EXECUTIVE SUMMARY

This paper aims to analyze and study AgriNurture Inc. company also engages in the

manufacture and distribution of fruit beverages and puree, dried fruit snacks, processed fruit

mix, frozen fruits & vegetables, dairy and rice products. And serves the fresh needs of the

leading retail & key institutional accounts in the country, and also supplies homegrown fruits

such as banana, sweet pineapple and papaya to customers in the Greater China Region,

Japan, Korea, and the Middle Eastern, European, and North American Regions.

Based on the strategic tools and analysis, it is recommended for the company to focus

on Concentric Diversification, Conglomerate Diversification, Market Development and Joint

Ventures. Joint Venture is the chosen strategy that the Group would use to drive shareholder

value increases. In addition to the pursuit of growth, companies diversify to increase

shareholder value, to spend down large amounts of cash on the balance sheet and to decrease

risk. Despite of having incurred such deficits, management believes that the Corporation will be

able to turnaround and achieve positive operations in future years. The combination of these

strategies will enable the Company to reach its objectives to earn P909.87 million in revenues

by end of 2020.
 Food, Beverage and Tobacco Industry are distinguished by the raw materials (usually

livestock or agricultural products) that they transform into products for consumption. Typically,

these products are sold to wholesalers or retailers to be passed on to consumers, but

businesses that primarily sell bakery or candy products made and packaged on the premises

are included as well the beverage manufacturing industry is made up of establishments that

make either alcoholic or nonalcoholic beverages.

Successful agricultural business requires a clear sense of what the firm is about and

where is headed. With the dramatic challenges in agricultural sector in the past decades the

enterprises are more often forced to adapt operations, plans, strategies to changes and

uncertainties in their legal and business environment. New demands to product quality, food

safety and sustainable agricultural production but also the increasing competition between the

firms have stimulated the interest in new strategic planning for the agricultural firms.

Agriculture has recovered with a high of 5.28 percent growth in the first quarter of 2019

after several quarters of declines. All subsectors posted output increments with the crops

subsector as the major growth driver during the period. At current prices, gross value of

agricultural production amounted to P407.6 billion. This was 8.79 percent higher than the

previous year’s record.

ANI (AgriNurture Inc.) traces its humble beginnings in 1997 as a trader of post-harvest

agricultural machineries that help improve the productivity and income of rural Filipino farmers.

Formerly known as Mabuhay 2000 Enterprises, Inc., it eventually diversified into various agro-

commercial businesses and has become one of the country’s top fresh mango exporters to the

world markets.

At present, the company engages in the manufacture and distribution of fruit beverages
and puree, dried fruit snacks, processed fruit mix, frozen fruits & vegetables, dairy and rice

products. ANI also serves the fresh needs of the leading retail & key institutional accounts in

the country, and also supplies homegrown fruits such as banana, sweet pineapple and papaya

to customers in the Greater China Region, Japan, Korea, and the Middle Eastern, European,

and North American Regions.

ANI’s family of brands now includes FCA (Fresh Choice Always) for fresh and processed

wellness food products; La Natural for coconut juice and Nikka for mango nectar and tamarind

juices, all of which are exported; Sungrown rice; Superfresh and Big Chill for fresh fruit

beverages and dessert kiosks; Canecoctions for sugar cane juice; Chantilly for desserts; and

Cafeteria Verde, Fresh Bar by Big Chill, and C’Verde by Big Chill for healthy snack bar and

cafeteria. It has also entered into a master license agreement with Tully’s Coffee International

PTE LTD to operate Seattle’s famous Tully’s coffee shop in the Philippines.

AgriNurture Inc. is preparing for an intention to boost revenues started exploring through

new and innovative distribution methods such as direct selling approach to address consumers

and institutional buyers’ need for fresh produce amidst problems on lack proper storage. This

strategic paper has the objectives for maintaining, developing and improving the company’s

function for its objectives.

Chosen Company

The researcher took AgriNurture Inc. as the chosen company considering that it

belongs in Agriculture industry. The researcher is entranced when it comes to agriculture.

“Agriculture is the way to go” there are two things; “You are not only helping people, but

you also become at the top of the temple when it comes to income”. Agriculture is one of

the best sources of income for the Filipino. That is why Agriculture is the choice of the
researcher. Knowing that AgriNurture Inc. conveys with Agriculture Industry, and the

noteworthy part of it is how the researcher will help the Group to recover from its consistent

loss with the aid of implementing new strategies for the Group. Filipino people eat three

times a day, sometimes five times a day or more often, so choosing the business is

intended if it gives fastest turnover; food and beverage is always one of the fastest

turnover, appliances business or kitchenware can buy only once a year, but food is very

consumable. That is why Agriculture is the way to go, the only downside are the production

and distribution side of it. That ANI must innovate and improve as well.
 CHAPTER II

RESEARCH DESIGN AND METHODOLOGY

This Chapter presents the research design and methodology and the data gathering

process used in the study.

Research Design

This study used the descriptive and historical research design. The descriptive research

design is a method that aims to describe and observe what is currently happening in the entity.

The researcher used this research design to acquire information directly from the people

involved in this research study. Historical method of research is the process of systematically

examining the company what has happened in the past. This method is a scientific method in

which comparison is used to gain an understanding of the various historical stages.

Data Gathering

The information gathered in this paper was acquired through primary and secondary

data. The primary data that the researcher used interview. The researcher conducted an

interview in order to acquire relevant information that are not available on the internet and in the

company’s annual report and website portal about AgriNurture Inc., particularly to their Ortigas

Branch. The gathered information was used in order to make a significant paper. The

researcher conducted an interview together with Mr. Eugene Macalino, HR Specialist of

AgriNurture Inc.

The majority of the information gathered was through secondary sources, in the external

analysis, data were attained from different internet and publications of Philippine Stock

Exchange Commission. For comparative purposes, background of some major competitors in

the industry is also needed, especially in the financial and operations aspect. It is also

necessary to have enough internal information about AgriNurture Inc., which is the objective of

this paper.
Scope and Limitation

The scope of this Strategic Management paper is focused on Manufacturing Industry in

the country. It is restricted to the chosen firms, AgriNurture Inc. and its Two Direct Competitors

and One indirect competitor; DOLE Philippines Inc., Del Monte Pacific Limited and ConAgra

Food Inc., which are chosen by their revenue size, sector and subsector, products & services

and considering that they are the direct competitor of AgriNurture Inc. The basis of the

researcher for management assessment of each unit and the basis of the researcher its

strategic decision-making activities. The financial statements that mere used in this paper were

limited to years 2016-2018. The researcher set a three-year period in defining and assessing

the firm’s development in terms of their financial position in the business.

 CHAPTER III

EXTERNAL ANALYSIS

This Chapter presents the external analysis of the industry where the company operates,

specifically on political, economic, socio-cultural, technological, environmental and legal. Also

this Chapter will show the opportunities and threats present in the industry.

PESTEL Analysis

PESTEL analysis is a simple and effective tool used in situation analysis to identify the

key external (macro environment level) forces that might affect an organization. These forces

can create both opportunities and threats for an organization.

Political Factor

Political Factor refers to legislation or regulatory shifts, which could have a substantial

impact on how company operates and its bottom line.

Corruption

Corruption in government contracts or licenses for agricultural supplies is common. This

increases the cost of agricultural production and eliminates competition in the fertilizer industry

as other firms have little chance of getting the government contract. The Philippine Center for

Investigative Journalism has documented that farmers receive low quality planting materials,

unhealthy farm animals and undelivered farm equipment from the state.

RELEVANCE: Agriculture is the major source of raw materials of food manufacturers.

Corruptions done by government officials will interrupt agricultural sectors to innovate and

produced high quality raw materials used by many food manufacturers for their production. This

affects the Agricultural Industry because of how government gave poor quality, undelivered

goods and high prices to the farmers that results to unhealthy far animals and undelivered farm

equipment. The inclination is that the production of agriculture will be cluttered.

Free Trade Agreement

An FTA is an agreement which mandates its members to abolish both tariff and non-tariff

barriers (NTBs). A tariff, which is a form of protection, is a tax imposed on imported items sold in

the domestic market. On the other hand, non-tariff barriers are restrictive policies such as

quotas, licensing, and product safety policies, which are alternative forms of protection. When

these barriers, both tariff and non-tariff, are reduced or fully eliminated, markets will become

more predictable, which intensifies trade.

RELEVANCE: It benefits trading countries through competitive advantage. When barriers are

fully eliminated, agribusiness will be more anticipated which will help to boost the trading

industry.

ASEAN Integration

The country has been experiencing robust economic growth, consistent upward rankings

in competitiveness, and successive credit rating upgrades. In fact, this year, the Philippines

achieved an average growth rate of 6.8%, the highest during the past 40 years. ASEAN

countries are yet to reach their production boundaries. Investors, leveraging on the region’s

balanced climate, fertile lands, and mix of lowlands and uplands, forests, rivers, and coastlines,

are likely to find opportunities not just in crop and livestock production but also in managing food

supply chain, agriculture infrastructure and safety, and agribusiness.

RELEVANCE: This signifies that it is a big factor to Agriculture Industry it will help it to be more

competitive and to be well-known brands in the local and international markets. And also help

the farmers to save in labor and production cost that will benefit the industry supplementary. All

of these endeavors are in line with all the efforts to accelerate production, manufacturing and

distribution in the region, all the while creating an enabling environment for businesses to

prosper, and ensuring that every farmers participates and seizes the opportunities.
Vat Exemption

In a recent clarification of the Bureau of Internal Revenue (BIR) under Revenue

Memorandum Circular No. 55-2014 (RMC 55-2014), it noted that sale or importation of livestock

and poultry feeds or ingredients used in the manufacture of finished products are exempted

from VAT in the Philippines. Notably, some ingredients of finished products could also be used

for the production of food for human consumption

RELEVANCE: This will have an influence to the Agricultural Sector having VAT exemptions for

the agricultural products will be helpful to the farmers and will boost agricultural production in

the country.

Government Stability

“Gov’t subsidies to agri agencies rise amid efforts to mitigate dry spell”

Subsidies to government-owned and -controlled corporations increased 38% year on

year to P3.71 billion, according to data from the Bureau of the Treasury. Subsidies form part of

the national government’s expenditures, which accelerated 13% year on year to P1.992 trillion

during the 11 months to November. Most of the firms that received subsidies in November form

part of the interagency task force created to mitigate possible adverse effects of the El Niño

phenomenon. The current El Niño cycle is expected to linger until the second quarter. Its

strength has been widely compared with the 1997-1998 episode, when the Philippines’

agriculture output dropped by almost a fourth.

RELEVANCE: The government’s financial aid to the agricultural industry has an impact in

measuring the government stability of the country. The industry almost took up 40% in the

manufacturing sector of the Philippines.

Economic Factors

The economic environment involves the general set of economic conditions facing all

industries that influence the behavior of consumers and the institutions.

The Future is in Agribusiness

Experts have long been saying that agriculture is a key factor in making economic

growth inclusive and in reducing poverty incidence in the country. One of those who has been

stressing the need to pursue large-scale activities in the agribusiness sector. This is the same

view shared by several business organizations that believe an efficient agricultural sector with

improved productivity, through increased investments and industrialization, would significantly

contribute to poverty alleviation efforts and help residents in poor rural communities improve

their quality of life.

RELEVANCE: As one can imagine Agribusiness will be the country’s future. This looks like that

it would impact the Industry. In the past, the Philippines had experienced periods of slow or

negative growth, however given that the Industry’s primary business is basic food, it enjoys

certain degree of protection from the negative effects of economic stagnation or recession.

Interest Rate

Increasingly unexpected and adverse movement of interest rates is a source of

operating risk for farms and agri-businesses. A sudden increase in interest rates may result in

higher than planned interest expenses if a business is holding a variable rate loan. Higher

interest expenses reduce profitability of farms and agri-businesses, discourage investment and

decrease farmland values.

RELEVANCE: Having an increase interest rates will have a big collision which will not help

maintain the position of the industry in the market and ensure continuing acceptability of its

agricultural products. Interest expenses on holding inventory could have a significant impact on

farm profitability and associated agribusinesses.

Gross Domestic Product

According to the World’s Bank latest edition of Global Economic Prospects. For 2017,

Philippines’ economy is expected to advance between 6.5 to 7.5%. That’s almost twice

country’s long-term growth. GDP Annual Growth Rate in Philippines averaged 3.68% from 1982

until 2017, reaching an all-time high of 12.40% in the fourth quarter of 1988 and a record of -

11.10% in the first quarter of 1985, according to Trading Economics.

The Philippines Economy has benefited from a stable macroeconomic environment of

low inflation and low debt to GDP ratio, which has helped sustain a healthy domestic demand

growth; and from a revival of the Asia Pacific Region that have boosted exports, which account

for close to a third of GDP.

9
8 7.77.6 7.5
6.9 6.9 6.9
7 6.5 6.4 6.5
6 5.8 6
6
5.3
5 Q1
5
Q2
4 Q3
3 Q4

2
1
0
2013 2014 2015 2016 2017

Figure 3.1
RELEVANCE: Gross Domestic Product is a standout amongst the most generally utilized

measures of an economy's output or production as one can imagine, economic production and

growth, what GDP represents, has a large impact on nearly everyone within that economy. It is

characterized as the aggregate estimation of merchandise and enterprises created inside a

nation's fringes in a particular day and age – month to month, quarterly or yearly. This led to the

rise and rapid expansion of large agribusiness complexes which increasingly controlled

international trade in food products and which became an important earner of Gross Domestic

Product in the country.

International agricultural trade

Current trade liberalization strategies emphasize the need for an export-driven economy.

In recent years, developing countries have tailored domestic agricultural policies to respond to

changes associated with the expansion and liberalization of international trade. Exporting helps

grow national economies and expands the global market. Every country is bestowed with

certain advantages in resources and skills. the more a country exports, the more domestic

economic activity is occurring. More exports mean more production, jobs and revenue. Exports

from the Philippines rose 12.1% from a year earlier to USD 4.81 billion in April 2017.

RELEVANCE: That affects the Industry of Agriculture, having a well charge of looking markets

as well as the sourcing best quality produce to satisfy its growing number of clients. In the

Industry of Agriculture export has vast outcomes that results broader market capital, and when

the product exports to other foreign countries and having best quality produce it will satisfy the

number of clients and promote the products of the state.

Common Economic Interest

The Common economic interest of each planners and political leaders are being biased

with the smaller farmers and give more attention to those larger farmers because they think that
Larger Farmers gives better quantities when it comes to buying and selling of goods.

RELEVANCE: Which will not help to improve the Agriculture Industry. To be able for the

smaller farmers to mend, extension agents should not be engrossed to larger farmers to that

the economic stimulus will be balanced.

Importations

Imports are important for businesses and individual consumers. Individual consumers

also benefit from the locally produced products with imported components as well as other

products that are imported into the country. Oftentimes, imported products provide a better price

or more choices to a consumer.

RELEVANCE: These activities can contribute not only in diversifying and increasing the value of

agribusiness outputs, but also contribute to the inclusive growth and rural development agenda

of the Philippine government. Because of this, the agribusiness sector is positioned to largely

contribute to the industrial development of the Philippine economy.

Increase in budget for Agriculture

The Department of Budget and Management (DBM) on Monday, August 15, submitted

to the House of Representatives the proposed P54.20 Billion, 17.96% 2017 national budget, the

highest proposed by any administration so far. This marks the beginning of Congress’ months-

long deliberations on the proposed national budget, which the administration of President

Rodrigo Duterte dubbed as “A Budget for Real Change.”

RELEVANCE: This will result to an increase in the sales of the Agricultural manufacturing

business considering that the present administration is eyeing in establishing a well-functional

regional food terminals and maximize food productivity and income opportunities for the

farmers.
Asian Food and Agribusiness Conference Underlines Organic Product Exportation

The Development Academy of the Philippines, in partnership with the Asian Productivity

Organization (APO) and the Agricultural Training Institute (ATI), conducted the “Asian Food and

Agribusiness Conference”.

With the theme “Enhancing exports of Organic Products”, the event served as a platform

for leaders of the agrifood sector to discuss emerging trends as well as success and challenges

affecting the productivity and sustainability of Asian organic agrifood small- and medium-scale

enterprises (SMEs).

Key stakeholders in the said sector such as the agriculture arm of the Philippines and

APO member countries graced the event and shared successful models of SMEs in organic

farming. This is in the hope of enhancing export opportunities for agribusiness and food

industry.

RELEVANCE: It aims to improve the global competitiveness which will be a big factor in the

Industry of the Agriculture sector particularly with the recent economic reintegration under the

ASEAN economic community. The talk also discussed about the emerging global and regional

trends, opportunities and challenges in organic food products in market.

Socio-Cultural Factors

The Socio-cultural Environment is a population, and it is described with special attention

paid to social and cultural factors. It includes the culture that the individual was educated or lives

in, and the people and institutions with whom they interact.

Innovators

In every society, there are some individuals who are more ready than others to accept

new ways of life. The innovator may then be regarded without suspicion, and even gain in

influence. General attitudes toward cultural change can then shift; new ideas may be welcomed
as promising a better life instead of being regarded as a threat to established ways of doing

things. People who leave their society, to study or work among another society, bring back

ideas which may change their way of life and be adopted by other people in their society. New

styles of clothing, music, religious beliefs, house designs, political ideas and so on are spread

from culture to culture by visitors and returning travelers.

RELEVANCE: The more people are exposed to new ideas, the more likely it is that change

may be accepted and benefited by the Agriculture industry. It benefits its industry by having new

innovative ideas that will help the industry to be more profitable.

Demographic

During 2017 Philippines population is projected to increase by 1,630,066 people and

reach 104,733,524 in the beginning of 2018. The natural increase is expected to be positive, as

the number of births will exceed the number of deaths by 1,779,566. If external migration will

remain on the previous year level, the population will be declined by 149 500 due to the

migration reasons.

RELEVANCE: This signifies that there would be a threat in possible consumers, in lieu with this

the demand for food and services will decreased.

Lifestyle

Lifestyle in the Philippines is changing rapidly. The Philippines has a strong tolerance on

handling diversity. Customers are demanding high quality products and services that make the

competition tight, because players in the industry are making their product and services cheaper

but they keep on innovating it.

RELEVANCE: Agricultural Industry is leading when it comes to the consumer’s preference for

foods. Because nowadays they encounter poor health caused by busy lifestyles, insufficient

exercise and fast food consumption. Hence, consumers are increasingly choosing naturally

healthy foods such as fruits and vegetables. That are in route with Agricultural Products.
Health and Safety

The lack of drinking water, sanitation facilities and/or handwashing facilities can lead to

many health effects. Farmworkers may suffer heat stroke and heat exhaustion from an

insufficient intake of potable water, urinary tract infections due to urine retention from

inadequate availability of toilets, agrichemical poisoning resulting from lack of handwashing

facilities, and infectious and other communicable diseases from microbial and parasitic

exposures.

RELEVANCE: Employee’s health and safety is subject to the health standards promulgated by

the Philippines Department of Labor and Employment. It’s a prevailing factor to the industry

considering that it’s a greater aspect to the productivity of the business.

New Consumers

“Millennials drive demand for organic goods”

The rapid rise in the premium end of the consumer food market, millennials’ growing

trust in smaller brands, and their interest and aptitude in online shopping and e-commerce

present opportunities for small manufacturers, said the study.

According to the report, small brands have been gobbling up shares in the premium

space because millennials are more likely to trust them to deliver features like natural,

sustainably sourced and no artificial ingredients. This shift of preference opens up wider

opportunities for local entrepreneurs to start up new business concepts, accommodating the

modern preference of the new-age market.

RELEVANCE: Millennials having a great influence nowadays is a big factor for Agriculture

Industry, because they demand more natural and organic products than having artificial

products. This is a positive outcome for the industry

Technological Factor

The technological environment is development in the field of technology which affects

business by new inventions of productions and other improvements in techniques to perform the

business work. It shows the external factors in technology that impact business operations.

Innovation

The overriding issue in developing commercially successful machines is meeting the

market demands within acceptable price levels. The industry must be able to come up with

marketable machines, which could meet farmers’ operational needs at an affordable price.

RELEVANCE: Research institutions have a tendency to be preoccupied with innovations rather

than be propelled by a clearly perceived market demands. More innovative machines can

improve its ability to control its quality and prices. Conducting new researches aims to have

high-yielding and high value varieties of fruits and vegetables.

Extension Workers

Extension workers are the key persons in technology transfer. They need not only

interpersonal communication skills, but technical qualifications as well. With a very limited

number of extension staff for a big number of client-farmers, the result would likely end-up in

non-adoption of some technologies. Besides, these workers might be lacking the capability to

integrate the mechanization technology in the total farming system.

RELEVANCE: Lacking with trainings or uneducated when it comes to agricultural

mechanization will be a big issue in the Agriculture Industry. Qualified skill is a must considering

that it can help to boost new viewpoints and concepts that will help the industry.

Social Media

In agriculture sector, social media is gaining popularity. Professionals are using them to

form networks and farmers are taking to social media to talk to peers and consumers.

Facebook, Twitter, YouTube, and blogs are the major platforms for agricultural information

dissemination. The uses of socially integrated messaging apps are also increasing in the rural

areas.
RELEVANCE: Social media like Instagram and Blogs of some popular Youtubers or Vloggers

wherein they promote different choices of food that are being featured, that subscribers or

followers will influence them to try it. By using social media, it will gain a big factor to the

Industry considering that it will make the products trendy that will results to increase customers.

And having many customers means higher chance of earning higher profitability of the

business.

Korean Farm machines are coming

Aside from developing a compact village-type corn mill, a Farm Mechanization Training

Center will be set up at the headquarters of PhilMech in the Science City of Muñoz in Nueva

Ecija. The training center will showcase the different agricultural machinery that are needed in

mechanizing farm operations in big as well as small farms. These include tractors and various

equipment that can make farming more fun and profitable.

Philip Kim of Fitcorea Philippines is very instrumental in bringing into the Philippines

Korean agricultural mechanization technology. He represents Kamico in the country and he has

been responsible for bringing Kamico and PhilMech to collaborate in undertaking various

projects. Aside from machinery for land preparation, Korean technology in postharvest operation

like drying and milling are being introduced in the country.

RELEVANCE: Efficient farm machines are also needed in land preparation. Plowing by

machine rather than by carabao is more thorough. It is possible to have deep plowing with

tractors and its implements so that land preparation is more thorough for better plant growth. It

will help the industry to have more improvement. Through science and technology, and

innovation, it can help small and medium enterprises with the technology that can create

globally competitive products to meet the demands of the local and international market

standards.
CEAT Agricultural Machinery Testing and Evaluation Center

AMTEC conducts laboratory and field tests to verify machine specifications, performance

quality of manufacturers, and the suitability of the machines to local farming conditions. It iis the

official testing and evaluation arm of the Department of Agriculture (DA). All agriculture and

fisheries machinery to be acquired under the various programs and projects of the DA shall

pass through testing by the AMTEC. AMTEC, in partnership with the Philippine Society of

Agricultural Engineers (PSAE) and concerned DA agencies, is also charged with the formulation

and development of the official agriculture and fisheries machinery standards of the Philippines.

RELEVANCE: By conducting machine test can enhance the sustainability of machineries that

the companies are using. It can heighten the quality of goods and services of each Agricultural

Industries.

Philippines needs more farm machinery to catch up with neighbors—DA chief

To keep pace with rice-exporting countries like Thailand and Vietnam, the Philippines

must raise the rate of mechanization in its farms to .8 horsepower per hectare from the

current .57 hp/ha, the Department of Agriculture (DA) said.

Agriculture Secretary Proceso Alcala on Tuesday said the DA has allotted P6 billion to

increase the use of machinery and other farm equipment in Philippine farms.

“Our target in the medium term is to increase the current farm mechanization level at

0.57 horsepower per hectare (hp/ha) to 0.8 hp/ha,” he said.

The amount is used to buy various farm production and post-harvest machinery and

equipment that the DA provides to qualified irrigators’ associations, farmers’ groups and local

government units. The DA shoulders up to 85 percent of the equipment cost, while the

remaining 15 percent serves as the equity or local counterpart of the beneficiaries.

RELEVANCE: This will be an enormous impact and factor to the industry considering that it can

help to lift Agriculture Industry to cogitate with farmers to use it, to enable them to have a firmer
and efficient actions to prepare their land at the same time and adopt a synchronized their

farming schedule. This practice would enable farmers to monitor and effectively control crop

pests, and subsequently minimize production losses.

Environmental Factors

The Environmental Factor consists of a variety of factors outside your company doors

that you typically don't have much control over.

Climate and Weather condition

The Philippine economy has outpaced most of its Asian neighbors in the last two years,

but its large rural sector may drag on growth in the second half as it confronts what forecasters

say will be one of the worst El Nino dry spells on record. Southeast Asia's fifth-largest economy

is looking more vulnerable as recent months of crop losses from weak rainfall take a toll on farm

output and commodity exports. Failed harvests will hit farm wages and crimp consumer

spending, the main driver of GDP and threaten to kindle inflation.

The economy rebounded in the second quarter but agricultural output contracted on

failed rice, corn and sugar cane harvests. With rains still scanty, faltering farm production

threatens to cloud the outlook for growth.

RELEVANCE: Environmental change is above all else an issue since individuals can't concur on

regardless of whether it's an issue in any case. It’s a major uncertainty in the Agriculture

Industry. Its inherent instability and the occurrence of extreme weather events due to climate

global climate change impacts greatly the performance and management of the industry’s

farming and trading operations, its full integration of operations, supply and product quality. The

facility to stock supplies will be inoperative.

Water Pollution

Although water resources become scarce in some regions and seasons, the Philippines

as a whole has more than enough surface and groundwater. However, the neglect of a coherent

environmental policy led to the actual situation, in which 58% of the groundwater is

contaminated. The main source of pollution is untreated domestic and industrial wastewater.

Only one third of Philippine river systems are considered suitable for public water supply.

RELEVANCE: Human activities contribute significantly in waste management can cause water

pollution. Recognizing the effects of improper management that could cause water pollution or

garbage crisis can be prevented by practicing waste characterization and segregation at

source, proper collection and transfer, recycling, and composting. Proper waste management

could save an individual to different diseases which would cause him absences and poor

performance in work. This occurrence of water pollution instability can lead to misfortune of the

industry, sudden changes in the business could have an adverse impact on the productions of

the firm.

Deforestation

Deforestation causes the loss of habitat for millions of species, and is also a driver of

climate change. Trees act as a carbon sink: that is, they absorb carbon dioxide, an unwanted

greenhouse gas, out of the atmosphere. Removing trees releases carbon dioxide into the

atmosphere and leaves behind fewer trees to absorb the increasing amount of carbon dioxide in

the air. In this way, deforestation exacerbates climate change. When trees are removed from

forests, the soils tend to dry out because there is no longer shade, and there are not enough

trees to assist in the water cycle by returning water vapor back to the environment.

RELEVANCE: It’s a big ambiguity to the Agriculture Industry whereas it is the most destructive

that will occur to the pattern of operations. Less carbon stored in the forest edges due to
increasing tree mortality will lead to an enormous treat to the Agriculture Industry.

Environment and Management System

This training provides a framework to help in developing an environmental management

system (EMS). They help ensure the integrity of the food chain by managing crops, enhancing

seed development, conducting soil testing and harvesting, moving products through the global

supply chain and managing trade inspection at export and import.

RELEVANCE: Having the EMS will help to improve sustainable development by improving

effective ways to conserve moving crops.

Legal Environment

The legal environment of business refers to the code of conduct that defines the legal

boundaries for business activity. To understand these boundaries, it is essential to first have a

basic understanding of the law and how it affects businesses and business practices.

Anti-Agricultural Smuggling Act of 2016

It is the policy of the State to promote the productivity of the agriculture sector and to

protect farmers from unscrupulous traders and importers, who by their illegal importation of

agricultural products, especially rice, significantly affect the production, availability of supply and

stability of prices, and the food security of the State.

RELEVANCE: Importers found in violation also face perpetual disqualification from importing

activity. Foreign violators for their part face deportation after serving the prescribed sentence.

Government officials involved in the illegal importation of agricultural goods face criminal liability

as well as perpetual disqualification from public office. This act is a factor in Agriculture Industry

considering that it will protect the corrupt traders and importers. Which will affect the production

of supply of its products and services.

Republic Act No. 3931 The National Water and Air Pollution Control Commission

It is hereby declared a national policy to maintain reasonable standards of purity for the

waters and of this country with their utilization for domestic, agricultural, industrial and other

legitimate purposes.

RELEVANCE: Agriculture Industry are concern when it comes to the people who are involve to

its operations. Employees and Consumer’s health and safety is subject to the health standards,

It’s a prevailing factor to the industry considering that it’s a greater aspect to the productivity.

Any such changes in laws and regulations could have a material adverse effect on the

Company’s business, financial condition and results of operations.

Republic Act 7394 The Consumer Act of the Philippines

It is the policy of the State to protect the interests of the consumer, promote his general

welfare and to establish standards of conduct for business and industry. This act recognize

protection against hazards to health and safety and involvement of consumer representatives in

the formulation of social and economic policies.

RELEVANCE: It is the policy of the State to protect the interest of the consumer, promote his

general welfare and to establish standards of conduct for business and industry. It is a big factor

in the industry because the major responsibility of a business is to ensure the consumer’s

general safety. Through the promotion of social and economic policies.

Republic Act No. 6727 Wage Rationalization Act

It is hereby declared the policy of the State to rationalize the fixing of minimum wages

and to promote productivity-improvement and gain-sharing measures to ensure a decent

standard of living for the workers and their families; to guarantee the rights of labor to its just

share in the fruits of production; to enhance employment generation in the countryside through
industry dispersal; and to allow business and industry reasonable returns on investment,

expansion and growth.

RELEVANCE: Legal Proceedings has an impact when it comes to Agricultural Workers to their

wages and salary. It is a big responsibility of the industry to ensure their theoretical justice when

it comes to their worker’s wages and salaries.

Republic Act No. 7875 National Health Insurance Act

It is hereby declared the policy of the State to adopt an integrated and comprehensive

approach to health development which shall endeavor to make essential goods, health and

other social services available to all the people at affordable cost and to provide free medical

care to paupers. Towards this end, the State shall provide comprehensive health care services

to all Filipinos through a socialized health insurance program that will prioritize the health care

needs of the underprivileged, sick, elderly, persons with disabilities (PWD), women and children

and provide free health care services to indigents.

RELEVANCE: This will be a big factor for the industry especially for their workers. It is

important to ensure their health and safety. While having doing their operations, the company

should provide health insurance.

Comprehensive Agrarian Reform Program, or RA 6657

It is the policy of the State to pursue a Comprehensive Agrarian Reform Program

(CARP). The welfare of the landless farmers and farmworkers will receive the

highest consideration to promote social justice and to move the nation toward sound

rural development and industrialization, and the establishment of owner cultivator-ship

of economic-size farms as the basis of Philippine agriculture.

RELEVANCE: To have an equitable distribution and ownership of land, with due regard to the

rights of landowners to just compensation and to the ecological needs of the nation, shall be

undertaken to provide farmers and farmworkers with the opportunity to enhance their dignity

and improve the quality of their lives through greater productivity of agricultural lands.

CHAPTER IV

INDUSTRY AND COMPETITOR ANALYSIS

This Chapter shows vital information about the industry and its competitors and the

factors affecting the rivalry. The Industry and Competitor Analysis Chapter explains the

competition between the players in the industry. This includes comparisons of market share and

market revenue in 2018 named below. Porter’s five forces of competitive analysis, Competitive

Profile Matrix (CPM) and the External Factor Evaluation were also presented.

INDUSTRY DEFINITION

The Food and Drink sector provides safe, quality, healthy and affordable food to millions

of people worldwide. Despite structural changes in the past decades the sector remains a large

source of manufacturing output and employment, particularly in developing countries where the

industry grew rapidly. Officially available statistics suggest that more than 22 million workers

were employed worldwide in food and drink manufacturing in 2008. These figures may increase

significantly if jobs throughout the entire food production system are counted.
 Overall, working conditions have gradually improved in the food and drink sector,

however there are a number of challenges to overcome in order to fulfill decent work in this

sector, including low labor productivity and low skills; limited social protection and other benefits;

occupational, safety and health issues at the workplace; gaps in working conditions between

female and male workers; and the need to strengthen social dialogue.

In the next decades the food and drink sector faces an unprecedented confluence of

pressures such as changes in supply and demand, climate change, food price volatility and food

security. These may also have a significant impact on current and future employment trends

and on working conditions in the sector.

Table 1

Major Players and Industry Ranking

Others 11.50%
Susan Baker 0.10%
Hoc Guan Mfg Corp 0.20%
ConAgra Brands Inc. 0.60%
AgriNurture Inc. 0.80%
Tosen Foods Inc. 0.80%
New Señorito Frozen 1.60%
McCains Foods 2.20%
SM Retail 2.20%
PTC Commercial Corp 2.50%
Cenmaco Inc. 2.80%
RFM 5.30%
Maple Leaf Food Royal 5.70%
Dole Philippines Inc. 19.60%
Del Monte Philippines 44.90%
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00%

Figure 4.1

(Source: Euromonitor Portal)

 CHOSEN COMPETITORS

1. Del Monte Pacific Limited

2. DOLE Food Company Inc.

3. AgriNurture Inc.

4. ConAgra Food Inc.

Table 4.1

The industry ranking shown in Table was obtained by the researcher through its Annual

Report that came from Security Exchange Commission. The researcher gathered the data of

each entity and ranked it according to its Market Share.

COMPETITOR ANALYSIS

Under this section of the research paper are the top three competitors of AgriNurture Inc.

and other information about their company that would be useful for the research.

AgriNurture Inc.

ANI serves the fresh needs of the leading retail & key institutional accounts in the

country, and also supplies homegrown fruits such as banana, sweet pineapple and papaya to

customers in the Greater China Region, Japan, Korea, and the Middle Eastern, European, and

North American Regions.

The company also engages in the manufacture and distribution of fruit beverages and

puree, dried fruit snacks, processed fruit mix, frozen fruits & vegetables, dairy and rice products.

ANI’s family of brands now includes FCA (Fresh Choice Always) for fresh and processed

wellness food products; La Natural for coconut juice and Nikka for mango nectar and tamarind

juices, all of which are exported; Sungrown rice; Superfresh and Big Chill for fresh fruit

beverages and dessert kiosks; Canecoctions for sugar cane juice; Chantilly for desserts; and
Cafeteria Verde, Fresh Bar by Big Chill, and C’Verde by Big Chill for healthy snack bar and

cafeteria. It has also entered into a master license agreement with Tully’s Coffee International

PTE LTD to operate Seattle’s famous Tully’s coffee shop in the Philippines.

COMPETITORS:

DOLE Food Company Inc.

Dole’s dedication to quality is a commitment solidly backed by: comprehensive programs

for food safety, scientific crop protection programs, stringent quality control measures, state-of-

the-art production and transportation technologies, continuous improvement through research

and innovation, and dedication to the safety of our employees, communities and the

environment.

Dole is committed to nutrition education to communicate to the public the health benefits

of eating a diet rich in fruits and vegetables. In the Philippines, Dole has introduced premium

quality, healthy food products in fresh and packaged foods. Its focus on health and nutrition

remains strong even as Dole continues to expand its healthy food products. Its product lines

range from canned pineapple solids, canned mixed fruits, canned beverages, packaged fruit

snacks to tomato and spaghetti sauces.

Del Monte Pacific Limited

Dual listed on the Mainboards of the Singapore Exchange Securities Trading Limited

and the Philippine Stock Exchange, Inc, Del Monte Pacific Limited (Bloomberg: DELM SP/

DMPL PM), together with its subsidiaries (the “Group”), is a global branded food and beverage

company that caters to today’s consumer needs for premium quality healthy products. The

Group innovates, produces, markets and distributes its products worldwide.

DMPL’s USA subsidiary, Del Monte Foods, Inc (DMFI) (www.delmontefoods.com) owns

other trademarks such as Fruit Naturals, Orchard Select, SunFresh and Fruit Refreshers. The
Group sells packaged fruits, vegetable and tomato, sauces, condiments, pasta, broth and

juices, under various brands and also sells fresh pineapples under the S&Wbrand.

DMPL is 67%-owned by NutriAsia Pacific Ltd and Bluebell Group Holdings Limited,

which are beneficially-owned by the Campos family of the Philippines. The NutriAsia Group is

the market leader in the liquid condiments, specialty sauces and cooking oil market in the

Philippines.

ConAgra Food Inc.

ConAgra Foods is a food company that operates in many sectors of the food industry,

with a significant focus on the sale of manufacturing, private branded, and value-added

consumer food, as well as foodservice items and ingredients. They use many different raw

materials, the bulk of which are commodities. The prices paid for raw materials used in making

their food generally reflect factors such as weather, commodity market fluctuations, currency

fluctuations, tariffs, and the effects of governmental agricultural programs. Although the prices of

raw materials can be expected to fluctuate as a result of these factors, it believe such raw

materials to be in adequate supply and generally available from numerous sources. From time

to time, they have faced increased costs for many of their significant raw materials, packaging,

and energy inputs. They seek to mitigate higher input costs through productivity and pricing

initiatives, and the use of derivative instruments used to economically hedge a portion of

forecasted future consumption.

They manufacture primarily for stock and fill their customer orders from finished goods

inventories. While at any given time there may be some backlog of orders, such backlog is not

material in respect to annual net sales, and the changes of backlog orders from time to time are

not significant.

MARKET SHARE ANALYSIS

 MARKET SHARE YEAR OF COMPETITORS
2016
80.00%
70.00% 68.29%
60.00%
50.00%
40.00%
30.00% 31.20%

20.00%
10.00%
0.00% 0.34% 0.17%
AGRINURTURE DOLE Food Del Monte Pacific ConAgra Food Inc.
INC. Company Lmited

REVENUE/SALES

Figure 4.2

2015
AGRINURTURE INC. 1,225,773,872.00 0.34%
247,258,899,421.7 66.41
DOLE Food Company 6 %
112,960,900,948.4 31.25
Del Monte Pacific Limited 5 %
ConAgra Food Inc. 606,644,992.09 0.17%
362,052,219,234.3
TOTAL 0

Table 4.2

The data below in Figure 4.2 shows the 4 companies (AgriNurture Inc., DOLE Food

Company, Del Monte Pacific Limited and ConAgra Food Inc.) with its industry in terms of Market

Share for the year 2016 based on their Revenues. In figure 4.2 DOLE Food Company

registered the highest percentage at 66.41% with Php247,258,899,421.76. Meanwhile, Del

Monte Pacific Limited has 31.25% with the Php112,960,900,948.45 which makes it to the
second spot. AgriNurture Inc. having 0.34% with the Php1,225,773,872 revenue/sales. And

lastly ConAgra Food Inc. having 0.17% with Php606,644,992.09 revenue/sales.

MARKET SHARE YEAR OF COMPETITORS

2016
70.00%
66.31%
60.00%
50.00%
40.00%
33.36%
30.00%
20.00%
10.00%
0.00% 0.16% 0.17%
AGRINURTURE DOLE Food Del Monte Pacific ConAgra Food Inc.
INC. Company Lmited

REVENUE/SALES

Figure 4.3

2016
AGRINURTURE INC. 570,848,924.00 0.16%
232,838,993,076.3 66.31
DOLE Food Company 8 %
Del Monte Pacific 117,152,878,495.4 33.36
Lmited 0 %
ConAgra Food Inc. 591,652,973.44 0.17%
351,154,373,469.2
TOTAL 2

Table 4.3

The data below in Figure 4.3 shows the 4 companies (AgriNurture Inc., DOLE Food

Company, Del Monte Pacific Limited and ConAgra Food Inc.) with its industry in terms of Market

Share for the year 2016 based on their Revenues. In Figure 4.3 DOLE Food Company

registered the highest percentage at 66.31% with Php232,838,993,076.38. Meanwhile Del

Monte Pacific Limited has 33.36% with the Php117,152,878,495.40 which makes it to the

second spot and ConAgra Food Inc. which has 0.17% with Php591,652,973.44. And lastly

AgriNurture Inc. has 0.16% with Php570,848,924.00 revenue/sales.

MARKET GROWTH RATE

MARKET GROWTH YEAR OF COMPETITORS

2016
250,000,000,000

200,000,000,000

150,000,000,000

100,000,000,000

50,000,000,000

0
AGRINURTURE DOLE Food Del Monte Pacific ConAgra Food Inc.
INC. Company Limited
-50,000,000,000

NET INCOME REVENUE TOTAL ASSETS

Figure 4.4
 The data above in Figure 4.4 shows the 4 companies (AgriNurture Inc., DOLE Food

Company, Del Monte Pacific Limited and ConAgra Food Inc.) with the its industry in terms of

Total Assets, Revenue and Net Income. In Figure 4.4 in terms of Net Income Del Monte

Company registered the highest, with a Net Income of Php2,816,143,338. Meanwhile, DOLE

Food Company has Net Loss of (Php1,186,077,346), AgriNurture Inc. has a Net Loss of

(Php145,185,689) and ConAgra Food Inc. has also a Net Loss of (Php33,795,670.58).

Target Market Segmentation of the Industry

For the new product, segmentation’s bases for the industry itself, that would be relevant

for segmentation would be Age and life-stage, lifestyle and Benefits segmentations. Customers’

pattern of consumption differ by age like an adolescent will a buy a product depending on the

amount the latter gets form his/her parent while a young adult working would not depend on

his/her parent to buy a product. On the other hand, customers (LUZON, VISAYAS &

MINDANAO) determine their consumption pattern on the basis of their lifestyle that is whether

they are culture-oriented, sport-oriented or outdoor-oriented. Moreover, consumers are seeking

much on the benefits offered by fruit juice like taste and quality that promotes healthiness and

safety.

Channel Distribution for Processed Fruits and Vegetables in Philippines

 Figure 4.5

Michael Porter’s Five Forces of Competitive Analysis

Michael Porter’s Five Forces of Competitive Analysis is an analysis tool that uses five

industry forces to determine the intensity of competition in an industry and its profitability level. It

is created to understand how five key competitive forces are affecting an industry. The five

forces determine an industry structure and the level of competition in that industry.
 Bargaining Power of Suppliers
Threat of New Entrants
No. of Sources
Capital Requirement
Number of suppliers
Government and Legal Barriers
Switching Cost
Product Differentiation
Distribution Channel

RIVALRY AMONG COMPETITORS

Similar Line of Products
Customer Preference
Customer Loyalty

Threat of Substitutes
Bargaining Power of Buyers Customer Value
Buyer Concentration Health of the Consumer
Volume of Buyers Switching cost
Similar Product Line
Many Substitute

Figure 4.6

1. THREATS OF NEW ENTRANTS – LOW; Table 4.4

Factors Analysis
 The competition for new entrants is weak
 Capital Requirement considering that by entering the Food,
 Government and Legal Beverage and Tobacco Industry is arduous to
Barriers enter. Pondering the capital requirement
 Product Differentiation needed in the company to startup by
 Distribution Channel
 The Government and Legal Barriers are
 The existing companies can create new
 The Distribution Channel have a broad
2. RIVALRY AMONG THE COMPETITORS – HIGH; Table 4.5
Factors
 Similar Line of Products
 Customer Preference
 Customer Loyalty
purchasing machineries, equipment and the
channels of distribution necessary to allocate
the products is difficult to enter.
tough to negotiate it will need to have
numerous papers to secure. The Industry
operates its businesses in a highly regulated
environment that requires secure license
and/or permits from government agencies
which what other New Entrants will need to
acquire.
products that the customers will patronize
because they already verified their names in
the Industry.
market base, they sell its products both local
and international markets and in various
channels of distributors such as supermarket
chains, groceries, hotels, restaurants,
canteens, wet markets and traders. The
Industry must engaged in land transportation
and carriage of passengers, goods and
merchandise which helps their channel of
distribution easier. New Entrants will have a
hard time to produce a product that will make
the customers patronize.
Analysis
 Competing with large manufacturers or
companies is not that easy. Competitors can
easily promote their product and services by
commercials or advertisements that can be
an advantage to access the market share
they have. There are major competitors in
the industry, the success of the competitor’s
rests on the high recall of key brands, the
players in the industry, which have been
attained through years of promotions.
 Their use of flanker brands allows these
companies to cater to price-conscious
consumers, while also protecting their key
brands from competitors, which could steal
share through low price positioning. The
industry’s competitors can produce new

3. BARGAINING POWER OF THE BUYERS – LOW; Table 4.6
Factors
 Buyer Concentration
 Similar Product Line
 Volume of Buyers
 Many Substitute Products
4. THE THREAT OF SUBSITUTES PRODUCTS – LOW; Table 4.7
Factors
 Customer Value
 Health of the Consumer
products and services, in similar with the line
of the products of the companies.
 Nevertheless, the industry must be a well-
known for its high quality products and well-
known brands in the local and international
markets. They must be considered as one of
the leaders in the food
production/manufacturing and distribution
industry. The industry also has largely price
sensitive and driven by product quality and
brand loyalty by their consumers. The
consumers’ preference for foods that
counters with healthier lifestyle will give them
the idea of choosing more high quality and
reliable product and they became loyal to the
companies who are offering it.
Analysis
 This force looks at the power of the consumer
to affect pricing and quality.
 Retail Market or Groceries are the primary
buyers of the Manufacturing Companies;
Food, Beverage and Tobacco. Retail &
Franchising which the industry intends to
expand in order to secure supply and
maintain export buyers prefer despite of
having similar products line with the major
players within the industry. Since some
buyers who value the quality and reliability of
the product and its delivery above the price.
The emerging Industry Trends are geared
towards health and wellness which some
buyers are ensuring that the product provided
is top of the line.
Analysis
 Health of The Consumer counters poor health
caused by busy lifestyle, insufficient exercise
 Switching cost
5. THE BARGAINING POWER OF THE SUPPLIERS – LOW; Table 4.8
Factors
 No. of Sources
 Number of suppliers
 Switching Cost
and fast food consumption. Hence
consumers are increasingly choosing
naturally healthy foods such as fruits and
vegetables, organic and natural are
increasing becoming hot, which consumers
willing to pay a premium for these products
over the commercially ones, so the industry
are establishing system of product that is
product quality guaranteed so it’s not a
difficulty for them securing consumer’s health.
Customers know if it is safe or not. The
consumers also conscious when it comes to
their health, so tendency is they chose
healthier foods that the industry is offering.
 Consumers tend not to switch to other brands
that are offering the same products because
of the quality that others are offering. The
current substitutes for agricultural products
are food supplements and other vitamins
which clearly are priced higher than the
current commodities provided by the
agricultural sector. The effect of these
substitutes is also not yet proven to be more
effective than the natural and organic
products offered by the industry
Analysis
 The industry has numerous number of
sources and suppliers. The players within the
industry engaged in the management of the
Company’s Farms with its objective of making
the farms the primary source of supply of its
industry.
 It is also engaged in corporate farming in the
provinces which also gives the sources and
supplies of their products. And by supplying
them agricultural products. Considering this it
only reflects that they have enough number of
suppliers and sources.
 The industry can definitely adjust with
switching cost when it comes to their
suppliers with no effects because they have
numerous numbers of sources to acquire.
Competitive Profile Matrix

The critical success factors (CSF) are the key areas, which must be performed at the

highest possible level of excellence if organizations want succeed in the particular industry.

These factors vary between different industries and include both internal and external factors.

Each critical success factor assigned a weight ranging from 0% (low importance) to

100% (high importance). The number indicates how important the factor is in succeeding in the

industry. The sum of all the weights must equal 100%. The most significant factor is the

management qualification and experience.

The ratings in CPM refer to how well companies are doing in each area. The researcher

makes a range from 5 to 1, where 5 means a major strength and 1 major weakness. Ratings, as

well as weights, are assigned subjectively to each company

COMPETITORS
AgriNurture
Critical Success Weight Inc. DOLE Ph. Del Monte ConAgra
Inc. Pacific Inc.
Limited

RANK AS RANK AS RANK AS RANK AS

1. Market Share 0.20 2 0.4 4 0.8 3 0.6 1 0.2

2. Innovation of 0.20 3 0.8 4 0.8 4 0.8 3 0.6

Products and
Services
3. Financial 0.15 2 0.3 4 0.6 3 0.45 2 0.3
Position

4. Net Income 0.15 2 0.3 2 0.3 4 0.6 2 0.3

5. Distribution 0.15 3 0.45 4 0.6 4 0.6 4 0.6

Network

6. Brand 0.10 2 0.2 4 0.4 4 0.4 3 0.3

Reputation

7. Effective 0.05 4 0.2 4 0.2 4 0.2 4 0.2

Corporate
Social
Responsibility
TOTAL 1.00 2.65 3.70 3.65 2.50
Summary Analysis:

The CPM Analysis reveals that DOLE Food Company is the stronger competitor of

AgriNurture Inc. with relative strengths in Effective Corporate Social Responsibility, Brand

Reputation, Innovation of Products and Services, Financial Position, Market Share, Net Income

and Distribution Network. On the other hand, Del Monte Pacific Limited also prevails and

ConAgra Food Inc. is also trying it’s preeminent to compete. While AgriNurture Inc. has a weak

rating in Financial Position, Market Share and Net Income with its relative competitors. The

companies should create their strategies according to their strengths and weakness and

improve their ratings in the most significant industry’s areas.

Market Share = 20%

AgriNurture Inc., DOLE Food Company and Del Monte Pacific Limited with its industry in

terms of Market Share for the year 2018 based on their Total Assets. In terms of Financial

Assets, DOLE Food Company has the highest amount with Php150B while Del Monte Pacific

Limited comes seconds having P139B AgriNurture Inc. with Php2B, and last ranked is

ConAgra Food Inc. has Php680M.

Products and Services = 20%

AgriNurture Inc. is not limited to their range of products and services, they engage in

the export trading and distribution of fruits, vegetables, and other agro products in the

Philippines and internationally. It offers homegrown fruits, such as banana, sweet pineapple,

and papaya, as well as mango and coconut water; and manufactures and distributes fruit

beverages and puree, dried fruit snacks, processed fruit mix, frozen fruits and vegetables, and

dairy and rice products the reason why it is ranked highest. Del Monte offers engaged in

growing, processing, developing, manufacturing, distributing, marketing, and selling packaged

fruits and vegetables, canned fished and fresh pineapple, pineapple concentrate, tropical mixed

fruit, tomato-based products which is also ranked as one of the highest. DOLE Ph. Inc.

continued its tradition of diversification and innovation, introducing a line of packaged fresh

vegetable products such as bananas, pineapples (fresh and packaged), grapes, strawberries,

salads, and other fresh and frozen fruits and juices. The convenience of precut vegetables and

salads appealed to consumers and soon became the fastest-growing division in grocery stores.

And the ConAgra Food Inc. best-known brands includes Hunt's tomato products, Healthy

Choice, Banquet meals, Armour meats, Bumble Bee tuna, Louis Kemp seafood, La Choy, Chun

King, Lunch Makers, Wesson, Country Pride, Blue Bonnet, Kid Cuisine, Parkay, Reddi-wip,

Marie Callender's, Cook's ham, Butterball, Act II, Slim Jim, Decker, Chef Boyardee, Orville

Redenbacher's, PAM Cooking Spray, Snack Pack puddings, Van Camp's, Peter Pan, Hebrew

National, Gulden's mustard, Pemmican Jerky, Swift Brown 'n Serve Sausages, Swiss Miss, and

many others.

Financial Position = 15%

Financial position is a significant part of the success of a company because it defines

how much a company has been able to perform for the previous year. Assets and gross

revenue are two examples of the factors to determine a company’s financial position.

The following companies of Savory Snack Industry have a good trend when it comes to

company’s revenues year by year. DOLE Food Company as it has the highest gross revenue

with Php232,838,993,076.38. Del Monte Pacific Limited ranked as the second with

Php117,152,878,495.40, ConAgra Food Inc. ranked as the third with Php591,652,973.44 and

AgriNurture Inc. in the fourth ranked having Php570,848,924.00. Increase in gross revenue of

a couple percent shows upward movement and a strong financial outlook.

Net Income = 15%

The following companies had their ups and downs when it comes to their Net Income

(LOSS). AgriNurture Inc. had a net loss of (Php145,185,689), DOLE Food Company had a
net loss of (Php186,077,346), ConAgra Food Inc. has a net loss as well of (Php33,795,671)

and Net Income for Del Monte Pacific Limited is Php2,816,143,338.

Distribution Network = 15%

The three companies (DOLE food company, Del Monte Pacific Limited and ConAgra

Foods Inc.) are ranked as highest since most of their products are available and can be

purchased in any distribution networks. And AgriNurture Inc. ranked second.

AgriNurture Inc. has their Domestic Distribution and in Retail and Franchise Division,

engages in the commercial distribution of fresh fruits and vegetables, dairy products and grains

to key retail accounts in the country, as well as in the wholesale trading and distribution of

commercial crops through trade channels such as hotels, restaurants, public wet markets and

catering companies. As well as Export Distribution to Asia, Middle East, North America and

Europe.

The RFM Corporation, has around 35 distribution channels nationwide. RFM Corp. has

entered into an exclusive distribution partnership with fruit grower and manufacturer Dole

Philippines. DOLE Ph. Inc. and RFM Corp. has entered into an exclusive distribution

partnership with fruit grower and manufacturer Dole Philippines. The move of Dole to let RFM

distribute its products was meant to consolidate its selling efforts into one major distributor to

have a “more cost–efficient and simpler but more cohesive sales and distribution system that

should lead to better placements and sales revenues for Dole products.

Del Monte Pacific Limited has strong distribution network in the Philippines. It will

definitely open new doors for further collaboration and will allow both companies to seize more

opportunities to enlarge our respective markets.

ConAgra Food Inc., one of the world's largest branded food companies, and Sigma

Alimentos (Sigma), a leading Mexican refrigerated and frozen food marketer, announced today

creation of a frozen foods joint venture. ConAgra Foods is acquiring 50 percent of Sigma's

frozen prepared foods subsidiary, Sigma Alimentos Congelados, S.A. de C.V., as part of the
joint venture. Sigma retains ownership of the other 50 percent. Terms of the transaction were

not disclosed. They also have their brands in several supermarkets here in the Philippines.

Brand Reputation = 10%

Each companies mentioned have grown to become one of the leading manufacturers in

the country. All of them had gained their reputation for becoming one of the well-liked brands in

the country. AN’s Group is effort to strengthen brand recognition and for purposes of brand

protection, the group has registered its trademarks with the Intellectual Property Office of the

Phlippines (IPO) and expects the registration of additional trademarks with the expansion of its

product folio and service. That is well-known brands in both local and international markets. It is

considered as one of the leaders in the food production/manufacturing and distribution industry.

While DOLE Ph. Inc. Best known for its pineapples, Dole Food Company, Inc. promotes its

Dole brand of fresh and packaged food and nonfood products through what it calls its 'Dole

Standard.' With its fully integrated operations of sourcing, growing, processing, distributing, and

marketing, it is the world's largest producer and distributor of fresh fruits and vegetables. Del

Monte Pacific Limited has its heritage brands - Del Monte, S&W, Contadina and College Inn –

majority of which originated in the USA more than 100 years ago as premium quality packaged

food products. The Group has exclusive rights to use the Del Monte trademarks for packaged

products in the United States, South America, the Philippines, Indian subcontinent and

Myanmar, while for S&W, it owns it globally except Australia and New Zealand. The Group

owns the Contadina and College Inn trademarks in various countries. And ConAgra Food Inc.

is one of the world's largest and most successful food companies. As North America's largest

foodservice manufacturer and second largest retail food supplier, ConAgra is a leader in

multiple segments of the food business and focuses on adding value for customers in retail

food, foodservice, and agricultural product channels.

Effective Corporate Social Responsibility = 5%

All companies are presenting Effective Corporate Social Responsibility ANI’s Group are

focusing on its long-term strategy for sustainability and continuity. Basic Social Services, ANI

conducts Medical and Dental Missions for marginalized people. They also undertake Tree

planting and clean-up activities. Giving Full Scholarships to deserving students pursuing BS

Agriculture. They also have Research and Development that is working with local and foreign

partners to conduct field trials and testing high-value and high-yielding varieties of foods and

crops. Capability Building for Indigenous People, Disaster Relief During Emergencies for

affected families. The competitors; Del Monte Pacific Limited engrossed with operate with

integrity and innovation, stewardship of natural resources and enrich people’s lives. DOLE Ph.

Inc. is committed to offering employees education, protection and necessary tools for personal

growth and development in their communities. And ConAgra Food Inc. is giving back to

communities, sourcing ingredients in a responsible way and being a caretaker of the

environment, they bring these commitments to life by embedding integrity into their sustainable

business practices and developing innovative programs that deliver on our promise of being a

leading corporate and community citizen.

External Factor Evaluation (EFE) Matrix

The external factor evaluation (EFE) matrix is used to show all the identified opportunities

and threats in the analysis of the external environmental, industry, market, and trends that the

company is involved

The opportunities and threats, which are selected based on its impact and relevance to

the company’s growth and performance against its competitors and outside forces in the

company, and the level of responsiveness of the company.

The ratings in external matrix refer to how effectively company’s current strategy

responds to the opportunities and threats. The numbers range from 4 to 1, where 4 means a
superior response, 3 – above average response, 2 – average response and 1 – poor response.

Ratings, as well as weights, are assigned subjectively to each factor.

Key External Factors Weight Rating Score SOURCES

Opportunities
1. ASEAN Economic Community Integration Political Factor
which may encourage more exports of Fruits and
Vegetables to complement the need for benefiting
from accelerating production, manufacturing,
distributing which can help to boost the
Agribusiness in ASEAN Countries. 15% 3 0.45
2. Anti-Agricultural Smuggling Act of 2016. Legal Factor
This act is an opportunity in Agriculture Industry
considering that it will protect the corrupt traders
and importers. Which will affect the production of
supply of its products and services. 10% 4 0.4
3. New technology that helps the Food, Beverage Technological Factor
and Tobacco Industry to better meet their
customer’s needs. (Korean Farm Machines are
coming)

10% 3 0.3
Legal Factor

4. Free Trade Agreement. When barriers are fully

eliminated, Agriculture Industry will be more
anticipated which will help to boost trading
operation. 5% 2 0.1
5. Consumer’s Health. Health of The Consumer Economic Factor
counters poor health caused by busy lifestyle,
insufficient exercise and fast food consumption.
Hence consumers are increasingly choosing
naturally healthy foods such as fruits and
vegetables, organic and natural are increasing
becoming hot, which consumers willing to pay a
premium for these products over the commercially
ones, so the industry are establishing system of
product that is product quality guaranteed so it’s
not a difficulty for them securing consumer’s
health. 10% 3 0.3

Threats
1. Climate change, frequent typhoons, and Environmental Factor
Natural Calamities. Inclement weather is
traditionally a major source of uncertainty in the
agriculture industry. Its inherent volatility and the
occurrence of extreme weather events due to
global climate change impacts greatly the
performance and management of the Company’s
farming and trading operations 10% 1 0.1
2. Pest and Insect Infestation that affects both Environmental Factor
the quantity and quality of commodities
available in the market. If not addressed
appropriately, infestation may translate to
decreased crop yield and farm output, as well as
uncertainty in commodity prices. Infestation may
also render the Company‘s products unacceptable
to both domestic and export products, and could
adversely affect its results of operations. 10% 1 0.1
3. The COVID-19 pandemic is a global health Economic Factors
crisis that is already having devastating impacts
on the world economy the virus poses a serious
threat to food security and livelihoods in the
poorest countries, where agricultural production
systems are more labor-intensive and there is less
capacity to withstand a severe macroeconomic
shock. Because food is a basic necessity, the level
of food demand should be affected less by the
crisis than the demand for other goods and
services. However, there has been a major shift in
the structure of demand, with a collapse in demand
from restaurants, hotels and catering, the closure
of open markets, and a surge in demand from
supermarkets. There are signs that businesses
along the food chain are already adapting to shifts
in demand

15% 2 0.3
4. Weakening of peso / Declining value of local Economic Factor
currency. Since some of the AgriNurture Inc.’s
imports their products from outside the Philippines,
a weakening peso is a threat since cost of goods
sold converted into peso becomes higher.
AgriNurture Inc. fully hedges its foreign exchange.
The company's policy must not allow for such
volatility risks. 5% 2 0.10
5.Interest Rate. Philippine economy would be Economic Factor
affected by the increase in interest rate considering
that it would result to having less investor in the
Philippines. Interest expenses on holding inventory
would have a significant impact on farm profitability
and associated agribusinesses. 5% 2 0.10
Grand Total 100% 2.25
poor response (1), average response (2), above-average response (3),
superior response (4)
 CHAPTER V

COMPANY ANALYSIS

This Chapter presents an internal analysis of the company’s operations and financial

performance, and also identifies its strengths and weaknesses, and how they respond to the

internal and external factors they are facing.

Mission and Vision

Company Vision

A global leader in providing nourishment from farm to plate

Vision Statement Evaluation

The parameters that serve as guidelines in the evaluation of the vision statement

of the company are presented in Table 5.1.

Table 5.1

Parameter Yes or No

Does it clearly answer the question: What No AgriNurture Inc.’s vision

do we want to become? statement does not clearly
states what it wants to
become.
Is is concise enough yet aspirational Yes The vision is concise to
what it describes. And
using the “providing
nourishment” gives the
inspiring part.
Is it aspirational? Yes Since it is emphasized that
from “farm to plate” theme,
it is aspirational to the
company to pursue the
process of farming to
household place.
Does it give clear indication as to when it No Considering that they will
should be attained provide nourishment for
the Filipino citizens to have
a healthy lifestyle but it
does not shows or tells
when it will aims it vision.
Summary Analysis:

The vision statement of the AgriNurture Inc. is clear that it wants to be the customers’

choice and wants to indicate a global leader in providing nourishment from farm to plate. It is

concise to what it describes, using the “providing nourishment” gives the inspiring part and also

it shows that the company to pursue the process of farming to household place. But there is no

clear indication as to when it should be attained.

Company Mission

 Supply quality and affordable products within market reach.

 Apply modern technologies to address from productivity, food security and food safety.

 Enhance stakeholder’s value.

 Promote advocacies for environmental and social upliftment.

 Foster national Pride

Mission Statement Evaluation

The parameters that serve as guidelines in the evaluation of the vision statement of the

company are presented in Table 2.

Mission Statement Evaluation Matrix

Table 5.2

Parameter If yes, which part of the statement

Customers No It does not indicate anything about the
customer
Product Services Yes Supply quality and affordable products.

Markets Yes Supply quality and products within market

reach.
Technology Yes Apply modern technologies to address the
production of its products. They use farm
machineries and equipment.
Concern for Survival Growth Yes Enhancing the stakeholder’s value.
Profitability
Philosophy Yes They promote advocacies for environment
and social upliftment.
 Self-Concept Yes They have environmental concerns and
more affordable products.
Concern for employees No It is not stated in the mission.

Concern for nation building Yes They promote environment and social
upliftment.

Background of the Company

AgriNurture, Inc. (the Parent Company or ANI) was registered and incorporated with the

Philippine Securities and Exchange Commission (SEC) on February 4, 1997 primarily to engage

in the manufacturing, producing, growing, buying, selling, distributing, marketing at wholesale

only insofar as may be permitted by law, all kinds of goods, commodities, wares and

merchandise of every kind and description and to enter into all kinds of contracts for the export,

import, purchase, acquisition, sale at wholesale only and other disposition for its own account as

principal or in representative capacity as manufacturer’s representative, up consignment of all

kinds of goods, wares, merchandise or products, whether natural or artificial. In 2009, the SEC

approved the change in the Parent Company’s primary purpose to engage in corporate farming,

in all its branches for the planting, growing, cultivating and producing of crops, plants and fruit

bearing trees, of all kinds and in connection to engage in agri-tourism and other pleasurable

pursuits for the enjoyments and appreciation of mother nature and ecology and to engage in the

establishment, operation and maintenance of equipment, structures and facilities for the

preservation, conservation and storage of foods, grains and supplies, like cold storage and

refrigeration plants.

The Parent Company’s secondary purpose include, among others, to purchase, acquire,

lease, sell and convey real properties such as lands, buildings, factories and warehouses and

machines, equipment and other personal properties as may be necessary or incidental to the

conduct of the corporate business, and to pay in cash, shares of capital stock, debentures and

other evidences of indebtedness, or other securities, as may be deemed expedient for any
business or property acquired by the Parent Company.

The Parent Company and its subsidiaries (collectively referred to as the Group) are

involved in various agro-commercial businesses such as export trading and distribution of fruits

and vegetables, and retail and franchising.

Mckinsey 7s Framework

Mckinsey 7s Framework is a tool that analyzes firm’s organizational design by looking at

7 key internal elements: strategy, structure, systems, shared values, style, staff and skills, in

order to identify if they are effectively aligned and allow organization to achieve its objectives.

Figure 5.1

STRATEGY

1. What is the company’s strategy?

ANI recast its business structure, from adopting a purely farm-to-market trading business

model into utilizing a “farm-to-plate”-based concept –supported by full forward and backward

integrations. As a result, ANI’s breadth of operations has consequently expanded, providing a

strategic advantage hinged on the synergy of all business activities, from farming, packing,

trading, distribution, manufacturing and processing, up to sales and retail operations. This

unique and competitive agri-business model has put ANI in the best position to promote private
sector participation in agriculture as both a viable business opportunity and as an effective tool

for nation-building.

The company’s strategy is they focus on export-trading business both local and foreign.

IMEX is a wholly subsidiary of ANI that is engaged in manufacturing and processing, likewise

the strategy of the company by acquiring IMEX is to serve overseas demand. The Local

Distribution Group will undertake aggressive expansion of its product portfolio. It intends to

launch new products such as processed foods, grains and condiments.

The company’s strategy by acquiring their wholly-owned subsidiary of Best Choice

Harvest Agricultural Corporation (BCH) is because it engaged in management of Company’s

farms in Luzon and Mindanao, they used it as primary source of supply for their company.

ANI acquires Fruitilicious because it operates a cold storage facility, blast freezing and

food processing facility which helps the company to produce frozen and dried fruit products for

local and international clients.

The company also acquires The Big Chill Inc. that engaged in business of selling on

retail, beverages and other food products that operates 45 outlets, that completes the innovative

“farm-to-plate” business model of the Company that strategized of all company’s fruit and

vegetables business. It is the strategy of the company to expand further the retail franchise

opportunities in direct sales of License Agreements as well as the sale of profitable existing

locations to qualified buyers.

Their strategy when something happens for each of its facilities and inventories against

variety of risk including fire, lightning, catastrophic, perils (typhoons, floods, earthquake,

volcanic eruption), explosion, civil commotion, riot/strike, malicious damage, and other perils

liability. Company provides a strategy for this by maintaining various general liability and product

liability insurance policies covering its operations. The Company’s Insurance policies are

provided by leading Philippine Insurance companies that are generally registered by major

international insurance companies.

 2. How do the company intend to achieve their objectives?

By establishing more reliable local supplier and manufacturer of conveyor systems and

other equipment they used. They have their Company’s Export Group that is in charge of

looking for markets abroad as well as sourcing the best quality possible to satisfy its growing

number of clients. To be able to achieved their objectives they want to boost revenues by

starting to explore through new and innovative distribution methods such as direct selling

approach to address consumers and institutional buyer’s need for fresh produce amidst

problems on lack of proper storage.

3. How do the company deal with competitive pressure?

The fresh produce export business has established player. However, ANI intends to

expand its corporate banana plantations and enter into corporate pineapple plantation in order

to secure supply and maintain quality of ANI export buyers prefer.

The Retail Group competes in the fresh fruit shake and specialty coffee categories.

Flagship brands Big Chill and Tully’s Coffee both cater to A, B, and Upper C market segments

with high purchasing power, strategizing both brands with multiple opportunities for growth and

expansion.

They noted trend in the Industry that is the consumer’s preference for foods that

counters poor heath caused by busy lifestyles, insufficient exercise and fast food consumption.

Hence, costumers are increasingly choosing naturally healthy foods such as fruits and

vegetables. To maintain its position in the market and to ensure continuing acceptability of its

agricultural product the Group established a reasonable system of product traceability. Through

this practical system, controls are put in place for the identification and tracking of produce. And

with full integration of operations, supply and product quality is guaranteed.

4. How are changes in customer demands dealt with?

 The company’s strategy when it comes to their customers is that they don’t depend to

any single customer when it comes to Export groups and Retail Groups amounting for more

than 43% and 13% respectively. Considering that they tend to have other resources.

Changes in customers’ demand dealt by the company when the demand and supply of

fruits and vegetables is seasonal and the price of commodity may change significantly,

depending on season. Company diversified its source of products geographically such that

seasonal fluctuations in one region can offset to those in another region. The setting-up of

additional cold storage facilities allows the company to stock up on certain produce when they

are ‘in season’ and therefore in relatively inexpensive when customers don’t demand for it. And

thus such produce can be sold in the market when they are ‘off season’ and can command

higher prices and provide wider gross margins for the consumers who are demanding on it.

5. How is the company’s strategy adjusted for environmental issues?

The company’s strategy for environmental issues is subject to a number of employee

health and safety regulations in the Philippines. The company is subject to the occupational

safety and health standards promulgated by the Philippines Department of Labor and

Employment. The company believes that a safety and health work environment is fundamental

to the management group responsible for formulating, implementing and enforcing Company’s

employee health and safety policies as a well as ensuring compliance with applicable laws and

regulations.

Their strategy also subject to various laws and regulations concerning the discharge of

materials into the environment. The Company is subject to intensive regulation by the Philippine

Department of Environment and Natural Resources.

STRUCTURES

1. How is the company or team divided?

The Company are divided into Four Major Division; Farming, Manufacturing, Distribution

and Retail & Franchising.

The Farming Group’s sales to its sister company’s accounts for more than 20% of its total

business.

The Manufacturing group does not depend on any single customer which accounts for more

than 20% of its total business.

The Distribution Group’s local sales to leading supermarket chain accounts for more than

20% of its total local distribution business. For its export market, it does not depend on any

single customer

The Retail Group does not depend on any single customer which accounts for more than 20%

of its total business.

The Farming Group is engaged in rice production, fruit and vegetable production, joint-

venture farming and contract growing. It is also engaged in the distribution of farm inputs such

as seeds, fertilizers, pesticides, greenhouse technology, and farm machineries and equipment.

The activities of the Farming Group are undertaken by its four (4) divisions: Vegetables, Fruits,

Grains and Inputs/Equipment Trading.

The Manufacturing Group operates M2000 Imex in Bulacan and Fruitilicious in

Cagayan de Oro through its Manufacturing Division. M2000 Imex is the subsidiary engaged in

the manufacture and processing of branded and toll-manufactured fruit beverages such as

Mango Nectar, Tamarind Juice, and La Natural Coco Juice. Meanwhile, Fruitilicious serves the

frozen and processed fruit requirement of food manufacturers and processors both in the local

and export market. The plant, situated within the fruit-bountiful provinces of Bukidnon, Davao,

Lanao del Norte and Agusan del Sur, also serves as ANI’s logistics and sourcing hub for its

Visayas and Mindanao operations.

DISTRIBUTION:

Domestic Distribution engages in the commercial distribution of fresh fruits and

vegetables, dairy products and grains to key retail accounts in the country, as well as in the

wholesale trading and distribution of commercial crops through trade channels such as hotels,
restaurants, public wet markets and catering companies. These are being done through its three

subsidiaries, First Class Agriculture Corportion (FCA), Fresh and Green Harvest Agricultural

Company, Inc. (FG), and Lucky Fruit and Vegetables Products, Inc. (LF), all under its Domestic

Distribution Division.

Export Distribution of mangoes, bananas, pineapples and other tropical fruits and

vegetables to Asia, Middle East, North America and Europe. To meet the stringent quality

requirement of the export market for fresh mangoes, ANI also invested in VHT (Vapor Heat

Treatment) and WHT (Water Heat Treatment) facilities in Taguig and is being operated through

its subsidiary Hansung Agro. The company also has offices in Australia, Spain and Netherlands

and offer fresh produce available in their regions.

Retail and Franchising Division, to complete the full integration of its operations, ANI

engages in the management and operation of SuperFresh shakes and dessert kiosks through

its Retail & Franchise Division. SuperFresh utilizes fresh products of ANI as key components of

its offerings. To expand and complement the product portfolio of ANI and to capitalize on the

growing demands of Filipinos for other food categories, ANI recently acquired The Big Chill, a

corporation engaged in the business of selling beverages and food products under the following

brands: Big Chill for fresh fruit beverages and dessert kiosks; Canefusion for sugar cane juice;

Fresh Bar and C’ Verde for healthy snack bar; and Chantilly for dessert concoctions. ANI also

forged an agreement with Seattle’s famous Tully’s Coffee International to develop and launch

Tully’s Coffee houses in the Philippines. It offers specialty coffee drinks, handcrafted coffee

products and baked goods to the Filipino market. Through Tully’s and other retail channels ANI

will soon operate, fresh and premium quality products will be made more accessible to the

consumers as these retail channels will also pave the way for the cross-merchandising of some

of ANI’s existing and soon-to-launch products.

 Figure 5.2

2. What is the hierarchy?

Figure 5.3

3. How do the various departments coordinate activities?

All the Groups described referred to collectively as the “ANI GROUP”. All various

departments coordinate their activities by the Lucky Fruit considering that it is a wholly-owned

subsidiary of ANI and it acquires Goods and Nutrition for All Inc. (GANA) strategized by

engaging it to operate, conduct and maintain the activities of each divisions of Manufacturing,
Importing, Bartering, Distributing, Selling on wholesale or retail and otherwise dealing in all

kinds of goods, commodities, merchandise and wares. For them to be easier and well conduct.

4. Is decision making and controlling centralized or decentralized?

The decision making and controlling is Centralized where is said to be a process where

the concentration of decision making is in a few hands. No single person or employee are

expected to make significant contribution to the business since the Company considers the

collective efforts of all its employees as instrumental to the overall success of the Company’s

Performance.

5. Where are the lines of communication? Explicit and implicit?

The lines of Communication in the company is Explicit where it is fully and clearly

express something, leaving nothing implied. To be able for the company to have the easiest

way and clearly to communicate, their strategy to acquire Qualis Logistics and Transport

Services Inc. for 51% engaged in land transportation for the transportation and carriage of

passengers, goods and merchandise within any place in Philippines. And as of International

distribution, ANI has operations in different countries like Hong Kong/China, Australia and

Europe.

SYSTEMS

 What are the main systems that run the organization? Consider financial and HR

systems as well as communications and document storage.

The company observes an “open line” type of communication with all its suppliers,

maintaining 24/7 constant coordination and accessibly with key personal including the

Company’s Top Management. This enables the Purchasing Division to realign sourcing

activities and locations in a timely and appropriate manner.

The customer relationship system where introduced and taught by the HR department

through variety of trainings. But more of them conduct seminars that teaches them how to be
more profitable. They make sure that every employee is prepared and well educated about the

company policies in dealing with customers especially their rule in answering their telephone for

customers.

 Where are the controls and how are they monitored and evaluated?

ANI’s Group are being monitored and evaluated by measuring or determining the level of

compliance of the Board of Directors and top-level management with its Manual on Corporate

Governance (the “Manual”), the Company shall establish an evaluation system composed of the

following:

1. Self-assessment system to be done by Management.

2. Yearly certification of the Compliance Officer on the extent of the Company’s compliance

to the Manual.

3. Regular committee report to the Board of Directors.

4. Independent audit mechanism wherein an audit committee, composed of three (3)

members of the Board, regularly meets to discuss and evaluate the financial statements

before submission to the Board, reviews results of internal and external audits to ensure

compliance with accounting standards, tax, legal and other regulatory requirements.

 What internal rules and processes does the team use to keep on track?

Systems like monitoring, tracking, communications, logistics and procedures are also

being constantly reviewed, changed and or upgraded as part of the overall effort to minimize

and eliminate inefficiencies in the supply chain.

SHARED VALUES

Integrity

1. Honesty and fairness guide our every action.

2. Uncompromising integrity and ethical business practices.

3. We are honest in all interactions.

Teamwork

• We communicate actively and openly.

• We build trust by honoring our commitments.

• We show respect for each other and value diversity.

Care for People

• We show respect for each other and value diversity.

• We focus on their career development and provide a conducive environment for their growth.

• We spend time to communicate, coach, and give recognition.

STYLE

 How participative is the management/ leadership style?

The Board of Directors and the Top Level Management have served without

compensation, nor have they received any amount or form of compensation for committee

participation or special assignments.

Self-assessment system to be done by the Management. They also have regular

committee report to the Board of Directors and Independent audit mechanism wherein an audit

committee composed of three members of the Board, regularly meets to discuss and evaluate

the Financial Statements before submission to the Board, reviews result Internal and External

Audits to ensure compliance with accounting standards, tax, legal and other regulatory

requirements.

 How effective is that leadership?

The Company also establishing the specific duties, responsibilities and functions of the

Board of Directors. Constituting committees by the Board and identifying each committee’s

function, role of Corporate Secretary, role of External and Internal Auditors and Instituting

penalties in case of violation of any of the provisions.

  Do employees/team members tend to be competitive or cooperative?

The employees tend to be competitive and cooperative because of the tight competitions

in the Company’s Industry.

 Are there real teams functioning within the organization or are they just nominal

groups?

There are no other employees who are expected by the Company to make a significant

contribution to its business. Moreover, the business of the Company is not highly dependent on

the services of certain key personnel.

STAFF

Few employees are needed for an organization. They are motivated by business growth

and rewarded with business shares, of which market value is rising.

As of 31 December 2016, the Company has 153 employees supported by 11 officers.

The employees are not subject to a collective bargaining agreement (CBA).

The table below presents the Company’s personnel numbers by functional category for the

period indicated below:

The Corporation does not anticipate any increase in the number of its employees within

the ensuing twelve (12) months. There were no employees covered by a Collective Bargaining

Agreement. There are no supplemental benefits or incentive arrangements. The Corporation’s

employees are not on strike and have never gone on strike in the past.

Number of Employees for the Year Ended December 31,

CATEGORY 2014 2015 2016

Executives(Officers 15 9 11

and Managers)

Project Employees 0 3 0
 and Consultants

All Other 177 102 153

Employees

Table 5.3

SKILLS

The strongest skills represented within the company is that their strategy when it comes

to sustainability and continuity. Develop and operate productive farmland that would significantly

influence the implementation of Good Agricultural Practices and traceability and reduce and

eliminate its dependence on third party sources for its suppliers and improve its ability to control

its quality and prices.

They are good and well known for allowing and enhancing the synergy of all Company’s

fruit and vegetable businesses

When it comes to their Distribution Group ANI is still working on taking its Distribution to

a global level with the Australian, European and US markets on the target list. They have the

capability to expand using their modern technology to increase the shelf life of their products.

David’s Internal Audit

Management Audit

Company objectives and goals as well communicated because the department heads

send emails to team leaders, to be disseminated to team members or call through telephone.

After which all end users of the information received the memo, the executives and/or managers

conduct briefing to clarify and address concerns, if there’s any. Executives and Department

heads usually conduct a biannual strategic planning to assess ANI’s performance against key

objectives and industry players.

Self-assessment system to be done by the Management. They also have regular

committee report to the Board of Directors and Independent audit mechanism wherein an audit
committee composed of three members of the Board, regularly meets to discuss and evaluate

the Financial Statements before submission to the Board, reviews results Internal and External

Audits to ensure compliance with accounting standards, tax, legal and other regulatory

requirements.

The Company also establishing the specific duties, responsibilities and functions of the

Board of Directors. Constituting committees by the Board and identifying each committee’s

function, role of Corporate Secretary, role of External and Internal Auditors and Instituting

penalties in case of violation of any of the provisions.

The customer relationship system where introduced and taught by the HR department

through variety of trainings. But more of them conduct seminars that teaches them how to be

more profitable. They make sure that every employee is prepared and well educated about the

company policies in dealing with customers especially their rule in answering their telephone for

customers.

ANI’s Group are being monitored and evaluated by measuring or determining the level of

compliance of the Board of Directors and top-level management with its Manual on Corporate

Governance (the “Manual”), the Company shall establish an evaluation system composed of the

following:

1. Self-assessment system to be done by Management.

2. Yearly certification of the Compliance Officer on the extent of the Company’s compliance

to the Manual.

3. Regular committee report to the Board of Directors.

4. Independent audit mechanism wherein an audit committee, composed of three (3)

members of the Board, regularly meets to discuss and evaluate the financial statements

before submission to the Board, reviews results of internal and external audits to ensure

compliance with accounting standards, tax, legal and other regulatory requirements.
 The directors have served without compensation, nor have they received any

amount or form of compensation for committee participation or special assignments. Under

Section 8, Article III of the By- Laws of the Company, by resolution of the Board, each director

shall receive a reasonable per diem allowance for their attendance at each meeting of the

Board. Also provided therein is the compensation of directors, which shall not be more than

10% of the net income before income tax of the Company during the preceding year, which

shall be determined and apportioned among the directors in such manner as the Board may

deem proper, subject to the approval of the stockholders representing at least a majority of the

outstanding capital stock at a regular or special meeting. As of this date, no standard or other

arrangements have been made in respect of director’s compensation.

COMPENSATION PLANS:

The Board approved a Stock Ownership Plan (the “Plan”) during its meeting on 17 December

2014. The following are the salient provisions of the Plan, among others:

1. All REGULAR employees of ANI and its subsidiaries are eligible under the Plan.

2. The Plan shall be effective for a period of ten (10) years to commence upon ratification

of the Stockholders’ of the terms and conditions and upon approval of concerned

governmental regulatory bodies, However, the grant of stocks shall be “purely

gratuitous” such that ANI’s Compensation and Remuneration Committee (hereinafter

referred to as the “Committee”) has the sole discretion whether to grant stocks for the

year based on the financial performance of ANI during the preceding year.

3. ANI will grant common shares in favor of all regular employees equivalent to an

employee’s one (1) month salary, which will be evidenced by an Award Agreement. The

Award Agreement shall contain the terms and conditions of the Plan which must be

complied with by the employee during the vesting period, otherwise the employee

forfeits his/her rights over the shares of stock.

4. There will be a 3-year vesting period during which the employee is not yet considered as

the owner of the shares, and his/her rights over the shares are restricted, including the

right to dispose of the shares, receive dividends and/or vote as a shareholder.

5. Upon the lapse of the vesting period, the Committee shall instruct the Corporate

Secretary to issue the Stock Certificates to the employees who have complied with the

terms as stated in the Award Agreement. An employee forfeits his/her shares when the

said employee resigns or is found guilty of an offense defined as less grave or grave

offense as per ANI Employee Handbook.

Marketing Audit

The Marketing Department can easily determine which of the segment highly

contribute to the firm’s revenue. The information is backed up by statistics. Thus, making the

market segmented effectively.

ANI’s Group market is currently starting to explore through new and innovative

distribution methods such as direct selling approach to address consumers and institutional

buyer’s need for fresh produce amidst problems on lack of proper storage.

ANI’s Group review the core competencies of the company. They assessed the

company’s product, pricing policies, choice of distribution channels, means of marketing

communication, and the role of the sales force. They focus on identifying how it compares to the

competition. They also look into the price points of the product, and how they are compared to

the price points their competitors.

ANI’s Group auditors also evaluate the effectiveness of the marketing activities that

they have been or are being performed or carried out. The most common benchmarks they

used are cost-effectiveness and profitability.

Financial Audit

Key Financial Performance Indicators

“Financial Highlights”

Table 5.4

2018 2017 2016

REVENUE -0.53 -0.02 -0.02

GROWTH

ANI Group sustained a consolidated sale of goods and services at and Php570.84

million for the year ended December 31, 2016, Php2,337.62 million for the year 2016 and 2017

Php2,367.18 million. For the year ended in 2018 Philippine operations contributed 29.3% while

sales from foreign operations accounted for 70.7% of consolidated sales while for the year

2016, Philippine operations contributed 69.05% while sales from foreign operations accounted

for 30.95% of consolidated sales. Sales of goods and services by business segment follows:

 Export Sales for 2018 decrease of 76% year-on-year primarily due to (i) decrease in

supply of bananas due to no permanent source of bananas as compared to previous

years wherein the Company’s established banana plantation joint-venture under Tagum

Resources Agri Industries, Inc. (TRAIN) which was divested in 2064 (ii) decrease in

number of customers due to a political issues linked to one of the major stockholder and

(iii) unstable selling price in the international markets.

 Domestic Contribution posted a decrease of 21.31% for the year 2018 and increase of

12.28% in 2016 from 2017 mainly due to the decrease of rice trading business in 2017.

Rice trading sales in 2017 posted a Php220 million revenue while Php108 million in

2016 but other distribution channels such as wholesale of fresh fruits and vegetables to

leading supermarkets and sale of fruit purees registered an increase in revenue during

the year due to improve in operations.

  Retail and Franchising sales registered decline of 9.05% for the year 2017 to

Php74.53 from a minimal increase by 2.08% to Php81.95 million for fiscal year 2017

from Php80.27 million for 2016, primarily due to rationalization of backroom and store

operations. This was also affected by the closing of some sub performing outlets which

improves profit and additions of franchisees during the year.

 Combined Foreign trading operations posted a decrease of 67.39 % to Php176.68

million for 2017 from an increase of 1.38% to Php1,653.71 million for 2016 from

Php1631.17 million for 2016, mainly because of the decrease in mango sales for both

Hong Kong/China closure of one of the stores in HK Airport and Joyful BVI covers only 5

months of operations in 2018. The Australian operations figures were impacted by the

depreciation of the Australian dollar.

For the year ended 2016, ANI Group’s cost of sales and services amounted to

Php2,184.96 million up by 5.46% from Php2,072.02 million for the year 2015. And for the year

ended 2016, ANI Group’s cost of sales and services amounted to Php479.60 million down by

59.75% from the year 2016 mainly due to lower amount of purchases in line with the decrease

in sales.

Consolidated gross profit up by Php91.24 million or 166.97% for the year ended

December 31, 2018. The gross profit up by from Php34.18 million in 2017 to Php91.24 million in

2018. Gross profit increases in distribution, retail and foreign trading in 2018.

Gross profit ratio declined to 6.53% for 2017 from 12.5% for the previous year. The

decline in the margin of the Banana Plantation/Farming business from 4.2% in 2014 to -38.6%

in 2017 contributed to this decrease and parallel decline in sales under both Philippines and

Foreign operations.
 Consolidated operating expenses for the 2018 amounted to Php229.99 million down for

2017. Consolidated operating expenses for the 2017 amounted to Php458.59 million down from

Php585.3 million for 2016 mainly due to the reduction of manpower cost for regular employees

and contracted services, decrease in freight and handling relative to the decrease in sales

during the year and reduction of office rental expense. Other were a total of Php17.36 million in

2018 and Php65.85 million in 2017. The decrease is due to decrease in number of write offs

and impairment of assets in 2017 compared last year.

Finance Costs for the years 2018, 2017, 2016 are Php59.09 million, Php93.33 million

and Php77.60 million, respectively. The decrease is mainly due to the recapitalization and

reduction of debt.

“MEASURE OF SOLVENCY”
Table 5.5

2018 2017 2016

Current Ratio 0.71 0.57 0.96
ANALYSIS: In 2016, 2015 and 2014 the ratios of the company’s current assets to
its current liabilities are 0.71, 0.58 and 0.96. These ratios foretold a
positive result because ANI Group’s consolidated total current assets
as of 2016 amounted to Php2,340.65 million, a decrease of 18.90%
from Php2,886.14 million at 2015 and a decreased of 25.70% from
Php3,889.12 million and decreased of 25.79% from 2014 to 2015

The Group’s cash balance decreased by Php9.52 from 2015 to 2016

and from 2014 to 2015 decreased by Php50.33 primarily due to day
to day operations of the Company and settlement of liabilities.
Receivables decreased by Php75.39 from 2015 to 2016 and
decreased as well from 2014 to 2015 by Php111.70 mainly due to
improved collections. Advances to stockholder decreased from
Php1,417.78 in 2016 to Php708.23 in 2015 and from 2014 amounting
Php1,621.54 decreased to 2015 amounting Php1,426.68 due to
settlement and liquidations of advances. And Inventory balance
decreased from a year end 2015 balance of Php44.82 to Php28.05 in
2016 and decreased as well from 2014 amounting Php70.41 to
Php44.82.

Table 5.6
2018 2017 2016
Quick Ratio 0.09 0.12 0.16
ANALYSIS: Acid Ratio of 2016 is 0.63 compared to the baselines of 0.50 in 2015
and 0.82 in 2014 is not bad at all. As they can see the higher acid
ratio among the previous years is in 2014. Quick assets; the Group’s
cash balance decreased by Php9.52 million from 2015 to 2016 and
from 2014 to 2015 decreased by Php50.33 million primarily due to
day to day operations of the Company and settlement of liabilities.
And receivables decreased by Php75.39 million from 2015 to 2016
and decreased as well from 2014 to 2015 by Php111.70 million
mainly due to improved collections. Current Liabilities Total current
liabilities amounted to Php1,400.81 million, Php1,869.46 million and
Php2,430.40 million as of 2016, 2015 and 2014 respectively. The
25.07% from 2015 to 2016 and from 2014 to 2015 23.98% decrease
is mainly due to payments of loans and borrowings and trade
payables.

Table 5.7
2018 2017 2016
Receivable 6.04 7.01 8.05
Turnover 60.43 52.07 45.34
Turnover in Days
ANALYSIS: This ratio had decreased it means the company doesn’t have a better
management or operations when it comes to collecting money better.
This shows that the company somehow does not targets with their
objectives. Trade receivables are noninterest-bearing and are
generally due and demandable. These are generally settled through
cash payment or application of customer’s deposit. Other receivables
include receivables from previous related parties.

The Company’s impaired trade receivables have been specifically

identified. Receivables that were written-off directly from the accounts
amounted in 2016 and 2015, and Php370.51 million in 2014. The day
sales in receivables in 2016 is 74.06 compared to the baselines of
2015 and 2014. It indicates that ANI’s is not effective in collecting
outstanding receivables.

Table 5.8
2018 2017 2016
Inventory Turnover 2.03 2.73 3.36

Turnover in Days 179.80 133.70 108.63

ANALYSIS: The ratio in Inventory Turnover in 2016 is 2.03 compared to the

baselines of 2.73 in 2015 and 3.36 in 2014 is preferred indicating that
ANI’s has a satisfactory level working capital and inventory makes up
a reasonable portion of current asset.
Due to slow down amount and over stocking inventories. 2016 it has
able to sell roughly two times with are of 179 days can be assumed to
have work sales/large discounts.
 Table 5.9
2018 2017 2016
Asset Turnover 0.24 0.42 0.31

ANALYSIS: This ratio measures a company’s ability to produce sales in relation to

total assets to determine the effectiveness of the company’s asset
base in producing sales. The ratio for ANI’s for 2016 is 0.24 which
compared to the baseline of 0.42 for 2015 and 0.30 for 2015 indicates
the company’s performance in this area is lacking and management
should consider taking measures to improve this ratio. Having a low
asset turnover ratio is not normal for this kind of sector that most
often yields the highest asset turnover ratio. It also has relatively
small asset bases but have high sales volume. Mainly due to ANI
Group’s consolidated total assets as of 2016 amounted to
Php2,340.65 million, a decrease of 18.90% from Php2,886.14 million
at 2015 and a decreased of 25.79% from Php3,889.12 at 2014. And
its net sales from its business segments; Export Sales, Domestic
Distribution Sales, Retail and Franchising Sales and Combined
Foreign Trading Operations had all decline from its previous years.
In 2016, ANI Group’s cost of sales and services amounted to
Php479.60 million down by 59.75% from Php1,191.58 million for the
year 2015 mainly due to lower amount of purchases in line with the
decrease in sales. But for the year 2015, ANI Group’s cost of sales
and services amounted to Php1,191.58 million up by 5.78% from
Php1,264.72 million from the year 2014.

“MEASURE OF PROFITABILITY”
Table 5.10

2018 2017 2016

Return on Sales -0.25 -0.40 -1.03

ANALYSIS: The percent of net income to net sales ratio is -0.25 which compared
to the baselines of -0.40 in 2015 and -1.03 in 2014, mainly because
of the Philippine operations contributed 55.79% from its domestic
distribution sales posted an increase of 12.38% and retail &
franchising a minimal increase of 2.08%. Driven by improving sales of
brands due to the unending effort of the company though it is in
negative term.

Table 5.11
2018 2017 2016
Return on Equity -0.19 -0.68 -0.96

ANALYSIS: Compared to the results from 2015 and 2014 the highest is in 2016. it
is in conducted the higher ratio as of current time. In 2016 the percent
rate of return on Owners Equity which is -0.19 compared to the
 baselines of -0.68, it is in negative percentage mainly due to
consolidated stockholder’s equity from 2015 amounting to Php711.70
million to 2016 amounting to Php762.43 million. Denotes that their
management may not effectively be managing the profits earned by
ANI. This is mainly due when the Group executed a subscription
agreement with Greenergy Holdings, Inc. (GHI) for 85,990,533
primary common shares of the Group at the issue price of Php3 per
share or a total subscription price of Php257.97 million resulting to a
premium amounting to Php171.98 million, payable in full upon
execution. The 13.8% of the increased capital shares was subscribed
and fully paid by GHI in 2014.
Table 5.12
2018 2017 2016

Return on Assets -0.06 -0.17 -0.31

ANALYSIS: The ratio of net income to total asset in 2016 is a negative

percentage because the company incur a net loss amounting
Php145.185million. In 2016 it has -0.06 compared to the baselines of
2015 which is -0.17 and 2014 which is -0.31 it shows that 2016 has
slightly increased which indicates a satisfactory level (ANI) with a
return on assets though it is in negative range. This indicates that
their Group need improvement and continue to strive hard to operate
in their industry. And it shows that the ANI is not over-investing when
it comes to their assets but still they were slowly generating income
using their assets since they used their investments efficiently.
These ratios are mainly due to Net Loss for fiscal year 2016
amounted to (Php145.19) of which (Php149.62) is attributable to
equity holders of the parent while Php4.43 is attributable to non-
controlling interest. Net income for fiscal year 2015 amounted to
(Php485.78) of which (Php437.82) is attributable to equity holders of
the parent while (Php47.96) is attributable to non-controlling interest.
Net income for fiscal year 2014 amounted to (Php1,194.03) of which
(Php1,175.12) is attributable to equity holders of the parent while
(Php18.91) is attributable to non-controlling interest.

“MEASURE OF STABILITY”
Table 5.13

2018 2017 2016

Debt to Equity 2.07 3.06 2.13

ANALYSIS: Ratio in 2016 is 2.07 compared to the baselines of 3.06 and 2.13. It
shows that it gets lower. A lower number in Debt ratio suggest there
is a both a lower risk involved for creditors, long term, financial
security for our Group. And seeing in 2016, it has not a solid
performance in that area.
 Table 5.14
2018 2017 2016

Equity Ratio 3.07 4.05 3.13

ANALYSIS: The percent in Equity ratio in 2016 is 3.07 compared to the baselines
of 2015 and 2014. In had decreased, that indicates more total capital
has been contributed by the creditors and less by the owners in the
year 2016. As we can see if creditors had greater extent than owners
it is considered as trading on equity. This can be also due to the
Group’s cash balance decreased by Php50.33 million primarily due to
day to day operations of the Company and settlement of liabilities.
Resulting to change equity Interest.

Mainly due to decreased in interest expense from 2015 to 2016 for

noncurrent portion of loans. For interest expense incurred above
lease payable amounted to Php2.28, Php18.62 and Php12.13 in
2016, 2015 and 2014 respectively. As of 2016 and 2015, deferred tax
liabilities arising from pension liability which is recognized under other
comprehensive income amounted to Pph1,660,536.

No deferred tax assets were recognized on the following deductible

temporary differences because management believes that it is not
probable that sufficient taxable income will be available to allow part
of the deferred tax assets to be utilized.

The Group did not avail of the optional standard deduction in 2016
and 2015.

Table 5.15
2018 2017 2016
Fixed Assets to 0.45 0.37 0.55
Long Term
Liabilities
ANALYSIS: Net Fixed Assets to Equity is 0.45 in 2016 which compared to the
baselines of 0.37 and 0.55 indicates that ANI’s performance is
adequate in this area. Mainly attributed in capital was used to finance
productive assets, continue growing the Group’s existing businesses
in response to growing demand.

This ratio has increased slightly it means that the company lost some
of its long term assets. I have a theory here that some of the long term
assets were used as payment or mortgages for the liabilities that
haven’t been paid during 2014.

Internal Factor Evaluation (IFE) Matrix

 Internal Factor Evaluation (IFE) Matrix is a strategy tool used to evaluate firm’s internal

environment and to reveal its strengths as well as weaknesses. The ratings in internal matrix

refer to how strong or weak each factor is in a firm. The numbers range from 4 to 1, where 4

means a major strength, 3 – minor strength, 2 – minor weakness and 1 – major weakness.

Strengths can only receive ratings 3 & 4, weaknesses – 2 & 1.

Internal Factors EXPLANATION

STRENGTHS

1.ANI is a publicly listed in The Philippine The Company’s track record of

Stock Exchange which can generate more
capital through its shareholders.
2. AgriNurture Inc. (ANI) is taking over
performance and grasp of the markets in
which it operates is evidenced by
accreditations and recognition from local and
international agencies. ANI has over thirteen
(13) years of experience in handling fresh
fruits and vegetables and gaining many years’
worth of learning in product innovation, and is
consistently in Philexport’s list of the top 100
exporters of the country. The Company is also
a Publicly-Listed in the Philippine Stock
Exchange. That enables the Company to grow
topline bottom-line wise. Capital can be used
to fund research and development, fund
capital expenditure, or even used to pay off
existing debt. Another advantage is an
increased public awareness of the company
because IPOs often generate publicity by
making their products known to a new group of
potential customers.
Pay8 provides payment solutions to utilities

fintech firm Pay8 Inc. from the DFNN like provincial and rural electric cooperatives.

Group as part of a vision to “digitally To provide payment centers in far-flung and

transform” the agriculture and agrarian unconnected areas. Pay8 seeks to function

sector and usher farmers into the financial like a neighborhood payment center, thus

system. ANI signed a memorandum of eliminating the need for people in remote
 agreement to acquire from DFNN unit areas to travel over land or sea just to make

HatchAsia up to 51 percent of Pay8’s utility payments. Through Pay8, the unbanked

authorized capital stock for some P377.9 masses can have access to the banking grid

million after effecting an increase in its even if they are in areas with no access to

capitalization, wired internet since it utilizes VSAT (dish)

antennas. Linking the e-wallet of Pay8 to ANI’s

affiliate banks within the ecosystem will allow

farmers to access credit online and offline and

withdraw its profit from any ATM throughout

the country. ANI’s banks would also benefit

having access to DFNN Group’s digital core

banking platforms and secure identification

platforms,” ANI said. Pay8 also aims to serve

Winsun Green Ventures, a subsidiary of

Greenergy Holdings Inc., likewise led by Tiu,

which is set to introduce alternative energy

generation options in the central business

district and rural areas.

With its acquisition of Pay8, ANI plans to

leverage on its strength as a dominant player

in farm-to-table models to bring marginalized

farmers into the banking grid,” the disclosure

said.A NI is building an ecosystem to promote

financial inclusion among farmers. Through its

affiliate BRB Digibank, the first electronic


3. Agrinurture Inc., in its Product
Research and Development spends
approximately 0.05-0.15% for product
research and development over the last
three (3) years.
4. AgriNurture Inc. having their Proficient
Training and Development through online
scheme that would consider in the
creation of learning opportunity to its
employees to achieve their full potential
and development.
money institution-licensed rural bank, the
group seeks to provide online microfinancing
of farm inputs to contract farmers via agri
vouchers.
AgriNurture Inc. spends approximately 0.05-
0.15% for product research and development
over the last three (3) years. In line with this, to
help their own downfall to survive their market.
Which really gives an optimistic vision for the
Company. The Company adheres to its core
product, fruits and vegetables, and finds no
need to further conduct product research and
development. However, it continuously adopts
new production technology to which spending
is through market capitalization amounting to
Php8.096Billion and spending Php50-
100Million annually for production technology.
AgriNurture Inc. considers in the creation of
learning opportunity to its employees to
achieve their full potential and development.
The Group visions development as an on-
going partnership between the company and
its employees, with the latter having the
responsibility to grow in knowledge, skills and
values or attitudes in areas that match the
needs of the company.
AgriNurture Inc. conducts their monthly
trainings to develop and maintain a
competitive workforce through formal and/or
informal training.
Trainings are particularly provided for the
following individuals:
 Newly hired employees
 Employees who needs improvement in
job performance.
 Employees who must acquire changes

5.Good Manufacturing Practice
in technology, services, practices,
procedures and governmental
requirements.
Scope of the trainings shall focus on the
following various contents:
 Technically
 Functionally
 Environmental, Health and Safety –
related to compliance with company
policies, objectives, and procedures
and governmental laws.
 Computer – related to software
application
Recently: ANI’s employees also participated
at the recently concluded Gulfood at the Dubai
World Trade Centre and highlighted its fresh
produce and coco products for export. As one
of the biggest trade shows this year, Gulfood
extended its show format to five days which
provided more opportunities for visitors to
connect with ANI. ANI’s latest product, La
Natural CocoSplash 1 Liter Tetra, was
launched during the trade fair.
Good Manufacturing Practice certificate
ensures the integrity of AgriNurture Inc.’s food
manufacturing process as well as their
compliance with food safety regulations. And
considering this, consumers can assure quality
products from ANI.
 The Company and its subsidiaries
incurred an estimated cost of Php180,
141 in 2018 and Php253, 547 in 2019
for compliance with food safety
regulations. On a yearly basis,
expenses incurred by the ANI Group in
order to comply.
 Certified and verified by SGS.
Certifying their food safety
management system against Good
Manufacturing Practices with SGS an
excellent way to inspections by
regulatory authorities and other
stakeholders. This process helps ANI
to ensure regulatory compliance and
demonstrating knowledge of the

6.Vision of ANI for the country’s
agriculture sector offering scholarships to
Filipino Youth.
WEAKNESSES
1. Low Volume of Farm Productivity
2. The amounts of their products are
excessively expensive.
3.Lacks effort in advertising the firm and
its Brand Identity.
importance of producing and trading
safe, quality food.
Helping make an agriculture degree more
attractive by offering scholarships in order to
convince the Filipino youth to become
agriculturists. So it’s not just about attracting
investments in order to resuscitate the sector;
it’s also about improving many impoverished
Filipinos’ lives and contribute to overall
national economic development.
Farm productivity plays a vital role in the
corporation since the revenues that can be
generated relies on the productivity and
capacity of the farm.
AgriNurture currently has an average farm
productivity of 10,000 tons of fruits and
vegetables which is relatively low compared to
its immediate competitors which can produce
up to 25,000 tons of fruits and vegetables per
day.
SM Supermarkets and SM Hypermarkets
cutting their 20year relationship with
AgriNurture Inc. The Group net loss started
year 2014. Mainly due to; subsidiaries First
Class Agricultural Corporation and Fresh and
Green Harvest Corp congested supplying SM
Supermarkets and SM Hypermarkets with
fresh fruits and vegetables. According to SM
Investments Corp. ANI only accounts them for
less than 3%.
Advertising affects consumer awareness of the
Company’s products by distinguishing it from
other fresh produce, some of which are sold
unbranded. Sales volumes and revenues may
therefore be positively affected by the
effectiveness of the Company’s branding and
advertising campaigns.
There is no Advertising affects consumer
awareness of the Company’s products by
distinguishing it from other fresh produce,
some of which are sold unbranded. Sales
volumes and revenues may therefore be
positively affected by the effectiveness of the
Company’s branding and advertising
campaigns.

4.Complicated reporting lines prohibiting
faster decision-making process
5. AgriNurture Inc. saw its net income
decline by 29.5% to P31.7 million in the
first quarter, weighed down by lackluster
foreign trading operations.
Since advertisement from TVs, radios, and
newspapers are not well modified. But in terms
of fliers and tarpaulins scattered in the
community, advertisement can be of help.
Decision making structure is important since
this will spell the company's growth and future.
There is a slow decision making that is
happening in the company that will not be able
to address the ever-changing landscape of it.
The company is using Centralized decision
making process where is said to be a
process where the concentration of decision
making is in a few hands. No single person or
employee are expected to make significant
contribution to the business, this is
compensated by the fact that decisions made
by the company are strategic rather than
tactical. This inherent the possibility of having
complicated reporting lines, that requires
employees to seek approval from the head
office before making decisions fosters rigidity.
When the control function is decentralized,
employees can often work within a more
democratic structure, sharing ideas for
improving processes and products until they're
refined and forwarded to the business owner.
When the central office holds tight control, a
high degree of innovation is harder to achieve
because employees are less likely to suggest
deviations from the company’s status quo.
Revenues declined 31% to P827.74 million as
combined businesses overseas reported a
50% plunge in sales due to lower sales of
residential and commercial units since the
lockdown in China started owing to the
 coronavirus crisis.

As a result, gross profit fell 26% to P158.57

million. It supplies other homegrown fruits

such as banana and pineapple to customers in

Hong Kong, China, the Middle East and to the

different European regions.

It acquired a 70% stake in Guangzhou Lexian

Fruit Industry Co. Ltd., a foreign entity

incorporated in China in wholesale trade.

W Weight 4 Major Strength

R Rate 3 Minor Strength
 S Score

2 Minor Weakness
1 Major Weakness

Table 5.17 Internal Factor Evaluation Matrix

Internal Factors Importance Firm’s Rating Weighted Score

Weight

STRENGTHS

ANI is a publicly listed in 5% 3 0.15

The Philippine Stock
Exchange which can
generate more capital
through its shareholders.
AgriNurture Inc. (ANI) is 15% 4 0.6
taking over fintech firm
Pay8 Inc. from the DFNN
Group as part of a vision to
“digitally transform” the
agriculture and agrarian
sector and usher farmers
into the financial system.
Agrinurture Inc., in its 10% 3 0.3
Product Research and
Development spends
approximately 0.05-0.15%
for product research and
development over the last
three (3) years.
AgriNurture Inc. having their 5% 3 0.15
Proficient Training and
Development would
consider in the creation of
learning opportunity to its
employees to achieve their
full potential and
development.

Good Manufacturing 15% 3 0.45

Practice
 Vision of ANI for the 5% 3 0.15
country’s agriculture sector
offering scholarships to
Filipino Youth.
WEAKNESSES

Low Volume of Farm 10% 1 0.1

Productivity

The amounts of their 15% 1 0.15

products are excessively
expensive.
Lacks effort in advertising 5% 1 0.05
the firm and its Brand
Identity.
Complicated reporting lines 5% 1 0.05
prohibiting faster decision
making process
Agrinurture Inc. saw its net 10% 1 .1
income decline by 29.5% to
P31.7 million in the first
quarter, weighed down by
lackluster foreign trading
operations.
Total 100% 2.25

Summary Analysis:

In Table 5.17 shows the strengths and weaknesses used as the key internal

factors in the evaluation. AgriNurture Inc. has a responsive rate of 2.25 to the internal factors

that would have an impact to the company.

 CHAPTER VI

STRATEGY FORMULATION

This chapter shows different strategy formulation tools such as TOWS Matrix, SPACE

Matrix, Internal-External Matrix, Grand Strategy Matrix, and Quantitative Strategic Planning

Matrix that are used in order to formulate strategies for the company.

TOWS Matrix

TOWS Matrix is used in order to come up with strategies for the company by combining

its internal strengths and weaknesses with its external opportunities and threats.

Table 6.1

Strengths (S) Weaknesses (W)

S1. ANI is a publicly W1. Low Volume of
listed in The Philippine Farm Productivity
Stock Exchange which
can generate more
capital through its
shareholders.
S2. Advanced W2. The amounts of
technology and their products are
increased access to excessively expensive.
capital. From their
allied; Zongshan
Fucang Trade Co. Ltd.
(Fucang).
S3. Agrinurture Inc., in W3. Lacks effort in
its Product Research advertising the firm
and Development and its Brand Identity.
spends approximately
0.05-0.15% for product
research and
development over the
last three (3) years.
S4. AgriNurture Inc. W4 Complicated
having their Proficient reporting lines
Training and prohibiting faster
Development would decision making
consider in the process
creation of learning
opportunity to its
employees to achieve

Opportunities (O)
O1. ASEAN Economic
Community Integration
which may encourage
more exports of Fruits and
Vegetables to complement
the need for benefiting
from accelerating
production, manufacturing,
distributing which can help
to boost the Agribusiness
in ASEAN Countries .
O2. Anti-Agricultural
Smuggling Act of 2016.
This act is an opportunity
in Agriculture Industry
considering that it will
protect the corrupt traders
and importers. Which will
affect the production of
supply of its products and
services.
O3. New technology that
helps the Food, Beverage
and Tobacco Industry to
their full potential and
development.
S5. Good
Manufacturing Practice
S6. Vision of ANI for
the country’s
agriculture sector
offering scholarships
to Filipino Youth.
SO Strategies
SO1. Enhance a complete
Integration of its operation,
to establish quality
products and provides
excellent pricing for its
supply, in different
markets. that would attract
new customers and reach
more clients. (S2, S3, S4,
S5, O1, O5)
SO2. Agriculture industry
would create new products
and services, that will
succor manpower in a
lower cost. Having full
potential of Agriculture’s
Economies of scale, and
fastest turnover that would
fostered improvements
within its Group. (S3, S4,
S5, O2, O3, O4, O5)
SO3. Rapidly penetrate
new market channels that
would innovate reputation,
WO Strategies
WO1. Build more leaders
in their society through
strengthening and
providing the people
substantial and effective
training and education.
(W4,O2,O4)
WO2. Stipulate financing
lines that it believes
adequately support its
working capital needs that
will result of gaining more
growth in opportunities.
 Seek to improve
quality, focusing on
being better, while
the Group’s
competitors are
nearly claim to be
being better. Lower
cost, and improve
speed efficiency by
building pride and
good reputation
that will improve
customer’s loyalty,
that believes to
help the financing
lines of the Group.
(W1, W4, O2, O3)
WO3. Strengthen internal
process and system to
reduce failure in
better meet their and include successful
customer’s needs. development and
(Korean Farm Machines marketing.
are coming)  Launch product
extensions to
extend patent of
innovative products
(S1, S5, S3, O1,
O5)
O4. Increase Proposed SO4. Provide large-scale
Budget for Agriculture. production capacity that
The Department of Budget would significantly reduce
and Management fixed cost even while
increases its budget for increasing production
Agriculture sector from output that will result to
2017 (45.05 Billion) to growth opportunities in
2018 (54.20 Billion) for both international and
more than 17.96%. domestic.
2. Hedge funds to
secure stability of
importation costs
for international.
3. Leverage on the
company’s strong
field force to
capture the rising
demand in
Agriculture industry
by focusing on
growth areas. (S5,
O1, O2, O3)
transaction due to poor
relationship with vendors
and commercial providers.
Focus on key relationship
with vendors, commercial
providers and growth
areas such as in provincial
areas by restructuring field
force colleagues and
developing skills and
capabilities to address
opportunities in the
account management area
The Group must continue
to expand its core
business and increase
coverage distribution
(fruits, vegetables, rice),
retail, export sales
channels.
1. Retail Arm must
expand its
franchise network
with plans to cover
not only in the
Philippines on a
national basis (W4,
O1, O2, O5)
WO4. Knowing that the
Company is a publicly
listed, and well established
reputation, and its
transparency would also
mean that they can borrow
money in banks and it will
be more comfortable for
the bank to lend the
Company knowing that
they are in a verdict of
downfall it its net profit
margin. And create new
innovative products and
services to sustain and
survive in its industry. So
that they can still attract
competent people to join
the company intended that
Agricultural Industry has its
momentum stage. (W4,
W2, O1, O2, O3, O4, O5)
O5. Free Trade
Agreement. When barriers
are fully eliminated,
Agriculture Industry will be
more anticipated which will
help to boost trading
operation.
O6. Consumer’s Health.
Health of The Consumer
counters poor health
caused by busy lifestyle,
insufficient exercise and
fast food consumption.
Hence consumers are
increasingly choosing
naturally healthy foods.
Threats (T)
T1. Climate change,
frequent typhoons, and
Natural Calamities.
SO5. Establish a WO5. Sales volumes and
professional track record revenues may therefore be
grasp of the markets that positively affected by the
will operate an evidenced effectivity of the
for accreditations and Company’s branding and
recognition from local and advertising campaigns.
international agencies. Knowing that most people
 Focus the field seek healthy lifestyle. That
force (a field would proves Agriculture is the
be an internet and way to go (W2, O1, O2,
some would be O3, O4, O5)
physical market
place where the
sales can be
generated) in
promoting high-
yield products that
would impact net
income
 Outsource some of
the field force who
can penetrate sales
of AgriNurture’s
products. (S1, S2,
O2, O3)
SO6. Consumers are
increasingly choosing
naturally healthy foods
such as fruits and
vegetables, organic and
natural are increasing
becoming hot, which
consumers willing to pay a
premium for these
products over the
commercially ones, so the
industry are establishing
system of product that is
product quality guaranteed
so it’s not a difficulty for
them securing consumer’s
health. (S1, S2, S3, O6)
ST Strategies WT Strategies
ST1. Implement a WT1. The company must
geographical diversification not depend on a certain
strategy where its key personal, they must
operations are spread further enhance their HR
across the country, Management enable for
depending on the existing them to find a potential

T2. Pest and Insect
Infestation that affects
both the quantity and
quality of commodities
available in the market..
T3. Philippines is
running out of farmers”
The country’s supply for
food farming activities will
be significantly affected by
the loss of farmers. The
new generation would
rather go to the cities or
migrate abroad than
continue the farming
tradition. For the farmers,
farming is not a way out of
poverty.
T4. Weakening of peso /
Declining value of local
currency. Since some of
the AgriNurture Inc.’s
imports their products from
outside the Philippines, a
weakening peso is a threat
since cost of goods sold
converted into peso
becomes higher.
AgriNurture Inc. fully
hedges its foreign
season (wet or dry) to
ensure continued
production and trading.
(S1,S2,S3,S4,T1,T3, T4)
ST2. Adopting a mix of
modern pest control
systems, GAP (such as
crop rotation), the use of a
mixture of organic
fertilizers in its production
farms, and the use of
biotech products especially
those that are resistant to
pests and diseases. This
way, no widespread
infestation would
drastically weaken the
Company’s supply chain at
any time. (S1, S2, T2, T3,
T4)
ST3. Inaugurate and
operate productive
farmland that would
significantly influence the
implementation of Good
Agricultural Practices
(GAP) and traceability and
reduce or eliminate its
dependence on third party
sources for its supplies
and improve its ability to
control its quality and
prices. (S1, S2, T3, T4)
ST4. Implement safety
management group
responsible for formulating,
implementing and
enforcing the Company’s
employee health and
safety policies as well as
ensuring compliance with
applicable laws and
regulations. (S1, S2, S5,
T4, T5)
employee for that position.
(W3, W4, T4)
WT2. Company must
improve financing lines
that it believes adequately
support its working capital
needs. In anticipation of an
increase in its future
working capital
requirements, the
Company must convert
their short term loans to
long term loans in order to
increase the flexibility on
the Group’s Capital and
minimize immediate impact
on operational cash flows.
And ANI can use the asset
and the positive credit they
have developed paying for
it for future borrowing.
(W2, W4, W5, T3, T4, T5)
WT3. Increased efforts in
asset management
seemed a reasonable
offset to exposures in
financial risk, though most
of the assets under
management had to be
acquired in the market at
relatively high prices, on
which the expected return
was not high. (W3, W4,
T4)
WT4. Evaluating new
product that will result to
profitability is a valuable
tool that can manage the
Group’s net loss, and
assessing the new product
whether it will really help
the Group in its value over
the long term.
 If it can’t
demonstrate a
measurable value,
 exchange. The company's
policy does not allow for
such volatility risks.
T5. Interest Rate.
Philippine economy would
be affected by the increase
in interest rate considering
that it would result to
having less investor in the
Philippines. Interest
expenses on holding
inventory would have a
significant impact on farm
profitability and associated
agribusinesses.
don’t use it.
Technologies that
cannot give a
measurable
improvement to the
profit of the Group,
is simply
generating
needless overhead.
So the Group can
sell it to other
companies that has
the capability to
acquire and use it.
(W3, W4, T4)
ST5. Provide free trainings WT5. Advertise and
and education for the implement strict policies in
employees enable them to improving personal
have a good quality of information security and
performance that will business transactions.
enhance the growth of the (W1, W3, W4, W5, T4, T5)
company.
 Get Rapid,
Accurate
Feedback. The
Group must know
about their
employees and
suppliers in the
market at all times.
Ignorance can fail.
(S1, S2, T4, T5)

SPACE Matrix

The Strategic Position and Action Evaluation Matrix or SPACE Matrix is a useful

technique for evaluating a particular strategic plan. It represents two internal dimensions which

are Financial Strength and Competitive Strength and two external dimensions which are

Environmental Stability Position and Industry Strength. These factors are important

determinants for the organization’s overall strategic position. Each quadrant indicates

aggressive, conservative, defensive, and competitive strategies of the company.

 Table 6.2 Space Matrix

Financial Strength Ratings

Liquidity 2
Working Capital 2
Leverage 2

TOTAL
AVERAGE 6
2
Industry Strength
Industry growth 4
Productivity 4
Sustainability 4

12
TOTAL 4
AVERAGE

Environmental Stability
Inflation Rates -4
Annual GDP -3
Increase in Budget -2

TOTAL -9
AVERAGE -3

Competitive Advantage
Customer Loyalty and Trust -3
Products and services -4
Integration of Operation -4
Existing Distribution and Sales Network -3

TOTAL -14
AVERAGE -3.50

Conclusion:
X-Axis (CA average + IS average)
(-3.50+ 4 = 0.50)

Y-Axis (ES average + FS average)

(-3+ 2= -1)
 Coordinates for the SPACE Matrix

Concentric Diversification
Conglomerate Diversification
Horizontal Integration
Joint Ventures

Figure 6.1

Conclusion:

AgriNurture Inc. is in the competitive quadrant. Considering that the firm has a strong

advantage in an attractive Industry but financial strength is insufficient. And since all the

factors, the company’s x-axis that consists of Competitive Advantage and Industry Strength is

0.50 and the y-axis which consists of Environmental Stability and Financial Strengths is -1.

Therefore, Concentric Diversification, Conglomerate Diversification, Horizontal

Diversification and Joint Ventures are feasible.

Internal and External Matrix

 The Internal-External (IE) matrix is a strategic management tool used to analyze working

conditions and strategic position of a business. The Internal External Matrix is based on an

analysis of internal and external business factors which are combined into one suggestive

model.

Table 6.3 Internal and External Matrix

IFE Total Weighted Score (2.05)

Strong Average Weak

3.0-4.0 2.0-2.99 1.0-1.99

EFE Total High I II III

Weighted 3.0-4.0

Score Medium IV V VI

(2.35) 2.0-2.99

Low VII VIII IX

1.0-1.99

The total IFE rating is 2.05 and the total EFE rating is 2.35 which falls in the II quadrant.

The II division can be managed; Joint Ventures, Concentric Diversification and Conglomerate

Diversification are three commonly employed strategies for this case.

Grand Strategy Matrix

The grand strategy matrix is primarily based on four essential elements: rapid market

growth, slow market growth, strong competitive position and weak competitive position. Using

the analysis from the internal and external evaluation, appropriate strategies for an organization

to consider are listed in sequential order of attractiveness in each quadrant of the matrix.
 Grand Strategy Matrix

Rapid Market Growth

Quadrant II Quadrant I
Market development Market development
Market Market
penetration penetration
Product Product
development development
Horizontal Forward
integration integration
Divestiture Backward integration
Liquidation Horizontal integration
Concentric Strong
Weak diversification Competitive
Competitive Position
Position Quadrant III Quadrant IV
Concentric
Retrenchment diversification
Concentric Horizontal
diversification diversification
Conglomerate Conglomerate
diversification diversification
Horizontal Joint
diversification ventures
Divestiture
Liquidation
Slow Market Growth

AgriNurture Inc. falls on the 2nd (II) quadrant, considering that Agriculture Industry has a

continuous growth in the market and it has recovered with a high of 5.28 percent growth in the

first quarter of 2018 after several quarters of declines. All subsectors posted output increments

with the crops subsector as the major growth driver during the period. At current prices, gross

value of agricultural production amounted to P407.6 billion. This was 8.79 percent higher than

the previous year’s record. Although the Company has its current downfall, the researcher still

considers that with the help of its Industry, it can still recuperate from its Net loss and will boost

its Sales.
Summary of Strategies

The summary of the strategies counted which strategies were recommended by strategy

formulation tools utilized earlier using the various information drawn from external and internal

analysis

Table 6.4 Summary of Strategies

Strategy Options TOWS SPACE IE GRAND TOTAL

Concentric Diversification     4

Joint Ventures     4

Conglomerate Diversification    3

Horizontal Diversification   2
 CHAPTER VII

STRATEGIC OBJECTIVES AND RECOMMENDED STRATEGIES

This chapter shows the recommended strategies for the subject company and the

forecasted balance sheet and income statement for the next five years after implementing the

strategies.

After analyzing the environment, the industry, the business’ current structure and

formulating strategies and matrices, the proponent has suggested that the following strategies

be considered for the purpose of adding value to the company.

The strategic objectives for the company are to increase the market share, to develop

services to reduce the cost of funds and to explore new avenues for growth and profitability.

Revised Vision-Mission Statement

Recommended Vision

A global leader in providing nourishment from farm to plate, to operate family based and

sustainable agri-business to stipulate landowners and operation. That will be viewed in the

coming years giving the agricultural sector the boost in needs to flourish.

Table 7.1

Parameter Yes or No

Does it clearly answer the question: What YES AgriNurture Inc.’s vision
statement already clearly
do we want to become? states what it wants to
become.
Is is concise enough yet aspirational Yes The vision is concise to
what it describes. And
using the “providing
nourishment” gives the
inspiring part.
Is it aspirational? Yes Since it is emphasized that
from “farm to plate” theme,
it is aspirational to the
company to pursue the
process of farming to
household place.
Does it give clear indication as to when it Yes Considering that they will
should be attained provide nourishment for
the Filipino citizens to have
a healthy lifestyle and
already shows or tells
when it will aims it vision.
Recommended Mission

To satisfy customers with supply quality and affordable products within market reach.

Applying new modern technologies to address farm productivity, food security and food safety.

By promoting advocacies for environmental and social upliftment to foster national pride that will

enhance shareholder’s value.

Table 7.2

Parameter If yes, which part of the statement

Customers Yes It clearly indicates about the customer

Product Services Yes Supply quality and affordable products.

Markets Yes Supply quality and products within market

reach.
Technology Yes Apply modern technologies to address the
production of its products. They use farm
machineries and equipment.
Concern for Survival Growth Yes Enhancing the stakeholder’s value.
Profitability
Philosophy Yes They promote advocacies for environment
and social upliftment.
Self-Concept Yes They have environmental concerns and
more affordable products.
Concern for employees Yes It is already stated in the mission.

Concern for nation building Yes They promote environment and social
upliftment.

Proposed Strategy

Joint Venture

Joint ventures can be a rapid and very effective mechanism for strategic growth. Such

unions can enable fast access to new skills and technologies. Beyond that, it can secure

production capacity and lower cost production; offer access to both local and distant markets;

and offer ways of creating economies of scale and market power. Companies achieve this
through resource sharing, operational combinations and knowledge transfers. The AgriNurture

Inc. has in need of capital to manage expanded operations because it incurred recurring net

losses and also reported deficits. Despite of having incurred such deficits, management

believes that the Corporation will be able to turnaround and achieve positive operations in future

years, considering that they still have enough fixed assets to use, lower debt ratio,

increasing working capital and international distribution network. In line with this

AgriNurture Inc. is a publicly listed in The Philippine Stock Exchange which can generate more

capital through its shareholders, New allied; Zongshan Fucang Trade Co. Ltd. (Fucang),

Product Research and Development, a Proficient Training and Development would consider in

the creation of learning opportunity to its employees to achieve their full potential & development

and Good Manufacturing Practice. The following strategies can help AgriNurture to achieve

positive operations in future years.

Joint Ventures is the best strategy suited for AgriNurture Inc. to grow revenues, reduce

costs, and mitigate risk. ANI belongs to a highly competitive market in which many producers

compete with each other to satisfy the needs and wants of a large number of consumers.

Knowing that there are several big opportunities in Agriculture Industry that makes it’s an

attractive one. ASEAN Integration, Laws implemented to protect its products, New

technologies and Increase in Budget for Agriculture are in line with the proposed strategy

for the Company. One of the weaknesses of ANI mentioned in its Internal Factor Evaluation

Matrix Lacks effort in advertising the firm, customers are the people who buy the product

only after they are made aware of the products available in the market. It also plays a very

important role for the producers and the sellers of the products for it helps increasing sales,

helps producers or the companies to know their competitors and plan accordingly to meet up

the level of competition. And helps making people aware of the new product so that the

consumers can try the product and lastly, helps creating goodwill for the company and gains
customer loyalty. It is best for ANI to enter into an agreement or make a joint venture proposal

to an established and strong company, and be a well-known brand in the same industry. Both

company’s strengths securing consumer’s health. With all these being said, AgriNurture Inc.

would offer DOLE Food Company a joint venture with their company in order to enhance and

compete with the best in the business. Considering that DOLE food Company had established a

good reputation for the past decades and second major player in the industry with a market

share of 19.60%, that can help ANI to recover from its incurring net loss and saving money by

sharing advertising and marketing cost.

The firms do not have the same strengths, creating alliances can allow them to share it.

This, in turn, can help firms produce more efficiently or at a higher quality products and services.

Firms must learn to recognize which other companies can offer complementary skills. ANI being

a publicly listed company in The Philippine Stock Exchange which can generate more

capital through its shareholders which DOLE Food Company is lacking, it enables the

Company to grow topline bottom-line wise. Capital can be used to fund research and

development, fund capital expenditure, or even used to pay off existing debt. Which DOLE Food

Company can be benefited from since its greatest competitor Del Monte Philippines which is a

Dual listed on the Mainboards of the Singapore Exchange Securities Trading Limited and the

Philippine Stock Exchange.

Together the companies can move a greater height which benefits both DOLE Food

Company and AgriNurture Inc. With a joint venture they can have financial stability to sustain

miscellaneous like advertising, equipment and many others that could improve the familiarity of

the consumers and improve the production of the product and does improve ANI’s sales in

return. With this joint venture with DOLE Food Company, ANI can acquire additional capital that

could help advertising expenses and also giving DOLE Food Company to expand its income

since ANI have market in greater CHINA, with from their Allied; Zongshan Fucang Trade Co.

Ltd. (Fucang), that it is engaged in agri commodity trading and with investments in real estate
development and agri trading. With the help of Fucang, it will succor them to widely expand its

core business and increase coverage in their distribution networks, since DOLE Food Company

has their foreign operations only in Costa Rica, Colombia, Ecuador, Mexico and Peru. With a

capital share of ANI’s product with the same brand name will be under DOLE food Company

giving them favorable stand by putting DOLE Food Company in all ANI’s label in all of their

products. Alongside they can be on top in the business industry provided they have the same

perspective, competitiveness, and goals.

Departmental Programs

For the company to execute its strategic and financial objectives, departmental

strategies should be implemented. Each strategic recommendation is broken down into key

activities which should translate to achievement of the goals.

Human Resource

Building potential leaders and small farmers through strengthening and providing the

people substantial and effective training and seminars. Implementing proper disease

management, harvest practices (including picker instruction and supervision), and postharvest

handling are critical to marketing success.

By working with other famers, it can provide CSA customers with a wider variety of

produce than ANI can grow by their company itself. This will help strengthen ANI’s business,

reduce its risk, and support other local farmers.

 Outreach Programs: Conduct of Outreach Programs and capability building programs

such as farm-based trainings on cost-efficient practices in sugarcane farming, technical

trainings on fertilizer usage and application, advisory services, on-site trainings, farm

visits, etc.
  Training and Development: The Company views development as an on-going

partnership between the company and its employees, with the latter having the

responsibility to grow in knowledge, skills and values or attitudes in areas that match the

needs of the company.

Training shall focus on the development of the alignment of purpose and performance

across the company, with particular emphasis on individual employee; team; and the total

organization in order to develop and maintain a competitive workforce through formal training

and/or informal training; which shall equally provide the trainee.

Marketing Program

These proposed strategies that would be implemented can help to boost Sales volumes

and revenues that would be positively affect the Group’s performance. And with the help of

these Low-Cost Marketing Programs the Group can recapture the attention of the consumers by

branding and advertising campaigns. By imposing methods; first method is to participate in

trade shows (an exhibition to showcase and demonstrate their new products and services) that

will be a valuable resource. The second method is the development and use of ANI’s Internet

website by; Chamber of Commerce, must secure a link that will help the company to be featured

in their blogs, because it allows local customers that are looking for new trends or

products/services that would succor The Group from loss. The last method of communication

that ANI can use are advertisements in Industry-Trade Publication, every single market has its

trade publication that basically summarizes the events in the market, these is a great source for

ANI, considering that ITP are looking for free content and articles, ANI can contact ITP, and

introduce their new products though ANI will not be paid for it, the benefit is that they would

have free advertisement (it will include articles about the Group selling their products or

promote a particular viewpoint).

 Though the past year Filipino people had witnessed the tragic effects of the nation’s

most lamentable social ills: the orchestrated misuse of government funds, the systemic violation

of basic human rights, and the continuous loss of life and property due to abandonment, lack of

knowledge and greed. There is so much poverty in the Philippines that’s why AgriNurture Inc.

proposed advocacy is “Walang Pipilino dapat magutom sa sariling Bayan” (No Filipino should

go hungry in its own Native Land). The first chosen advocacy will help the Filipino to be able to

see the Philippine Landscape together with the Newly Created products that are also connected

with the advocacy of ANI. Showing the Filipino people, how rich the Philippines are when it

comes to natural resources, and showing them how to maximize technologies and resources

with low-cost products yet delicious and affordable high-quality produced. And the second

advocacy is “There is No Unproductive Soil, only an Unproductive Farmer” to help the farmers

especially those farmers who have a mindset of the difficulty to take risk and to go out in their

comfort zone. AgriNurture Inc. will make them realize never stop dreaming, and that farmers

don’t need to depend to anyone like mayors, governors or any political figure, they just need to

believe in their selves. And the last advocacy is “You are What You Eat” health is nothing but a

clear reflection of your food habit. Consuming healthy food will definitely stay healthy and fit. But

sometimes, the eye-catching advertisements and the colorful packaging of unhealthy processed

foods de-motivate people and send them healthy food habits into a spin. In such situations,

AgriNurture Inc. will provide an inspiration from different sources to keep people on the right

track to healthy food. It proposes that those developments are now geared, ANI will promote

awareness and education when it comes to fruits and vegetables, that it can be used in many

flexible aspects.

There is no point in going into a business unless the Company can make a radical

difference in other people’s lives. Educating people of the values about the said advocacies in

connected with the new products can be a competitive advantage to the Group. All of these

advocacies will be implemented and discussed while having trade shows, ANI’s website, and in
the Industry-Trade Publication articles to attract the attention of the consumers, together with

the Newly Created products of AgriNurture Inc.

These marketing programs can succor to boost sales volumes and revenues by

effectively operating Company’s branding and advertising campaigns.

The heavy marketing directed towards youth as well, especially young children, appears

to be driven largely by the desire to develop and build brand awareness/recognition, brand

preference and brand loyalty. The researcher believes that brand preference begins before

purchase behavior does. Brand preference in children appears to be related to two major

factors: 1) children's positive experiences with a brand, and 2) parents liking that brand.

To further enhance its competitive strength and build a strong corporate brand, ANI must

deepen the respective specialization and expertise of its subsidiaries and create new specific

business area or market that can help the Group to survive.

Operating Logistics

Operations Logistics is very important in a manufacturing business as they need to

transform resources into finished goods. Making the decisions involved in the effort to attain

these goals is the job of the operations manager.

 AgriNurture Inc. will be on hand with the distribution channel in greater ASIA while DOLE

Food Company will be on hand with the distribution channel in North and South America.

 AgriNurture Inc. as mentioned in its weakness in its Internal Evaluation matrix it has Low

Volume of Farm Productivity, which has an average farm productivity of 10,000

tons of fruits and vegetables. While DOLE food company has an estimated number of

productivity which is 20,000 tons of fruits and vegetables per day. So for manufacturing

of fruits and vegetables, they will both combine their operations to produce tons of fruits

and vegetables to compete with the level of other competitors who produce greater

number of fruits and vegetables.

  The company should conduct regular inspections on the performance of its equipment

and possibly upgrade these with cleaner technologies. With the help of CEAT

Agricultural Machinery Testing and Evaluation Center, by conducting machine test

that would enhance the sustainability of machineries that the companies are using. It can

heighten the quality of goods and services of each Agricultural Industries.

Finance Program

 The marketing program will propose an estimated budget of Php200,000 for the

marketing department in advertising their products specifically in trade shows: Trade

Show Display Solution, Graphics, Flooring, AV & Furniture and Accessories, Show

Services (Material Handling, Electrical, IP Address, Lead Retrieval, Daily Cleaning &

Plants), Travel Expenses & Personnel, Collateral & Giveaways RENTALS. In Chamber

of Commerce and Industry-Trade Publication are only for free. And the implementation

of the advocacies together with the new products will propose an estimated budget of

Php15,0000.

 The operations department will propose a Research and Development proposed

budget of Php50 Million annually to Improve and mechanize production efficiency in

order to acquire new machineries to improve and mechanize production efficiency to

address the decreasing number of farm workers to improve farm productivity and

capacity producing fruits and vegetables.

 With a Total Asset of DOLE Food Company of Php139.20 Billion and AgriNurture Inc.

having Php2.34 Billion which can be combined to achieved their proposed budget for

them improve mechanize and marketing strategies to further compete with other

competitors.
Financial Impact Projections

The financial plan for the company, by doing the recommended strategy, is to increase

the Assets and Net Income of the firm. AgriNurture Inc. for their respective future subscriptions

in fulfillment of the recommended strategies:

 For the Income Statement projections the researcher makes a continuous upward trend

of the accounts in revenue in income statement which increases by 5-25 percent.

 While the downward trend of the expenses of the company which decreases by 5-25

percent was estimated due to the foregoing cost cutting of the company and newly

implemented strategies.

 The combination of increasing revenues and continuing cost cutting of the company will

make the Corporation to turnaround and achieve positive operations in future years.

 All the costs of the corporation decrease except for the professional and management

fees which increases by 5-25 percent, the researcher deems that all of the strategies

that will implement will boost the sales of the Group.

 For the balance sheet the researcher assumed that upon implementing the foregoing

newly introduce products, the existing and new customers will patronize its products that

can help the Group to survive their consistent net loss.

 The strategies made by the researcher aim to earn capital for the company so the

researcher assumed that by implementing its recommended strategies for planning the

assets and the equity of the company will continue to increase

 Chapter VIII

CONCLUSION

Conclusion

Looking back to whole information, concepts discussed and evaluated to draw down and

conclude the important points of the study. AgriNurture Inc. strong enmity in the Fruits and

Vegetables Industry (Agriculture) is evidence because of having a consistent Net Loss of the

Group. So the Group need to boost revenues and strive their best to survive in the industry, with

the help of the continuous growth in the Industry. The Group is expected to gain its profitability

for year 2017-2020 at a minimum net profit rate of 5-25%.

Regarding the renowned strengths, weaknesses, opportunities and threats, Strategies

Implemented have been proposed through the use of Matrices such as TOWS Matrix, SPACE

Matrix, Internal and External Matrix, Grand Stagey and QSPM. Within this, it was divulged that

Joint Venture is the recommended strategy that hysterics the company and this would be

achieved by strengthening completely innovating new ideas, that will succor the Loss of the

Group. Action Plans and Proposed Programs will effectively be planned and implemented

based on the Recommended Strategies.

 BIBLIOGRAPHY

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