SAN BEDA UNIVERSITY

College of Arts and Sciences

Department of Business Management and Entrepreneurship

INDUSTRY PAPER (MAYNILAD)

In partial fulfillments to the requirements of MICROEC
MICROECONOMICS

Submitted to: Dr. Maybelle A. Gallardo

Submitted by:
BAUTISTA, Juan Gabriel T.
CULALA, Aicezer C.
ESMAQUILAN, Emmanuel R.
SIMON, Don Carlos M.

BS Entrepreneurship
2ABE

DECEMBER 2023
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TABLE OF CONTENTS

CHAPTER 01: INTRODUCTION…………..…………….…………………….……………...3

When and how it started in the Philippine Setting...........................................................................3
The significant personalities involved in its operation.................................................................... 3
Significant events/major breakthroughs in its operation................................................................. 4
ORGANIZATIONAL CHART...................................................................................................5

CHAPTER 02: PERFORMANCE OF THE INDUSTRY......................................................... 8

Players and Competitors in the Industry..........................................................................................8
PESTEL ANALYSIS..................................................................................................................9
Market Share..................................................................................................................................14
Type of Product or Services Produced...........................................................................................15
Market Structure............................................................................................................................ 15
PORTER’S FRAMEWORK.....................................................................................................18
Degree of competition among players...................................................................................... 18
Pricing behavior used by the players for revenue generation................................................... 18
Pricing Strategy....................................................................................................................18
Output Decision................................................................................................................... 18
Behavior in the Market........................................................................................................ 18
Production and cost-behavior........................................................................................................ 19
MAYNILAD SPACE MATRIX................................................................................................20

CHAPTER 03: MAJOR PROBLEM/S ENCOUNTERED OR CURRENTLY

ENCOUNTERING BY THE INDUSTRY AND ITS POLICY IMPLICATIONS................ 21
Identify the problem/s that significantly affect/s the operation of the industry............................. 21
Specific actions done or doing by the industry to address/remedy the problem/s.........................21
Specific government policy/ies to address the problem/s (Laws, Republic Acts).........................21
Strengths and limitations of the above actions by the industry and government...........................22

CHAPTER 04: AREAS FOR FUTURE POLICY PRESCRIPTION.................................... 23

SWOT Analysis............................................................................................................................. 23
Group’s prospect of the industry for the next five years................................................................26

BIBLIOGRAPHY........................................................................................................................ 27
APPENDIX...................................................................................................................................28
ABOUT THE PROPONENTS................................................................................................... 30
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CHAPTER 01: INTRODUCTION

A. When and how it started in the Philippine setting

Established in 1997, Maynilad Water Services, Inc. (Maynilad) came into existence following the
successful bid by the consortium of Benpres Holdings Corporation and Suez Lyonnaise de Eaux,
granting them the exclusive rights to provide water and wastewater services in the Western Zone
of Metropolitan Manila. Prior to this, the Metropolitan Waterworks and Sewerage System
(MWSS) was responsible for these services.

Facing challenges in meeting service and financial

obligations at the end of 1997, Maynilad
encountered difficulties due to the Asian financial
crisis and El Niño phenomenon. These
circumstances resulted in a series of financial,
legal, and regulatory disputes between Maynilad
and MWSS. (Maynilad, 2020)

B. The significant personalities involved in its operation

In 2005, Benpres and Suez relinquished management and control of Maynilad to MWSS.
Subsequently, a competitive bidding process by the Philippine Government in the following year
aimed to re-privatize Maynilad.

The joint venture of Metro Pacific Investments Corporation (MPIC) and DMCI Holdings, Inc.
(DMCI), known as DMCI-MPIC Water Company, emerged victorious in the bidding, acquiring
83.96 percent of Maynilad's shares. On January 24, 2007, the new ownership assumed control of
Maynilad and initiated an ambitious five-year investment program to revitalize the company and
its operations. In 2013, Marubeni Corporation of Japan acquired a 20 percent stake in
DMCI-MPIC Water Company, becoming a strategic partner of the Metro Pacific-DMCI
consortium.
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Since its re-privatization in 2007, Maynilad has invested over P100 Billion in capital expenditure
projects to enhance and expand its water and wastewater operations. Consequently, more than
9.7 million people in the Western Zone of the Greater Manila Area now benefit from safe and
reliable water supply, along with improved sewerage and sanitation services. The company
remains committed to prioritizing wastewater investments while ensuring the continued
provision of water supply to its existing and future customer base. (Maynilad, 2020)

C. Significant events/major breakthroughs in its operation

Maynilad Water Services, Inc. (Maynilad), the West Zone concessionaire, was honored with the
2020 Philippine Enterprise Innovation Award for its adept use of digital technology in designing,
constructing, operating, and maintaining complex treatment facilities. The award recognizes
organizations transforming their businesses through digital technology, with nominations
reviewed by a committee of IT experts. Maynilad's winning entry highlighted the use of
"Building Information Modeling" (BIM) and "Distributed Control System" (DCS) technologies,
enhancing operational efficiency. The award was received during the Asia IoT Business Platform
regional conference in Singapore. Maynilad President and CEO Ramoncito S. Fernand
emphasized the company's commitment to adopting digital technology for improved customer
service. The awarded project focused on the Putatan Water Treatment Plant 2, showcasing
effective DCS adoption and serving as a model facility. Maynilad continues to apply BIM and
DCS in constructing new treatment plants. The Philippine Enterprise Innovation Award is
organized by the AIBP, a leading business program promoting the adoption of the "Internet of
Things" for enterprises. (Maynilad, 2020)
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ORGANIZATIONAL CHART OF MAYNILAD WATER SERVICES INC.

DETAILED OUTLINE ABOUT THE ORGANIZATION

CEO:
● Ramon Mon Saldua Fernandez

VICE PRESIDENT:
● Martin de Guzman (Head of Human Resources)
● Randy Estrellado (Chief Operating Officer)

SENIOR VICE PRESIDENT:

● Chris Lichauco (Senior Vice President and Head of Customer Experience and Retail
Operations)

OPERATIONS:
● Dianna Mae Diaz ( Customer Service Specialist)

HEALTH:
● Mary Bati (Physician)

FINANCE:
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● Ricardo De Los Reyes (Chief financial officer)

DIRECTOR (04):
● Mark Capati
● Maria Tañada
● Cybele Regalado
● Leslie Tubianosa

MANAGER (03):
● Krisha Leong
● Alvin Ong
● Carmina Padilla

HUMAN RESOURCES:
● Russel Cristi (Head of Talent Acquisition)

DIRECTOR (02):
● Feliza Garin
● Ferdie Pasion

MANAGER (02):
● Anne Pascual
● Sarah Bagshawe

LEGAL:
● Mayflor Tomarong (Head of Contracts and Quality Management)

MARKETING:
● Kathleen Dorico (Head of Marketing Services)

DIRECTOR (02):
● Lalaine Tiangco
● Madel Zaide

SALES:
● Elsie Luna (Human Resource Business Partner)

DIRECTOR (05):
● Larry Pacelo
● Chris Chua
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● Marie Angelique Estrella

● Rodora Gamboa
● Carlo Comsti

MANAGER (03):
● Christian Jamolod
● Wiljeim Laureola
● Leandro Lapis

INFORMATION TECHNOLOGY DEPARTMENT:

● Rafael King U Ramos (Water Production Head)
○ Korina Monoso (IT Operations Head)
■ DIRECTOR (05):
● Maria Sophia Orticio
● Emer Mabunga
● Gazmin Alex
● Edison Malahito
● Adrianne Andres

● MANAGER (03):
● Joyce Biares
● Jewel Ong
● Niña Marie Cruz
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CHAPTER 02: PERFORMANCE OF THE INDUSTRY

A. Players and Competitors in the Industry

Maynilad Water Services Incorporated is a wastewater service which provides water
around seventeen cities and municipalities that compromise the West Zone of the Greater Metro
Manila area. Managed by Maynilad Water Holdings Company, Inc. -a joint venture between
Metro Pacific Investments Corporation (MPIC), DMCI Holdings, Inc. and Marubeni
Corporation. Maynilad is under the jurisdiction of the Metropolitan Waterworks and Sewerage
System (MWSS) which approves the provision of water services in designated areas around the
country.

Despite the existence of multiple water providers in different regions of the country,
competition is notably absent in the industry. Rather than engaging in competitive practices,
entities within this sector often establish monopolistic control over specific territories to provide
water services. One such example is Maynilad and Meralco, which operates in a monopolistic
manner by dominating a particular territory, limiting consumer choices and fostering a lack of
competition within that specific region.
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PESTEL ANALYSIS

POLITICAL ECONOMIC SOCIAL

● Size of Government ● Employment Rate ● Birth Rate

Budgets Local ● GDP Trend and Rate ● Attitude towards

Governments of Economic Growth Health and Safety

● Government ● Price Fluctuations in ● Societal Norms and

Regulations and both Local and Hierarchy

Deregulations International Markets ● Demographic Trend

● Segregation of ● Government Spending ● Power Structure in

Political ● Demand Shifts from a Society

Responsibilities Goods Economy to a ● Level of Social
between Different Service Economy Concerns and
Government Agencies Awareness in Society
● Transition of ● Attitude towards
Government and Leisure
Changes in Policy

● Regulatory Practices

TECHNOLOGICAL ENVIRONMENTAL LEGAL

● Integration of ● Influence and ● Consumer Protection

Technology into Effectiveness of Laws

Society and Business Environmental ● Business Laws:

Processes Agencies Before Entering a

● Empowerment of ● Environmental New Market

Supply Chain Partners Standards and ● Independence of

Regulations both at Judiciary and Relative

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● Cost of Production National and Local Influence of

and Trends Levels Government

● Acceptance of Mobile ● Influence of Climate ● Adherence to

Payments and Fintech Change Common Law

Services ● Focus and Spending ● Transparency in the

● Mobile Phone and on Renewable Judiciary System and

Internet Penetration Technologies Processes

● Likelihood of ● Waste Management ● Health and Safety

Technology Laws

Disruption

POLITICAL:
● Size of Government Budgets Local Governments – The government of local levels
are running deficit budgets which are boosting growth in the short term but may lead to
an increase in inflation over the medium term.
● Government Regulations and Deregulations – The government is adhering to all the
rules and regulations under World Trade Organization norms. There is consistency in
both policy making and implementation of those policies.
● Segregation of Political Responsibilities between Different Government Agencies –
There are numerous government agencies which reduces the risk of overwhelming
pressure by one agency. But on the flip side, it does increase both the time and cost of
doing business and getting certifications and clearances.
● Transition of Government and Changes in Policy – There is consistency in
policy-making from one government to another. Secondly, governments from all parties
adhere to the treaties made by the previous governments.
● Regulatory Practices - The regulatory practices are streamlined with global norms
which have helped the country to improve its “ease of doing business” ranking.
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ECONOMIC:
● Employment Rate – If the employment rate is high then it will impact Maynilad's
strategies in two ways; it will provide enough customers for Maynilad products, and
secondly it will make it expensive for Maynilad to hire talented & skillful employees.
● GDP Trend and Rate of Economic Growth – The higher GDP growth rate signals
growing demand in the economy. Maynilad can leverage this trend by expanding its
product range and targeting new customers. One way to start is by closely mapping the
changes in consumer buying behavior and emerging value propositions.
● Price Fluctuations in both Local and International Markets – Compared to the level
of quantitative easing in the last decade the prices of Maynilad products and prices of
overall products have remained sticky in the US market. Manila Water should consider
the fact that at deficit levels of the United States in an emerging economy can lead to
rampant inflation and serious risks of currency depreciation.
● Government Spending – As mentioned in the political factors, the government of the
country is running a deficit budget. The implication for Maynilad is that it can boost sales
of its product in the short run but also expose Maynilad to medium-term forex and
currency depreciation risks.
● Demand Shifts from a Goods Economy to a Service Economy – The share of services
in the economy is constantly increasing compared to the share of manufacturing, goods,
and agriculture sectors.

SOCIAL:
● Birth Rate – Birth rate is also a good indicator of future demand. The USA has avoided
the European Union-style stagnant economy on the back of a slightly higher birth rate
and a higher level of immigration.
● Attitude towards Health and Safety – The attitude towards health and safety is often
reflected in the quality of the products and the cost structures of manufacturing processes.
Maynilad has stringent norms for health and safety norms so in emerging economies it
may have to compete with players who don’t have high-cost structures like Maynilad.
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● Societal Norms and Hierarchy – What sort of hierarchy and norms are acceptable in
society also influence the types and levels of consumption in a society. In highly
hierarchical societies the power of decision-making often resides at the top
● Demographic Trend – The demographic trend is one of the key factors in demand
forecasting of an economy. Maynilad should consider demographic trends before new
product developments and integrate features that cater to this segment. As the population
is aging it will require less tech-intensive products.
● Power Structure in Society – Maynilad should carefully analyze both the power
structure in society and how it impacts the demand in the economy.
● Level of Social Concerns and Awareness in Society – Higher levels of social concerns
in society often result in higher consumer activism and pressure from non-governmental
organizations, & pressure groups.
● Attitude towards Leisure – Manila Water should conduct ethnographic research to
understand both attitudes towards leisure activities and choice of leisure activities. The
experience economy is one of the fastest-growing segments both among millennials and
among baby boomers.

TECHNOLOGICAL:
● Integration of Technology into Society and Business Processes – Maynilad should
build a strategy that can integrate societal values, infrastructure, and the Maynilad
business model.
● Empowerment of Supply Chain Partners – Maynilad should analyze areas where
technology can empower supply chain partners. This can help Maynilad to bring in more
transparency and make the supply chain more flexible.
● Cost of Production and Trends – Maynilad should assess; What are the cost of
production trends in the economy and the level of automatization.
● Acceptance of Mobile Payments and Fintech Services – Maynilad should assess the
preferred choices of mobile payments in the local economy and choose the business
model based on it.
● Mobile Phone and Internet Penetration – Maynilad should assess the level of internet
and mobile phone penetration in the country as it will in building a requisite business
model based on local needs and realities.
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● Likelihood of Technology Disruption – If the country is the hub of technology

companies then there is a high chance of technology disruption among various industries.
Maynilad has to assess whether it can live with the fast pace of technology disruption in
its industry.

ENVIRONMENTAL:
● Influence and Effectiveness of Environmental Agencies – The role of environment
standards enforcement agencies is critical in safeguarding norms. But often in emerging
countries, these agencies delay the process as a tactic to extract bribes. Maynilad should
be aware of the presence of such practices in a country.
● Environmental Standards and Regulations both at National and Local Levels –
Often the environment policy at the national and local level can be different. This can
help Maynilad in numerous decisions such as plant location, product development, and
pricing strategy.
● Influence of Climate Change – How climate change will impact Maynilad's business
model and supply chain. For example, if the supply chain is not flexible it can lead to
bottlenecks if shipments from one part of the world are delayed because of a sudden
climate shift.
● Focus & Spending on Renewable Technologies – How much of the budget is spent on
renewable energy sources and how Maynilad can make this investment as part of its
competitive strategy.
● Waste Management – What is the policy of waste management in the prospective
market and how Maynilad can adhere to the waste management requirements in that
market.

LEGAL:

● Consumer Protection Laws – Maynilad needs to know what are the consumer laws,
what is the rate of enforcement, what is the attitude of authorities towards consumer
protection laws, and what is the role of activist groups in the enforcement of consumer
protection laws.
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● Business Laws: Before Entering a New Market – Maynilad has to assess what the
business laws and how they are different from the home market.
● Independence of Judiciary and Relative Influence of Government – The judiciary
independence often reflects both the strength and credibility of the institutions in the
country.
● Adherence to Common Law – Is the country following common law that is uniform for
all parties; Whether domestic or international. If there is arbitrariness in the judicial
process then Mayniladr can’t be sure of the judgments.
● Transparency in the Judiciary System and Processes – Transparency is essential for
fair and consistent decision-making. If the process is consistent and transparent then
Maynilad can plan with greater conviction.
● Health and Safety Laws – What are the health and safety laws in the country and what
Maynilad needs to do to comply with them? Different countries have different attitudes
towards health and safety so Maynilad should conduct thorough research for a better and
positive impact on its customers.

B. Market Share
Maynilad, the water concessionaire for the west zone of Metro Manila, is preparing to become a
publicly traded company following the recent acquisition of a new concession deal. This decision
aligns Maynilad with Manila Water, its counterpart serving the east zone, which is already listed
on the stock exchange. Metro Pacific Investments, currently the largest shareholder of Maynilad
with a 52.8% stake, announced this week that the listing is a prerequisite of the revised
concession agreement. However, details regarding the size of the stake to be offered and the IPO
timetable have not been confirmed. Other notable shareholders in Maynilad include DMCI
Holdings from the Philippines, holding a 25.24% stake, and Japan’s Marubeni Corporation with
a 20.00% stake. Manila Water, Maynilad's peer, presently holds a market value of approximately
PHP30.2 billion ($628 million). In terms of financial performance, both companies reported
comparable revenue and net core income figures for the calendar year 2020. Maynilad recorded
PHP22.9 billion ($479 million) and PHP6.5 billion ($136 million) respectively, while Manila
Water slightly trailed with PHP 21.1 billion ($441 million) and PHP5.8 billion ($121 million).
 15

This information suggests that Maynilad's decision to go public could present an opportunity for
investors in the Metro Manila water utility sector.

C. Type of Product or Services Produced

Maynilad is a management of treatment facilities,
applying best practices in operating conventional-type,
pulsator-type, and membrane-based treatment plants.
This water and wastewater service company includes
water sampling, chemical handling, preventive and
corrective maintenance, and housekeeping, among
others. Maynilad caters to the different needs of
consumers such as:

● Water Supplier
● Sewerage Maintenance
● Waste Septage

Maynilad serves as a multifaceted water and wastewater service provider, delivering treated
water to residential, commercial, and industrial consumers through its advanced treatment
facilities, including conventional, pulsator, and membrane-based plants. The company ensures a
continuous supply of clean and potable water while also managing the sewerage system,
overseeing the design, construction, operation, and maintenance of sewage infrastructure.
Maynilad's responsibilities extend to waste septage management, involving the safe collection,
transport, and treatment of liquid waste from septic tanks to prevent environmental
contamination and safeguard public health. Through its comprehensive services, Maynilad plays
a pivotal role in the efficient and sustainable management of water resources in its extensive
service areas.

D. Market Structure
Maynilad covers the East Zone concession spans across 1,400 square kilometers, encompassing
23 cities and municipalities in Metro Manila and Rizal. This area includes Mandaluyong, Makati,
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Pasig, Pateros, San Juan, Taguig, Marikina, as well as parts of Quezon City and Manila.
Additionally, the towns of Angono, Baras, Binangonan, Cainta, Cardona, Jalajala, Morong,
Pililia, Rodriguez, Tanay, Taytay, Teresa, San Mateo, and Antipolo in the province of Rizal fall
within the East Zone. Manila Water has organized its concession area into six Service Areas,
each with strategically located offices where customers can personally address their
service-related concerns.

Market structure pertains to the level of competition within a specific industry, outlining the
nature of competition and the barriers to entry. It also delineates the key players in that industry.
Maynilad Water Services Incorporated is often perceived as operating within a duopoly due to
the presence of Manila Water Company. Nonetheless, it is more accurately characterized as a
monopoly, as these two dominant entities do not compete with each other but instead operate
within distinct service areas.
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PORTER'S FRAMEWORK

1. Bargaining power of suppliers of Maynilad - If suppliers have strong bargaining power then
they will extract higher prices from Maynilad.
2. Bargaining power of buyers of Maynilad – If the buyers have strong bargaining power then
they usually tend to drive the price down thus limiting the potential of Maynilad to earn
sustainable profits.
3. Threat of new entrants - if there is a strong threat of new entrants then current players will be
willing to earn less profits to reduce the threats.
4. Threat of substitute products and services - If the threat of substitutes is high then Maynilad
has to invest in R&D either continuously or risk losing out to disruptors in the industry.
5. Rivalry among existing players – If competition is intense then it becomes difficult for
existing players such as Maynilad to earn sustainable profits.
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a. Degree of competition among the players

Aforementioned above that Maynilad Water Services Inc. and Manila Water Company are
monopolistic companies it does serve as each other's competitors. The primary reason for this
“competition” is the similarities they have, mainly their services and locations they provide
around the Philippines. Both companies are known to take measures to provide water where the
other lapses over or has difficulty during times of shortage.

b. Pricing behavior used by the players for revenue generation

Pricing Strategy
Maynilad, the provider of water and wastewater services in the West Zone of the Greater Manila
Area in the Philippines, has the authority to set its own prices as the main supplier of water in the
region. Due to the essential nature of water and the lack of alternatives, Maynilad holds the
position of a price setter with significant pricing influence. Manila Water Company, Inc.
currently imposes a fee of Php 0.24 per cubic meter, representing a Php 0.05 per cubic meter rise
from the previous FCDA rate of Php 0.19 per cubic meter.

Output Decision
As of the conclusion of the year 2018, Maynilad managed a client base of 1,407,503 accounts,
equivalent to approximately 9.5 million individuals. Given the indispensability of water for all,
consumers are compelled to utilize this service, irrespective of its substantial cost. Maynilad,
possessing market power, operates with the characteristic that the quantity of output is not
contingent on the prevailing price. This distinctive position enables Maynilad to ascertain the
optimal price point along the demand curve, reflecting the maximum price at which individuals
are willing to procure this essential commodity.

Behavior In The Market

Maynilad stands as the predominant provider of water and wastewater services in the West Zone
of the Greater Manila Area, holding the position of the largest entity of its kind in the
Philippines. Its unique position devoid of competition and comparable alternatives affords
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Maynilad the autonomy to establish its pricing structure. Despite this pricing authority, Maynilad
is constrained by the dynamics of market demand, requiring it to consider both the volume of
sales and the consumers' willingness to acquire its services at the set price.

c. Production and cost-behavior (To identify the economies of scale and productive use
of its inputs to production)
Maynilad operates on 7,941 kilometers of primary, secondary, and tertiary pipelines. They in turn
have 38 pumping stations, 38 water reservoirs, and 35 in-line boosters along their service area.
Stretching from North Caloocan to Cavite, the Maynilad water distribution system is the longest
ISO-Certified facility of its kind in the Philippines. Maynilad also operates and maintains five
water treatment plants; the La Mesa Treatment Plants 1 and 2, the Putatan Water Treatment
Plants 1 and 2, and the Parañaque NEW WATER Treatment Plant. All water treatment plants are
world-class and provide water that meets the Philippine National Standards for Drinking Water
(PNSDW) by the Department of Health (DOH). Maynilad then operates 20 Sewage Treatment
Plants, two Joint Sewage and Septage Treatment Plants, and one Septage Treatment Plant that
process wastewater and sludge; of which 22 are certified in three standards. Maynilad sources
water from various raw water suppliers, such as the Metropolitan Waterworks and Sewerage
System (MWSS) and Laguna Lake. As treated water is distributed among customers through
pipeline networks, Maynilad bills them based on their respective water consumptions and has
various payment options in place. From there, maintenance of distribution outlets, pipelines,
pumps, etc. are ensured for steady and reliable water supply to the customers.
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MAYNILAD SPACE MATRIX

The water quality characteristics tested from several Maynilad water sources, such as New
Water, Water from the Las Piñas-Muntinlupa Tunnel Project (LMTP), and a combination of both
sources, are displayed in the table. In order to evaluate compliance with set drinking water
quality guidelines, it compares these parameters against the Philippine National Standards for
Drinking Water 2017. It highlights metrics like residual chlorine, turbidity, pH value, nitrate,
heavy metal concentrations, total dissolved solids (TDS), and bacterial counts.
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CHAPTER 03: MAJOR PROBLEM/S ENCOUNTERED OR

CURRENTLY ENCOUNTERING BY THE INDUSTRY AND ITS
POLICY IMPLICATIONS

A. Identify the problem/s that significantly affect/s the operation of the industry
Water Supply Interruptions: Maynilad faces challenges in maintaining a consistent and
adequate water supply due to factors such as population growth, climate change affecting
water sources, and aging infrastructure.

Non-Revenue Water (NRW) Losses: High levels of NRW due to leaks, illegal
connections, and water theft impact the company's revenue and the efficient distribution
of water to customers.

Infrastructure Expansion and Maintenance: The need for continuous infrastructure

expansion and maintenance to meet increasing demand while ensuring the reliability of
services poses a significant challenge.

B. Specific actions done or doing by the industry to address/remedy the problem/s

Investment in Infrastructure: Maynilad invests in infrastructure development and
rehabilitation to improve water supply systems, reduce leakages, and enhance service
reliability.

NRW Reduction Initiatives: The company implements programs to reduce non-revenue

water, such as leak detection technologies, pipeline replacement, and community
engagement to curb illegal connections.

C. Specific government policy/ies to address the problem/s (Laws, Republic Acts)

Government Policies and Actions: Philippine Clean Water Act (Republic Act No.
9275): This law aims to protect and preserve the country's water resources. It establishes
policies and standards for water quality management and mandates the government to
ensure water quality.

Regulatory Oversight by MWSS: The Metropolitan Waterworks and Sewerage System

(MWSS) regulates water utilities like Maynilad, ensuring compliance with service
standards, pricing, and quality.
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D. Discussion on the strengths and limitations of the above actions by the industry and
the government.
Strengths:
Investment in infrastructure helps address water supply and reliability issues.
Efforts to reduce NRW demonstrate a commitment to improving operational efficiency.

Limitations:
Infrastructure development takes time, and disruptions during construction may
inconvenience customers.

Despite efforts, NRW reduction might not be immediate due to complex factors like
illegal connections and widespread leaks.

Government Policies:

Strengths:
The Philippine Clean Water Act provides a legal framework for water quality
management. Regulatory oversight by MWSS ensures accountability and adherence to
standards.

Limitations:
Enforcement and implementation of policies might face challenges due to resource
constraints or bureaucratic inefficiencies. Continuous updates and adaptations to cope
with emerging challenges are necessary.
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CHAPTER 04: AREAS FOR FUTURE POLICY PRESCRIPTIONS

A. By identifying the strengths and weaknesses, provide a discussion of your policy
prescriptions/recommendations

SWOT ANALYSIS
STRENGTHS:
● The geographic presence in different regions can act as one of the major strengths of the
organization. It determines the business’s reach to the target market and ensures easy
accessibility.
● A strong financial position and health can allow the firm to make further investments.
● Access to suppliers that offer raw materials at a lower cost can improve the overall
business efficiency.
● The locational advantage can improve the firm's competitive positioning in various ways,
such as lower cost, improved accessibility, or enhanced brand image.
● The well-developed and efficiently integrated IT infrastructure can improve operational
efficiency and increase knowledge of the latest market trends.
● Competent and committed human capital can act as a powerful source of competitive
advantage, particularly when business is service-oriented in nature.
● High product quality increases brand loyalty and improves Maynilad Company's
performance in a competitive market.
● An organization may own different intellectual property rights that can make the product
offerings unique and exclusive, making it difficult for competitors to imitate.

WEAKNESSES:
● The company may lose efficiency due to poor inventory management practices. The
shortage or excessive inventory can either result into
● Insufficient budget for marketing and promotion activities weakens the firms’ ability to
expand the customer base and encourage repeat purchases.
● Less expenditure on research and development activities can weaken the company's
performance due to poor local/international market knowledge.
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● The inability to understand customers’ needs and expectations leads to an ineffective

strategic decision-making process. With this weakness, the organization may not be able
to identify the potential improvement-seeking areas in the product/service mix.
● The prices charged by the business may not be perceived as justified when compared to
the product/service characteristics. It indicates the need to revise the pricing strategy.
● Poor customer service (such as inefficient customer complaint handling) can trigger
negative word of mouth about the business and affect business growth.
● Poor project management practices can internally weaken the ability of the organization
to successfully open new branches or expand the product line.
● Organizational culture also becomes a big internal weakness when it does not align with
the strategic/business objectives. For example, the main strategic objective of the chosen
business organization is to launch innovative and new products in the market. However,
there exists a risk-averse attitude prevailing in organizational culture, which discourages
employees from thinking creatively.

OPPORTUNITIES:
● The population's exponential increase, especially in the current and prospective client
categories, presents a significant opportunity for corporate organizations to expand.
● Innovation can be ingrained in corporate operations by making use of the development of
new technology to aid in the manufacture and distribution of goods and services.
Innovative goods can be quickly introduced, costs can be reduced, and efficiency can be
increased through advanced technology integration.
● Increasing the number of affluent customers and their disposable income presents a
chance to expand the line of high-end products.
● If Maynilad Company can guarantee a strong online presence on various social
networking sites, the development of e-commerce and social media marketing could be a
significant potential.
● There are prospects for business and product line expansion as new market segments and
niches arise.
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● With fewer barriers to entry and increased worldwide connectivity, the company can
expand internationally, reach a geographically dispersed client base, and boost
profitability.
● One favorable external environmental element for Maynilad Company is the government
subsidies it offers and other initiatives to improve the business climate.
● More consumers will use goods and services and there will be more opportunities to
promote purchases as a result of improvements in customer standards and lifestyle.

THREATS:
● The Maynilad Company is seriously threatened by the new, tougher restrictions that have
been introduced along with the evolving regulatory framework. For the company
organization, it increases the complexity and difficulty of complying with legal
regulations. The likelihood of costly lawsuits increases when regulations are not
followed.
● It may be challenging for the company to draw in personnel with the appropriate skill set
if there is a labor shortage.
● The capacity of the company to maintain and grow its client base is impacted by the
growing number of direct and/or indirect competitors.
● When declining economic conditions have a direct impact on consumers' spending habits
and purchasing power, business performance is impacted.
● The profitability of businesses is impacted by the growth in inflation, which also raises
production costs.
● Growing trends in environmental sustainability pose a serious risk when goods and
services are provided that are not environmentally friendly. It damages the brand's
reputation in a cutthroat market and attracts bad press and condemnation from
environmentalists.
● Organizations that are not culturally intelligent may suffer as a result of globalization's
pressure to deal with cultural diversity and cross national boundaries.
 26

B. Discuss your own view on the prospect of the industry for the next five years

The group's outlook for the industry over the next five years seeks to adjust to impending
challenges—such as inflation, population growth, and climate change—that we may or may not
be able to predict. The group wants to see the company's plan for maintaining the environment
and the cleanliness of the water, as well as for expanding its infrastructure, investing in the
quantity and quality of distribution to further-flung areas of the targeted population, and
expanding its services domestically and internationally. The team would also recommend that
the two water firms in Manila, the east and west, be combined in order to reduce costs even
further, boost profits, and further concentrate on Metro Manila's water distribution system and
renewing old pipes of water distribution networks.
 27

BIBLIOGRAPHY

AdminP, & AdminP. (2020, February 27). "Water monopolies raking in insane profits -
Rigoberto Tiglao." Rigoberto Tiglao.
https://rigobertotiglao.com/2019/04/02/water-monopolies-raking-in-insane-profits/

Global Water Intelligence. (n.d.). "Global Water Intelligence."

https://www.globalwaterintel.com/news/2021/22/maynilad-set-for-ipo-after-manila-contract-deal

GOVPH. (2022) "About Us." GOVPH. https://lwua.gov.ph/about-us/

Maynilad. (2020). Frequently asked questions | maynilad water services inc. Maynilad Water
Services Inc. https://www.mayniladwater.com.ph/contact-us/faqs/

"Maynilad Company SWOT analysis." (n.d.). Case48.

https://www.case48.com/swot-case/14217-Manila-Water-Company

Maynilad Water Services Inc. (2022). "Maynilad."

https://www.mayniladwater.com.ph/our-company/our-story/#:~:text=(Maynilad)%20was%20for
med%20in%201997,West%20 Zone%20 of%20 Metropolitan%20 Manila

Pro, E. (2019, May 4). "MBA PESTEL / PEST Solution : Maynilad Company PESTEL / PEST
/STEP Analysis & Solution." EMBA Pro for Executive MBA Professionals.
https://embapro.com/frontpage/pestelcase/14217-manila-water

Ycalina, J. (2021). "Ycalina-examples of market structure.pdf - Jella Mae T. Ycalina BSA-2B

Monopoly 1. Maynilad Water Services Inc. Pricing Strategy." Course Hero. [URL:
https://www.coursehero.com/file/122530462/YCALINA-EXAMPLES-OF-MARKET-STRUCT
UREpdf/]
 28

APPENDIX

Appendix 1 Appendix 2
Capital Expenditures of Manila Water and Organizational Chart of Maynilad Water
Maynilad (1997-2005) Services Inc.

Appendix 3 Appendix 4
Metropolitan Waterworks and Sewerage Maynilad Product and Services
System logo

Appendix 5 Appendix 6
 29

PORTER'S FRAMEWORK for Maynilad Space Matrix for Maynilad Water Services
Water Services Inc. Inc.
 30

ABOUT THE PROPONENTS

Juan Gabriel T. Bautista is currently in his second year at San Beda

University, pursuing a Bachelor of Science in Entrepreneurship. Prior
to this, he completed his studies in the Humanities and Social Science
(HUMSS) program at Lourdes School Quezon City. Following his
graduation, he has aspirations of establishing his own business.

Aicezer C. Culala is currently in his second year at San Beda

University, pursuing a Bachelor of Science in Entrepreneurship. Prior
to this, he completed his studies in the General Academic Strand
(GAS) program at Claremont School of Binangonan Rizal. Following
his graduation, he has aspirations of managing and putting up his own
business.

Emmanuel R. Esmaquilan is currently in the second year of his

Bachelor of Science in Entrepreneurship program at San Beda
University. Before this, he successfully completed the Accountancy
and Business Management (ABM) program at San Beda University in
Rizal. Upon graduation, he envisions managing and establishing his
own family business based in the province of Marinduque, expanding
across the country.

Don Carlos M. Simon is currently pursuing his second year in the

Bachelor of Science in Entrepreneurship program at San Beda
University. Before this, he completed the Accountancy and Business
Management (ABM) program at San Beda University Manila. His
post-graduation goal is to manage and establish his own business and
become a renowned Entrepreneur.