening in the mobile phone industry. With the rise of the mobile phones
industry, it also can potentially mean the rise in mobile phone accessories as well. In terms of
consumer and competitive market size, the mobile phone accessories industry has a very large
size and is continuously growing. According to GSMA data, five billion people own a phone
and uses it currently in daily life (TekRevue Contributor, 2019).The segments under this
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particular industry are numerous ranging from protective phone cases to chargers and power
banks Mobile Accessories Market 2018 Global Size, Share, Industry Analysis, Top Leaders,
Growth Factors, Development Status and Opportunity Assessment by 2022, 2018). The
present segments in the market are still expanding and adapting to the needs of the consumers
as well as the changing environment. In terms of product, the highest market share belongs to
the protective cases area since the need to product the luxury phones by consumers has
become present more than ever which as a result, is increasing the industry size overall (Global
Mobile Phone Accessories Market 2019-2023, 2019).
3.2.2 Growth Potential
The potential growth of the industry is said to be high and continuously expanding
due to many factors in the consumer market. One of those reasons is the rise of demand for
mobile phone cases and covers which can stem from the rise of consumer spending and the
demands of the consumers, specifically the younger generation (Mobile Phone Cases And
Covers Market: Global Industry Analysis 2012 – 2016 and Opportunity Assessment; 2017 –
2027,n.d.). According to Trading Economics, the last quarter for 2018 reached 1791823.92
PHP Million in consumer spending (Philippines Consumer Spending,n.d.). This high amount
of spending can potentially bring more consumers to spend on consumer goods such as goods
that can be found in the mobile phone accessories industry. As for the demand of the younger
generation, specifically Generation Z, whose world has been shaped by the use of digital
platforms, social media accounts, and the Internet all though the use of mobile gadgets that
include mobile phones (Radcliffe, 2017). Different trends especially in the mobile phone cases
segment such as the rise of demand for cases with convenient features and the call for
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innovation especially for Generation Z, also adds to the increasing growth of the industry
itself. Some needs such as the need to protect one’s mobile phone which has been ever-present
also adds to the growth potential seeing as mobile phones are becoming more and more varied
and some phones call for mobile phone accessories unique to the model or brand which again
adds more potential for the industry’s growth (Mobile Phone Cases And Covers Market:
Global Industry Analysis 2012 – 2016 and Opportunity Assessment; 2017 – 2027, n.d.). Not
only that, the industry is said to have a growth in “CAGR of 5.8% during the forecast period
2016-2023” (Credence Research, 2016).
3.2.3 Geographic Locations
For the mobile phone accessories industry, its location is worldwide with regions like
“Asia-Pacific, Europe, Middle East, Africa, North America, and South America” (Global
Mobile Phone Accessories Market 2019-2023, 2019). Currently, APAC or Asia-Pacific is
leading with having 70.6% share in the industry as of 2016. It is said that this is due to the fact
that first, it has one of the world’s largest population size and the fact that China is serving as
one of the major suppliers or traders in the mobile phone accessories market. As for Europe,
the market there is said to grow at 8.7% in terms of CAGR in the 2017-2023 time span (Global
mobile phone accessories market analysis & opportunity outlook 2023,n.d.).
3.2.4 Industry Trends
Currently, the mobile phone accessories industry globally is moving towards
accessories that include more components which offers more convenience for the consumer
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market. It is said that due to this, the growth of compound annual growth rate will move up
to 4% in the coming years. It is also said that the consumer market is moving their preferences
to “battery-integrated protective cases” (Global Mobile Phone Accessories Market 2019-2023,
2019). From the creation of Beats by Apple and the use of Alcantara by Samsung, the industry
is creating further innovations that can provide more convenience and style as well as meet
the demands of the consumer market.
3.2.5 Seasonality Factors
Since the mobile phone accessories industry is closely tied and dependent to the
growth of the mobile phone industry, it is safe to say that the seasonality factors of the mobile
phone accessories industry is in line with the mobile phone. According to an article made by
Investopedia, it states that one of the peak times for sales would be from November to
December due to the fact that it is the Christmas season (Maverick, 2019). Not only that, the
release of new phones can potentially become a season factor due to the fact that supporting
mobile phone accessories can benefit from the new releases.
3.2.6 Profit/Sales Characteristics
When it comes to gaining profit, the mobile phone accessories industry is a potential
profit maker. With new styles and innovations as well as a booming market, the industry still
has a lot of untapped potential. Listed below are the profit characteristics of the industry:
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1. Profit is constantly fluctuating. Unlike some industries that usually have a more stable
profit margin, the industry of mobile phone accessories can easily vary. This is possibly
due to the season factors and the release of new phones. Though it is stated that the
time period from November until December are one of the peaks of the industry, the
other remaining months of the year remain unknown possibly because either sales are
constant or that it varies depending on the circumstances.
2. Profit is determined by various factors especially in the external environment. Some
of the external factors that affect profit would include customer preference, season factors,
current trends, and other various factors. For customer preference, the different mobile
phone accessories can possibly be heavily dependent on the consumer market seeing as
the consumer market determines the profit. Current trends such as convenience in mobile
phone cases and desired multiple functions also serve as a basis for profit (Mobile Phone
Cases And Covers Market: Global Industry Analysis 2012 – 2016 and Opportunity
Assessment; 2017 – 2027,n.d.).
3. The way to gain profit in this industry are numerous. From distribution channels to a
variety of products, the industry has many ways one can gain profit. The products that a
business can offer can vary from power banks to phone cases and so much more. Not
only that, the mobile phone accessories industry is one of the industries that does not
necessarily require the creation of a brand new product. It is an industry where design and
style thrive and actually create distinctions between products of the same area such as
phone cases.
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3.2.7 Industry Distribution Channels
Different distribution channels are currently being used by the industry in order to
penetrate the market and promote the products. Majority of entities that are selling in the
mobile phone accessories industry are using direct selling (Boundless, n.d.). Companies like
Samsung and Apple who not only sell mobile phones but also sell accessories to go with the
phones have retail stores worldwide and sometimes have certified sellers that have their own
stores located across the globe. An example would be Apple who has 506 retail stores across
the globe (Farfan, 2018). Aside from the major brands, small resellers of mobile phone
accessories also make use of bazaars, public events, large malls, and marketplaces to promote
and sell the accessories. In the Philippines, a lot of these resellers can be seen in various areas
in the city and in the province. The use of distribution channels is a very crucial part of the
marketing and the promotion of the companies as well as the products put up for sale
especially in the mobile phone accessories industry seeing as these products are physical and
not online services. However, this does not mean that the industry does not make use of the
Internet. In fact, the growing digital world is now paving new ways for companies to promote
the products as well as creating a new distribution channel: online selling. This shift to online
selling and exposure can also be stemmed from the fact that the current generation have a
high amount of time spent on scrolling through their mobile devices which are connected to
the Internet. Companies like Samsung are making use of online platforms by partnering with
different online selling sites like Amazon, ShopClues, and the like (Samsung Mall- One Stop
Shopping Mall, 2018). This can be known as selling through intermediaries which is another
form of distribution channel.
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In addition to that, with the growing industry, new forms of distribution channels are
also being innovated in order to create better market penetration and provide more product
variety for the consumers.
Figure 3.2.7 ( Distribution Channel)
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3.2.8 Basis of Competition
Rivalry of Competition Factors
Sluggish Growth within the Industry the industry does not appreciate the rapid
growth rate
there is also a high degree of quality towards
any extant share in the market. Once lost, it
may be hard to recover.
Barriers to Exit if barriers to exit within the industry is possible,
then low profit company and will remain
engaging.
there will be competitive pressure to stay
relevant in the market
Strategic Focus a company sacrifices short term profitability to
ensure its long term presence in the market
Economic Growth In the technology industry, advancements have
led to growth in several world economies.
Possibly, accessories correlating to the
technology being used such as smartphones
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may also increase the market demand, hence
increase in the economic growth of the country
Table 3.2.8 (Basis of Competition)
3.3 Competition Profile
3.3.1 Direct Competitors
Marketing Mix of Competition for Lokal Loca Ltd
Hinangan Yakan Product Price Place Promotion
Yakan Weaved Php 750 Basilan online
Phone Case Zamboanga advertisement,
Peninsula online selling on
social media
Figure 3.3AHinangan Yakan and
platforms and
Online Store promotion of
through localization
Instagram:
(@hinanganya
kan)
*Lazada: Happon Case for Happon Case Php 396 Lazada online
Android for OnePlus 6T (Online advertisement
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Case Full Shopping and use of online
Protection PU Platform) shoppingplatfor
Leather Folding m
Stand
Shockproof
Figure 3.3B Lazada Happon
Wallet Type
Phone Case
Phone
Protector Black
*Shopee: Leather Wallet Product: Php 266 Shopee online
with Metal Ring Case for Leather Wallet (Online advertisement
iPhone 6-8/ 6-8+/ X/ XS/ with Metal Ring Shopping and use of online
XS Max Case for iPhone Platform) shopping
6-8/ 6-8+/ X/ platform
XS/ XS Max
Figure 3.3C Shopee Leather
Wallet with Metal Ring Case for
iPhone 6-8/ 6-8+/ X/ XS/ XS
Max
Table 3.3.1A (Marketing Mix for Competition)
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*Phone cases from Lazada and Shopee are not direct competitors. However for compliance, it is put
as a competitor but no implication is done to Lokal Loca Ltd.
Implication of Hinangan Yakan’s Strength and Weaknesses to Lokal Loca
Strengths Weaknesses
Pioneer of using local fabric as Weak distribution channel
base design for a phone case

Hinangan Yakan Advertising and marketing is
limited to online platforms
Price range is too expensive
for the working class
Implication to Lokal Loca
No extensive impact will be Competitive advantage
done to Lokal Loca. Hinangan especially on market
Yakan focuses on fabric cases penetration, offline
while Local Loka is directed to distribution channel and
T’nalak pricing profile
Table 3.3.1B (Implication of Hinangan Yakan to Lokal Loca)
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Marketing Mix of Lokal Loca
Product Price
T’nalak multifunctional phone case Php 350
Includes the following:
- Card slots (can be used in RFID)
- Zipped wallet
- Phone case itself
Place Promotion
Online Platforms: Online Advertisements in Instagram and Facebook*
Instagram and Shopee
Word of Mouth
Offline Platforms
ABM Bazaar, Noel Bazaar, Concept Stores and Booth Design in upcoming bazaars
Direct Selling through Distributors
3 for 1 000 promo*
*Facebook page is not the priority platform of Lokal Loca, further
updates on social media will be subject to change
*Promos will only be done during Christmas bazaars
Table 3.3.1C (Marketing Mix of Lokal Loca)
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Strategy Formulation for Lokal Loca based on the Assessment of Competition
Competitor’s Strength Competitor’s Strategy Formulation
Hinangan Yakan Weakness
Pioneer of using local Weak distribution The goal of the
fabric as base design channel company is to help
for a phone case Yakan weavers

Advertising and
promote their
marketing is limited to
products through
online platforms
selling of Yakan cloth
Price range is too based products such as
expensive for the phone cases,
working class accessories and the
like.
Table 3.3.1D (Strategy Formulation for Lokal Loca)
3.3.2 Indirect Competitors
Lokal Loca’s indirect competitors are companies who sell phone cases in general. It
may be generic phone cases or specialized cases. Nevertheless, thorough research has been
done but Hinangan Yakan is the closest competitor which makes every other companies or
stores who sells phone cases as the Lokal Loca’s indirect competitor.
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3.4 Customer Profile
3.4.1 Demographic Profile
Demographic Aspects Results
Gender all genders are catered by Local Loka’s Tala
Case
Age Bracket 16-22 years old
Relationship Status Single
Nationality Filipino
Profession or Educational Attainment De La Salle University Students, both Senior
High School (Grade 11 and 12) and
Undergraduate Students
Allowance Bracket Php 1 000 – Php 3 000
Table 3.4.1 (Geographic Profile)
3.4.2 Psychographic Profile
Usually the customers of Lokal Loca are motivated to spend due to peer
pressure or use of Tala case as a statement, hence a trend in the making and impulsive
shopping. Since the bazaar is only once a year and the it will be the Christmas season,
customers tend to check out the ABM Bazaar to buy Christmas gifts there instead of
shopping in malls due to strict academic schedules.
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These customers may still be in the academe 5 years from now or have their
jobs as professionals. Even though 5 years may have passed, Tala cases would still be
functional and useful for their everyday living. However, in the market survey done,
the people who are solely interested to the products are the Senior High School-Early
years of college (First and Second year students).
3.4.3 Geographic Profile
Location Description
Where the customers live Urban: Metro Manila
Condominiums and Dormitory, specifically around
Taft. Avenue
Where the customers work or study De La Salle University, Taft Avenue, Malate Manila
Mode of transportation Commute through public transportation such as:
a. LRT 1
b. LRT 2
c. MRT
d. PNR
e. Jeepney
f. Bus
g. Point to Point Shuttles
Table 3.4.3 (Geographic Profile)
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The geographic profile of Lokal Loca’s customer are based in Metro Manila,
specifically in Taft Avenue since the primary target market are the students of De La Salle
University both Senior High School and College. Most of the customers are either staying in
condominiums and dorms or uses public transportation. Therefore the multifunctionality of
Tala cases are very much useful in this target customers.
3.4.4 Behavioral Profile
The customers of Local Loka demands for effectiveness and efficiency. Given these
two aspects, they want a multifunctional product that would help them ease their everyday
burden of bringing excessive stuff especially for those who are on the go.
They are passionate in joining organizations and clubs. Moreover, organizing different
activities for the student body must be visible in their everyday schedules. The customers are
also interested in having a neat and organized compartment wherein they can put their things
easily. But having these factors, they also want a compact case to house their everyday
essentials from 7:30 classes up until 5:00 pm org meetings.
Given this scenario, their online presence is heavy. The customers are active in all
social media sites such as Twitter, Facebook, Instagram, Snapchat and the like. Therefore, the
online market distribution and penetration is very accessible to them.
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3.5 Target Market Profile
3.5.1 Primary Target Market Profile
Lokal Loca targets the universal market. The company generally aims people who are
always on the go demanding accessibility, efficiency and effectiveness especially commuters.
Furthermore, to specify the profile for marketing purposes the company aims to support the
market following demographics:
Demographic Lokal Loca’s Target Market
Age on the go mobile users aged 13-22; students
Gender universal; all genders
Location Within the Philippines, both urban and rural areas
Income Level • receives an educational allowance of 1500-2000 php
Occupation • universal;
• Junior High School, Senior High School and College Students
• Commuters
Table 3.5.1 (Demographics and Target Market Table)
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3.5.2 Secondary Target Market Profile
Demographic Lokal Loca’s Target Market
Age on the go mobile users aged 22 and abvoe
Gender universal; all genders
Location universal; local and international
Income Level • has an income of at least 20 000 php
Occupation • universal;
• Working class
- Professors
- Call center agents
- commuters
• Stay at home parents and workers
Table 3.5.2 (Secondary Target Market Profile)
3.6 Pricing Profile
While Lokal Loca is a social enterprise intending to donate a portion of the sales to the local
community (i.e. indigenous tribes), the company also needs to secure a substantial amount of income
for reasons such that the business is a for-profit organization and cannot risk bankruptcy. For this
reason, the company has set Php 350.00 as the selling price for the Tala phone case. Additionally,
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results from the market survey reveal that 68.1% of the respondents are willing to pay for the price
of Php 350.00 and above for the case.
In comparison to Lokal Loca’s direct competitor, Hinangan Yakan, the Tala case is sold at a
much lower price. Hinangan Yakan prices their phone cases at Php 750.00, featuring the indigenous
woven design only. However, Lokal Loca sells the Tala case at Php 350.00 with additional features
such as the wallet and card compartment, giving clients much more value for their money especially
at a lower cost. Computations for the selling price of the Tala case may be seen in the following tables.
Variables Needed in Computing the Selling Price of Tala
Variable Cost (V) Php 105.30
Mark-up Rate (r) 232% (2.32)
Profit per Product (P) Php 244.60
Table 3.6A (Variables Needed in Computing the Selling Price of Tala)
Computation for the Profit per Product of Tala
Variable Cost (V) x Mark-up Rate (r) Php 105.30
= Profit per Product (P) x 232%
Php 244.70*
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*Value rounded up from 244.296 to 244.30 then increased by 0.40 centavos
in order to achieve an integer value
Table 3.6B (Computation for the Profit per Product of Tala)
The closest number to achieve a selling price of Php 350.00 would be having 232% as the
mark-up rate. Since this number only brings the selling price to Php 349.60, the business has made
the decision to increase the mark-up amount by 0.40 centavos to be able to have a flat amount or
whole number value for the selling price.
Computation for the Selling Price of Tala
Variable Cost (V) + Profit per Product (P) = Selling Price (S) Php 105.30
• 244.70
Php 350.00
Table 3.6C (Computation for the Selling Price of Tala)
3.7 Gross Margin on Products/Services
In the production of the Tala phone case, specific materials are required as seen below in Table
3.7A. Direct materials are the raw materials used in manufacturing the phone case. This amounts
to Php 90.00 for one phone case. As for indirect materials, these items compromise the packaging
and labeling of the Tala phone case, amounting to Php 7.30 per phone case. Direct and indirect
materials come together at Php 105.30 as the direct cost per unit.
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Direct Cost per Unit for Tala
Raw Materials Cost of Raw Materials
Direct Materials
T’nalak cloth and wallet Php 58.00
Phone case 40.00
Total Cost of Direct Materials Php 98.00
Indirect Materials
Craft resealable stand-up pouch Php 6.50
Logo Stamp 0.30
Sticker Label 0.50
Total Cost of Indirect Materials Php 7.30
Direct Cost per Unit Php 105.30
Table 3.7A (Direct Cost per Unit for Tala)
In order to obtain the mark-up rate, the gross profit per unit must be determined first by
taking the difference between the selling price and cost per unit. The gross profit for the Tala case
would be Php 244.70. Next, this value is divided by the variable cost per unit, hence, the mark-up rate
would be 2.32 when rounded off.
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Mark-up Rate for Tala
Gross Profit per Unit
Gross Profit per Unit = Selling Price minus Cost per Unit
= Php 350.00 - Php 105.30
Gross Profit per Unit = Php 244.70
Mark-up Rate
Mark-up Rate = Gross Profit per Unit / Variable Cost per Unit
= Php 244.70 / Php 105.30
Mark-up Rate = 2.32383665717 or 2.32 or 232%
Table 3.7B (Mark-up Rate for Tala)
The gross profit margin illustrates the efficiency of a company in sales and production in
terms of profitably generating revenue from the costs involved in producing their products and
services. This is done by dividing the company’s gross profit by their net sales. The gross profit margin
for Tala is 70%, indicating that there is Php 0.70 centavos direct profit for every peso of sales.
Gross Profit Margin for Tala
Gross Profit Net Sales - Cost of Goods Sold = Gross Profit
Php 631, 400.00 - Php 189,961.20 = Php 441,438.80
Gross Profit Margin Gross Profit / Net Sales = Gross Margin
Php 441,438.80 / Php 631, 400.00 = 0.69914286 or 70%
Table 3.7C (Gross Margin for Tala)
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3.8 Break-Even Analysis
Variables needed for computing the Break-Even for Tala
Fixed Cost (F)
Booth Design Php 1,000.00
Freight Expense 500.00
Total Fixed Costs 1,500.00
Selling Price (S) Php 350.00
Variable Cost (V) Php 105.30
Table 3.8A (Variables needed for computing the Break-Even for Tala)
Lokal Loca uses the break-even analysis to determine the level of sales volume necessary to
cover the company’s total costs. This will also aid the business in production management and
developing a desired sales mix. To obtain this value, the fixed cost must be divided by the difference
between the selling price and variable cost. From the calculations below in Table 3.8B, the break-even
point is at seven units for the Tala case, amounting to Php 2,145.48. This number must be exceeded
or at least met in order to avoid a net loss in profits.
Break-Even Analysis for Tala
Selling Price per Unit Php 350.00
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Fixed Costs
Booth Design Php 1,000.00
Freight Expense 500.00
Total Fixed Costs Php 1,500.00
Variable Cost
Direct Materials Php 58.00
T’nalak cloth and wallet 40.00
Phone case
Indirect Materials
6.50
Craft resealable stand-up pouch
0.30
Logo Stamp
0.50
Sticker Label
Php 105.30
Total Variable Cost
Contribution Margin per Unit Php 244.70
Contribution Margin Ratio 69.91%
Break-Even Units 7 units
Break-Even Sales Php 2,145.48
Table 3.8B (Break-Even Analysis for Tala)
3.8.1 Potential Demand Analysis
The estimated population of the organization’s target market is 13,527, comprising
senior high school students and undergraduate students based on statistical data provided by
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the university (“Quick facts and figures,” n.d.). The business encapsulates 89.4% of the target
market population.
3.8.1.1 Chain Ratio Method
Formula for Potential Demand or Market Potential using Chain Ratio Method
Formula X = (U) (A) (I) (S)
Variables X = Potential Demand or Market Demand
U = Estimated Population of Senior High School Students and College Students in
DLSU-Manila
A = Estimated percentage of users of phone cases
I = Proportion that is willing to buy Tala in the future
S = Proportion that is willing to buy Tala worth Php 350.00
Table 3.8.1.1A (Formula for Potential Demand or Market Potential using Chain Ratio Method)
Potential Demand or Market Potential Computation for Lokal Loca
X = (U) (A) (I) (S)
X = (13,527) (89.4%) (89.4%) (68.1%)
X = 7362.47
Table 3.8.1.1B (Potential Demand or Market Potential Computation for Lokal Loca)
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3.8.2 Sales Forecast with Assumptions
Business operations and product selling will begin by the month of September 2019.
Items will be ordered for manufacturing forty-five (45) days before the targeted schedules for
sales and distribution. To increase sales and distribution, the business will be maximizing
participation in various bazaars inside and outside the university such as the ABM Bazaar,
Noel Bazaar, DTI Sikat Pinoy Bazaar and Trendsetters Bazaar. In addition, the company will
be utilizing online selling platforms as another distribution channel for the organization.
Online and offline promotions such as social media posts and advertisements, word-of-mouth,
and seasonal promos through discounts will also aid in amplifying revenue.
The company has projected that seventy-five percent (72%) of units ordered will be
sold for the first month since the business has just started. By the second month, sales will
have increased by 3% as the -ber months pass. By November, sales will continue rising due to
seasonality factors specifically, the Christmas season. By December, sales will shoot up to 275
as the Christmas season reaches its peak. For the month of January, sales will drop to less than
half of the previous month’s sales. However, sales will shoot up once more due to the
Valentine season. From March to May says will decline but will rise again by June until August.
Sales for the second year of operations will follow the pattern of the first year of operations
but units sold for almost each month will reach higher.
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Sales Forecast for the 1st year of Operations of Lokal Loca
Year 1 (2019- Sept. ‘19 Oct. ‘19 Nov. ‘19 Dec. ‘19 Jan. ‘20 Feb. ‘20
2020)
Units Sold 180 187 192 250 100 130
Unit Price Php 350 Php 350 Php 350 Php 350 Php 350 Php 350
Sales Php Php Php Php Php Php 45,500
63,000 65,450 67,200 87,500 35,000
Mar. ‘20 Apr. ‘20 May ‘20 Jun. ‘20 Jul. ‘20 Aug. ‘20 TOTAL
125 118 112 130 136 144 1,804
Php 350 Php 350 Php 350 Php 350 Php 350 Php 350 -
Php 43,750 Php Php Php Php Php Php
41,300 39,200 45,500 47,600 50,400 631,400
Table 3.8.2A (Sales Forecast for the 1st year of Operations of Lokal Loca)
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Sales Forecast for the 2nd year of Operations of Lokal Loca
2021)
Units Sold 152 169 190 275 120 143
Unit Price Php 350 Php 350 Php 350 Php 350 Php 350 Php 350
Sales Php Php Php Php Php Php 50,050
53,200 59,150 66,500 96,250 42,000
140 137 132 147 152 155 1,912
Php 49,000 Php Php Php Php Php Php
47,950 46,200 51,450 53,200 54,250 669,200
Table 3.8.2B (Sales Forecast for the 2nd year of Operations of Lokal Loca)
3.9 Market Penetration
The company targets every mobile end users. However, not all mobile phone users are willing
to buy mobile accessories such as cases. Majority of the focus group discussion (FGD) responses are
troubled on the size and bulkiness of the product. Given that, people nowadays want a product that
serves several purposes in one compact entity. Therefore to extend product sales volume and revenue,
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strategic practices will be done such as (1) online marketing, (2) use of influential bloggers and
youtubers, (3) online advertising- ads, (4) testimonial reviews of products, (5) concept stores, (6)
bazaars and (7) product design that fits the market demands, in lieu with accessibility and portability
issues.
3.9.1 Distribution Channels
3.9.1.1 Strategy for Distribution Channels
Among the distribution channels, the company have a direct supplier and consumer.
Figure 3.9.1.1 (Distribution Channels for the company)
This kind of channel often represent the strategic relationship between a producer and
the user. Via strategic channel selection, entering new markets by exposure and localization
through local retailers are being given. Retailing in short-time span such as bazaars and long-
time span like concept stores are the first method. However, with technological advancements
keeping aside, possible courier and shipping will be done to reach the end users. Other
methods of distribution such as online selling are also currently being considered.
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3.9.1.2 Logistics Strategy
Logistics Partner within Metro Manila Reasons
Lalamove Local deliveries are fulfilled at a breakneck 55
minutes, door-to-door. Providing reliable and
quick deliveries for customers, Lalamove also
optimises drivers fleet and route to maximise
their earning potential.

Figure 3.9.1.2A Lalamove Logo
In a motorcycle, the base fare would be 60 php
only plus 8 php per kilometers. The delivery
will be shouldered by the customer.
Logistics Partner outside Metro Manila JRS is the leading courier company when it
JRS Express comes to next-day delivery service anywhere in
the country. They also have more than 400
branches now situated in major towns and
cities nationwide.
The express delivery would cost approximately

Figure 3.9.1.2B JRS Express Logo
120 php from Metro Manila to nearby
provinces.
Table 3.9.1.2 (Logistics Strategy)
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3.9.2 Sales Representatives
Sales representatives oftentimes sell retail products, to customers. Part of the job will
be focusing on inside sales, which is the process of calling new clients who are probably
interested in the products being sold while in an office setting, or outside sales, which involves
visiting clients in the field with new or existing clients.
As an efficient sales representative, one must possess the following skills:
Customer Service Skills: to be able speak in an accommodating way to potential customers,
hearing out to their demands and helping communicate options for them.
Communication Skills: to speak to customers about the product's different features and
benefits.
However, due to the fact that employees are limited the co-owners will serve as the
Sales Representatives to the upcoming ABM Bazaar, and any bazaar to be participated
3.9.3 Direct-Sales Force
Direct selling refers to products being directly sold to the consumer in a non-retail
environment. The products go from manufacturer straight to the company, then to the
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distributor and to the end-users. Selling Tala Cases directly have multiple benefits for Lokal
Loca such as:
a. Increase in Sales
This happens because the product being sold are getting a higher exposure to
the market due to the fact that the distributors are selling in different penetration
method of the market.
b. Lower Costs
Using the direct sales force can lower business costs. Advertising costs are not
that high, or sometimes is not applicable. Therefore, lowered cost can increase sales.
c. Word of Mouth
The most effective marketing and advertising method is through word of
mouth and testimonials. One satisfied customer is one of the possible best sales
agents.. Word of mouth does not cost anything but it will definitely increase sales.
3.9.4 Telemarketing
Telemarketing is not the company’s desire in marketing and advertising of Tala
Cases. Consequently, social media sites and offline distribution channels are present as a
viable marketing spectrum of the company.
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3.9.5 Corporate Giveaways
Lokal Loca is very much willing to partner with companies who are interested in using
Tala cases as their company giveaway. Given below are the following terms:
1. Minimum order of 50 pcs, any color and phone models
2. A small booth will be present in the company event for further promotion of
the product, or
3. Advertising materials shall be posted within the venue of the event and
4. Social media exposure of Lokal Loca must be done
In addition, Lokal Loca can be a company’s sponsor in their event given the following
terms:
1. The affair should only be a one day event
2. Minimum participants of the event should be 500 heads
3. The company will only sponsor to the extent of using Tala cases as a
raffle giveaway
4. Monetary sponsorship will not be provided by Lokal Local
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3.10 Advertising and Promotion
3.10.1 The Branding Bible for Lokal Loca
Tagline
The company will be using “Livin’ La Vida Lokal” as the tagline present in
all advertisement both online and offline platform.
Logo Usage
To standardize the use of logo, three size are provided for most uses,
including online platforms, documents and offline advertisements.
2.13 cm x 3 cm
Figure 3.10.1A (2.13cm x 3cm logo)
2.79cm x 3.94 cm
Figure 3.10.1B (2.79cm x 3.94cm logo)
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4.14 cm x 5.82 cm
Figure 3.10.1C( 4.14cm x 5.82cm logo)
Font and Typography
There should be a defined style for both print and digital applications. Rules
for typography should be clear and distinct, from what typefaces are acceptable, how
each is used, and guidelines for additional styling, size and use of color. Lokal Loca
used Arima Madurai Extra Bold as the font for the logo.
Figure 3.10.1D (Arima Madurai Extra Bold)
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Color Palette
Figure 3.10.1E (Company Color Palette)
3.10.2 Online Advertising Strategy
3.10.2.1 Social Media Accounts
3.10.2.1.1 Specific Media Accounts
Currently, there is only one social media platform Lokal Loca uses and
that is through Instagram. Attached below is the interface of the company in
the said social media site.
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Figure 3.10.1F (Instagram Interface)
3.10.2.1.1.2 Content of Online Advertisement Platforms
3.10.2.1.1.2.1 Unique Selling Points of Lokal Loca
The company will use different publishing materials such as
posters, Instagram story banners, gifs, commercials and videos. Since
the company owners believe that Lokal Loca will stand out more in
Instagram, further advertisement will be promoted through the
platform. However, advertising Tala cases won’t be limited to
Instagram as well because a web page for the product will also be
released soon.
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Figure 3.10.1G (Instagram Story Banner)
3.10.2.1.1.2.2 Tone of Branding for Lokal Loca
The company aims to mirror the colorful culture of T’boli and
T’nalak clothing. With that being said, three main colors can seen in
the brand and its advertisement, as seen on Figure 3.10.1E Company
Color Palette.
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Figure 3.10.1H (Tone of Branding)
Lokal Loca’s business model aligns perfectly with a brand that
is friendly, welcoming and is appreciating the Filipino culture which is
appealing to a wide consumer base. The first is through the copy and
messaging. The company have organized Tala Cases into connecting
the audience through lifestyle scenarios which is an important way to
engage to the endorsers Additionally, Lokal Loca styled the copy with
a playful script to push the friendly tone even further.
3.10.2.1.1.2.3 Relevance of Online Content
Building product and brand reputation is the greatest benefit
of online content. This will help build trust, connection and might have
the possibility to new leads and customers. Oftentimes, an engaging
and valuable content makes it easier for the target audience to trust the
brand. Furthermore, it also serves as the most cost-cutting alternative
when it comes to advertising because usually it comes for free
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especially in using modern age technology, hence the social media sites
platforms.
However, Lokal Loca’s online content will be based on the
month or current seasonality factor. Usually, end-users are more active
in the evening rather than in the daytime. Given that if the company
posts a publishing material, featuring of Tala cases and further
announcements, it will be done in the evening, 8:oo pm.
Moreover, the company will not immediately respond based
on trends and “viral videos and/or memes”. Lokal Loca will filter
every postings based on its company mission, vision and objectives.
3.10.2.1.1.2.4 Frequency of Online Post
Although the company wants to be an active user on
Instagram, Lokal Loca doesn’t want to flood the user’s account too.
Therefore, publishing materials will be posted once a week. However,
the company would also like to update the customers through
Instagram stories, a 24 hr speed story feature of Instagram, thrice to
five times a week.
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3.10.2.1.1.2.5 Use of Influencer Marketing
Currently there are three influencers the company aims to
partner with. Below are the list of the influencers and their brief
description:
Bianca Gan
Figure 3.10.1I (Bianca Gan)
Bianca Larisse Gan is a Youtuber with 41,214 subscribers.
Currently, she studies in De La Salle University- Manila. Like the
famous Youtubers, she is inclined with Beauty and Lifestyle videos.
The company owners would like to work with her and use her active
social media platforms such as Youtube and Instagram.
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Justricia
Figure 3.10.1J (Justricia)
Justricia is a 16 year old Youtuber with 311,351 subscribers.
She is a Grade 12 Health Allied student from University of Sto. Tomas.
She also features video related to with Beauty and Lifestyle. Again, the
company owners would like to be partners with her to suffice the use
of her active social media platforms such as Youtube and Instagram.
Ella and China Gatchalian
Figure 3.10.1K (Ella and China Gatchalian)
Ella and China Gatchalian are sisters-influencers based in
Baliuag, Bulacan. Ella Gatchalian has her own Youtube channel
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garnering 566,244 subscribers. Currently she is a second year Medical
student from University of Sto. Tomas. China on the other hand
focuses more on Instagram and Twitter.
3.10.3 Offline Advertising Strategy
3.10.3.1 Tradeshows/Bazaars
The company aims to enter concept stores that features local products and
small companies like Lokal Loca. Moreover, bazaars like featured ABM Bazaar in De
La Salle University-Manila, in partial fulfillment of the course and several Christmas
bazaars are also targeted. However, the company will also do individual direct and
personal selling of Tala phone cases. Retail stores will not be established but in lieu on
the vision of the company, Lokal Loca targets to weave accessibility in the end user’s
hands. Therefore, the company will find every opportunity to introduce Tala to the
market especially during the month of December for the Christmas season. In this
season, the market demand for unique product that will serve as gifts are on high
stakes.
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3.10.3.2 Advertising Materials/Posters
3.10.3.2.1 Unique Selling Points of Lokal Loca
Figure 3.10.1L (Sample Banners)
Lokal Loca will fully utilize the use of online platforms, however
during bazaars and tradeshows the company will use this banner. Since Lokal
Loca is a sustainable company as well, papers and print outs will be lessened
and publishing materials will be reused and kept properly.
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3.10.3.2.2 Tone of Branding for Lokal Loca
The tone of branding for the offline strategy will be same with the
online to keep the uniformity and vision of the company. It will be seen on
3.10.2.1.1.2.2 Tone of Branding for Lokal Loca.
3.10.3.2.3 Relevance of Offline Content
Same applies for the relevance of offline content. Since offline
advertising strategy will be mostly done in bazaars and trade shows, surely the
peak season of the industry. Whatever is seen in the online applies offline, as
seen on 3.10.2.1.1.2.3 Relevance of Online Content.
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3.11 Packaging and Labeling
(a) Current packaging and labeling
Current Packaging Description
• To furthermore continue the sustainable
advocacy of Lokal Loca, the packaging is
broken down into 3 parts
1. Kraft Paper
2. Sticker strip
3. Stamped Logo
• This is the exact representation of current
Figure 3.11A packaging
Craft Paper Pouch
• 12x20 cm
• Resealable stand up pouch
• Biodegradable
• Maximum of 5 Tala phone cases per pouch

Figure 3.11B
Sticker Strips
• Label of the phone model and
corresponding color bought would be
shown through a sticker strip
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• 5x8 cm
Figure 3.11C
Stamped Logo
• To minimize costs and expenses, rubber
stamps will be manually impressed in the
craft pouches
• Although a laborer is needed in the

Figure 3.11D
process, this is also to lessen the machine
work being used by the company
• The stamp costs 600 pesos, while the ink
on the other hand costs 110 pesos. This is
consumable for approximately 1000
pouches
Table 3.11A (Current Packaging and Labelling)
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(b) Future packaging and labeling
Future Packaging Description
• The goal of the company is cut all
possible unnecessary costs for packaging
while maintaining its sustainable
advocacy. It is seen here that the target
packaging in the future is very efficient in
casing the phones while on display
however the use of plastic is also seen
• This is also a cheaper alternative to the

Figure 3.11E
current packaging especially if ordered in
bulk
Craft Paper Bag
• It is the company’s goal to have a
statement paper bag
• Seen here is a craft paper bag with gold foil
embossing. This is for bazaars and trade
shows especially if the customers would
buy in bulk.
Figure 3.11F
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• It may also come in a smaller size because
the product is small in general. Since the
vision of the company is to provide
multifunctionality and accessibility in every
person’s hand, packaging should be too
PR Boxes
• If the company is big enough to reach
social media influencers, Lokal Loca would
give PR packages for widespread
promotion and advertising.

Figure 3.11G
Table 3.11B (Future Packaging and Labelling)
3.12 Service and Warranties
As seen on 2.9. Under Article 1561, a seller has the full responsibility of ensuring the items
being sold has no hidden defects. However, a vendor or seller may not be held liable in cases of defects
those which are clearly visible upon inspection of the product bought.
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However Lokal Loca do not warrant that the quality of any products, services, information, or
other material purchased or obtained by you will meet your expectations.
The company doesn’t guarantee, represent or warrant the use of product will be uninterrupted,
timely, secure or error-free. However the customer have the right to expressly agree the use of, or
inability to use, the product is at your sole risk. The products handed to the end users through the
service are provided 'as is' and 'as available' for your use, without any representation, warranties or
conditions of any kind, either express or implied, including all implied warranties or conditions of
merchantability, merchantable quality, fitness for a particular purpose, durability, title, and non-
infringement.
Return Policy
All sales are final, unless defects are seen within 24 hours of purchase. The company do not
offer refunds nor exchanges beyond 24 hours, nor do we allow cancellations and returns. Lokal Loca
reserves the right to refuse any returns beyond the given period.
Please see Appendix K for the sample warranty certificate
3.13 Trade Shows
The company aims to extend its horizons through trade shows and bazaars in the
Philippines.
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Trade Shows Details
Noel Bazaar
Now on its 19th year this December, the Noel
Bazaar has risen to become the largest and
longest-running annual holiday bazaar in
Metro Manila.
In cooperation with GMA Network and
Philippine Daily Inquirer, Noel Bazaar
features groups of entrepreneurs who carry

Figure 3.13A Noel Bazaar
the latest crafts and merchandise from
clothing, Christmas and home decors, fashion
accessories, novelty and gift items to food and
drinks.
Figure 3.13B Filinvest Tent
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DTI Sikat Pinoy Baaar Filipino entrepreneurs eagerly await the
staging of the National Domestic Trade Fairs
every year, as this serves as a venue where
they can showcase their products and expand
their market presence. The national domestic
trade fairs constitute a major component of

Figure 3.13C Sikat Pinoy Logo
the services offered by the Department of
Trade and Industry’s Bureau of Domestic
Trade (DTI-BDT), which is mandated to
develop, strengthen and promote the
domestic market for MSMEs
Figure 3.13D Sikat Pinoy Fair
Trendsetter’s Bazaar
Trendsetter’s Bazaar is a monthly three day
event with over 100 brands—local start-ups,
online shops, and influencers’ booths
combined, this bazaar might be your ultimate
one-stop-shop for all things trendy this
Figure 3.13E Sikat Pinoy Fair season.
Table 3.13 (Trade Shows)
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3.14 Future Markets
In the Philippines there are no future market regulators to monitor future exchanges
activities. However, a list of major regulators across the world are herewith below:
• Australia: the Australian Securities and Investment Commission (ASIC).
• Chinese mainland: the China Securities Regulatory Commission, i.e., 中国证券监督管理委
员会.
• Hong Kong: the Securities and Futures Commission, i.e., 證券及期貨事務監察委員會.
• Japan: the Financial Services Agency, i.e., 金融庁.
• India: the Securities and Exchange Board of India, i.e., भारतीय प्रितभूित और िविनमय बोडर्.
• South Korea: the Financial Supervisory Service, i.e., 금융감독원.
Nevertheless, future market is now digitalized, therefore the country can cope up. This is a
modern system called electronic trading. As a result, in this specific market, Lokal Loca can
purchase and sell futures contracts as well as company commodities.
3.15 Public Relations
Lokal Loca believes in supporting Filipino culture and appreciation to Yakan tribe and T’bolis
especially the dreamweavers. Especially in the modern age, there is a visible problem on lack of cultural
appreciation and support in the the Philippines. Thus, for every sale of Tala Cases, a 10% of profit
goes to a livelihood fund for the weavers of the TADECO Livelihood T’boli Tribe.
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The weavers are able to earn an extra amount of money from a few hours’ work of weaving
T’nalak, leaving them the rest of the day to pursue other endeavors. Therefore. The company are
fully committed to the sustainable livelihood development of the T’boli tribe in Davao.
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CHAPTER 4: THE OPERATING AND CONTROL SYSTEM
4.1 Administrative Policies, Procedures, and Controls
Since Lokal Loca is just starting, both company owners will be handling receipt and
delivery of most purchased materials, other distribution functions and all outbound shipping.
There are no charges for this service.
4.1.1 Receiving Orders
Lokal Loca will be receiving orders through the following:
(a) Bazaar Orders
This will be held face to face wherein the sales representative will manually
tally the item bought by the customer. Afterwards, she will also encode it in
the Microsoft Excel for back-up purposes
(b) Online Platforms
§ Instagram Direct Message
Customer may message the account directly for a hassle free order.
When the message is received by the representative, the same method
applies wherein it will be recorded in a Microsoft Excel Sheets
(c) Phone calls and Texts
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Customer may call or text both sales representatives. When the message or
call is received by the representative, similar method will be applied wherein
the order will be recorded in a Microsoft Excel Sheets
4.1.2 Billing the Customers
Invoice processing is the handling of invoices from arrival to payment. It matches
purchase orders and payment terms with invoices to ensure payments are made accurately
and on-time. As the tip of the spear in accounts payable, invoice processing plays a critical
role in managing any company's cashflow. If the order is from the online platform, a digital
copy of invoice will be sent.
4.1.3 Paying the Suppliers
Sales representatives are instructed to send invoices directly to Accounts Payable for
proper processing. This is the best way to ensure invoices are paid in a timely manner.
Invoices will be entered by Accounts Payable. If after review of the invoice, the bill should
not be entered/paid (due to a dispute with the vendor, etc.) the management shall notify
Accounts Payable in a timely manner. In order to maintain a good payment record and to
encourage the proper use of Purchase Orders, Accounts Payable will give the highest
payment priority to original invoices supported by properly issued and approved Purchase
Orders, and confirmation of receipt of goods and services.
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4.1.4 Collecting the Accounts Receivable
All amounts determined to be due to the company must be promptly recorded as an
accounts receivable. Each account receivable must be recorded and maintained until
payment is received or the recorded amount is written off or extinguished. An adequate
provision for doubtful accounts must be established. When all reasonable efforts fail to
collect an account receivable and it has been approved for write off, the related provision for
doubtful accounts should be reduced.
4.1.5 Reporting to Management
It is the goal of the Human Resource department to practice transparency and daily
reports on sales, marketing, operations and employee welfare. This ensures that any problem
or issues in the business could be alleviated or solved promptly. The departmental managers
are expected to report on a weekly basis. The laborers on the other hand must accomplish a
daily report and control form to monitor every action done in the company. Lokal Loca, in
general will have a monthly meeting to cover evey concerns each employee has.
4.1.6 Staff Development
A process where an employee goes under a various of training programs to improve
and grow as an individual not just as a laborer. Training is an educational process which
involves the sharpening of skills, concepts, changing of attitude and gaining more knowledge
to enhance the performance of the employees. Good & efficient training of employees helps
in their skills & knowledge development, which eventually helps a company improve.
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4.1.7 Inventory Control
Inventory control is something that should be front-of-mind for anyone in the
wholesale distribution business. In the simplest of terms, inventory control involves having
greater oversight over one's stock. An inventory control sheet both printed and digital copy
will be filled up upon business operations.
Item Code Description Qty Date
Table 4.1.7A (Inventory Control Masterlist)
Date Particulars In Out Remaining
Balance
Table 4.1.7B (Daily Inventory Card)
4.1.8 Handling Warranties and Returns
As seen on Chapter 3.12 Lokal Loca does not warrant that the quality of any products,
services, information, or other material purchased or obtained by you will meet your
expectations.
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The company doesn’t guarantee, represent or warrant the use of product will be
uninterrupted, timely, secure or error-free. However the customer have the right to expressly
agree the use of, or inability to use, the product is at your sole risk. The products handed to
the end users through the service are provided 'as is' and 'as available' for your use, without
any representation, warranties or conditions of any kind, either express or implied, including
all implied warranties or conditions of merchantability, merchantable quality, fitness for a
particular purpose, durability, title, and non-infringement.
Return Policy
All sales are final, unless defects are seen within 24 hours of purchase. The company
do not offer refunds nor exchanges beyond 24 hours, nor do we allow cancellations and
returns. Lokal Loca reserves the right to refuse any returns beyond the given period.
Please see Appendix K for the sample warranty certificate
4.1.9 Monitoring the Company Budgets
Managing budget is an ongoing process for any business and it requires continuous
monitoring, controlling and reporting, which is the budget manager's responsibility. The
budgetary process is the sole responsibility of senior management staff and finance staff.
Hence these members of staff must have accurate and updated information efficient budgeting
procedures. Budget monitoring is done to make sure that resources are being utilised as per
plans on the budget. Tracking or monitoring the way that financial resources are utilised or
effectively used is very important for every department and the organization. It is a continuous
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process to ensure that objectives are being met as specified on the budget. It is through this
monitoring that you will be able to make budgeting decisions and take necessary or appropriate
actions whenever or wherever necessary. The tracking will be done through a Microsoft Excel
Sheet as stated in 4.1.1.
4.1.10 Security Systems
One of the most important factors of a business is to ensure the security of every
aspect of the company. This covers the production, manufacturing, staff control, online
platforms, products, data and clients as well. However, as a starting company, wide range
security system will not be imposed due to lack of budget and there is only a small reach of
entities to protect.
4.2 Documents and Paper Flow
Document management is a process of handling business documents and confidential
information that can must be organized, stored and filed properly. Moreover, it should be done in
the most effective and efficient way.
To ensure security, Lokal Loca aims to use two methods. First, the paperless method which
is done on MS Excel and scanning of files to be uploaded in the company’s Google Drive. This will
serve as a back-up copy of all printed documents concerning the company. Obviously the second
method is through printing of documents and securing it in a filer. On a monthly basis, important
company documents will be placed on a long brown envelope to segregate and classify the papers
according to use.
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4.3 Planning Chart
4.3.1 Product Development
List of Operational Methods for the Production of Tala
Operational Description of Operational Illustration of Operational Method
Method Method
Step 1: Acquisition of supplies needed
Procurement for the production of the Tala
Process phone case
Figure 4.3.1A
Step 2: Assembly In this step, raw materials
Process outsourced from step 1 will be
used to make the case which will
be done by the manufacturer
Figure 4.3.1B
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Figure 4.3.1C
Step 3: Logistics Final product will be shipped to
Process the base city of operations
(Manila, Philippines)
Figure 4.3.1D
Step 4: Packaging Final products will be packaged
and Labeling and labelled once items have
Process arrived
Figure 4.3.1E
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Figure 4.3.1F
Table 4.3.1 (Product Development)
4.3.2 Manufacturing
Manufacturing
(Resources)
• Man Step 1: Receive package from High quality, multifunctional and
• Suppliers phone case supplier nationalistic Tala phone case
• Manufacturer • Manufacturing facility that has met the design, function
• Workers and will receive and secure and quality standards from the
weavers contents of package idea generation phase
• Delivery men from the phone case
• Materials supplier
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• T’nalak material • Check package for any
• Machineries product defects
• Back strap loom

Step 2: Weave T’nalak fabric
• Methods
• Native weavers and
workers weave the abaca
used in weaving the
fibers on back strap
T’nalak fabric
loom
• Dye fabric via Ikat style,
used in producing
use of beeswax and
the phone case and
natural pigments
wallet
• Add nut oil for shine
Step 3: Produce wallet and
card holder
• Using material from step
4, the wallet and card
holder will be formed
Step 4: Attach woven material,
wallet and card holder onto
phone case
• Use the clear phone case
as the product base
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• The indigenous fabric
will be adhered to the
phone case
• Then, the wallet and card
holder will be attached to
new phone case
Table 4.3.2 (Manufacturing)
4.3.3 Financial Requirements
Lokal Loca Ltd.
Start-up Expenses
Item Price per Piece Quantity Total
Direct Materials
T’nalak cloth and wallet Php 58.00 100 Php 5,800.00
Phone case 40.00 100 4,000.00
Total Direct Materials Php 9,800.00
Indirect Materials
Craft resealable stand-up pouch Php 6.50 110 Php 715.00
Logo Stamp 0.30 1,000 300.00
Sticker Label 0.50 1,000 500.00
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Total Indirect Materials Php 1,515.00
Total Start-up Expenses Php 11,315.00
Table 4.3.3 (Financial Requirements)
4.3.4 Marketing Flowchart
Market Look for Order Raw Production and

Research Attainable Materials for Manufacturing
Survey Suppliers Production of Product
Promotions
Receive during peak
Finished Post Products Join Bazaars and season
Products Online Tradeshows Advertisement
both online and
offline
Figure 4.3.4 (Marketing Flowchart)
4.3.5 Market Penetration
Market penetration indicate the company’s potentiality for increased sales. Higher
market penetration indicates that a product has become established. This cans also be used in
developing different strategies to increase market share of Tala Cases.
To calculate market penetration, the current sales volume for the product or service is
divided by the total sales volume of all similar products, including those sold by competitors.
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The result is multiplied by 100 to move the decimal and create a percentage. If a company has
a high market penetration for their the products, they're considered a market leader in that
industry.
Hinangan Yakan sells an approximate 30 units on a monthly basis. The number
given is based on the Instagram posts on the products being sold in a day. Further research
will be done as soon as possible in this field of the business plan. Based on the sales forecast
by Lokal Loca on Table 3.8.2 Sales Forecast with Assumptions, by September 2019 the company
would be able to sell 72 units.
Market Penetration
September 2019
Company Sales Volume Percentage
Lokal Loca 72 units 70.6%
Hinangan Yakan 30 units 29.4%
Total 102 units 100 %
Table 4.3.5 (Market Penetration)
It is visibly seen that Lokal Loca currently leads the industry based on sales forecasts.
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4.3.6 Management and Infrastructure
Figure 4.3.6 (Organizational Chart)
In the event that the owners of the Lokal Loca organization are unable to attend to
business obligations due to personal reasons, the company will request assistance and
external management support from the appointed members of the advisory council found in
section 1.5.
Name of Advisory Council Member Information
Ms. Camille Go City of Residence: Manila
Email: camillego91@yahoo.com
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Capt. Ronald Go City of Residence: Davao
Email: topgone85@yahoo.com
Ms. Patricia Zuluaga City of Residence: Laguna
Email: zuluaga.pic@gmail.com
Sir Patrick Hariramani City of Residence: Bulacan / Quezon City
Email: patrick.hariramani@dlsu.edu.ph
Mrs. Nerlie Gonzales City of Residence: Baliuag, Bulacan
Email: kalamilksoap@gmail.com
Mr. Michael Tom Jim Gonzales City of Residence: Baliuag, Bulacan
Email: michaeltomjim@yahoo.com
Mr. Jose Rommel Era City of Residence: Quezon City
Contact Number:
Email: jose.rommel.era@dlsu.edu.ph
Table 4.3.6 (Advisory Council)
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4.4 Risk Analysis
4.4.1 Industry Analysis (Porter’s 5 Forces of Competition)
Porter’s Five Forces Analysis allows businesses to take a look at the influencing factors
around an industry’s competitive environment, particularly the industry’s attractiveness and
likely profitability. This analytical model encourages business firms to look beyond their
competitors and examine the key elements enforcing the financial gain of the industry which
they belong to. Focusing on the external environment, an organization can decide how to
influence or to exploit particular characteristics of their industry (Recklies, 2001). In the
following forces, Lokal Loca’s corresponding industry, the mobile phone accessories industry,
will be evaluated.
4.4.1.1 Threat of Substitutes
Alternative and identical products in the industry make it harder for companies
to assert dominance in the market especially when these similar products are more
attractive to buyers in terms of pricing and benefits from the product or service.
Moreover, this aspect takes into account industries that are possible alternatives to the
product or services provided by their current industry. When more substitutes are
available, the demand elasticity grows since customers have more alternatives (mba
tools, n.d.). Threats to substitutes are classified here:
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Factors to Consider Conclusion
(Strong, Moderate, or Weak)
Brand loyalty of customers Weak
Product differentiation Weak to Moderate
Switching costs for customers Weak
Price competition Strong
Current trends Strong
Table 4.4.1.1 (Threat of Substitutes)
Alternative or substitute products are prevalent within the market, therefore
posing huge threats to companies within the industry. With weak customer loyalty and
product differentiation, alternative goods are likely to be patronized. Current trends
and price competition also strongly impact the industry and possible substitutes.
Under these circumstances, the threat of substitute to the mobile phone accessories
industry is high.
4.4.1.2 Threat of New Entrants
Not only pre-existing rivals pose a threat to firms in an industry, but also the
possibility of new businesses to enter. These new businesses put existing companies
at risk due to the likelihood that they may change major determinants of the market
such as market shares, prices and customer loyalty (Recklies, 2001). This force
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determines the level of difficulty for one to enter the industry, therefore, industries
possess such characteristics that inhibit additional competition from entering the
market (mba tools, n.d.). These characteristics are called barriers to entry in which the
threat of new entries depend on. The following table evaluates such barriers:
Economies of scale/capital and fixed costs Weak
Brand loyalty of customers Weak
Government restrictions Moderate
(e.g. Patents and licensing)
Access to supply and distribution channels Weak to Moderate
Retaliation from pre-existing organizations in the market Weak
Table 4.4.1.2(Threat of New Entrants)
Based on the conclusions from the table above, threat of entry in the mobile
phone accessories industry is strong. Due to low capital costs, weak customer loyalty,
easy access to supply and distribution channels, and low chances of retaliation from
already existing companies, entry to this industry is much more attractive and
accessible to new entrants.
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4.4.1.3 Rivalry Among Existing Firms
Usually one of the strongest of the five forces (Grundy, 2006), this force
describes the intensity of competition between existing rival companies or players in
the same field (Recklies, 2001). In a competitive industry, high pressure in competition
results in pressure on affected factors such as price, market share, and profitability for
each company in the industry. Through this force, a company may determine the
strength of rivalry within their industry. The following table shows important factors
to consider in this aspect and corresponding conclusions regarding the industry’s stand
towards the specific factor.
Number of Competitors Strong
Price Competition Strong
Product Similarity Moderate
Product Quality and Performance Moderate to Strong
Market Growth Rate Strong
Barriers for Exit Moderate
Switching Industry Costs Moderate
Table 4.4.1.3 (Rivalry Among Existing Firms)
217
From the table above, businesses within the mobile phone accessories industry
face numerous competitors with similar-to-identical products which are priced at
varying amounts. Additionally, the rapid market growth challenges market shares and
profitability of each company in the industry. Not to mention, barriers to exit and
switching industry costs keep rivals in the game. Overall, rivalry amongst competitors
in the mobile phone accessories industry is strong.
4.4.1.4 Bargaining Power of Suppliers
Supplier power affects a producing industry which requires materials in order
to manufacture such products of the company. All sourcers needed in order for a
company to sell their products or services are provided by the suppliers. The supplier’s
ability to exert an influence on an industry can be determined by:
Number of suppliers Moderate
Substitute for suppliers Moderate
Switching supplier costs Weak to Moderate
Threat of integrating forwards Weak to Moderate
218
Table 4.4.1.4 (Bargaining Power of Suppliers)
Looking at the table above, suppliers do not have a large influence over the
mobile phones accessories industry due to a sufficient amount of suppliers and
switching suppliers does not cost much. Therefore, supplier power is weak to
moderate.
4.4.1.5 Bargaining Power of Buyers
Similar to supplier power, the bargaining power of customers also determines
how much customers may impose pressure on an industry’s margins and volumes
(Recklies, 2001). Buyers are the immediate customers of a business, with that, buyers
that possess a strong bargaining power can dictate prices and the fate of the industry
(Grundy, 2006). The following table examines factors pertaining to buyer power:
Number of buyers Strong
Concentration of buyers Moderate
Switching costs for buyers Weak
Buyer demand Moderate to Strong
219
Sensitivity to price Moderate to Strong
Available substitutes Strong
Table 4.4.1.5 (Bargaining Power of Buyers)
Buyer power, as presented in the table above, seems to be considerably
moderate. On one hand, buyers have the upperhand when buying in bulk and have
the advantage of many available substitutes which does not cost much to switch
between. Furthermore, buyers’ sensitivity to price affects the company’s pricing of
their goods. However, the industry is advantageous in terms of buyer demand and the
number of buyers.
4.4.2 SWOT Analysis
Strengths Weaknesses
1. Support in local indigenous community 1. Size, bulkiness and protection
2. Promotion of Filipino culture extending to a 2. Product Development Phase:
locally released product Contact of Suppliers
3. Product that embodies convenience and 3. International Market and Shipping
accessibility for on-the-go people and 4. Lack of image and reputation for
commuters business establishment
4. Targets everyone; a universal product 5. Capital, Funds and Finances
5. Presence of Business Adviser
220
6. Not catering all available phones in
the mobile phone industry
Opportunities Threats
1. Advertisement edge: Social Media- 1. Availability of phone cases in the
Instagram, Facebook and use of influential market with very cheap price;
bloggers and youtubers Lazada, Shopee, Alibaba
2. Local events: ABM Bazaar, Christmas 2. Counterfeit products
Bazaar, any open bazaars and concept stores 3. Stability of supplies in comparison
3. Market demand on accessibility and being to established business
on-the-go 4. Cheaper production cost of
4. Use of the course: Practical Research 1 to competitor with unit cost
test the market in furthermore establishment 5. Direct Competition: Hiningan
of the product and business. Yakan
Table 4 (SWOT Analysis on Tala)
Lokal Loca has a conceptual framework that assesses the company’s internal and
external factors on the company’s strategic planning. Hence, SWOT Analysis helps the
company on identifying controllable factors and the otherwise. The analysis is divided into
two factors; internal and external factors. By concept, Strengths (S) and Weakness (W) are
identified as internal factors that affect the company which means measure control can be
done. Opportunities (O) and Threats (T) ,on the other hand, are external factors which control
can’t be implied.
221
The strengths (S) of a business are the characteristics that allow a company attain the
mission of the organization either tangible or intangible. It can be employees’ competency,
strategic capability, products and services, brand loyalty, and the like. Correspondingly, Lokal
Loca aims to support the local indigenous community through integrating the traditional local
product of the community and technological advancement by creating a mobile phone case
out of weaved material. In addition, to supporting of local indigenous community, the
company also promotes Filipino culture. The weaved design represents different indigenous
group the company will support. Furthermore, it doesn’t just support the local community
through product sales but also it help supports the end-users through a product the embodies
both convenience and accessibility into one entity for on-the-go people like commuters.
However, Tala case does not just targets the people in a hurry but it also aims to reach
everyone. Seemingly impossible although the company is just establishing Lokal Loca,
however has the edge on the presence of having business adviser, Mr. Patrick Hariramani.
Provided that, weaknesses (W) on the other hand are the components that avert the
company’s mission in to full potential. Factors considered in the weaknesses do not meet the
standards that should be met. Although controllable, still it weakens the company’s growth
and success. Thus, in the Focus Group Discussion the company did the respondents were
worried on the size, bulkiness and the material for protection Tala will have. Given that Lokal
Loca is still in the process of product development phase, contact of suppliers is one of the
major problem the company have at this point. On that condition, another weakness of Lokal
Loca is the international market and how will it be shipped. Since the aim of the company is
not specified on certain location but universal it is also overseen as another major problem.
Moreover there are initial weaknesses that the company currently faces due to the fact that the
222
company is just on the phase of establishment. First on the list is the lack of image and
reputation. How do Lokal Loca get the market’s attention to buy the product? Second, where
will the company get the initial investment on capital, additional investments in funds and
more financing activity related movement? Lastly, although the aim of Tala phone case is
universal, it is not yet catering all available phones in the mobile accessories industry. Hence,
aspects that hinders the organization into continual growth must be deteriorated, minimized
or removed.
Opportunities (O), on the other hand are the competitive advantage of a company.
Usually, an effective opportunity approach is furthermore establishing the strengths and
eliminating the weaknesses. Thus, opportunities could be opened up or restored. Firstly, Lokal
Loca has advertisement edge on social media such as Instagram, Facebook and use of known
influential bloggers and youtubers. Secondly, the company targets every possible events such
as bazaars and concept stores. Specific bazaars like ABM Bazaar and Christmas bazaars are
aimed by the time the product will be released. Thirdly, being on an environment wherein the
market demands both efficiency and effectiveness is the company’s real target market. Tala
case reaches on people who are in need of multipurpose phone case that are both accessible
and on-the-go. Fourthly, in establishing business usually owners are risking initial capital and
they figure out themselves on how to raise this business into a bigger entity. Therefore, it is an
edge for the company to use the course: Practical Research 1 in testing the market in further
expansion of the business.
Lastly, the threat (T) component of the analysis are uncontrollable jeopardy in the
external environment. The organization’s stability on profit and customer loyalty may be at
223
stake. Technological advancement, whereas are both opportunity and a threat because certain
company who uses manpower as the strength can be minimized or eliminated when
advancement happens. Notably, mobile accessories industry is large and common to market.
Thus, one of the company’s direct competitions is the availability of phone cases in the market
with very cheap price that can be found online such as Lazada, Shopee and Alibaba. Aside
from cheap products found online another major threat of Lokal Loca are the counterfeit
products and direct competition of Hiningan Yakan. The company (Hiningan Yakan) also
creates a weaved phone case. The major difference of Tala from theirs is the multifunctionality
of Lokal Loca’s. Lastly, stability of supplies in comparison to established business and cheaper
production cost of competitor on unit cost are two factors that might not affect the external
entity but the otherwise, thus the internal.
224
CHAPTER 5: THE FINANCIAL PLAN
5.1 Sales Projections
Lokal Loca Ltd.

Sales Forecast for Year-end August 2020 and 2021
August 2020 August 2021
Number of Units Sold 712 761
Unit Price Php 350.00 Php 350.00
Total Sales Php 248,600.00 Php 265,650.00

Table 5.1A (Lokal Loca Ltd. Yearly Sales Forecast for August 2020 and 2021)
Sales Forecast for the 1st year of Operations of Lokal Loca
2020)
Units Sold 72 75 77 90 40 52
Unit Price Php 350 Php 350 Php 350 Php 330- Php 350 Php 350
350*
Sales Php Php Php Php 30,900 Php Php 18,200

25,200 26,250 26,950 14,000
50 47 45 52 54 58 712
Php 17,500 Php Php Php Php 18,900 Php Php

16,450 15,750 18,200 20,300 248,600
Table 5.1B (Sales Forecast for the 1st year of Operations of Lokal Loca)
Sales Forecast for the 2nd year of Operations of Lokal Loca
2021)
225
Units Sold 61 68 76 105 48 57
Unit Price Php 350 Php 350 Php 350 Php 330- Php 350 Php 350
350*
Sales Php Php Php Php 36,050 Php Php 19,950

21,350 23,800 26,600 16,800
56 55 53 59 61 62 761
Php 19,600 Php Php Php Php 21,350 Php Php

19,250 18,550 20,650 21,700 265,650
Table 5.1C (Sales Forecast for the 2nd year of Operations of Lokal Loca)
5.2 Income Projections
Lokal Loca Ltd.

Income Projections for Year-End August 2020 and 2021
August 2020 August 2021
Net Sales Php 248,600.00 Php 265,650.00
Less: Cost of Goods Sold (82,973.60) (89,133.30)
Gross Profit 165,626.40 176,516.70
Less: Operating Expenses
Distribution Costs (12,000.00) (12,000.00)
Administrative Expenses (57,300.00) (57,300.00)
Operating Profit 96,326.40 107,216.70
Less: Cash Donations (9,632.64) (10,721.67)
Net Income Php 86,693.76 Php 96,495.03

Table 5.2 (Income Projections for Year-End August 2020 and 2021)
Table 5.2 shows the income projections for the first and second year of operations. As can be
seen, net income for year-end August 2020 is Php 86,693.76, calculated by getting the difference
226
between net sales and expenses. For the following year, net income increases by Php 9,801.27,
resulting in an amount of Php 96,495.03.
5.3 Cash Requirements
Lokal Loca needs to obtain Php 11,315.00 for the start-up expenses. Both company owners
will be contributing Php 10,000.00, giving a sum total of Php 20,00000. Therefore, there is Php
8,685.00 remaining to cover other expenses such as salaries, fixed costs and other related payables.
Lokal Loca Ltd.

Start-up Expenses
Item Price per Piece Quantity Total
Direct Materials
T’nalak cloth and wallet Php 58.00 100 Php 5,800.00
Phone case 40.00 100 4,000.00
Total Direct Materials Php 9,800.00
Indirect Materials
Craft resealable stand-up pouch Php 6.50 110 Php 715.00
Logo Stamp 0.30 1,000 300.00
Sticker Label 0.50 1,000 500.00
Total Indirect Materials Php 1,515.00
Total Start-up Expenses Php 11,315.00

Table 5.3 (Cash Requirements - Start-up Expenses)
5.4 Sources of Financing
Lokal Loca cannot function unless adequate funds are made available to it. A clear assessment
of the financial needs and the identification of various sources of finance is a significant aspect of
running a business simulation. The need for funds arises from the decision making stage, hence the
target of the course Practical Research 2. Therefore, Lokal Loca Ltd partnership will source the start-
227
up working capital and other related financial expenses through the parents of the company owners.
Financing will be in a form of debt capital with no interest rate. This is to help the company owners
simulate Lokal Loca as a working business formally without any cash expectations in return. However,
as a formality, the company owners would like to return the favor through payment of invested capital,
that is the very reason of considering the source of financing as debt capital. Nonetheless, the people
involved do not seek any shares in Lokal Loca.
Name Amount of Share (in Php)
Ronald Go Php 7 500
Nerlie Gonzales Php 7 500
Table 5.4 (Sources of Financing)
5.5 Attached Financial Projections
5.5.1 Income Statement for Two Years
Lokal Loca Ltd.

Income Statement
For the Year Ended August 31, 2020
Note
Net Sales 1 Php 248,600.00
Less: Cost of Goods Sold 2 (82,973.60)
Gross Profit 165,626.40
Distribution Costs 3 Php 12,000.00
Administrative Expenses 4 57,300.00 (69,300.00)
Operating Profit 96,326.40
Less: Cash Donations (9,632.64)
228
Net Income Php 86,693.76
Table 5.5.1A (Lokal Loca Ltd. Income Statement for the Year Ended August 31, 2020)
Lokal Loca Ltd.

Income Statement
Note
Net Sales 1 Php 265,650.00
Less: Cost of Goods Sold 2 (89,133.30)
Gross Profit 176,516.70
Distribution Costs 3 Php 12,000.00
Administrative Expenses 4 57,300.00 (69,300.00)
Operating Profit 107,216.70
Less: Cash Donations (10,721.67)
Net Income Php 96,495.03

Table 5.5.1B (Lokal Loca Ltd. Income Statement for the Year Ended August 31, 2021)
5.5.2 Balance Sheet for Two Years
Lokal Loca Ltd.

Statement of Financial Position
Note
Assets
Current Assets
Cash Php 97,427.36
Inventory 9,266.40
Non-Current Assets
Total Assets Php 106,693.76
229
Liabilities and Owners’ Equity
Liabilities
Current Liabilities
Non-Current Liabilities
Total Liabilities Php 0.00
Owners’ Equity
Lokal Loca, Capital - Php 20,000.00

September 1, 2019
Retained Earnings 86,693.76
Total Owners’ Equity 106,693.76
Total Liabilities and Owner’s Equity Php 106,693.76
Table 5.5.2A (Lokal Loca Ltd. Statement of Financial Position For the Year Ended August 31, 2020)
Lokal Loca Ltd.

Statement of Financial Position
Note
Assets
Current Assets
Cash Php 180,549.29
Inventory 13,373.10
Non Current Assets
230
Total Assets Php 193,922.39
Liabilities and Owners’ Equity
Liabilities
Current Liabilities
Non-Current Liabilities Php 0.00
Total Liabilities Php 0.00
Owners’ Equity
Lokal Loca, Capital - September 1, 2020 Php 106,693.76
Retained Earnings 3 87,228.63
Total Owners’ Equity 193,922.39
Total Liabilities and Owners’ Equity Php 193,922.39

Table 5.5.2B (Lokal Loca Ltd. Statement of Financial Position For the Year Ended August 31, 2021)
Lokal Loca Ltd.

Statement of Changes in Owners’ Equity
Subtotal 106,693.76
Lokal Loca, Drawings 0.00
231
Lokal Loca, Capital - August 31, 2020 Php 106,693.76
Table 5.5.2C (Lokal Loca Ltd. Statement of Changes in Owners’ Equity For the Year Ended August 31, 2020)
Lokal Loca Ltd.

Statement of Changes in Owners’ Equity
For the Month Ended August 31, 2021
Subtotal 193,922.39
Lokal Loca, Drawings 0.00
Lokal Loca Capital - August 31, 2021 Php 193,922.39

Table 5.5.2D (Lokal Loca Ltd. Statement of Changes in Owners’ Equity For the Year Ended August 31, 2021)
Lokal Loca Ltd.

Statement of Cash Flows
Cash Balance, September 1, 2019 Php 0.00
Cash Flow from Operating Activities
Cash receipts from customers Php 248,600.00
Payment of inventory purchases (84,240.00)
Payment of freight expenses (8,000.00)
Payment of marketing and promotional (12,000.00)

expenses
Payment of salaries (30,300.00)
Payment of office supplies (6,000.00)
Payment of rent and utilities (6,000.00)
Payment of registration fees (3,000.00)
Payment of bazaar fees (12,000.00)
Payment of cash donations (9,632.64)
232
Net Cash Flow from Operating Activities Php 77,427.36
Cash Flow from Financing Activities
Cash flows from initial investment Php 20,000.00
Net Cash Flow from Financing Activities Php 20,000.00
Net Increase in Cash Php 97,427.36
Cash Balance, August 31, 2020 Php 97,427.36

Table 5.5.2E (Lokal Loca Ltd. Statement of Cash Flows For the Year Ended August 31, 2020)
Lokal Loca Ltd.

Statement of Cash Flows
Cash Balance, September 1, 2020 Php 97,427.36
Cash Flow from Operating Expenses
Cash receipts from customers Php 265,650.00
Payment of inventory purchases (93,506.40)
Payment of freight expenses (9,000.00)
Payment of marketing and promotional (12,000.00)

expenses
Payment of salaries (30,300.00)
Payment of office supplies (6,000.00)
Payment of rent and utilities (6,000.00)
Payment of registration fees (3,000.00)
Payment of bazaar fees (12,000.00)
Payment of cash donations (10,721.67)
Net Cash Flow from Operating Expenses Php 83,121.93
Net Increase in Cash Php 83,121.93
Cash Balance, September 31, 2021 Php 180,549.29

Table 5.5.2F (Lokal Loca Ltd. Statement of Cash Flows For the Year Ended August 31, 2021)
233
Lokal Loca Ltd.
Notes to Financial Statements
Note 1 - Net Sales
Sales Php 249,200.00
Less: Sales Discounts (600.00)
Net Sales Php 248,600.00
Note 2 - Cost of Goods Sold
Merchandise Inventory, Beginning Php 10,530.00
Add: Net Cost of Purchases
Net Purchases Php 73,710.00
Add: Freight-In 8,000.00 81,710.00
Cost of Goods Available for Sale 92,240.00
Less: Merchandise Inventory, End (9,266.40)
Cost of Goods Sold Php 82,973.60
Note 3 - Distribution Costs
Marketing and Promotional Expenses Php 12,000.00
Note 4 - Administrative Expenses
Salaries Expense Php 30,300.00
Office Supplies Expense 6,000.00
Rent and Utilities Expense 6,000.00
Registration Fees 3,000.00
Bazaar Fees 12,000.00
Total Administrative Expenses Php 57,300.00
Note 5 - Retained Earnings
Retained Earnings, Beginning Php 0.00
234
Add: Net Income 86,693.76
Less: Dividends 0.00
Retained Earnings, End Php 86,693.76

Table 5.5.2G (Lokal Loca Ltd. Notes to Financial Statements For the Year Ended August 31, 2020)
Lokal Loca Ltd.

Notes to Financial Statements
Note 1 - Net Sales
Sales Php 266,350.00
Less: Sales Discounts (700.00)
Net Sales Php 265,650.00
Note 2 - Cost of Goods Sold
Merchandise Inventory, Beginning Php 9,266.40
Add: Net Cost of Purchases
Net Purchases Php 84,240.00
Add: Freight-In 9,000.00 93,240.00
Cost of Goods Available for Sale 102,506.40
Less: Merchandise Inventory, End (13,373.10)
Cost of Goods Sold Php 89,133.30
Note 3 - Distribution Costs
Marketing and Promotional Expenses Php 12,000.00
Note 4 - Administrative Expenses
Salaries Expense Php 30,300.00
Office Supplies Expense 6,000.00
Rent and Utilities Expense 6,000.00
235
Registration Fees 3,000.00
Bazaar Fees 12,000.00
Total Administrative Expenses Php 57,300.00
Note 5 - Retained Earnings
Retained Earnings, Beginning Php 86,693.76
Add: Net Income 96,495.03
Less: Dividends (95,960.16)
Retained Earnings, End Php 87,228.63

Table 5.5.2H (Lokal Loca Ltd. Notes to Financial Statements For the Year Ended August 31, 2021)
5.5.3 Ratio Analysis
Ratio Analysis
Financial Ratio As of August 2020 As of August 2021
Gross = Gross Margin = 165,626.40 = 0.67 or 176,516.70 = 0.66 or
Margin Net Sales 248,600.00 67% 265,650.00 66%
Ratio Revenue
Profit = Net Income = 86,693.76 = 0.35 or 96,495.03 = 0.36 or

Margin Net Sales 248,600.00 35% 265,650.00 36%
Ratio Revenue
Operating = Operating = 96,326.40 = 0.39 or 107,216.70 = 0.40 or

Margin Margin 39% 40%
Ratio Net Sales 248,600.00 265,650.00
Revenue
Return on = Net Income = 86,693.76 = 0.81 or 96,495.03 = 0.50 or

Equity Shareholder’s 106,693.76 81% 193,922.39 50%
Ratio Equity
Return on = Net Income = 86,693.76 = 0.81 or 96,495.03 0.50 or

Assets 81% = 50%
Total Assets 106,693.76 193,922.39
Ratio
Total Assets 106,693.76 193,922.39
Table 5.5.3 (Ratio Analysis)
236
1. Gross Margin Ratio
The gross margin ratio is a metric of how profitable a company is in terms of selling
its merchandise, not yet covering overhead expenses. It measures the percentage of each peso
of sales that results in gross profit. Lokal Loca’s gross margin ratio for the first year of
operations is 67%, indicating that for every peso of sales, there is 0.67 centavos direct profit
that the business inherits. Meanwhile, as of the second year of business, there is 0.66 centavos
direct profit that the company receives since the gross margin ratio is 66%. Despite a lower
ratio for the second year, the difference is not as significant since it is only a 0.01 difference.
2. Profit Margin Ratio
The profit margin ratio determines the amount of net income earned with each peso
of sales. This is a measure of how effectively a company can convert sales into net income. As
of year-end August 2020, Lokal Loca realized 0.35 centavos as profit. By the next year, the
ratio rises up by 0.01, resulting in 0.36 centavos realized as profit. Higher ratios are more
favorable as such a value indicates a higher number in earnings.
3. Operating Margin
The operating margin of a business shows the percentage a company makes on a
peso of sales after production and operating costs have been deducted. Direct operations
generate returns of 0.39 centavos for every peso of sales as of the first year of business. For
the second year, 0.40 centavos are generated for every peso of sales.
237
4. Return on Equity
Return on equity measures the profits made for each peso from equity. For year-end
August 2020, every peso of equity earned about 0.81 centavos of profit. Investors would like
to see a high return on equity ratio because this indicates that the company is using its
investors’ funds effectively. For the next year however, 0.50 centavos of profit is earned for
every peso of equity. This is due to the deduction of dividends from the company’s retained
earnings.
5. Return on Assets
Return on asset ratio shows how efficient a company's management is at using its
assets to generate earnings. For every peso invested in assets, 0.81 centavos of net income is
produced as of year-end August 2020. By year-end August 2021, only 0.50 centavos of net
income is produced for each peso amount of assets. This ratio has equal values as those of the
return on equity ratios since the company does not have any liabilities.
238
APPENDICES
Appendix A – Trademark Application Period
239
Appendix B – Trademark Application Period
240
Appendix C – Articles of Partnership of Lokal Loca
Limited Partnership
ARTICLES OF PARTNERSHIP
OF
LOKAL LOCA
That we, the undersigned partners, all of legal age, residents and citizens of the
Philippines, have on this day voluntarily associated ourselves together for the purpose of forming a
limited partnership under the following terms and conditions and subject to existing and applicable
laws of the Republic of the Philippines:
AND WE HEREBY CERTIFY:
ARTICLE I. Partnership Name: That the name of this partnership shall be
LOKAL LOCA LTD and shall transact business under the said company name.
241
ARTICLE II. Business Purpose: That the purpose/s for which this partnership is formed
is/are: cultural appreciation on Yakan tribe and profitability
ARTICLE III. Principal Place of Business: That the principal place of business of this
partnership shall be located at 2402 Manila Residences Tower 1, Taft Avenue, Malate, Manila
ARTICLE IV. Term of Existence: That this partnership shall have a term of 10 years from
and after the original recording of its Articles of Partnership by the Securities and Exchange
Commission.
ARTICLE V. Partners’ Circumstances: That the names, nationalities and complete
residence addresses of the partners are as follows:
Name Citizenship Address Contact Number
Go, Cassandra Justine Filipino 2402 Manila Residences (0922) 872 1711
Cruz Tower 1, Taft Avenue,
Malate Manila
Gonzales, Mary Mikanel Filipino 2558 Green Residences, (0995) 756 8125
Sarmiento Taft Avenue, Malate,
Manila
ARTICLE VI. Capital Contributions: That the capital of this Partnership shall be the
amount of FIFTEEN THOUSAND PESOS_ (P 15 000), Philippine Currency, contributed in cash
by the partners, as follows:
242
Name of Business Owner Percentage of Amount in Pesos
Share/Ownership
Go, Cassandra Justine Cruz 50% Php 7 500
Gonzales, Mary Mikanel 50% Php 7 500
Sarmiento
That no transfer of interest which will reduce the ownership of Filipino citizens to less than
the required percentage of capital as provided by existing laws shall be allowed or permitted to be
recorded in the proper books of the partnership.
ARTICLE VII. Sharing Ratios: That the profits and losses of this partnership shall be
divided and distributed proportionately on the ratio of the capital contribution of each
partner.(Limited partner shall be liable for losses only to the extent of his/her contribution.)
ARTICLE VIII. Management: That this partnership shall be under Mary Mikanel
Gonzales, as General Manager, who shall be in charge of the management of the affairs of the
company. He shall have the power to use the partnership name and in otherwise performing such
acts as are necessary and expedient in the management of the firm and to carry out its lawful
purposes.(Only the General Partner can be the General Manager.)
ARTICLE IX. Undertaking to Change Name: That the partners undertake to change
the name of this partnership, as herein provided or as amended thereafter, immediately upon receipt
of notice or directive from the Securities and Exchange Commission that another corporation,
243
partnership or person has acquired a prior right to the use of that name or that the name has been
declared as misleading, deceptive, confusingly similar to a registered name, or contrary to public
morals, good customs or public policy.
IN WITNESS WHEREOF, we have hereunto affixed our signatures this ____ day of
______, 20___, at ________.
______________________ _______________________
Cassandra Justine Go Mary Mikanel Gonzales
SUBSCRIBED AND SWORN TO before me in Manila, Philippines on ______________,
affiants personally appeared before me and exhibited their competent evidence of identity indicated
after their respective names:
Name Citizenship Address
Go, Cassandra Justine Cruz Filipino 2402 Manila Residences Tower
1, Taft Avenue, Malate Manila
Gonzales, Mary Mikanel Filipino 2558 Green Residences, Taft
Sarmiento Avenue, Malate, Manila
NOTARY PUBLIC
244
Doc. No. ______;
Page No. ______;
Book No. ______;
Series of 20 ______.
245
Appendix D – Mayor’s Permit
246
Appendix E- Baranggay Clearance
247
Appendix F – Certificate of SEC Registration Articles of Partnership
248
Appendix G- Lease Contract
LEASE CONTRACT
This Contract of Lease made and entered into this _______________, 2019 in MANILA,
PHILIPPINES by and between:
RONALD ANTHONY C. GO, Filipino, of legal age, single, with postal address at #Unit
2402 Manila Residences Tower 1, Taft Avenue, Malate, Manila, hereinafter referred to
as the “PROPERTY MANAGER-LESSOR” or simply “LESSOR”;
-and-
CASSANDRA JUSTINE C. GO of LOKAL LOCA, Filipino, of legal age, single with a
Philippine based company, with postal address #Unit 2402 Manila Residences Tower 1, Taft
Avenue, Malate, Manila, hereinafter referred to as the “LESSEE.”
WITNESSETH THAT:
WHEREAS, the LESSOR is the property manager of the residential unit on a parcel of land
situated at #Unit 2402 Manila Residences Tower 1, Taft Avenue, Malate, Manila, with
an area of Thirty Two (32) square meters, hereinafter referred to as the “LEASED
PREMISE”: Unit No. : 2402
249
WHEREAS, the LESSEE desires to lease the above-mentioned LEASED PREMISE, and
the PROPERTY MANAGER - LESSOR is willing to lease the same unto the LESSEE.
As declared and agreed, usage of the premises will be as a company headquarters, subject to
the following terms and conditions hereinafter specified.
NOW THEREFORE, for and in consideration of the foregoing and mutual covenants
herein contained, the parties herein and hereby agrees as follows:
3. PERIOD OF LEASE – This lease shall be for a period of ONE (1) YEAR from September
1, 2019 TO August 30, 2019, renewable thereafter under such terms and conditions that
maybe agreed upon by both parties. The LESSEE must signify its intention to extend the
lease by written notice thereof to the PROPERTY MANAGER – LESSOR at least SIXTY
(60) DAYS PRIOR TO THE EXPIRATION OF THIS CONTRACT.
4. AMOUNT OF RENT – The parties herein agree that the basic monthly rental of the
LEASED PREMISES shall be FIVE HUNDRED PESOS (Php 500.00) Philippine
Currency.
Payment shall be made within the FIRST FIVE (5) DAYS OF THE MONTH (1ST TO
5TH DAY). In the event of failure to pay within the first five days of the month, A
SURCHARGE OF 5% PER MONTH shall be charged by the PROPERTY MANAGER
- LESSOR as penalty due to its delay. In case of renewal of the contract, the above rental rate
shall be subject to negotiation and mutual agreement of both parties.
250
14. UTILITIES – All utility expenses such as water, electricity, telephone, cable, etc., shall be for
the account of the LESSEE.
15. USE OF PREMISES – The LEASED PREMISES shall be for company headquarters
use only. It is understood that the same cannot be used as a dwelling place by the LESSEE
or any of his/her guest/visitor/customer/worker or by anybody.
16. SUBLEASE – The subject premises may NOT be subleased/assigned. Violation of this
provision will warrant termination of the contract.
17. FIRE HAZARD AND OBNOXIOUS SUBSTANCES – The LESSEE shall not keep,
deposit or store in the LEASED PREMISES any obnoxious substances or inflammable
materials that might constitute fire hazard.
18. FIRE EXTINGUISHER – The LESSEE is required to provide a fire extinguisher fully-
charged and functional for the duration of the lease. This fire extinguisher must always be
available for inspection by the PROPERTY MANAGER - LESSOR or a representative of
the Fire Safety Department.
19. IMPROVEMENTS – The LESSEE shall not make any changes, alterations and
improvements in the LEASED PREMISES without the WRITTEN CONSENT of the
PROPERTY MANAGER - LESSOR.
251
However, any major alterations or improvements made or introduced by the LESSEE in the
LEASED PREMISES with the written consent of the LESSOR shall, upon termination of
this contract, automatically inure to the benefit of the said premises and BECOME THE
PROPERTY of the PROPERTY MANAGER - LESSOR without any obligation on the
latter’s part to pay or refund its value or cost at the same time to the LESSEE.
20. SANITATION AND REPAIRS - The LESSEE shall keep the property clean and in good
condition. The LESSEE shall be responsible for the minor repairs (amounting to FIVE
THOUSAND PESOS (PhP 2,000.00) AND BELOW). The PROPERTY MANAGER
- LESSOR shall be responsible for major repairs (ABOVE TWO THOUSAND PESOS)
to be made on the premises provided the LESSEE shall notify the PROPERTY
MANAGER - LESSOR in advance within a reasonable time and specifying and describing
such major repairs to be made on the water, electrical and sewage installations caused by
ordinary wear and tear. However, repairs that are DUE TO THE FAULT OR
NEGLIGENCE OF THE LESSEE, her guests and visitors, whether minor or major, shall
be for the account of the LESSEE.
21. INSPECTION OF PREMISES – The PROPERTY MANAGER - LESSOR shall
maintain the LEASED PREMISES in good condition and for such purpose the
PROPERTY MANAGER - LESSOR reserves the right at reasonable times with prior
notice to enter and inspect the premises and to make the necessary repairs thereof. Further,
in case the PROPERTY MANAGER - LESSOR should have a prospective buyer of the
unit, the LESSEE shall allow the prospective buyer to inspect the leased premises provided
the PROPERTY MANAGER - LESSOR gives prior notice to the LESSEE.
252
22. SALE, TRANSFER AND MORTGAGE – in the event of sale, transfer, mortgage or any
encumbrance of the LEASED PREMISES or any existing sale, transfer, mortgage of the
same, the PROPERTY MANAGER - LESSOR shall respect all the terms and conditions
of this contract.
23. THIRD PARTY LIABILITY – The LESSEE shall hold the PROPERTY MANAGER -
LESSOR free and harmless from any damage or liability or responsibility to any person or
property arising out of a consequence of the use of the LEASED PREMISES by the
LESSEE, its agents, employees, or guests. When such damage or liability caused to LEASED
PREMISES by fortuitous events or acts of God, such as typhoon, earthquake, flood, etc.,
which are beyond the control of the PROPERTY MANAGER - LESSOR, the later shall
not be liable to the LESSEE or to any THIRD PERSON/PARTY
24. RETURN OF THE LEASED PREMISES - Upon termination of this contract, unless it
has been renewed or extended, it is understood that the LESSEE should clear or make full
accounting of liabilities of all bills and accountabilities pertaining to or for the restoration of
premises to its original condition, before LESSEE may totally be cleared to vacate the
LEASED PREMISES. The LEASED PREMISES shall be turned over by the LESSEE
to the PROPERTY MANAGER - LESSOR in a clean and orderly manner.
14. PENAL PROVISION – The LESSEE agrees that all covenants and agreements herein
contained shall be deemed conditions as well as covenants and that if default or breach be made
of any such covenants and conditions, that this lease, at the discretion of the PROPERTY
253
MANAGER - LESSOR maybe terminated and cancelled forthwith and the LESSEE shall be
liable for any and all damages, actual and consequential including all costs of litigation proceedings
resulting from such default or termination.
Any and all suits, cases, or litigations arising out of this agreement, including but not limited to
recovery of possessions of the LEASED PREMISES, or any amount due, or for any breach
thereof, shall be filed with or brought before the courts of competent jurisdiction in MANILA
CITY.
IN WITNESS WHEREOF, the parties have hereunto set their hands at the place and date first
above written.
_______________________________ __________________________
RONALD ANTHONY C. GO CASSANDRA JUSTINE C. GO
Lessor Lessee
ACKNOWLEDGEMENT
REPUBLIC OF THE PHILIPPINES
MANILA CITY, S.S.
254
BEFORE ME, this____ day of ______________ 2019 in Manila City personally appeared:
Ronald Anthony Go
and
All known to me and to me known to be the same persons who executed the foregoing
instrument and they acknowledged to me that the same is their free and voluntary act and
deed.
This instrument refers to a contract of lease consisting of five (5) including this page
where on the acknowledged is written and signed by the parties and their instrumental
witnesses on each and every page thereof.
WITNESS MY HAND AND SEAL on the date and place first above written.
NOTARY PUBLIC
Doc. No. _____
Page No. _____
255
Book No. _____
Series of 2019.
256
Appendix H – SSS Certification
257
258
259
Appendix I – Community Tax Certificate
260
Appendix J - BIR Form 1903 - Application for Registration for Partnerships
261
262
263
264
Appendix K – Warranty Certificate
WARRANTY
Tala Cases are covered with warranty to last for 24 hours upon purchase. Free exchange for
units found to be defective due to poor craftsmanship. However, any unauthorized repair of the unit
which resulted damaging the phone case during warranty tenure shall relieve Lokal Loca from
warranty obligation
Signed by
Customer Name and Signature
Date
Co-Owner, Lokal Loca
Mary Mikanel Gonzales
Co-Owner, Lokal Loca
265
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De La Salle University

Ramon V. Del Rosario

Business Model Canvas.....…………………..………..………………….……...……………… 20

Chapter 1: The Management and Organization..…….………...…………………………...... 21

1.1 Company Name and Logo.…………...………………………………………..…….... 21

1.1.1 Company Name.………………………………………...………………………….. 21

1.1.2 Brand Name…………………………………………………………………………22

1.1.3 Company Logo…………..……………………………...…………………………... 22

1.1.4 Brand Logo……....……………………………………...…………………….…….. 24

1.2 Company’s Vision, Mission, and Objectives.……...…………………...………………………. 24

1.2.3 Company Objectives.………………………………………...……………………... 27

1.2.3.1 Organizational Objectives.………………………………………...……… 27

1.2.3.2 Functional Objectives.………………………………………...………….. 28

1.3 Management Team.………………………………………...……………………..…………... 32

1.3.1 Roles and Responsibilities.………………………………………...…………….….. 34

1.3.2 Organizational Chart.………………………………………...……………………... 50

1.4 Compensation and Ownership…………………………..………...………………………….. 50

1.5 Board of Directors/Advisory Council………………………………………...………………. 55

1.6 Infrastructure (External Management Support)………………………………………......…… 60

1.7 Contracts and Franchise Agreement ………………………………………...…….…………. 60

1.7.1 Employee Contract………………………………………...………………………... 60

1.7.2 Suppliers Contract………………………………………...………………………….71

1.7.3 Lease Contract………………………………………...……………………………. 72

Chapter 2: The Product……...………………………………………………………………...... 80

2.1 Purpose of the Product………..……………....…………………………………………….…80

2.1.1 Product Description.………………………………………...………………………80

2.1.2 Product Usages & Benefits………………………………………...……………….. 80

2.1.3 Reason for Choice of Product………………………………………...…………….. 81

2.2 Unique Features of the Product……………………………………………………………….. 82

2.2.1 Unique Features of Tala……………………………...……………………………... 82

2.2.2 Product Differentiation from Other Similar Products…………………………....…..84

2.3 Stage Development………………………………...………………………………………..... 86

2.3.1 Idea Generation Development………………………………………...……………. 86

2.4 Related Products and Spin-Offs………………………………………...……………………..88

2.4.1 Purpose of Proposed Related Products and Spin-Offs………………………………88

2.4.2 List of Proposed Related Products and Spin-Offs……………………..…………….89

2.5 Future Research and Development………………………………………..…………………..93

2.5.1 Future Research and Development for Tala ……………………………………….. 93

2.6 Trademarks, Patents, Copyrights, Licenses, and Royalties…………………………………...... 94

2.7 Government Approvals……….…………………………………...…………………………..97

2.8 Product Limitations………………………………………...…………………………......…..100

2.9 Product Liability………………………………………...…………………………………….101

2.10.1 Value Creation for the Customer………………………………………...………....103

2.10.2 The Input-Process-Output Model (IPO Model) for Lokal Loca.…………………..103

2.10.2.1 The IPO Model for Value Creation……………..………………………..103

2.10.2.2 Identification of Desired Outcomes for an Effective Production

2.10.2.3 Identification of Production Inputs to Achieve Desired Outcomes……...1

2.10.2.3.1 The 4Ms of Production Inputs………………………………....105

2.10.2.3.1.1 Manpower (Labor Requirements).....................................105

2.10.2.3.1.2 Materials (Raw Materials)...................................................106

2.10.2.3.1.3 Machineries (Machines, Tools, & Equipment)...............108

2.10.2.4 The Input-Process-Output Model for Tala......................................................111

2.10.3 Production Process Flowchart............................................................................................117

2.10.4 Production Cost.…………………………….…………...……………..…………118

2.10.4.1 Production Cost per Unit ……………………………………………… 118

2.10.4.2 Percentage (%) Allocation for Lost Items ………………………………..119

2.11.1 Plant Location.…………………………….…………...………………………….119

2.11.2 Building Facilities and Utilities.…………………………….…………...…..……...120

2.11.3 Plant Layout.…………………………….…………...……………………………121

2.12 Supply Chain Management.…..……….…………...………………………………………...122

2.12.1 Identification of Key Suppliers.…………………………….…………...…………122

2.12.1.1 Primary Suppliers.…………………………….…………...……………..122

2.12.1.2 Secondary Suppliers.…………………………….…………...…………124

2.12.2 Supplier Specifications.…………………………….…………...……….……....... 125