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CASE 1
MAMA BEAR
Antonio Errol Ybanez Jr.

Mama Bear Child Care Center was founded five years ago by Mylene Bartolome, Antonette
Mendoza, Mary Rose Go and Alalyn Ramos. The four worked on the idea of forming a business based on
the emerging needs to help the working mothers or often called “mamas”. Mama was the acronym
taken from their names.

After graduation, Mylene, Antonette, Mary Rose and Alalyn created a partnership and launched
their venture leasing the condominium unit of Mylene in Makati. From the initial of four children of
their friends working in Makati, the business grows to 50 due to referrals from satisfied clients using the
word of mouth. The company’s services are customized, with affordable rates. The target market
identified to be the working parents aged between 25 to 45 years old, who are employed in Makati
offices with household income of at least P30,000.

The partners have done very well since graduation. Even if Mama Bear was conceived almost
effortlessly, its birthing pains were quite traumatic. They believe however, they now have a winning
formula and team.

They targeted and negotiated companies in the Makati Business District which have no day care
centers. Based on the report of the Philippine Commission on Women (PCW) 59% of their total
workforce are female. Women typically handle more of the care giving responsibilities for families and
are more often affected at work due to these responsibilities. While there are 25% men who are
particularly involved with making child care arrangements. Therefore, Mama Bear would like to exploit
the opportunity of addressing the work/life issues for both women and men.

“We felt,” Mylene said, “that with the demand for child care services steadily increases as more
and more women enter the work force, giving up the traditional role of full-time mother and
homemaker. As of 2018, 60% working mothers in both single and two-parent households constitute the
fastest growing segment of the paid work force. Many parent employees are worried, concerned or
thinking about their children so frequently it negatively impacts their work productivity. Over the last 30
years, economic need began to force some families to rely on two sources of salaries. Further, children
who enter formal schooling are expected to already have some knowledge and so preschool has now
become a necessity. These significant changes in the family dynamic, such as dual income families,
single parent families and the declining extended family have also dramatically increased the demand
for quality childcare.”

__________________________________________________
This case was prepared by Dr. Antonio Errol B. Ybanez, Jr., Faculty of the Graduate School of Management at the
Pamantasan ng Lungsod ng Maynila, Southville International School and La Consolacion College- Manila. This
was developed based on readings and experiences of the author. Should there be similarities with a certain
company, they are purely coincidental. All information provided in the case shall be used for academic exercise
only. This case cannot be reproduced in any form without the written permission of the copyright holder.
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“Using the networked digital cameras in the wall of every classroom and at reasonable prices,
Mom and Dad can have hourly – in some cases, minutely – offers a unique way of connecting with their
little precious angels. It will utilize technology that allows parents to ‘drop-in’ on their children via the
Web and Internet-based check-in,” said Mary Rose.

“We tested our ideas,” Mary Rose added, “as a project in a new enterprise subject and created
a feasibility plan. The Mama Bear Center is a ‘child-on cam’ with advanced and quality childcare services
that would meet parents’ needs.

Alalyn, a special education teacher and is the experienced and childcare specialist, developed
the childcare program and approaches including the computer software that will make the Center as a
dwelling place in enhancing the social and emotional growth as well as the development of both
physical and intellectual skills. This is the second home of the children ages from three months to four
years as we give their children the knowledge such as drawing, music, English lesson, dancing and
singing. Antonette, a registered nutritionist, along with two helpers are in charge for calculating
adequate nutrient food for the children.

The partners came up their core positioning message: “Play, Learn and Grow” with the end view
of differentiating their service from their competitors.

Steady Growth

In their second year of operation, more companies such as PLDT, Philippine Stock Exchange,
SGV & Co. Philippines, CitiBank, and BPI Commercial Bank became their institutional partners because
under the collection bargaining agreement, employees’ children will be provided with day care facilities
benefit. This prompted Mama Bear to lease another two condominium units of Mylene also in Makati
City as additional venues to accommodate the additional 100 children.

The company’s workforce has continued to grow during the past three years. In addition, the
company through a Memorandum of Agreement has tied up with St. Luke’s Hospital – BGC and Makati
Medical Center, for emergency cases, Globe Telecom for their on-line day care and SM Superstore for
the supplies requirements.

For the last 10 years, the partners are getting stronger, and the success story is based on
attitude, hardwork and frugality. Most feedback received is positive and encouraging which can be
summed up as ‘Mama Bear not only prepares children to become sociable child but train to be a child
who is ready to face the day ahead.’ Accordingly, they have each earned six-figure salaries and bonuses.
While they have been putting in incredible hours, they are making more money than they ever dreamed
of at this stage. Further, they have paid off their original loans and have improved their cashflow
position after the six-year debacle when they lost the 30% clientele-expats who were working in Makati.
These expats were once afraid that they can be killed given the experience in August 2010 carnage at
the Quirino Grandstand resulting in the killing of Chinese tourists. Today, Asian countries and the
Philippines have touting their renewed relationship which makes the country more attractive for
foreign investments.

At this juncture, Mylene broached the idea to the partners about the possibility of expansion
since they have access to a sizable credit line by capturing another market segment i.e. those parents
who use the MRT as means of transportation in coming to/from their respective offices, both to/from
north and south bound terminals. The management of MRT and SM has approved in principle the
proposed venue.
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During the meeting, it created the first serious disagreement among the four partners. Each has
a quite different view on how to capitalize further on their current success. Their thinking is outlined as
follows:

Mary Rose’s plan:

“I want us to keep doing what we are doing now because we are in charge and of course, no
bureaucracy. We have the advantage of running our business privately that is not under pressure to
grow at a certain pace or to declare dividends. We don’t have to answer to anybody except ourselves.
Or, the hiring of securities analysts analyzing our margins everytime.

Yes, I agree, we have hundreds of working parents as prospects. Mama Bear can make a name
for itself as a player but not necessarily to be a major, major player. I am already okay that there is one
child care at the mall, the Kids at Work which is located at the 3rd floor of Glorietta, Makati City. The
Kids at Work can accommodate as much as 50 children aged 5-12 years old, and if below four years,
these children should have a companion that will also pay for the entrance fee. Its peak days are during
weekends from 10 AM to 7:45 PM when the children are dropped off by parents for them to go
shopping and malling. Moreover, a total of 24 with early formal education settings are considered the
indirect competitors, with 2-3 hours of classes a day from 7 AM to 2 PM. As of now, we are privilege
enough to operate in more flexible hours.

Besides, I am already emotionally attached to the children and looking for other prospects
would be hard for me. To expand would mean increasing number of owners and designing the new
organizational structure.”

“Please take note further that in a bustling metropolis as the Makati district, individuals have to
be ‘in’ with various technological innovations not only to improve our business processes, systems and
operations but also to lure prospective clients.

To embark on any business carries with it the challenge of upgrading its technology to be above
par with competitors. Our childcare center must not only have an atmosphere of comfort and safety but
must also be conducive to learning equipped with the latest fads where little minds are being given a
chance to learn and explore but not missing one of the joys of childhood i.e. playing. If we can meet
with these, parents would never be persuaded to enroll their kids.

Also, small children frequently carry viruses, and they rarely cover their mouths when they
sneeze or cough. We must have a proactive policy against contagious diseases for our health and
customers. Failing to notify parents of contagious disease incident might cause them to question how
seriously we take their child’s health and well-being.

Moreover, many working parents may opt to delegate the task of child rearing to their relatives
living with them or even to household helpers. Moreover, this is an additional investment to be poured
in and I have no extra money. ”

Mylene’s plan:

“I find appealing in what Mary Rose says, but her approach has a number of flaws. While I’m
not nuts about trying to keep up this pace, I can handle it. What I can’t handle is the realization that we
may be giving up millions. We have a winning formula but we must leverage our time and capitalize on
it. Considering that our reputation has been highly regarded for excellence in care giving, education and
community involvement.
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Secondly, if we don’t build a bigger, stronger organization fast, we may not only lose
opportunities but the whole business program. A few ‘copycats’ in Ortigas Business Center and
Bonifacio Global Center have already tried to imitate our approach and are using it with some success.

Given that limiting constraints in doing business a priority of the government, the business of
child-care is no exemption for the foreign investors to establish their own because they see the growing
numbers of expats with children in the Philippines. Unless we get bigger and stronger so that we can
offer better service at lower price, we will lose what we have now. I want us to be a corporation and sell
up to 40% of our stocks to either a venture capitalist or to the public.

I am sure we can raise enough money to operate not only on a larger scale, but also a lot more
professionally and not to have to kill ourselves in the process. With a larger organization, we can look
for more market opportunities and further exploits our potentials.

The future economic outlook, so far, is promising. The amendments to RA No. 8762, otherwise
known as the Retail Trade Liberalization Act aim to do away with barriers to foreign investment by
easing equity and capitalization requirements to create a more favorable investment climate in the
country.

Seemingly, the Philippine economy grew by 6.2 percent in 2018, making it among the strongest
performers in the East Asia and Pacific Region. With increasing urbanization, a growing middle class,
and a large and young population, the Philippines’ economic dynamism is rooted in strong consumer
demand supported by a vibrant labor market and robust remittances. The country’s real GDP growth is
projected at 5.8% in 2019, before accelerating to 6.1% in 2020 and 6.2% in 2021. (source: The World
Bank).

Thirdly, we have to admit that we don’t have as much bargaining power with suppliers and
customers as a big player. Many childcare service providers can offer greater value without necessarily
reducing the price. Although, there are substitutes like employer-sponsored childcare facilities, non-
government organizations, churches, personal babysitters and the stay at home parents, it is hard to
put a price to value. The greater the perceived value of childcare services, the less likely customers are
going to haggle on the price and the greater the chance competitors’ customers will want to register
their child.

Relatedly, the customers in our industry have many options but finding high quality care that is
reliable, affordable and accessible can be very difficult for working parents. They tend to flock to
businesses who can offer childcare services that meet their need for a low price.

Lastly, there are so many potentials and prospects in this kind of business. “Based on the
result of the survey conducted which I commissioned; of the total number of daily MRT commuters of
260,000, it was established that there were 58% parents with four years old and below and have an
average of three kids. Of the 110.6 million populations as of May 2019, 12.8 million are in Metro
Manila. Many of these parents-commuters are frustrated because most of their time is spent stuck in
traffic which reduces their family time. Another business prospect to look at is the $3.5-billion Makati
City Sub-way, a “modern tramway system”. Its construction is set to begin before the year ends and
may be completed in 2024.

Antonette’s plan:

“Mylene may be right. I am presently satisfied that our business has been steadily growing. I
guess, however, I simply lack the foresight and the inside information of the total market potential to
head-on address growth and expansion opportunities in the metropolitan area. If we expand, there
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could a possibility of losing out to competition in the process. If it continuously keeps itself voluntary
blind and numb of significant market data relevant to its business. Therefore, the selling of our
company would relieve me from further stress and we should do it immediately before our imitators
outcompete us.”

“I would like also to raise my concern on the partners’ delineation of duties and responsibilities,
given our business set up. There were many instances that Mylene, being the managing partner has the
tendency to over manage. I understand that we may have different ideas evolving however, what I
cannot fathom is that Mylene may have committed an “ultra vires” act which to me did not inure to the
benefit of the partnership. “

Alalyn’s plan:

“I knew from the very start, how competitive the business is. It is my utmost dream to further
establishing Mama Bear beyond the reach of competition, by way of better customer reach and
coverage through establishing more centers, and making each client satisfied.

The thought of adding more centers would mean adding more personnel who are nurturing,
patient, caring and have educational requirements. Thereby, contribute to the solution of the country’s
unemployment rate which rose to 8% in April this year from 7.5% in the same period last year which
means 3.1 million Filipino who had no jobs based on the latest survey by the National Statistics Office.

However, we have been experiencing exodus of qualified and certified child care workers,
tutors and staffs in exchange for greener pastures. With the increasing demands of living, our newly
hired employees use our company for their advantage to gain experience and training. A hiatus is then
created. Usually, the ones left behind to assume temporarily (until a more skilled and competent person
applies for the job) the vacant roles of these resigned employees are rookies who have just yet to know
the operation of the company.

Further, we have been criticized by Atty. Elaine Mendoza, a radio commentator that we have
been active in helping others through Gawad Kalinga but not looking at the concern of our employees’
welfare, mostly contractuals for not being given their overtime pay and meal allowances for their extra
hours.

But what worries me more is we might not be able to comply with the Department Order No.
174 of the Department of Labor and Employment (DOLE) aimed at addressing President Duterte’s
promise to put a stop on ‘endo’. Such Order prohibits or limits our small scale enterprise from hiring
workers on a contractual basis which will possibly lead to closure of business.

Consequently, this will be disastrous to the Philippine economy as it will result to

unemployment of more than one million Filipinos.

The partners ended their meeting with no specific course of action to take. They agreed to meet
next month to have more time to study and thresh out possibly their differences because it will have
business repercussions.