GROUP 7

Chapter I
I. Company Background

San Miguel Corporation (SMC) is a Philippine multinational conglomerate with operations in

various industries, including food and beverage, power and energy, infrastructure, and
telecommunications. The company was founded in 1890 and is headquartered in Pasig City,
Metro Manila.

The current president and chief operating officer of San Miguel Corporation (SMC) is Ramon S.
Ang. He has been in this position since 2012. Ang is also a member of the SMC board of
directors and is known for his business acumen and leadership in various industries, including
food and beverage, power and energy, and infrastructure. Under his leadership, SMC has
continued to expand its operations and diversify its portfolio of businesses.
In 2021, SMC continued to report strong financial performance despite the challenges posed by
the COVID-19 pandemic. The company's consolidated revenue for the first quarter of 2021
reached Php 236.4 billion (approximately USD 4.9 billion), representing a 28% increase from
the same period in the previous year. SMC's net income for the same period also rose by 18% to
Php 17.2 billion (approximately USD 357 million).

SMC's food and beverage unit, San Miguel Food and Beverage, Inc. (SMFB), remains a key
revenue generator for the company. SMFB's brands include San Miguel Beer, Magnolia, and
Purefoods, among others. In 2020, SMFB completed the acquisition of the international
operations of Kingfisher beer, which further expanded its presence in the global beer market.
 Chapter II

II. Findings

Table of San Miguel Corp. Market

Segmentation, Targeting and
Positioning
In addition, SMC has also made significant investments in renewable energy. In 2021, the company
announced plans to invest Php 97 billion (approximately USD 2 billion) to build a 31.4-megawatt
hydroelectric power plant in Bukidnon, Philippines. The company also plans to expand its renewable
energy portfolio through wind and solar projects in the coming years.

SMC has also been involved in several initiatives to support the Philippine government’s COVID-19
response. In 2020, the company donated medical supplies and provided free transport for front
liners. SMC also partnered with the Department of Health to construct additional COVID-19
testing centers and donated land for the construction of a quarantine facility.

SEGMENTATION TARGETING POSITIONING

• Young adults and working professionals

• Quality products at affordable
• Families and households and Senior citizens
prices Convenient access through
DEMOGRAPHIC
• Age: (18-60 years old) various channels and Catering to
different age groups and lifestyles

• Accessibility and availability in key

• Location: Metro Manila and other major
areas
GEOGRAPHIC cities

• Adapting local preferences and

• Rural areas with growing economies
needs

• Promoting healthy and sustainable

• Health - conscious consumers products

PSYCHOGRAPHIC • Tech-savyy individuals • Incorporating technology and

• Environmentally- conscious consumers innovation

• Supporting environmental initiatives

• Rewarding loyalty and special

• Brand loyal customers
promotions
BEHAVIORAL • Occasional buyers
• Encouraging trial through promotion
• Value - seekers
• Providing value for money
 DEMOGRAPHIC FACTOR
SMC targets young adults and working professionals, families and households, and senior citizens. The company
offers quality products at affordable prices and provides convenient access through various channels. It caters to
different age groups and lifestyles, which helps it maintain a broad customer base.

GEOGRAPHIC FACTOR
SMC targets Metro Manila and other major cities as well as rural areas with
growing economies. The company ensures accessibility and availability in key
areas while adapting to local preferences and needs. This strategy allows SMC
to reach a wider range of customers across different regions.

2020
 PSYCHOGRAPHIC FACTOR
SMC targets health-conscious consumers, tech-savvy individuals, and environmentally-conscious
consumers. The company promotes healthy and sustainable products while incorporating technology
and innovation into its operations. It also supports environmental initiatives, which appeals to
consumers who prioritize these values.

BEHAVIORAL FACTOR
SMC targets brand loyal customers, occasional buyers, and value-seekers. The company
rewards loyalty with special promotions, encourages trial through promotions, and provides
value for money. This approach helps SMC retain its loyal customers while also attracting
new ones through promotional activities.
Chapter III: Market Environment

Political
The Philippines has a stable political environment, but there may be changes in policies and regulations
that could affect San Miguel Corporation's business operations. The government has recently been
implementing policies to promote foreign investment and economic growth, which could benefit the
company.

Economic
The Philippine economy has been impacted by the COVID-19 pandemic, which has led to
decreased consumer spending and disrupted supply chains. San Miguel Corporation has diversified
business operations across different sectors such as food and beverage, power, and infrastructure,
which could help mitigate the impact of economic fluctuations.
 Social
The pandemic has also affected social trends, with consumers becoming more health-conscious and adapting to
new ways of working and consuming products. San Miguel Corporation's food and beverage products could be
affected by changing consumer preferences, while its infrastructure and power operations could benefit from the
shift towards remote work and digitalization.

Technological
San Miguel Corporation has invested in technology to improve its operations and services, such as
the use of renewable energy sources and digitalization of processes. The pandemic has accelerated
the adoption of digital technologies and remote work, which could benefit the company's
operations.
Environmental
There is growing concern for environmental sustainability, and San Miguel Corporation has
committed to reducing its carbon footprint and implementing green initiatives. The company
operates in industries such as power and manufacturing that have a significant impact on the
environment and may face increasing pressure from regulators and stakeholders to reduce their
environmental impact.
Legal
The Philippines has laws and regulations that affect San Miguel Corporation's business
operations, such as labor laws, tax policies, and environmental regulations. The
company may also face legal challenges such as lawsuits or regulatory fines related to
its operations.
To achieve these objectives, San Miguel Corporation should conduct a SWOT analysis to identify its
internal strengths and weaknesses and external opportunities and threats. This analysis can help the
company develop a strategic plan that outlines specific goals and objectives and identifies initiatives to
achieve them.

The company should also establish clear communication and collaboration among its various business units to
ensure that everyone is working towards a common goal. This can involve creating cross-functional teams
that work on specific projects and initiatives, as well as implementing regular performance evaluations to
track progress and identify areas for improvement.
 Chapter IV
IV. Discussions
Based on the findings of the PESTEL analysis, San Miguel Corporation needs to be proactive and vigilant
in monitoring the changing political, economic, social, technological, environmental, and legal factors that
could impact its business operations. The company should leverage its strengths, such as its diversified
business portfolio, commitment to sustainability, and investment in technology, to take advantage of
opportunities in the market. At the same time, it should also address its weaknesses, such as the potential
legal challenges related to labor laws and environmental regulations.

San Miguel Corporation should also be prepared to respond to potential threats, such as changes in policies and
regulations that could affect its business operations, as well as the impact of the COVID-19 pandemic on consumer
behavior and the economy. The company may need to adjust its strategies and initiatives accordingly to address these
challenges.
 San Miguel Corporation (SMC) PESTEL ANALYSIS
Political
• stable political environment
• policies and regulations
• foreign investment
• economic growth
Technological
• High mobile phone penetration
• High rate of technological
advancements
• Technological innovations to
ensure quality and effectivity
• Competitive market which
markets the Corp. to progress
Economic
• COVID-19 Pandemic
• Decreased consumer
spending
• Disrupted supply chains
• Diversified business
operations
Environment
• Strong implementation of
environmental policies
• Controlled and designated waste
disposal in accordance to
environmental sustainability
• Green approach on its products
• Renewal energy investment (Solar
energy and Hyro plants)
Sociological
• Health conscious consumers
• New ways of working and
consuming products
• Changing consumer
preferences
• Infrastructure and power
operations
Legal
• Strict Regulations in Health
and Safety of the workers in
station
• Strict labor laws
• Anti-Discrimination Law
 Chapter V
V. Conclusion
In conclusion, the findings of this case study on San Miguel Corporation (SMC) reveal that
the company operates in a highly competitive and regulated market environment. However,
SMC's diversified business operations across different sectors such as food and beverage,
power, and infrastructure, along with its investment in technology and commitment to
environmental sustainability, could help the company stay competitive and adapt to
changing market conditions.

The stable political environment in the Philippines, along with the government's policies to
promote foreign investment and economic growth, could benefit SMC. However, changes
in policies and regulations could pose risks to the company's operations. The COVID-19
pandemic has also impacted the economy and consumer behavior, which could affect
SMC's various business operations.
 Furthermore, changing social trends and consumer preferences could affect SMC's food and
beverage products, while digitalization could benefit its infrastructure and power operations.
Legal challenges related to labor laws, tax policies, and environmental regulations could also
pose risks to the company.

Overall, SMC needs to continue monitoring the political and economic environment, as well as
changing social and technological trends, to make informed business decisions and stay ahead of
the competition. The company's commitment to sustainability and technology could also give it a
competitive advantage and contribute to its long-term success.
 Chapter IV
VI. Recommendations
As a highly diversified conglomerate, San Miguel Corporation operates in a constantly
evolving and competitive market environment. In order to stay competitive and sustain its
growth, SMC needs to regularly assess its internal strengths and weaknesses as well as
external opportunities and threats. One effective tool for this is a SWOT analysis, which
helps identify key factors that impact the company's performance and inform the
development of strategic plans and actions.
Based on our analysis of the latest PESTEL factors affecting SMC, we recommend
conducting a comprehensive SWOT analysis to identify the company's strengths, weaknesses,
opportunities, and threats. This will provide a structured framework to evaluate SMC's
position in the market, its competitive advantage, and its potential for growth and expansion.
By combining this analysis with a clear action plan, SMC can develop strategies that leverage
its strengths, address its weaknesses, capitalize on emerging opportunities, and mitigate
potential threats.

In the following sections, we will present a SWOT analysis for SMC based on our findings, and
provide an action plan with specific recommendations to address the identified issues and
leverage opportunities for growth and sustainability.

 Strengths
STRENGTHS KEY MEASURE STRATEGIES/ ACTION TIME FRAME SUCCESS INDICATOR

SMC's revenue and profit

continue to grow, and the
Expand into new markets and company has established
Diversified portfolio of Revenue and profit growth in
industries through acquisitions On going a presence in various
businesses each business segment
and partnerships industries, including
infrastructure and
renewable energy

SMC has consistently

reported strong financial
Improve operational efficiency,
Strong financial Revenue growth, net income, performance, with
invest in high-growth On going
performance and return on equity revenue and net income
businesses, and manage costs
growth and high return on
equity

SMC's brands, such as

Invest in advertising and
Established brand marketing campaigns to
Market share and brand equity
recognition maintain and improve brand
recognition
San Miguel Beer and
Magnolia, are well-known
On going
in the Philippines and
have a loyal customer
base

Employee retention and
Strong leadership and
engagement, business
management team promote a culture of innovation
performance
Strong commitment to Social and environmental
corporate social impact, stakeholder
communities, and engage with
responsibility engagement
SMC has a highly skilled
and experienced
leadership and
Invest in employee
management team, and
development and training,
On going the company has been
recognized for its
and collaboration
commitment to employee
development and
engagement
SMC has a strong
commitment to corporate
social responsibility, and
Implement sustainable the company has
practices, support local implemented various
On going
initiatives to support
stakeholders sustainable practices,
support local
communities, and engage
with stakeholders
 Weaknesses
WEAKNESSES KEY MEASURE STRATEGIES/ ACTION TIME FRAME SUCCESS INDICATOR

SMC has successfully

expanded its operations in
Expand into new international
Dependence on the Revenue and profit growth Southeast Asia, Australia,
markets through partnerships On going
Philippine market outside of the Philippines and New Zealand,
and acquisitions
reducing its dependence
on the Philippine market

SMC has invested in

upstream and
Invest in vertical integration and
Exposure to commodity Cost of goods sold, downstream businesses,
diversification to mitigate On going
price fluctuations profitability such as power and energy,
commodity price risks
to mitigate commodity
price risks

SMC has successfully

refinanced debt, reduced
Refinance debt, reduce interest
Debt-to-equity ratio, interest interest expenses, and
Heavy debt burden expenses, and improve cash On going
expenses improved cash flow
flow management
management, resulting in
a healthier balance sheet
 Limited innovation and new product
development Sales growth from
new products and services Increase
investment in research and
Increase investment in
development, partnerships, and
Limited innovation research and development,
Sales growth from new acquisitions to foster innovation and
and new product partnerships, and acquisitions On going
products and services develop new products Ongoing SMC
development to foster innovation and
has increased its investment in
develop new products
research and development, formed
partnerships, and made acquisitions to
expand its product portfolio and drive
innovation

Develop robust risk

SMC has implemented robust risk
management and crisis
management and crisis management
management strategies,
strategies, engaged with stakeholders,
High regulatory and Business continuity and engage with stakeholders,
On going and maintained strong relationships
political risks reputation and maintain strong
with government and regulatory
relationships with
agencies to mitigate regulatory and
government and regulatory
political risks
agencies
 Opportunities
TIME
OPPORTUNITIES KEY MEASURE STRATEGIES/ ACTION SUCCESS INDICATOR
FRAME

Short- SMC has made significant

Revenue and term (1-3 investments in renewable energy
Invest in renewable energy projects
Growing demand for profit growth years) and
and technologies, and expand the projects, resulting in increased
renewable energy from renewable Long-term
renewable energy portfolio revenue and profit from this
energy (3-10
years) business segment

SMC has successfully participated in

Infrastructure Participate in public-private partnership several PPP projects, such as tollways,
Revenue growth from
development in the
infrastructure projects
(PPP) projects and expand infrastructure On going airports, and water supply projects,
Philippines portfolio resulting in increased revenue and profit
from the infrastructure business

Short-term SMC has successfully launched new

Revenue growth from Develop new premium and craft beer (1-3 years) premium and craft beer products, such as
Growing demand for
premium and craft products and expand distribution and Long- Red Horse Beer Extra Strong and San
premium and craft beer
beer products channels term (3-10 Miguel Super Dry, resulting in increased
years) revenue from this business segment
 SMC has expanded its
food business in Asia
Expand food business in Asia through partnerships and
Growing demand for Revenue growth from
through acquisitions and On going acquisitions, resulting in
food products in Asia petrochemical products in Asia
partnerships increased revenue and
profit from this business
segment

SMC has expanded its

petrochemical business in
Growing demand for Expand petrochemical business Asia through partnerships
Revenue growth from
petrochemical products in Asia through acquisitions and On going and acquisitions, resulting
petrochemical products in Asia
in Asia partnerships in increased revenue and
profit from this business
segment
 Threats
TIME
THREATS KEY MEASURE STRATEGIES/ ACTION SUCCESS INDICATOR
FRAME

SMC has enhanced its

competitiveness through product
Enhance competitiveness through
Intense competition in On innovation, brand building, and
Market share and profitability innovation, brand building, and strategic
key markets going strategic partnerships, resulting in
partnerships
increased market share and
profitability

SMC has diversified its revenue

streams, managed costs, and
Diversify revenue streams, manage
Economic downturns Revenue and profit growth, On maintained a strong financial
costs, and maintain strong financial
and market volatility financial stability going position, allowing it to weather
position
economic downturns and market
volatility

SMC has invested in compliance and risk

Invest in compliance and risk
Stringent regulations management programs, engaged with
management programs, engage with On
and compliance Compliance and reputation regulators, and maintained a strong
regulators, and maintain a strong going
requirements reputation, allowing it to comply with
reputation
regulations and mitigate regulatory risks

Environmental and
Reputation and sustainability
social impact
Develop and implement
Business continuity and sustainable practices, engage
data security with stakeholders, and
enhance reputation
SMC has developed and
implemented sustainable
practices, engaged with
Technological disruptions and
On going stakeholders, and
cybersecurity threats
enhanced its reputation as
a responsible and
sustainable company
SMC has invested in
technology and
cybersecurity
infrastructure, developed
Invest in technology and
robust disaster recovery
cybersecurity infrastructure,
On going and business continuity
develop robust disaster recovery
plans, and maintained
and business continuity plans
data security, allowing it
to mitigate technological
disruptions and
cybersecurity threats
Thank you!