Republic of the Philippines

CENTRAL LUZON STATE UNIVERSITY

College of Business Administration and
Accountancy Science City of Muñoz, Nueva Ecija

MNGT 4122 STRATEGIC MANAGEMENT

STRATEGIC MANAGEMENT TERM PAPER

FOR RFM CORPORATION

DAVID, JESSIE LOU R.

DE GRACIA, MILBERT R.
DURAN, KRISTINE B
MIRANO, DAISY GRACE C.
SINENSI, MARILEN GRACE G.
GROUP 2
BSAC 3-2

DECEMBER 15, 2023

i
 TABLE OF CONTENTS

PAGE

Title Page i

Table of Contents ii

List of Figures iv

List of Tables v

List of Appendices vi

Executive Summary vii

INTRODUCTION

Overview of the Sector/Industry 1

Background of the Company 4

RESEARCH DESIGN AND METHODOLOGY

Research and Design 6

Scope and Limitation 6

COMPANY’S VISION AND MISSION

Vision 8

Mission 10

Objectives 12

INTERNAL ASSESSMENT/ANALYSIS

Internal Factor Evaluation 13

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EXTERNAL ASSESSMENT/ANALYSIS

External Factor Evaluation 17

STRATEGY GENERATION AND SELECTION

Strategy Generation 21

Strategy Selection 27

STRATEGY IMPLEMENTATION

Action Plans 30

STRATEGY MONITORING

Strategy Review 32

Strategy Evaluation 33

Strategy Control 34

CONCLUSION AND RECOMMENDATIONS 35

REFERENCES 37

APPENDICES 39

iii
 LIST OF FIGURES

FIGURE PAGE

1 Picture of the Industry 3

2 Logo of the Company 5

iv
 LIST OF TABLES

TABLE PAGE

1 Internal Factor Evaluation for the RFM Corporation 12

2 External Factor Evaluation of the RFM Corporation 16

3 SWOT Analysis/Matrix of the RFM Corporation 20

4 QSPM of the RFM Corporation 23

v
 LIST OF APPENDICES

APPENDIX PAGE

1 Income Statement for the Year ended December 31, 2022 37

2 Balance Sheet for the Year ended December 31, 2022 38

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 EXECUTIVE SUMMARY

RFM Corporation, established in 1957, has emerged as a prominent entity in the food and

beverage sector, owing to its rich history of pioneering advancements. The company has

established a robust brand presence among Filipino customers with its wide range of products,

including flour, pasta, poultry, ice cream, and dairy products.

RFM Corporation works in a dynamic market characterized by shifting customer

preferences, technology breakthroughs, and global economic fluctuations. Notwithstanding its past

achievements, the corporation encounters rising rivalry, evolving regulatory environments, and

the demand to conform to emerging sustainability and digitalization trends.

The strategic recommendations we provide are based on a thorough analysis of the

corporation’s Strengths, Weaknesses, Opportunities, and Threats (SWOT). Notable strengths

encompass an established history and experience of 58 years, growth in current and total assets,

and strong brand loyalty and consumer preference, while weaknesses include the risk of supply

chain disruptions and reliance on the Philippine market which leads to limited international

market presence. Potential advantages or opportunities can be found in the shift in the benefits of

technology adoption in enhancing production processes, while threats involve economic

uncertainties, intensified competition, and demand for organic and sustainable food options.

In conclusion, RFM Corporation can successfully navigate the challenges of the current

business landscape. In order to achieve long-term success in the constantly changing market,

RFM Corporation may establish a strong position by adopting digitalization, implementing

strategic expansion, cultivating partnerships, and prioritizing broadening its range of products.

vii
 INTRODUCTION

Overview of the Sector/Industry

More and more Filipinos are adopting plant-based diets or looking for vegetarian or

vegan alternatives at least some of the time. So, if a company offers plant-based food or

beverages, it will be catering to a growing demographic and making a positive impact on the

environment as well. For constraints in the food industry, the increase in production in the past

20 years has not kept pace with the rapid growth of the population. The inability to supply the

national food requirement is attributed to unavailability or low level of use and high costs of

inputs, lack of credit and financing assistance, lack of infrastructure, and ineffective government

intervention in marketing. For the non-grains food industry (crops, fisheries, and livestock)

constraints include poor farm-to- market roads, inefficient marketing and distribution systems,

lack of financing and low-cost availability, unavailability of superior varieties, high cost of

inputs, and limited postharvest technologies.

Food industries in the Philippines are currently being upgraded for global

competitiveness. Attempts are made to improve the quality of the products to satisfy

international standards. Hence, the use of modern technologies like mechanical harvesters,

mechanical dryers, cold storage, and dehydrators is beginning to appear. Philippine food

industries are bracing to cope with the impending global trade liberalization. Certainly, Filipino

consumers will have wide choices of quality food products at affordable prices and customer-

friendly services.

With regard to the Philippines’ beverage market consumption, soft drink is the only

segment that has remained constant in the Philippine beverage market. The whole Philippines
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Food

2
and Beverages market revenue reached over USD 100 billion in 2020 and is expected at a 7.16%

CAGR from 2021 to 2027.

COVID-19 has had a significant impact on food and beverage supply chains as well as

consumption patterns in the Philippines. The pandemic in 2020 had a substantial impact on

dining out, which was the preferred celebration in family celebrations. However, the market

showed a positive growth rate in 2020, owing to increased consumption of heated foods and

beverages and home-based food preparation, as well as direct purchasing in retail stores.

In the Philippines, the tobacco industry has been facing increased scrutiny and regulatory

changes aimed at reducing smoking rates and improving public health. The government has

implemented measures such as higher taxes on tobacco products to discourage smoking and

generate revenue for health programs. There's a growing awareness of the health risks associated

with smoking, leading to a decline in traditional cigarette consumption. This poses a challenge to

the industry as it seeks to maintain its market share.

To adapt to changing consumer preferences, the tobacco industry in the Philippines has

been exploring and diversifying its product offerings. This includes the introduction of

alternative tobacco products like e-cigarettes and heated tobacco devices. Figure 1 shows the

picture of the industry.

3
Figure 1. Picture of the Industry

4
Background of the Company

RFM Corporation is a well-established and diversified Filipino conglomerate with a rich

history from 1957. It initially focused on flour milling, but the company expanded its operations

beyond flour milling and ventured into poultry and cattle production, as well as several sectors of

food production. RFM also engages in non-food enterprises, such as providing barging services

and leasing commercial or office buildings to meet the internal needs of its many operating

divisions. This brief background provides an overview of RFM Corporation's critical areas of

operations, the company's vision and core principles, and its dedication to sustainability.

Core Business Segment

Food and Beverage: RFM Corporation is a well-known brand in the food and beverage

sector. The company produces and sells various popular food items, such as pasta, beverages, ice

cream, and other products. Its brands, such as White King, Royal and Fiesta, Sunkist, and Selecta

are well-known both inside and outside the Philippines.

Mission and Values:

RFM Corporation aims to improve lives through its products and services. A set of

fundamental values, such as excellence, integrity, customer-centricity, and social responsibility,

serve as the company's guide. These values highlight the business' dedication to providing high-

quality products and services while positively influencing the community and the environment.

5
Commitment to Sustainability:

RFM Corporation is involved in various corporate social responsibility (CSR) initiatives

and contributions. The company actively participates in ethical sourcing and environmentally

friendly production, which reflects a deeper understanding of the significance of sustainable

business practices.

Like many other companies, RFM Corporation has undertaken notable contributions,

which include giving financial assistance during the COVID-19 pandemic, scholarships for

underprivileged students, and programs intended to promote ethical farming practices that aid in

ensuring a sustainable source of raw materials for their food products. The company contributes

significantly to the economic development of the Philippines and creates numerous employment

opportunities for many. Its dedication to excellence and competitive advantage have elevated the

brand's reputation. Figure 2 shows the logo of the company.

Figure 2. Logo of the Company

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 RESEARCH DESIGN AND METHODOLOGY

Research and Design

This section provides a comprehensive overview of the methodologies employed in

gathering and analyzing data related to RFM Corporation. The research process comprises

primary and secondary data collection methods to ensure a well-rounded understanding of the

RFM strategic management practices.

RFM annual reports and financial statements provided critical insights into its financial

health and strategic goals. Additionally, a closer look at RFM Corporation’s official website

occurred to get a greater awareness of strategic decision-making processes and organizational

culture.

Industry reports, market analyses, and competitor studies helped position RFM

Corporation within the industry landscape, highlighting trends, challenges, and opportunities.

Meanwhile, an Internal and External Factor Evaluation, SWOT analysis, and QSPM analysis

were all applied to extract insights from the obtained data.

The insights derived from this research will serve as the foundation for strategic

recommendations for enhancing the competitive position and sustainable growth in the market.

Scope and Limitation

This strategic management analysis comprises an in-depth assessment of strategic efforts,

financial performance, and competitive positioning of RFM Corporation during the last several

years. This paper focused on gaining actionable insights to improve its competitive advantage

and encourage sustainable growth.

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 The examination includes internal factors, such as corporate culture and decision-making

processes, and external factors, such as industry dynamics, regulatory frameworks, and market

trends. Various analytical frameworks, such as Internal Factor Evaluation, External Factor

Evaluation, SWOT analysis, and QSPM analysis, broaden the scope to provide a complete

knowledge of the strategic environment. The recommendations only serve as a guide to RFM

Corporation toward informed and effective decision-making.

Several key assumptions that underpin this analysis include the accuracy and reliability of

the data gathered from annual reports, financial statements, and review of the corporate website

of RFM. It follows that the information provided by the company is transparent and accurate

regarding strategic practices and financial performance. In addition, the analysis assumes that

industry reports, market analyses, and competitor data reflect market conditions and the

competitive landscape.

The dynamic nature of the business environment introduces an inherent limitation to this

strategic management analysis, as conditions and factors affecting RFM Corporation may evolve

rapidly. This paper depends on historical data and current market conditions, and future

developments may influence the accuracy of strategic recommendations. Additionally, the

reliance on publicly available information poses a limitation, as proprietary or confidential data

not disclosed by RFM Corporation may impact the depth of a particular analysis.

8
 COMPANY’S VISION AND MISSION

Vision

RFM Corporation’s Vision Statement (Paraphrased)

RFM Corporation aims to be the Philippine market leader in affordable-quality food and

beverage products.

Analysis of RFM Corporation's Vision Statement

1. Future-Focused: The vision statement is future-focused as it articulates RFM

Corporation's aspiration to become the market leader in affordable-quality food and

beverage products in the Philippines. It sets a clear goal for the organization to achieve in

the future.

2. Directional: The vision statement provides a clear direction for RFM Corporation by

emphasizing market leadership in affordable-quality food and beverage products. This

helps guide the company's strategic decisions and actions towards a specific objective.

3. Clear: The vision statement is clear in its objective - to be the market leader in

affordable- quality food and beverage products. This clarity helps in aligning the efforts

of the organization towards a common goal.

4. Relevant: The vision statement is relevant to RFM Corporation's industry and market. It

reflects the company's commitment to providing affordable-quality products, which is

crucial in the food and beverage sector where quality and pricing are significant factors.

5. Purpose-Driven: The vision statement is purpose-driven as it focuses on the goal of

market leadership in affordable-quality products. This aligns with the company's

purpose of
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 delivering value to its customers through quality and affordability.

6. Values-Based: While the vision statement is clear on the goal, it could be enhanced by

explicitly incorporating the values that RFM Corporation prioritizes. Adding elements

related to sustainability, ethical practices, or customer-centric values could provide a

more comprehensive framework.

7. Challenging: The vision of becoming the market leader in affordable-quality food and

beverage products is challenging, which is positive. However, the statement could benefit

from including specific targets or benchmarks to make the challenge more measurable.

8. Unique: The vision statement is somewhat generic and could be more distinctive.

Including specific elements that set RFM Corporation apart from competitors or highlight

its unique approach to delivering affordable-quality products would enhance its

uniqueness.

9. Vivid: The vision could be made more vivid by incorporating specific details about what

being the market leader means for RFM Corporation. This could include market share

percentages, customer satisfaction metrics, or other tangible indicators of success.

10. Inspiring: While the vision is motivating, it could be made more inspiring by

incorporating language that ignites passion and excitement. Including a narrative that

paints a compelling picture of the future and the impact RFM Corporation aims to have

on the market could enhance inspiration.

RFM Corporation's “Improved” Vision Statement

“To lead the Philippine food and beverage industry with superiority, establishing

groundbreaking standards in affordability, quality, and sustainability. We dedicate ourselves to

10
ensuring customer satisfaction and embodying integrity, innovation, and social responsibility.

Our vision is to exceed demands, forging a path that inspires industry improvement and

resonates with everyone we serve.”

This recommendation aims to make the vision statement more specific, values-driven,

and inspiring, setting RFM Corporation apart in the competitive landscape while aligning with

broader societal expectations for responsible business practices.

Mission

RFM Corporation's Mission

To produce and market (7) better value (1,5,6) branded food and beverage products (2)

for the greater mass (8) of Filipino consumers (1) everywhere in the country (3).

Analysis of RFM Corporation’s Mission Statement

1. Customers: The mission statement focuses on the target audience, which is the greater

mass of Filipino consumers. The term "better value" suggests a commitment to providing

products that meet the needs and preferences of customers.

2. Products: The core of the mission statement revolves around the production and

marketing of branded food and beverage products. This highlights the company's dedication

to a specific industry and product category.

3. Markets: The mission statement clearly indicates the geographic market scope –

"everywhere in the country." This demonstrates the company's commitment to serving the

entire Filipino market.

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 5. Concern for Survival, Growth, and Profitability: While not explicitly stated, the

mission implies a concern for survival and growth by emphasizing the goal of producing and

marketing products for the greater mass of consumers. Profitability is indirectly implied

through the notion of providing "better value" products.

6. Philosophy: The mission reflects a business philosophy centered around offering value to

customers. The use of the term "better value" suggests a commitment to quality,

affordability, or a combination of both.

7. Self-Concept: The self-concept is reflected in the company's role as a producer and

marketer of food and beverage products. It sees itself as a provider of value to the mass

market.

8. Concern for Public Image: The mission statement addresses the company's desire to

cater to the greater mass of Filipino consumers, indicating a concern for a positive public

image by positioning itself as a brand that cares about meeting the needs of the broader

population.

In summary, RFM Corporation's mission statement primarily focuses on customers,

products, and markets. It implicitly includes elements of concern for survival, growth, and

profitability, philosophy, self-concept, and concern for public image. The statement doesn't

explicitly touch on technology or concern for employees, but these aspects can be inferred to

some extent.

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Objectives

RFM Corporation’s Objectives

● Commitment to quality in all products.

● Commitment to innovate products for children’s health and happiness.

● Commitment to providing the best for children.

Comment/s

● The commitment to quality lacks specificity and measurable indicators, making it

challenging to assess progress. Establishing clear quality metrics and timeframes would

enhance its effectiveness.

● The objective to innovate for children's health and happiness is specific but lacks

measurable criteria and a defined timeline. Adding quantifiable indicators and setting

innovation milestones would provide a more concrete framework.

● The commitment to providing the best for children is vague and could be more specific

and measurable to gauge success. Incorporating clear metrics and establishing a

timeframe for achieving this commitment would enhance its clarity and effectiveness.

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 INTERNAL ASSESSMENT/ANALYSIS

Internal Factor Evaluation

Strengths

RFM Corporation possesses several vital strengths relative to its competitors. The

company benefits from an established history and experience, having been in business for many

decades. This longevity has afforded RFM deep institutional knowledge and expertise within its

industry.

RFM Corporation's commitment to "Value for Money" involves high-quality products

and services at competitive prices. This strategic commitment positions RFM as a trusted and

preferred choice in a market where consumers prioritize cost-conscious decisions. As a result,

RFM remains competitive and contributes to sustained revenue streams and market share.

RFM Corporation's robust growth in the company’s assets highlights its financial strength

and operational effectiveness. The increase in Current Assets signifies the company's capability

to meet immediate financial obligations, while expansion in Total Assets reflects successful

market strategies and positions RFM for sustained growth in the competitive business landscape.

RFM enjoys strong brand loyalty and consumer preference for its products. Through

consistent quality, reliability, and customer service over many years, the company has built a

loyal following among customers. Positive consumer sentiment toward the RFM brand provides

a significant competitive advantage.

RFM maintains an established market presence due to its history and brand strength. The

company has widespread distribution channels and a large customer base due to its long-term

participation in the market. Securing such a solid foothold provides economies of scale and

ensures broad market access.

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Weaknesses

RFM Corporation, a prominent player in the flour-milling business, confronts significant

internal weaknesses that demand strategic attention. RFM Corporation could benefit from

diversifying its revenue base beyond the Philippine market. While the local market currently

provides most sales, overreliance on any single geography increases business risk. Expanding

into new international regions through strategic partnerships or acquisitions could help mitigate

this risk over time.

The company's reliance on outdated facilities poses a considerable risk to operational

efficiency and productivity. Aging machinery may lead to increased maintenance costs, reduced

production capacity, and a higher likelihood of unexpected breakdowns, thereby impacting

overall performance. To mitigate this weakness, RFM must invest in modernizing its

infrastructure to enhance operational resilience and maintain a competitive edge in the market.

Furthermore, a disruption in the supply chain can have cascading effects on production

schedules and product availability. RFM needs to develop robust contingency plans, diversify its

supplier base, and explore alternative logistics solutions to counteract potential disruptions and

ensure a consistent flow of raw materials. Proactive measures in these areas are crucial for RFM

to strengthen its internal capabilities and fortify its position in the dynamic flour-milling

industry. Additionally, protecting and enhancing the company's brand equity is paramount to

long-

term success. Customers' trust and loyalty are critical competitive advantages that must be

safeguarded through consistent product quality, responsible business practices, and transparent

communications. Any issues that threaten perceived brand integrity should be addressed swiftly

and transparently to maintain reputation.

15
 Finally, input costs fluctuate in any economic environment. Proactive measures to control

expenses through supply chain optimization, process efficiencies, or selective price increases

may be needed to counteract cost pressures and protect profit margins. A nimble, solutions-

oriented approach will help the company adapt successfully to changing market dynamics over

time. Table 1 shows the Internal Factor Evaluation of the RFM Corporation.

Table 1. Internal Factor Evaluation for the RFM Corporation

Key Internal Factors Weight Rating Weighted

Score
Strengths
1. Use of 58 years experience to lead in innovation 0.08 4 0.32
2. Commitment of providing Value for Money to satisfy 0.05 4 0.20
customers
3. Growth of 10% in Assets each year. 0.10 3 0.30
4. Increase brand loyalty through customer retention. 0.12 4 0.48
5. Expanding Market Presence by next year. 0.15 4 0.60

Weaknesses
1. Reliance on the Philippine market which needed more 0.10 2 0.20
international market share measured by sales revenue
2. Aging infrastructure in flour-milling business needs 0.08 1 0.08
upgrade to reduce downtime in operations
3. Challenges in maintaining a strong brand image, with 0.12 2 0.24
a goal of improvement in brand perception
4. Risk of supply chain disruptions, reduction in average 0.15 1 0.15
downtime
5. Margin compression due to higher input costs, 0.05 2 0.10
targeting improvement in profit margin.
TOTAL 1.00 2.67

Summary/Conclusions

In conclusion, RFM Corporation exhibits significant strengths that position it as a

formidable player in the flour-milling industry. Its established history, commitment to "Value for

16
Money," robust financial growth, strong brand loyalty, and widespread market presence

contributes to its competitive advantage and sustained success. However, the company faces

notable weaknesses that require strategic attention.

The overreliance on the Philippine market poses a risk, emphasizing the need for

diversification into international regions to mitigate business risks. The aging infrastructure

raises concerns about operational efficiency and productivity, necessitating investments in

modernization for long-term competitiveness. Supply chain disruptions, challenges in

maintaining brand image, and potential margin compression due to input costs add to the

complexity of the business landscape.

To navigate these challenges, RFM Corporation should consider strategic initiatives such

as international market expansion, infrastructure modernization, robust supply chain

management, and proactive brand protection measures. By addressing these weaknesses and

leveraging its strengths, RFM can enhance its internal capabilities, fortify its market position,

and successfully adapt to the dynamic flour-milling industry. The Internal Factor Evaluation

provides a comprehensive framework for understanding the company's current strategic position

and opportunities for improvement.

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 EXTERNAL ASSESSMENT/ANALYSIS

External Factor Evaluation

Opportunities

In the dynamic landscape of the food industry, several key opportunities are poised to

shape the future trajectory of businesses. Firstly, the escalating reliance of consumers on online

shopping opens up a vast avenue for market expansion. Companies can capitalize on this trend

by investing in robust e-commerce strategies and creating user-friendly digital platforms.

Additionally, the profound shift in consumer behavior towards online channels, coupled

with the increasing influence of social media on purchasing decisions, presents an opportunity

for businesses to enhance brand visibility. By establishing a strong online presence and

leveraging social media platforms, companies can actively engage with consumers, positively

impacting their decision-making processes.

Moreover, the growing globalization of food markets signifies untapped potential in

international territories. Strategic expansion into these markets, tailored to local preferences, can

result in increased sales and heightened brand recognition on a global scale.

Furthermore, the industry's pivot towards smart manufacturing and the adoption of

technology offers avenues for enhanced production processes, efficiency, and innovation.

Lastly, understanding and responding to shifts in consumer purchasing habits, coupled

with the creation of a positive retail environment, are critical in fostering customer loyalty and

satisfaction. Embracing these opportunities positions food businesses to thrive in an evolving

market landscape.

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Threats

The food industry faces a range of formidable threats that necessitate strategic adaptation

and resilience. Firstly, the burgeoning shift towards healthier eating habits and the heightened

demand for organic and sustainable food options pose a substantial challenge. To mitigate this,

companies must pivot towards incorporating healthier ingredients, transparent labeling practices,

and sustainable production methods to align with evolving consumer preferences.

Another critical threat arises from geopolitical tensions and natural disasters, which can

disrupt the global supply chain, leading to unpredictable fluctuations in commodity prices,

particularly for essential ingredients like grains and sugar. To navigate these uncertainties,

businesses should implement comprehensive supply chain management strategies, diversify

suppliers, and establish risk mitigation measures.

Economic uncertainties, including currency fluctuations and trade tensions, present an

additional concern, requiring companies to closely monitor economic trends, employ hedging

strategies, and develop contingency plans to offset potential negative impacts.

Moreover, the food industry contends with increasing regulations pertaining to food

safety, labeling, and advertising, necessitating stringent compliance measures, investments in

quality control, and transparent communication with consumers to foster trust.

Lastly, intensified competition from both local and global players heightens the need for

differentiation, product innovation, and robust brand-building strategies to carve out a distinctive

market position, while simultaneously maintaining cost competitiveness and operational efficiency

in the face of a crowded marketplace. Table 2 shows the External Factor Evaluation of

RFM Corporation.

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Table 2. External Factor Evaluation of the RFM Corporation

Key External Factors Weight Rating Weighted

Score
Opportunities
1. Increasing consumer reliance on online shopping; 0.14 4 0.56
Growing e-commerce trends in the food industry.
2. Shift in consumer behavior towards online platforms; 0.10 2 0.20
Increasing influence of social media on purchasing decisions.
3. Growing globalization of food markets; Opportunities in 0.08 3 0.24
untapped international territories.
4. Industry shift towards smart manufacturing; Benefits of 0.10 3 0.30
technology adoption in enhancing production processes.
5. Shifts in consumer purchasing habits; Importance of 0.07 2 0.14
creating a positive retail environment.

Threats
1. Shift towards healthier eating habits and increased demand 0.10 3 0.30
for organic and sustainable food options.
2. Geopolitical tensions and natural disasters disrupt the 0.09 2 0.18
global supply chain which leads to fluctuations in
commodity prices, such as grains and sugar.
3. Economic uncertainties, including currency fluctuations 0.09 2 0.18
and trade tensions
4. Increasing regulations related to food safety, labeling, and 0.08 4 0.32
advertising
5. Intensified competition from both local and global players 0.15 3 0.45
TOTAL 1.00 2.87

Summary/Conclusion

In summary, the External Factor Evaluation reveals a dynamic landscape for RFM

Corporation within the food industry, characterized by both promising opportunities and

formidable threats.

Opportunities stemming from the increasing reliance on online shopping, shifts in

consumer behavior towards digital platforms, and the globalization of food markets provide

avenues for market expansion, enhanced brand visibility, and global recognition. Additionally,

the industry's move towards smart manufacturing and technology adoption opens doors for

20
improved

21
production processes and innovation. By strategically embracing these opportunities, RFM can

position itself for sustained growth and competitiveness.

However, the food industry also faces substantial threats that demand strategic

adaptation. The shift towards healthier eating habits, geopolitical tensions, economic

uncertainties, regulatory challenges, and intensified competition necessitates proactive measures.

RFM Corporation must pivot towards healthier ingredients, sustainable practices, and transparent

communication to address changing consumer preferences. Robust supply chain management,

monitoring economic trends, and compliance with regulations are crucial for mitigating external

threats.

In conclusion, a strategic approach that combines seizing opportunities and mitigating

threats is essential for RFM Corporation's success in navigating the evolving food industry

landscape. By aligning with consumer trends, embracing technological advancements, and

implementing robust risk management strategies, RFM can fortify its position, differentiate itself

in the market, and ensure long-term sustainability. The External Factor Evaluation serves as a

valuable tool for the company to assess its external environment and make informed strategic

decisions.

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 STRATEGY FORMULATION

Strategy Generation

Like any other company, RFM Corporation uses SWOT analysis to evaluate its

Strengths, Weaknesses, Opportunities, and Threats. It helps them gain a comprehensive

understanding of their internal and external factors, aiding in strategic planning, decision-

making, and goal setting. SWOT analysis helps identify and capitalize on areas where the

company excels and recognizes areas needing improvement or development. The strategies to

be formulated will help identify potential avenues for expansion and anticipate and prepare for

external factors that could

negatively impact the business.

Ultimately, SWOT analysis serves as a foundational tool for companies to develop

strategies that align with their strengths, minimize weaknesses, capitalize on opportunities, and

mitigate threats in the pursuit of sustainable success.

A total of 14 alternative strategies were formulated upon plotting the strengths and

weaknesses along with the identified opportunities and threats. The formulated strategies allow

RFM Corporation to capitalize on strengths and address weaknesses thereby creating a more

effective plan for achieving goals.

SO Strategies

Recognizing opportunities helps pinpoint the areas where the strengths of RFM

Corporation can be maximized. The formulated strategies based on this assessment let the

company align the strengths with the available opportunities that were identified, enabling a

more focused approach toward reaching the objectives.

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WO Strategies

The formulated based on weaknesses and opportunities allow RFM to address their

shortcomings while capitalizing on potential areas for growth. Through these strategies, RFM

can implement targeted plans to improve its competitive position and pursue growth in specific

areas where there is potential for success while mitigating the weaknesses.

ST Strategies

The formulated strategies based on strengths and threats help RFM Corporation to

identify its competitive advantage and its core competencies while identifying potential risks and

challenges in the external environment that could impact the business. These strategies will help

RFM to be more focused on strengths to maintain a competitive edge in the industry.

WT Strategies

By addressing weaknesses through the identified WT Strategies, RFM Corporation can

focus on improving internal aspects that might hinder growth. The formulated strategies enable

RFM to proactively navigate external challenges while pursuing sustainable growth by turning

potential liabilities into opportunities for innovation.

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Table 3. SWOT Analysis/Matrix of the RFM Corporation

Strengths Weaknesses
S1:Use of 58 years experience W1:Reliance on the Philippine
to lead in innovation market which needed more
S2: Commitment of providing international market share
Value for Money to satisfy measured by sales revenue
customers W2:Aging infrastructure in
S3:Growth of 10% in Assets flour-milling business needs
each year. upgrade to reduce downtime
S4:Increase brand loyalty in operations
through customer retention. W3:Challenges in
S5:Expanding Market maintaining a strong brand
Presence by next year. image, with a goal of
improvement in brand
perception
W4:Risk of supply chain
disruptions, reduction in
average downtime
W5:Margin compression due
to higher input costs,
targeting improvement in
profit margin.
Opportunities SO Strategies WO Strategies
O1:Increasing consumer 1. Enhance the online 1. Strategically enter
reliance on online shopping; shopping experience. untapped overseas
Growing e-commerce trends (S2, O1) markets. (W1, O3)
in the food industry. 2. Invest in technology. 2. Utilizing social media
O2:Shift in consumer (S2, O4) influence and
behavior towards online 3. Engage in social proactive brand-
platforms;Increasing media campaigns and building initiatives.
influence of social media on customer feedback(S4, (W3, O2,
purchasing decisions. O2) O5)
O3:Growing globalization of 4. Ensure a strong online 3. Implement cost-
food markets;Opportunities in presence. (S5, O1) saving measures.(W2,
untapped international W4, W5, O4)
territories.
O4:Industry shift towards
smart manufacturing; Benefits
of technology adoption in
enhancing production
processes.
O5:Shifts in consumer
purchasing habits; Importance
of creating a positive retail
environment.

25
 Threats ST Strategies WT Strategies
T1. Shift towards healthier 1. Develop a new 1. Explore strategic
eating habits and increased product line utilizing partnerships or
demand for organic and organic andsustainable alliances with
sustainable food options. ingredients. (T1, S6) distributors and
T2. Geopolitical tensions and 2. Provide seminars and retailers to reach the
natural disasters disrupt the training to all international market.
global supply chain which employees to (W1, T5)
leads to fluctuations in guarantee compliance 2. Obtain certifications
commodity prices, such as with relevant from reputable food
grains and sugar. regulations and safety and quality
T3. Economic uncertainties, standards. (T4, S7) standards regulations.
including currency 3. Focus on product (W3, T4)
fluctuations and trade innovation and invest 3. Develop a robust risk
tensions T4. Increasing heavily in marketing mitigation strategy by
regulations related to food initiatives. (T5,S4) diversifying
safety, labeling, and relationships with
advertising alternative suppliers.
T5. Intensified competition (W4, T2, T3)
from both local and global 4. Explore hedging
players strategies and enter
into forward contracts.
(W5, T2)

Summary/ Conclusion

Market Penetration

Enhance the online shopping experience with competitive pricing, promotions, and

exclusive online deals to attract a broader consumer base.

This strategy suggests improving the overall experience for customers who shop online.

Enhancing online shopping experience with competitive pricing by offering products at prices

that are competitive or comparable to those of other similar businesses in the market. This

implies making improvements or optimizations to the way customers interact with an online

store. This could involve a user-friendly website design, easy navigation, quick loading times,

and a seamless checkout process. Using different promotional techniques, including discounts,

exclusive offers, or time-limited sales, can draw clients and motivate them to buy. The

26
ultimate objective is to

27
expand the range of customers who choose to shop online from the business. By offering

competitive yet reasonable pricing, attractive promotions, and exclusive deals, the business aims

to appeal to a wider audience, potentially reaching new customer segments and increasing

overall market share.

Product Development

Develop a new product line utilizing organic and sustainable ingredients to expand into

the growing natural foods market. With the right execution, a new natural product range has the

potential to significantly grow the business and better serve increasing numbers of health-

conscious consumers.

The strategy aims to broaden the entity’s offerings by developing a new product line that

embraces organic and sustainable ingredients, targeting the thriving natural foods market. By

doing so, it would better align itself with the growing consumer preference for choices that are

healthier and more ecologically friendly. The emphasis on "the right execution" highlights the

importance of a well-thought-out plan and implementation strategy. Successful execution of this

initiative could lead to substantial business growth, capitalizing on the expanding market of

health- conscious consumers who actively seek products that align with their values. In the end,

the objective is not only to broaden the product line but also to better meet the changing needs of

a customer who is becoming more and more concerned with sustainability and health. The

potential benefits include business growth and the ability to cater to the needs of a rising number

of health- conscious consumers.

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Backward Integration

Implement cost-saving measures, negotiate favorable contracts with suppliers, and

innovate production processes to maintain financial stability and competitiveness amidst

industry challenges.

This strategy will help RFM Corporation to navigate industry challenges and ensure

financial stability and competitiveness. The implementation of cost-saving strategies

recommends concentrating on finding and implementing ways to lower operating costs. This

could entail increasing overall cost-effectiveness through process simplification and resource

allocation optimization. Negotiating favorable contracts with suppliers indicates an intention to

engage with suppliers to secure better terms, potentially including discounts, bulk purchase

arrangements, or other concessions. The objective of this negotiation aims to lower the costs of

acquiring raw materials or services, contributing to overall cost reduction and improved financial

performance.

Developing new production processes demonstrates a dedication to coming up with

creative ways to produce goods or provide services more quickly. In order to increase

productivity while preserving or improving product quality, this innovation may entail following

best practices, enhancing workflow, or embracing new technologies. The corporation aims to

strengthen its financial stability in the face of economic challenges by combining these

techniques. The key objective is to maintain competitiveness through efficient cost management,

improved supplier relationships, and ongoing production process improvement. This proactive,

multidimensional strategy aims to put the business in a position where it can weather obstacles

and maintain its competitiveness in a fast-paced commercial market. Table 3 shows the SWOT

Analysis/Matrix of the RFM Corporation.

29
Strategy Selection

RFM Corporation is a company engaged in the food, beverage, and tobacco industry. It’s

known for processing and manufacturing flour, bread, and flour-based products like pasta and

cake mixes, sauces, milk, juice drinks, and ice cream. It has a strong market presence in the

Philippines which has received recognition and awards in the business and food industry for its

achievements, product quality, and contributions to the community.

The Quantitative Strategic Planning Matrix (QSPM) incorporates the internal and

external factors of RFM Corporation to assess the relative attractiveness and feasibility of

various strategic options. Table 4 shows the QSPM/Matrix of the RFM Corporation.

Table 4. QSPM of the RFM Corporation

30
31
Summary/Conclusion

After conducting the QSPM analysis for RFM Corporation, it highlighted several

alternatives that the company could pursue, ranging from market penetration, product

development and backward integration. The strategies under evaluation for the level of

attractiveness for appropriate prioritization showed that product development is the most

appropriate strategy, to be followed by market penetration while backward integration is the least

priority and appropriate for implementation.

In conclusion, product development must be considered as a favorable strategy for RFM

Corporation. It can enhance the corporation’s competitive positioning by introducing innovative

and unique products, capturing new segments, and adapting to changing consumer preferences.

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 STRATEGY IMPLEMENTATION

Action Plans

Strategy II. Develop a new product line utilizing organic and sustainable ingredients to

expand into the growing natural foods market. With the right execution, a new natural

product range has potential to significantly grow the business and better serve increasing

numbers of health-conscious consumers.

There is an opportunity for RFM Corporation to expand its portfolio and tap into the fast-

growing natural and organic foods market segment. Research shows consumer demand for

products featuring organic and sustainably sourced ingredients is increasing significantly each

year. With careful planning and execution, introducing a new line of natural products has strong

potential to meaningfully contribute to revenue growth and allow the company to better meet the

needs of more health-conscious customers.

The following action plan is to develop and launch a new product line centered around organic

and sustainable ingredients:

1. Conduct market research and competitor analysis to identify product gaps and opportunities in

the natural/organic space.

2. Develop formulations for 3-5 new product prototypes featuring organic and sustainably

sourced ingredients that align with market needs.

3. Secure organic and not genetically modified through the use of modern biotechnology for new

product ingredients as required.

33
4. Test prototypes with target customers and refine based on feedback.

5. Develop packaging designs, marketing strategy, and launch plan.

6. Manufacture initial run of new products and launch line through targeted retail channels and e-

commerce.

7. Monitor customer response and sales performance post-launch and make adjustments as needed.

With the appropriate resources and execution of the above action steps, it is believed that

introducing an organic and sustainable new product line has strong potential to drive meaningful

business growth and better serve an important customer segment.

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 STRATEGY MONITORING

The success of RFM Corporation's strategic move to introduce a new product line

featuring organic and sustainable ingredients relies heavily on a robust strategy monitoring

framework. This holistic approach comprises three interconnected components, meticulously

designed to align with RFM Corporation's objectives and effectively navigate the dynamic

landscape of the natural and organic foods market.

Strategy Review

The initiation of monthly strategic review meetings lays the groundwork for monitoring

progress. Key executives, strategy implementation teams, and department heads converge to

align ongoing activities with the prioritized product development strategy. A critical aspect of

this review process is the rigorous assessment of Key Performance Indicators (KPIs) to gauge the

effectiveness of the strategy. Quarterly SWOT analyses ensure a dynamic understanding of the

internal and external factors influencing the strategy, making sure that throughout the process of

developing the new product line, its strengths and weaknesses as well as the opportunities and

threats underlying it are well monitored. While continuous environmental scanning keeps the

organization abreast of evolving market dynamics.

Simultaneously, RFM Corporation's strengths, including its extensive history,

commitment to "Value for Money," and growing assets, play a pivotal role in the ongoing

strategy review. These factors, coupled with RFM's dedicated customer base and strong market

presence, shape how the company assesses its current actions to ensure alignment with

overarching goals. The company's historical legacy guides the evaluation process, the

commitment to fair pricing appeals to cost-

35
conscious consumers, and the financial growth underscores RFM's ability to manage immediate

expenses. Customer loyalty and a robust market presence are critical factors influencing ongoing

actions, ensuring that the strategy aligns with the brand and optimally leverages its market

position. Collectively, these elements serve as the foundation for assessing how well RFM

Corporation's current actions mesh with its broader strategic objectives.

Strategy Evaluation

As RFM Corporation advances into the strategy evaluation phase, it will strategically

incorporate benchmarking against industry standards and conduct a thorough analysis of

financial metrics. Bi-annual benchmarks, referring to assessments that occur twice a year at

intervals of six months, will play a crucial role in providing insights into areas for improvement

and excellence. This periodic evaluation, aligning with the broader context of business strategy,

involves reviewing key performance indicators, financial metrics, and other relevant aspects of

the business every six months. The implementation of bi-annual benchmarks is designed to help

the organization track its progress, identify areas for improvement, and measure success over a

defined timeframe. Simultaneously, regular financial reviews will be conducted to ensure the

alignment of financial performance with broader organizational goals.

Beyond the scope of financial metrics, RFM Corporation will actively integrate customer

feedback analysis and conduct employee input sessions during the evaluation process. These

aspects will be pivotal in gaining valuable insights into the anticipated market reception of the

new product line, which incorporates organic and sustainable ingredients to tap into the growing

natural foods market. The analysis of customer preferences will be instrumental in refining the

product development strategy to better cater to the health-conscious consumer segment.

Additionally,
36
insights derived from employee experiences will contribute to a more holistic understanding of

potential operational challenges and opportunities. This collaborative approach is designed to

ensure that the overall strategy remains agile and responsive, effectively meeting both market

demands and internal considerations during this crucial evaluation phase.

Strategy Control

Within the strategy control domain, meticulous attention is given to deviation analysis,

budget monitoring, and risk management. Monthly deviation analyses compare planned vs.

actual outcomes across each action step of the product development strategy. This detailed

analysis enables prompt corrective actions, ensuring that the strategy remains on course. Budget

monitoring, led by a dedicated finance team, extends beyond mere financial prudence; it involves

strategic financial management, ensuring that allocated resources align with evolving needs and

priorities within the product development process. Simultaneously, a tailored risk management

approach involves continuous reviews and contingency planning. A risk register, tailored to the

intricacies of the organic and sustainable foods market, serves as a dynamic tool for identifying

and managing potential risks. This risk mitigation strategy is not just a reactive measure but an

integral part of the strategic decision-making process. The integration of a continuous

improvement team further solidifies RFM Corporation's commitment to refinement, fostering a

culture of cross-functional collaboration for ongoing enhancement.

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 CONCLUSION AND RECOMMENDATIONS

Conclusion

RFM Corporation has a strong dedication to providing value for money, exceptional

financial growth, and a well-known brand that promotes customer loyalty. The company’s

favorable position is attributed to its strengths and extensive market presence. However, the

challenges that have been stated, such as a significant reliance on the Philippine market, old

infrastructure, and difficulties in the supply chain require strategic interventions. The growing

dependence on e-commerce, digital changes in consumer habits, and the worldwide integration

of food markets provide opportunities for market improvement. The internal and external factor

evaluation offers a valuable structure for making well-informed decisions, allowing the

organization to effectively manage the complexity of its environment in an external aspect. Other

analyses have yielded insights into different strategic options, with a particular emphasis on

product development as the most advantageous course of action, followed by market penetration,

whereas backward integration is regarded as a less suitable choice.

Recommendations

Amidst the ever-changing and competitive business environment today, the ability to

make well-informed and strategic decisions is crucial for achieving long-term success. Through a

thorough analysis, we have identified specific areas where RFM may utilize its strengths and

take advantage of prospects to gain a strategic edge. The recommendations we provide are based

on a comprehensive analysis using the Strengths, Weaknesses, Opportunities, and Threats Matrix

Quantitative Strategic Planning Matrix (QSPM). These are the following:

38
 1. Product Development

According to the QSPM Matrix, it is identified as the most strategically beneficial

option for the corporation, as it got the highest score. The corporation should prioritize

the introduction of new and distinctive products that are in line with the consumer

preferences.

2. International Market Expansion

Placing foreign expansion in line with the main objective of improving business

resilience, promoting growth, and establishing RFM Corporation as a strong competitor

in the international market.

3. Embrace Digital Transformation

Adopting digital transformation is crucial for improving operational efficiency,

and enhancing customer engagement ensures that the overall business copes up in the

digital age.

4. Backward Integration

In order to cut costs, engage in negotiations with suppliers, and introduce

innovative manufacturing methods, RFM Corporation can improve its financial stability

and competitive position in the market.

By effectively implementing these recommendations, RFM Corporation enhances its strategic

planning by taking into account both internal and external factors. This allows them to have

resilient strategies that correspond with their strengths, address weaknesses, take advantage of

opportunities, and minimize potential risks.

39
 REFERENCES

David, F. R., and F. R. David. (2017). Strategic management: Concepts and cases: A competitive

advantage approach (16th ed./ Global ed.). Pearson Education Limited.

Dess, G., G. McNamara, A. Eisner, and Lee, S.-H. (2021). Strategic management: Text and cases

(10th ed.). McGraw Hill Education.

Falla, J. (n.d.). Development and constraints of food industries in the Philippines.

Hill, C. W., M. A. Schilling, and G. R. Jones. (2020). Strategic management: An Integrated

Approach: Theory and cases (13th ed.). Cengage Learning, Inc.

Nguyen, L. (2023, August 9). Explore Philippines beverage industry analysis - tan do beverage.

Tan Do. https://tandobeverage.com/explore-philippines-beverage-industry-analysis/

Read, K. (2023, September 24). Trends in the food and beverage industry in the Philippines.

Kathryn Read.

Read, K. (2023a, September 20). Trends in the food and beverage industry in the Philippines.

LinkedIn. https://www.linkedin.com/pulse/trends-food-beverage-industry-philippines-

kathryn-read

RFM CORPORATION. (2022). Home.

https://www.rfmfoods.com/CompanyDisclosures/SECDisclosures.aspx

RFM CORPORATION. (n.d.). https://www.rfmfoods.com/AboutUs/TheCompany.aspx

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Rivera, D. (2023, October 10). Philippines food sector to grow 20 percent this year.

Smoking Tobacco - Philippines/ (n.d). Statista. https://www.statista.com/outlook/cmo/tobacco-

products/smoking-tobacco/philippines

41
APPENDICES

42
APPENDIX 1. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2022

OF THE COMPANY

43
APPENDIX 2. BALANCE SHEET FOR THE YEAR ENDED DECEMBER 31, 2022 OF

THE COMPANY

44
45