Department of Business Administration College of Business Administration and Accountancy Central Luzon State University Science City of Muoz

Three Little Star Learning Center, Inc.

A Strategy Management Paper Submitted in Partial Fulfillment of the Requirements for Strategic Management (MNGT 240)

SUBMITTED BY: NOEL BAUTISTA ROGELIO DELA CRUZ JR. BENJIE GADIAZA REONEL GARCIA JEZRAEL GROSPE ANGELO ORILLA MA. EMMACULADA PADILLA JAN ROBIN VILLEGAS

SUBMITTED TO: MR. JAMILTON ESGUERRA

February 29, 2012

TABLE OF CONTENTS Executive Summary...1 Chapter I: Introduction Nature of Business....................................................................................... 4 Company History...................................................... 4 Organizational Structure.............5 Number of Employees..............................................................................6 Major Market Served......7 Other Relevant Information......................................................................8 Chapter II: Research Design and Methodology Data Requirements and Data Sources...........................................................9 Research Design and Methodology..............................................................9 Scope and Limitations of the Study.............................................................10 Chapter III: External Analysis Key External Forces.....................................................................................11 Concern Factors Affecting Threats and Opportunities..13 Chapter IV: Industry and Competitors Analysis Market Size and Growth Rate..................15 Customer Composition and Characteristics..15 Technology Developments....16 Numbers of Players and Their Size...16 Competitive Rivalry..17 Industry Pricing.....17 Critical Success Factors In the Industry....19 Porters Five-Forces Model...19 Competitive Profile Matrix...22 External Factor Evaluation Matrix25 Conclusion on Industry Attractiveness........................................................27 Key External Strategic Issues......................................................................27 Chapter V: Company Analysis Vision Analysis............................................................................................28 Mission Analysis..........................................................................................28 Ways to Communicate Vision and Mission Statement................................29 Comparative Financial Statements...............................................................30 Market Share................................................................................................39 Financial Ratios.40 Internal Analysis......................................................................................... 47 Internal Factor Evaluation Matrix.52 Key Internal Strategic Issues.......................................................................53

Chapter VI: Strategy Formulations Strengths, Weaknesses, Opportunities and Threats Matrix.............54 Strategic Planning Action Evaluation (SPACE) Matrix...58 Grand Strategy Matrix...........61 Quantitative Strategic Planning Matrix (QSPM)......63 Chapter VII: Recommendations Recommended Revised Vision Statement....................................................67 Recommended Revised Mission Statement..................................................67 Recommended Strategic Objectives..............................................................67 Recommended Strategies..............................................................................68 Chapter VIII: Strategy Implementation Programs........................................................................................................69 Action Plan....................................................................................................69 Chapter IX: Strategy Evaluation and Control Evaluation......................................................................................................80 Control...........................................................................................................81 Contingency Plan..........................................................................................82 References.......................................................................................................................84 Appendix.........................................................................................................................85

TABLES: Table 1. Company Profile Matrix..................................................................22 Table 2. EFE Matrix......................................................................................25 Table 3. IFE Matrix.......................................................................................52 Table 4. SWOT Matrix..................................................................................54 Table 5. QSPM..............................................................................................63 FIGURES: Figure 1. Market Share..................................................................................29 Figure 2. Comparative Financial Performance..............................................45 Figure 3. Comparative Financial Position.....................................................46 Figure 4. SPACE Matrix...............................................................................60 Figure 5. Grand Strategy Matrix...................................................................61 Figure 6. Annual Objectives..........................................................................70 Figure 7. Proposed Organizational Structure................................................72

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EXECUTIVE SUMMARY Three Little Star Learning Center, Inc. (TLSLC, Inc.) is an educational institution located at 398 A. Bonifacio Street, Pinagpanaan, Talavera, Nueva Ecija. Currently, they offered pre-elementary and elementary school courses. Based on the external and internal analysis, the total weighted score of EFE Matrix is 2.31 which below the average of 2.5. This indicates that the business is not doing well, not taking advantage of external opportunities, and not neutralizing the impact of external threats. The total weighted score is 2.90 of the internal factor evaluation matrix which is above the average of 2.5. This indicates that the business is doing well in taking advantage of internal strengths and reducing internal weaknesses. The key issues that the company should consider are: customer trust and loyalty, rising number of competitors in the industry, potential transferees from public schools, availability of qualified teachers, employee turnover, marketing efforts, employee benefits and incentives and teacher-to-student ratio. The result of SWOT Matrix shows that the company should implement strategy such as increase in employee benefits and rewards to attract qualified teachers, offer High school curriculum, avail of cash discount on books to maximize the use of funds, recognized accomplishment of their students or alumni through print advertisements, provide additional incentives to employees to increase employee retention, continue providing quality education and stability assurance on management matters to increase customer loyalty, increase employee satisfaction and competitiveness by continuous trainings and seminars to enhance employee skills, adapting to technological changes

through the use of generated funds, and additional advertising cost to invite more enrollees and improve Facilities for recreation. The SPACE Matrix shows a result that the company, being in the conservative quadrant (upper-left quadrant) of the SPACE Matrix, should pursue conservative strategies which often include market penetration, market development, product development, and concentric diversification. It also implies that the firm should stay to their basic competencies and not taking excessive risks. Based on Grand Strategy Matrix, the industry has an annual growth of 5.56% which could be considered to have rapid market growth. The assessment on TLSLC, Inc. indicates that its external environment is weak. The suggested strategy to be pursued by TLSLC, Inc. must come from quadrant II which is market penetration and product development in particular. From the QSPM matrix, two strategic alternatives product development and market penetration are being considered by the group. Product development strategy includes, but not limited to, providing tutorials for students. On the other hand, strategies on market penetration can be carried out through intense marketing efforts. The sum total attractiveness score of 4.69 indicates that market penetration is more attractive strategy when compared to product development strategy. Strategies should be designed to support and to accord with organizational structure, vision and mission; to properly communicate it with key employees; to efficiently allocate and utilize the organizations limited resources; to attract and retain skilled teachers and other personnel; to redirect marketing efforts; to improve and maintain competitive position and financial stability; and to delegate authority and
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responsibility of every staff so that they can work efficiently and develop harmonious relationship within the organization. Summarizing all the matrixes prepared and examined, market penetration is the best strategy that should be implemented by the company. It implies that the company must seek to increase market share for present services in present market. The researcher examined the companys management, marketing, production and operation, finance and accounting, and management information system issues that are central to effective strategy implementation. Management issues central to strategy implementation include establishing annual objectives, devising policies, allocating resources, matching structure to strategy and linking performance and pay to strategies. Since the TLSLC, Inc. is a service industry, the operation process comprises inputs such as facilities, teaching materials, competitive teachers, to gain an output of quality education. When implementing strategies, the company must consider the capacity and behavior of its human resource. Problems that may arise in implementing strategies can usually be traced to one of three causes: (1) Disruption of social and political structure, (2) Failure to match individuals aptitudes with implementation tasks, and (3) Inadequate top management support for implementation activities. . The company can implement many ways to market and advertise its operation and name. The company can distribute leaflets to houses in order that the community will have information on the services, rates of tuition, its quality and benefits like proving better discounts against competitors provided by the company.

CHAPTER I INTRODUCTION

NATURE OF BUSINESS The Three Little Star Learning Center, Inc. (TLSLC, Inc.) is a privately owned institution primarily organized as an entity providing education service. It is a closed corporation where the incorporators are composed mainly of the family members. Currently, they offered pre-elementary and elementary school courses. The registered office address of the educational institution is 398 A. Bonifacio Street, Pinagpanaan, Talavera, Nueva Ecija. COMPANY HISTORY On June 1999 Mr. and Mrs. Maranan decided to put up a learning center in their locality in Brgy. Pinagpanaan, Talavera, Nueva Ecija in a newly build garage with an area of 48 sq. m. They believe that this center will develop children of 21st century to become adults and will sustain their creativity during the formative years through its curriculum. These were the heart and soul of programs philosophy, goals and objectives that are intertwined firmly so that their product will be quality children who are wellrounded individuals physically, cognitively, emotionally, and socially whos values are not only learned but caught and internalize as they move along through the years. Three Little Stars Learning Center was started with only twenty five pupils in the kindergarten and nursery classes handled by the directress, Mrs. Remedios G. Maranan and an assistant teacher. On February 14 2000, the school was granted the government
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recognition/accreditations #E0112 in the pre-elementary level. To carry on the goals and mission of the school, there is a need to continue the level of educating elementary pupils by giving them the basic education from grade I until they finally reach grade VI. It is only then that evaluation can be made if the learners have been equipped with all the skills cognitively, physically, socially, emotionally, morally upright and totally develop citizen. The company would be a partner of our government in developing the Filipino youth to become honest and competent leaders of our beloved Philippines, so that this nation will be great again. So on august 19 2005, TLSLC, Inc. was accredited by the DepEd #E-105, S. 2005 for grade I to grade VI of the elementary course. Organizational Structure Three Little Star Learning Center, Inc. Administration and Staff Mr. Alejandro D. Maranan Jr. President Mrs. Remedios G. Maranan Vice President/Directress Mrs. Christine G. Maranan Novales Secretary Mrs. Chona G. Maranan Osis Treasurer Mrs. Charina Grace G. Maranan Borge Auditor Mrs. Digna T. Maulino Asst. to the Principal Mrs. Marian E. Tongol Teacher in-charge Pre-Elementary

The above organizational structure given by the directress of the school is the one which has been filed to Securities and Exchange Commission (SEC) for compliance purposes only. Also, the structure provides positions which identify the duties and responsibilities of the officers. However, the above mentioned structure does not take effect for the present company operation.

Number of Employees Currently, the company has nine employees composed of eight contractual teachers and one utility personnel. Each contractual teacher undergoes certain qualifications and trainings. The teacher must be a graduate of Bachelor of Science in Elementary Education, had an early childhood teaching course and must passed the written examination, interview, and teaching demonstration to be evaluated by the directors of the school. After passing the said qualifications, the teacher must undergo into two weeks teaching training. Meanwhile, the utility personnel serve as the janitor and the security of the campus. The utility personnel must be trustworthy, industrious and committed in doing his job.

Major Markets Served The major market served by TLSLC is the parents/guardians with children of age 4-12 years old male and female, Filipino or non-Filipino, sectarian and non-sectarian. The students of the school are wholly within Talavera, Nueva Ecija.

Other Relevant Information Company Philosophy The administration and staff of TLSLC, Inc. believed that every individual is unique, worthy, dignified, so he or she should be respected, nurtured, with cognitive, emotional, social, and physical growth and provided with rich and age-appropriate learning experiences through self-discipline, good study habits, value integration in the curriculum coupled with scholarly and caring mentors. The school commits itself to create a good learning environment that is anchored with current educational trends and strategies, applies positive approaches and empathic understandings, accentuates and recognizes each childs God given talents and capacities. The school further emphasizes knowledge and discovery of the truth can be attained by virtue and values formation. With this, children are holistically transform to become productive, divergent thinkers, value oriented, thus: physically, mentally, socially, emotionally prepared to cope with complex issues and needs of the ever changing time; challenges of competitive world and adjust the advancement in science and technology.
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Company Vision TLSLC, Inc. envisions a community of active leaders of our country and citizens that will make this nation great again and be proud of ourselves as Filipinos. Company Mission TLSLC, Inc. provides well balanced educational programs in our curriculum for formation of individuals who are God loving, self reliance, creative, responsible, equipped with functional intelligence and moral virtues. Company Goals TLSLC, Inc. aims to be one of the best school in our place with up-to-date and age- appropriate practices and an electric curriculum which incorporates the traditional but useful and the new but fruitful knowledge. Company Objectives 1. TLSC, Inc. shall aim to develop the spiritual, moral, and physical capabilities, of the child pattern from the Revised Elementary Program in 1970. 2. Provide the child with experiences in democratic way of life. 3. Inculcate ideas and attitudes of patriotism and nationalism. 4. Teach the duties of a leader and a follower. 5. Encourage critical and logical thinking. 6. Broadens scientific, technological and creative thinking. 7. Promote the countrys cultural heritage.

CHAPTER II RESEARCH DESIGN AND METHODOLOGY

DATA REQUIREMENTS AND DATA SOURCES This research requires the following data: companys financial statements, mission and vision statement, goals and objectives, philosophy, background or history, general policies and other relevant information that is needed in this study. The researchers source of data was the interview conducted with Mrs. Remedios G. Maranan, the current Vice President and Directress of the said company. The researchers also obtain data from their student handbooks and accounting records. Information needed in performing External and Internal Audit was acquired through observation in the companys environment and operations. In determining their market share the researcher get the total number of pre-elementary and elementary students in Brgy. Pinagpanaan, Talavera. This information was gathered from the Municipal Planning and Development Office of the Municipality of Talavera..

RESEARCH DESIGN AND METHODOLOGY Interview was the method used in collecting data in this study. It is chosen because of its flexibility in terms of data gathering. It gathers data interactively and attains important data beyond the expectations. The interview method could yield a high proportion of information. This was possible because the interviewees answer could be easily validated and probed by the interviewer in real time. This was used in gathering data from the companys director and other key personnel about the companys rules
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and regulations governing their services, how the company complies with them and how they provide services. The interview method was also used in assessing how the management responds to the customer demands. The information that were gathered will undergo further analysis to answer the questions cited in this study and ultimately evaluate the performance of the company in responding to the varying preferences of customer in conformity with the services laid down by their competitors. researchers personally visit the school for an interview. The descriptive method of research was used in this study. The information concerned the current status of the phenomena to describe what exists with respect to the given conditions in a situation. Descriptive method involves the description, recording, analysis and interpretation of the present nature, composition or processes of phenomena. The

SCOPE AND LIMITATIONS OF THE STUDY This study focuses on the background of the TLSLC, Inc. such as its history , nature of business and the other relevant information, analysis of its external opportunities and threats; factors affecting its industry and competitors; evaluation of companys mission, vision and philosophy and objectives; and lastly using the gathered information to generate the best strategy.

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CHAPTER III EXTERNAL ANALYSIS

The following are the areas of concerns that are significant in analyzing the external environment of TLSLC, Inc.:

ECONOMIC FORCES The economic environment comprises the different economic conditions of the TLSLC, Inc. Some of the areas concerns are availability of qualified teachers and supply of capital needed for expansion. With regards to availability of qualified teachers, the company have a lot of applicants to hire because they can be hired even though they are not board passers. The company wants to expand their operations (from grade school to building high school courses) if they have some capital investment to use.

SOCIAL, DEMOGRAPHIC AND ENVIRONMENTAL FORCES Social The school participates in outside activities with other private schools. They participate socially in some activities like quiz bee on spelling, math, and science category which they compete with other private schools within the district, sponsored by Nueva Ecija Private Elementary Education Association (NEPEEA). They also practice social awareness within their four corner of the school. They celebrate significant events with quality and entertaining program that develops and showcases the students talents. Parents are enjoined to support their children in celebration of different momentous

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occasions such as the schools Foundation Day, Buwan ng Wika, Christmas and Graduation Program. Demographic The school is located at 398 A. Bonifacio St., Pinagpanaan, Talavera which is quite away from the main road. The location is also good because it is away from too many people so there is almost no disturbance or noise created. The surrounding is composed of family houses living there and is nature-oriented. It is also near to the Barangay Hall which is advantageous for security purposes. Environment - The surrounding of the school is very nature-oriented full of trees and fresh air roams freely. They also observe cleanliness inside and outside of the school. Near the school, there is a coconut plantation that enhances the natural beauty of the location.

TECHNOLOGICAL FORCES If the company wants to survive in the long-run, it must adopt to changes such as technological development. School nowadays have adopted technological development such as using computers. In order for TLSLC, Inc. not to be left behind by its competitors, they are offering computer subjects on their grade school courses and use it as learning materials in providing quality education.

GOVERNMENT AND LEGAL FORCES As compliance to government standards specifically Department of Education (DepEd) standards, the TLSLC, Inc make an effort to process their government recognition/accreditation such as #E 012 in the pre- elementary level during February 14,

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2000 and on August 19, 2005, they were granted accreditation by DepEd to operate Grade I to Grade VI of elementary courses. They are accredited by the Securities and Exchange Commission being a corporation in nature.

COMPETITIVE FORCES TLSLC, Inc. entered into a private educational institution industry that provides quality education to the student it serves. The external environment has contributed to its potential growth. The private schools within the town of Talavera increases in numbers and they were the main competitor of the TLSLC, Inc.

CONCERN FACTORS AFFECTING THREATS AND OPPORTUNITIES

Market Demand and Opportunities The school is surrounded by agricultural lands. There is opportunity of increase in number of residential houses around the school due to the conversion of agricultural lands. As a result of growth in population, there could be an opportunity of growth in market size. But examining the possible threats, there could be decrease in customer trust and loyalty due to false notion that the school will end its operations.

Competition in the Industry Looking the social forces of the school, it participates in some outside activities with other private schools. They compete in quiz bee and specialized subjects and gather competitiveness through winning in the competitions. But looking its competitive forces,

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the number of private schools is relatively high which contributes to the intensity of competition in the industry.

Suppliers and Labors The economic forces indicate that the availability of needed labor is stable. Thus, there are enough supplies of qualified teachers which provide quality education. Suppliers of books and learning materials allow the schools to maximize its capital investments by giving discounts and promos. On the other hand, present teachers treat the school as a stepping stone to enter in the public school. Thus, it creates loss of competitive teachers that often contributes to the competitiveness of the school.

Technological Advancement The technological forces allow the firm to see the importance of adapting to changes. The trend today is that schools are capitalizing in technological advancement in order to provide quality education. It could also used to improve its marketing efforts which could enhance its market share in the industry. But this also means, failure adapting to change will lead to loss of competitive advantage.

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CHAPTER IV INDUSTRY AND COMPETITORS ANALYSIS

Market Size and Growth Rate The market size has been determined by the researchers through the number of individuals of Barangay Pinagpanaan falling within ages 4 to 12 years old. This range of age is believed to be the range of potential market, Pre-elementary and elementary level. The total market size is 837 individuals. The growth rate projected is 5.56% every year.

Customer Composition and Characteristics The majority target customers of the industry are the parents with enough capabilities to send their children into a private school. The prospective students are young male and female under the age bracket of 4 to 12 years old which derives their necessities to their parents. The parents must have stable jobs or capable of supporting their children to private school because the tuition fee is significantly expensive. In less-developed countries like the Philippines, people are very meticulous in choosing services and products. They are considered as price sensitive because the price is very significant to them. Thus, price sensitive customers may prefer public school than private schools because e the tuition fee in private school is expensive compared to public school.

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Technology Developments The trend in companies engage in education is now focusing on e-learning education. This system comprises the use of computer and internet which is more interactive, faster and conducive for learning. Companies focusing on this kind of learning system invest large amount of money on more advanced teaching tools such as computers and projectors. The organization should employ teachers that are capable of implementing this kind of system. The company will benefit from this investment not only in terms of higher customer satisfaction but also in terms of payroll, accounting functions, flexibility of education, and grading system.

Competitive Rivalry The major competitors of TLSLC, Inc. in their industry are Holy Angels Academy, New Horizon, Renato E. Herera Montessori College (REHMC), Talavera Central School, and Marys Little Angels Montessori School. But their most significant rivals based on demographic location of TLSLC, Inc. are Kobayashi and Christian Faith Academy.

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Numbers of Players and Their Size Players within the industry of providing education has enormously increasing today, there are 15 private schools operating within Talavera. 80% of these are situated in the town proper where large number of potential market is available. The remaining 20% is operating outside the town proper and serving a small number of potential markets. TLSLC, Inc. belongs to the 20% of the private schools operating outside the town proper of municipality of Talavera.

Industry Pricing Enrollment Fee of Three Little Stars Learning Center Incorporated Three Little Stars Learning Center Inc. Enrollment Fee 2011-2012 Annual Tuition Fee Miscellaneous Books Computer Total Pre-Elem 9,000.00 2,400.00 2,400.00 13,300.00 Grade I-III 9,000.00 2,400.00 3,500.00 1,500.00 16,400.00 Grade IV-VI 9,000.00 2,400.00 3,700.00 1,500.00 16,600.00

Optional Down Payment of P5,000.00 Pre-Elem Monthly Quarterly Semi-Annual 979.00 2,935.00 4,400.00 Grade I-III 1,270.00 3,800.00 5,700.00 Grade IV-VI 1,290.00 3,870.00 5,800.00

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Optional Down Payment of P4,000.00 Pre-Elem Monthly Quarterly Semi-Annual Note: Monthly Payment Due: Quarterly Payment Due: Semi-Annual Payment Due: Discounts: 1. A 10% discount on tuition fee is given for those who pay in full upon registration or before the beginning of the regular school year. 2. Two brothers and/or sisters, youngest gets a 14% discount on tuition fee. 3. Three brothers and/or sisters, youngest gets 50% discount on tuition fee. 4. Four brothers and/or sisters and above, youngest gets 100% discount on tuition fee. 1st week of July to March July 1, October1 & January 1 July 1 & November1 1,090.00 3,270.00 4,900.00 Grade I-III 1,380.00 4,135.00 6,200.00 Grade IV-VI 1,400.00 4,200.00 6,300.00

The tuition fee pricing of the key competitors in the industry is relatively higher by approximately 2% compare to the pricing of TLSLC, Inc.

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Critical Success Factors in the Industry The critical success factors are composed mainly of internal and external issues. This could contribute to the formulation of effective strategy which could result to competitive advantage. The internal issues includes pricing, quality of services, employee skill and turnover, availability of capital, management and administration which define by organizational structure, and marketing concerns which includes advertising. The critical success factors on external issues include the market share in the industry, location of the firms, availability of technology advancement, and government compliance. These critical success factors would be used in analyzing the industry.

PORTERS FIVE-FORCES MODEL

Rivalry among Competing Firms The intensity of rivalry among competing firms tends to increase as the number of competitors increases. Capability of competitors becomes equal and any increase in the industry growth will bring each competitors equal chance to gain that growth. The Three Little Star Learning Center, Inc. experiences decline in enrollees this past year due to wrong notion that the school will ends its operation. The demand of consumers for quality education also intensifies the competition. The strategy of the firm is effective and successful if it provides competitive advantage over the strategies pursued by rival firms.
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Potential Entry of New Competitors Whenever there is new firms entering in the industry, the intensity of competition also increases. New players in the market cannot easily enter due to government regulatory policies concerning the accreditation granted by them. The requirements needed should be filed to the Department of Education for the enough capital, faculties, facilities, and good curriculum in order for the government to grant accreditation. Lack of experience and undesirable location covered also create barriers to entry in the market. Customer trust and loyalty can be achieved through significant experience of the firm. Another barrier is the location which must be competitive enough for the new firm to gain market share. Whenever the new firm entering the market, is significantly strong, the firm must be capable of securing its competitive position and take necessary actions to counter the new entrants.

Potential Development of Substitutes Product/Services The potential development of substitute services/products contributes to increasing competition in the industry. Customers today demand quality education for their children. Customers can hire independent tutors for their children to maintain the quality of education they demand. This would entail a decreased on the enrollees of the school and increased in the intensity of competition.

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Bargaining Power of Supplier The bargaining power of suppliers affects the intensity of competition. The TLSLC, Inc. allows the potential entry of new suppliers of books. The suppliers of books and educational tools offer discounts and promos to school they go. It must be the interest of both suppliers and producers to assist each other with reasonable prices and improved quality of learning materials. There is also enhancing availability of competitive teachers which provide quality education due to high supplies of fresh graduates whose major is education.

Bargaining Power of Consumers Nowadays, the demand for quality education is increasing because of the conviction that it would alleviate poverty. The customer of TLSLC, Inc. has a substantial influence on the competitiveness of the firm. In order for the school to gain customer trust and loyalty, it offers discounts on tuition fee to customers. The firm is also struggling in the face of falling consumer demand due to rumors that the school will gain to ends its operations. Thus, it also contributes to increase the bargaining power of consumers. A well-informed consumer about the schools service, prices and cost also contributes to the bargaining power of the customers. The increase of knowledge customers about prices makes them to think for substitutes or transferring to other school (e.g. public schools) if the price is significant to them.

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Competitive Profile Matrix Christian Faith Academy Weighted Weighted Weight Rating Rating Score Score 0.02 2 0.04 2 0.04 Kobayashi 0.17 0.17 0.13 0.09 0.08 0.06 0.07 0.03 0.04 0.03 0.04 0.03 0.03 0.01 1 3 1 2 1 3 2 3 3 2 3 3 2 1 2 0.51 0.17 0.26 0.09 0.24 0.12 0.21 0.09 0.08 0.09 0.12 0.06 0.03 0.02 2.13 4 3 3 4 3 2 3 3 3 3 4 4 4 3 0.68 0.51 0.39 0.36 0.24 0.12 0.21 0.09 0.12 0.09 0.16 0.12 0.12 0.03 3.28

Critical Success Factors Pricing Service Quality Market Share Finances Location Employees Skill Teaching Aid Management Administration Technological Advancement Government Compliance Employee Turnover Extra Curricular Activities Advertising Organizational Structure Total

Table 1. Company Profile Matrix The two most important factors to being successful in the industry are service quality and market share with a weight of 0.17. Kobayashi is weaker on market share with the rating of 1.0 or weighted score of 0.17 and Christian Faith Academy is stronger with the rating of 3.0 or weighted score of 0.51. Christian Faith Academy is relatively stronger in service quality with the rating of 3.0 or weighted score of 0.51 compare to Kobayashi with the rating of 4.0 or weighted score of 0.68.
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SUMMARY AND CONCLUSION External Opportunities Increase availability of qualified teacher because of abundant supply of fresh graduates of Bachelor of Science in Elementary Education (e.g. graduates from the newly branch of NEUST in Talavera). The school is located relatively far from the road which ensures the students safety. With the aid of technology, the company could increase accessibility through establishing net working site on which they promote their services. The fluctuation of tax rate imposed by government agencies does not influence them. Availability of book suppliers that allow the school to choose the best of quality books at a reasonable price. Increase in market size due to conversion of agricultural areas into residential areas. Increase in popularity because of excelling in different competitions in higher level such as national level quiz bee. Increase in students by adding high school department if there is available capital investment. High student transferees from public school because of unsatisfactory facilities.

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External Threats Possible loss of competitive teachers in the school because a lot of newly hired teachers treat the institution as a stepping stone for them to enter in the public school. Increasing number of competitors due to rising number of private school in the locality. New government regulations/policies that may affect the company. It may result to higher cost of compliance and if not complied, may result to decreased customers/students. Decrease in customer loyalty due to false notion that there will be changed in administration. The area around the school is included in the flood prone area. Increases degree of government intervention due to accreditations achieved. Decrease in competitive advantage due to failure to adapt to technological changes.

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External Factor Evaluation Matrix Key External Factors Opportunities Increase availability of qualified teacher because of abundant supply of fresh graduates of Bachelor of Science in Elementary Education (e.g. graduates from the newly branch of NEUST in Talavera). The school is located relatively far from the road which ensures the students safety. With the aid of technology, the company could increase accessibility through establishing net working site on which they promote their services. The fluctuation of tax rate imposed by government agencies does not influence them. Availability of book suppliers that allow the school to choose the best of quality books at a reasonable price. Increase in market size due to conversion of agricultural areas into residential areas. Increase in popularity because of excelling in different competitions in higher level such as national level quiz bee. Increase in students by adding high school department if there is available capital investment. High student transferees from public school because of unsatisfactory facilities. Threats Possible loss of competitive teachers in the school because a lot of newly hired teachers treat the institution as a stepping stone for them to enter in the public school. Increasing number of competitors due to rising number of private school in the locality. New government regulations/policies that may affect the company. It may result to higher cost of compliance and if not complied, may result to decreased customers/students. Decrease in customer loyalty due to false notion that there will be changed in administration The area around the school is included in the flood prone area. Increases degree of government intervention due to accreditations achieved. Decrease in competitive advantage due to failure to adapt to technological changes. Total Table 2. EFE Matrix
Weight Rating Weighted Score

0.11

0.44

0.08 0.03 0.03 0.07 0.10 0.06 0.04 0.05

2 1 1 3 1 3 2 4

0.16 0.03 0.03 0.21 0.10 0.18 0.08 0.20

0.05 0.11 0.03 0.12 0.06 0.01 0.05 1

4 1 1 3 1 2 2

0.20 0.11 0.03 0.36 0.06 0.02 0.10 2.31

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The most important factor to be considered to become successful in this industry is to neutralize the threat such as decrease in customer loyalty due to false notion that there will be changed in administration with 0.12 weight, because it will result in sudden decrease in total numbers of enrolees. Also take into consideration the two factors, Increase availability of qualified teacher because of abundant supply of fresh graduates of Bachelor of Science in Elementary Education and Increasing number of competitors due to rising number of private school in the locality with 0.11 weight. The industry has superior response (rating = 4.0) with regards to the following factors: Possible loss of competitive teachers in the school because a lot of newly hired teachers treat the institution as a stepping stone for them to enter in the public school and Increase availability of qualified teacher because of abundant supply of fresh graduates of Bachelor of Science in Elementary Education by taking necessary action such as giving essential benefits and incentives to their employees. The industry also has superior response on High student transferees from public school because of unsatisfactory facilities by continue improving their facilities to accommodate transferees or new students. Finally, the total weighted score of EFE Matrix is 2.31 which below the average of 2.5. This indicates that the business is not doing well, not taking advantage of external opportunities and not neutralizing the impact of external threats.

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CONCLUSION ON INDUSTRY ATTRACTIVENESS Filipinos nowadays give more importance in education because of the premise of better future. Thus, parents try to send their children to school that provide quality education. Thats why industries providing educational service doesnt easily vanished because of that demand for quality education. However, there are some external factors that may affect the trends such as economic condition, government policies and technological advancements. There could be potential growth in this industry if players in industry could uplift the desired output of its market.

KEY EXTERNAL STRATEGIC ISSUES Customer trust and loyalty Rising number of competitors in the industry Potential transferees from public schools Availability of qualified teachers

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CHAPTER V COMPANY ANALYSIS

VISION ANALYSIS A good vision statement of a company must briefly answer the basic question what do we want to become? It should also describe outcomes that are five to ten years away, and it should provide the foundation for developing a comprehensive mission statement. The researchers observed that the vision of the TLSLC, Inc. does not depict directly what the company wants to be in the long-run. It does not promote change for their desired direction, but they had only described their specific output they want to be achieved. It is also broad in scope.

MISSION ANALYSIS A good mission statement must rely accordingly with its vision statement. The researchers had made observation on the TLSLC Inc.s mission statement. Findings includes that it vaguely state what really the companys purpose is on making output in connection to what their companys vision is. The schools mission statement fails to comply with some of the characteristics of a good mission statement. It does not reveal that the firm is socially and environmentally responsible. The customers were not clearly identified and the technology that they used or offered was not stated. Furthermore, their commitment to growth and financial soundness of the firm was not identified; the company does not indicate its distinctive

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competency or major competitive advantage; and, it does not also specify how it valued its employees. As a result of the evaluation by the researchers, the mission statement of the company must be restated with more clear and sound message of their purpose of its existence.

WAYS TO COMMUNICATE VISION AND MISSION STATEMENT The vision and mission statement, philosophy, goals and objectives must be communicated well throughout the organization. This will make a harmonious flow of tasks and perform efficiently within the operation. The following are the recommendations provided by the researchers in order that TLSLC will have their vision, mission statement, philosophy, goals and objectives be well communicated among their employees and students. Include the company statement as basis of agendas when conducting meetings to their employees. Require each and every employee to memorize and to put in action the company statements. Create school pledge through empowerment that will bring their students aim and feel noble in studying. Always remind the employees and students of their mission and vision statement, philosophy, pledge, goals and objectives, through providing copies in each room and within the school premise.
29

COMPARATIVE FINANCIAL STATEMENTS (2008-2010)

THREE LITTLE STARS LEARNING CENTER, INC. Statement of Comprehensive Income For the year ended December 31, 2008 Revenue: Tuition Fees(Cash and On Account) Miscellaneous Gross Revenue Expenses: Salaries and Wages Employee Benefits Repair and Maintenance Supplies Expense Light and Water Expense Rent Expense Permits and Licenses Communication Expense Insurance Expense Charitable Contribution Gasoline and Oil Depreciation Expense Total Expenses NET PROFIT (Note 2) 539,000.00 46,500.00 25,000.00 28,260.00 57,495.50 70,000.00 43,451.06 32,600.00 6,605.75 8,500.00 24,000.00 25,100.00 906,512.31 386,417.38 (Note 1) 1,247,929.69 45,000.00 1,292,929.69

Note 1: Tuition Fees Cash On Account Total Tuition Fees 930,750.00 317,179.69 1,247,929.69

Note 2: Depreciation Expense Classroom Chairs & Tables Computer Accessories Audio/Video System Total Depreciation 10,000.00 10,500.00 4,600.00 25,100.00

30

THREE LITTLE STARS LEARNING CENTER, INC. Statement of Financial Position As of December 31, 2008

ASSETS Current Assets Cash and Cash Equivalent Accounts Receivable Non-Current Assets Library Classroom Chairs and Tables Jitney (XLT) Service car Toys and Furniture Computer Accessories Copying Machine Audio/Video System Air-conditioning Units TOTAL ASSETS LIABILITIES AND EQUITY Current Liabilities Accounts Payable books Equity Member's Donated Capital Donated Capital Advances from Officers Add: Excess of Receipts over Disbursements TOTAL LIABILITIES AND EQUITY 50,000.00 6,000.00 317,179.69 323,179.69

75,400.00 83,500.00 270,000.00 150,000.00 44,370.00 160,000.00 26,000.00 107,100.00 84,000.00 1,000,370.00 1,323,549.69

50,000.00 1,130,242.00 120,000.00 -26,692.31 1,273,549.69 1,323,549.69

31

THREE LITTLE STARS LEARNING CENTER, INC. Statement of Cash Flows For the Year Ended December 31, 2008 Cash Balance Beginning Add: Cash Inflows: Advances from Officers Donated Capital Tuition Fees Increase In payables Miscellaneous Total Cash Available Less: Cash Outflows: Operating Expenses Increase in non-current Assets Increase in Receivables Total Cash Outflows Cash balance, end 70,500.00 120,000.00 118,372.00 930,750.00 50,000.00 45,000.00 1,334,622.00

1,002,442.31 9,000.00 317,179.69 1,328,622.00 6,000.00

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THREE LITTLE STARS LEARNING CENTER, INC. Statement of Comprehensive Income For the year ended December 31, 2009 Revenue: Tuition Fees(Cash and On Account) Miscellaneous Gross Revenue Expenses: Salaries and Wages Employee Benefits Repair and Maintenance Supplies Expense Light and Water Expense Permits and Licenses Communication Expense Insurance Expense Charitable Contribution Gasoline and Oil Depreciation Expense Total Expenses NET PROFIT (Note 2) 405,904.00 10,716.00 6,540.00 63,765.00 36,375.00 32,075.00 1,900.00 109,850.00 2,000.00 18,771.00 25,100.00 712,996.00 477,974.31 (Note 1) 967,970.31 223,000.00 1,190,970.31

Note 1: Tuition Fees Cash On Account Total Tuition Fees 943,500.00 24,470.31 967,970.31

Note 2: Depreciation Expense Classroom Chairs & Tables Computer Accessories Audio/Video System Total Depreciation 10,000.00 10,500.00 4,600.00 25,100.00

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THREE LITTLE STARS LEARNING CENTER, INC. Statement of Financial Position As of December 31, 2009

ASSETS Current Assets Cash and Cash Equivalent Accounts Receivable Non-Current Assets Library Classroom Chairs and Tables Jitney (XLT) Service car Toys and Furniture Computer Accessories Copying Machine Audio/Video System Air-conditioning Units TOTAL ASSETS LIABILITIES AND EQUITY Current Liabilities Accounts Payable books Equity Member's Donated Capital Donated Capital Advances from Officers Add: Excess of Receipts over Disbursements TOTAL LIABILITIES AND EQUITY 43,980.00 43,986.69 341,650.00 385,636.69

75,400.00 93,500.00 270,000.00 450,000.00 49,970.00 149,500.00 39,000.00 102,500.00 95,000.00 1,324,870.00 1,710,506.69

50,000.00 1,103,549.69 86,000.00 426,977.00

1,666,526.69 1,710,506.69

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THREE LITTLE STARS LEARNING CENTER, INC. Statement of Cash Flows For the Year Ended December 31, 2008 Cash Balance Beginning Add: Cash Inflows: Tuition Fees Miscellaneous Total Cash Available Less: Cash Outflows: Operating Expenses Increase in non-current Assets Payment of advances from Officers Decrease in Payables Increase in Receivables Total Cash Outflows 804,302.00 259,821.00 34,000.00 6,020.00 24,470.31 1,128,613.31 943,500.00 223,100.00 1,172,600.00 6,000.00

Cash balance, end

43,986.69

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THREE LITTLE STARS LEARNING CENTER, INC. Statement of Comprehensive Income For the year ended December 31, 2010 Revenue: Tuition Fees(Cash and On Account) Miscellaneous Gross Revenue Expenses: Salaries and Wages Employee Benefits Repair and Maintenance Supplies Expense Light and Water Expense Permits and Licenses Communication Expense Insurance Expense Charitable Contribution Gasoline and Oil Depreciation Expense Total Expenses NET PROFIT (Note 2) 405,904.00 10,716.00 5,190.48 50,607.14 28,869.05 32,075.00 1,507.94 87,182.54 1,587.30 14,897.62 25,100.00 663,637.06 281,577.47 (Note 1) 768,230.40 176,984.13 945,214.53

Note 1: Tuition Fees Cash On Account Total Tuition Fees 530,304.40 237,926.00 768,230.40

Note 2: Depreciation Expense Classroom Chairs and Tables Computer Accessories Audio/Video System Total Depreciation 10,000.00 10,500.00 4,600.00 25,100.00

36

THREE LITTLE STARS LEARNING CENTER, INC. Statement of Financial Position As of December 31, 2010 ASSETS Current Assets Cash and Cash Equivalent Accounts Receivable Non-Current Assets Library Classroom Chairs and Tables Jitney (XLT) Service car Toys and Furniture Computer Accessories Copying Machine Audio/Video System Air-conditioning Units TOTAL ASSETS LIABILITIES AND EQUITY Current Liabilities Accounts Payable books Equity Member's Donated Capital Donated Capital Advances from Officers Add: Excess of Receipts over Disbursements TOTAL LIABILITIES AND EQUITY 34,904.76 59,841.27 74,206.35 214,285.72 357,142.86 39,658.73 118,650.79 30,952.38 81,349.21 75,396.83 1,051,484.14 1,357,544.99 68,134.86 237,926.00 306,060.86

39,682.54 875,833.09 68,253.97 338,870.63 1,322,640.23 1,357,544.99

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THREE LITTLE STARS LEARNING CENTER, INC. Statement of Cash Flows For the Year Ended December 31, 2010 Cash Balance Beginning Add: Cash Inflows: Tuition Fees Miscellaneous Total Cash Available Less: Cash Outflows: Operating Expenses Increase in non-current Assets Payment of advances from Officers Decrease in Payables Increase in Receivables Total Cash Outflows Cash balance, end 37,986.69 748,809.52 177,063.49 963,859.71

638,334.92 206,207.14 26,984.13 4,777.78 19,420.88 895,724.85 68,134.86

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MARKET SHARE Market share is computed by getting the total number of enrolees of TLSLC Inc. divided by the total population of individuals ranging from 4 years old to 12 years old of Brgy. Pinagpanaan, Talavera, Nueva Ecija. The total population is 837 individuals with the growth rate of 5.56% every year.

Market Share

Total Number of Enrollees Total Population

70 students 837 students

8.36%

Market Share
8.36% 3.23% 3.58%

Three Little Star Learning Center Christian Faith Academy Kobayashi Schools Outside Locality and Public Schools

84.83%

Figure 1. Market Share

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FINANCIAL RATIOS (2008) Liquidity Ratios Current Ratio = Current Assets Current Liabilities Quick Assets Current Liabilities Current Assets Current Liabilities Cash Current Liabilities = 323,179.69 50,000 323,179.69 50,000 323,179.69 50,000 6,000 50,000 = 6.46

Quick Ratio

6.46

Working Capital

273,179.69

Cash Ratio

0.12

Leverage Ratios Debt-to-Total-Assets Ratio = Total Debt Total Assets Total Debt Total Capital Total Capital Total Assets Income Before Fixed Expenses Fixed Charges = 50,000 = 1,323,549.69 50,000 = 1,273,549.69 1,273,549.69 = 1,323,549.69 3.78%

Debt-to-Equity Ratio

3.93%

Equity Ratio

96.22%

Fixed Charge Coverage

291,811.63 76,605.75

3.8 times

Activity Ratios Accounts Receivable Turnover Average Collection Period Revenue (On Account) Average A/R 360 days A/R Turnover

317,179.69 24,470.31 360 days 12.96 times

12.96 times

28 days

40

Fixed Asset Turnover

Revenue Fixed Assets Revenue Total Assets

1,292,929.69 = 1,000,370.00 1,292,929.69 = 1,323,549.69

1.29 times

Total Asset Turnover

.98 times

Profitability Ratios Net Profit Margin = Net Income Revenue Net Income Total Assets Net Income Total Capital = 386,417.38 = 1,292,929.69 386,417.38 = 1,323,549.69 386,417.38 = 1,273,549.69 29.89%

Return on Total Assets

29.19%

Return on Total Assets

30.34%

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FINANCIAL RATIOS (2009) Liquidity Ratios Current Ratio = Current Assets Current Liabilities Quick Assets Current Liabilities Current Assets Current Liabilities Cash Current Liabilities = 385,636.69 43,980 385,636.69 43,980 385,636.69 43,980 43,986.69 43,980 = 8.77

Quick Ratio

8.77

Working Capital

= 341,656.69

Cash Ratio Leverage Ratios Debt-to-Total-Assets Ratio

1.00

Total Debt Total Assets Total Debt Total Capital Total Capital Total Assets

43,980 1,710,506.69 43,980 1,666,526.69 1,666,526.69 1,710,506.69

2.57%

Debt-to-Equity Ratio

2.64%

Equity Ratio

97.43%

Activity Ratios Accounts Receivable Turnover Average Collection Period = Revenue (On Account) = Average A/R 360 days A/R Turnover Revenue Fixed Assets Revenue Total Assets = 24,470.31 1,888.14 360 days 12.96 times 1,190,970.31 1,324,870.00 1,190,970.31 1,710,506.69 = 12.96 times

28 days

Fixed Asset Turnover

0.90 times

Total Asset Turnover

.70 times
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Profitability Ratios Net Profit Margin = Net Income Revenue Net Income Total Assets Net Income Total Capital = 477,974.31 1,190,970.31 477,974.31 1,710,506.69 477,974.31 1,666,526.69 = 40.13%

Return on Total Assets

27.94%

Return on Total Assets Growth Ratio

28.68%

Growth in Sales

Current Yr. Revenue Previous Yr. Revenue Previous Yr. Sales Current Yr. NI Previous Yr. NI Previous Yr. NI

1,190,970.31 1,292,929.69 1,292,929.69 477,974.31 386,417.38 386,417.38

-7.89%

Growth in Net Income

23.69%

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FINANCIAL RATIOS (2010) Liquidity Ratios Current Ratio = Current Assets Current Liabilities Quick Assets Current Liabilities Current Assets Current Liabilities Cash Current Liabilities = 306,060.86 34,904.76 306,060.86 34,904.76 306,060.86 34,904.76 68,134.86 34,904.76 = 8.77

Quick Ratio

8.77

Working Capital

= 271,156.10

Cash Ratio Leverage Ratios Debt-to-Total-Assets Ratio

1.95

Total Debt Total Assets Total Debt Total Capital Total Capital Total Assets

34,904.76 1,357,544.99 34,904.76 1,322,640.23 1,322,640.23 1,357,544.99

2.57%

Debt-to-Equity Ratio

2.64%

Equity Ratio

97.43%

Activity Ratios Accounts Receivable Turnover Average Collection Period Fixed Asset Turnover Total Asset Turnover = Revenue (On Account) Average A/R 360 days A/R Turnover Revenue Fixed Assets Revenue Total Assets = 24,470.31 1,888.14 360 days 12.96 times 945,214.53 1,051,484.13 945,214.53 1,357,544.99 = 12.96 times

28 days

= =

= =

= =

0.90 times .70 times

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Profitability Ratios Net Profit Margin = Net Income Revenue Net Income Total Assets Net Income Total Capital = 281,577.47 959,208.26 281,577.47 1,357,544.99 281,577.47 1,322,640.23 = 29.36%

Return on Total Assets

20.74%

Return on Equity Growth Ratio

21.29%

Growth in Net Income

Current Yr. NI Previous Yr. NI Previous Yr. NI Current Yr. Revenue Previous Yr. Revenue Previous Yr. Revenue

281,577.47 477,974.31 477,974.31 945,214.53 1,190,970.31 1,190,970.31

-41.09%

Growth in Revenue

-20.63%

1,400,000.00 1,200,000.00 1,000,000.00 800,000.00 600,000.00 400,000.00 200,000.00 2008 2009 2010 Revenue Operating Expenses Net Income

Figure 2. Comparative Financial Performance

45

Figure 2 illustrates the trend of revenue, operating expense and net income of Three Little Stars Learning Center Inc. for 2008, 2009 and 2010. The revenue as well as operating expenses are continuously decreasing from 2008-2010, this is because of the decreasing number of enrolees of the school for that period. However, the net income increased from the year 2008-2009 but decreased from the year 2009-2010.

1,800,000.00 1,600,000.00 1,400,000.00 1,200,000.00 1,000,000.00 800,000.00 600,000.00 400,000.00 200,000.00 2008 2009 2010 Current Assets Non-current Assets Current Liabilities Owners' Equity

Figure 3. Comparative Financial Position

Figure 3 illustrates the changes in current assets, non-current assets, current liabilities and owners equity. It shows that all of them increased from the year 20082009 and decreased in year 2009-2010 the reason for that is the decreasing number of enrolees.

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INTERNAL ANALYSIS

Management TLSLC, Inc. are not using strategic management concept in its management function. The company merely manages the company operation in usual way. The company administration did not have any written strategic plan to consider as a basis for the companys management operation instead short-term objectives were set by the company. Company objectives and goals are measurable and well communicated. Currently, the decisions made for the company were centralized from the president and directress. Based on the interview made by the researchers, the directress gave a statement containing relevant information regarding the actual duties and responsibilities of the officers. According to the directress, the president and vice-president of the company has the direct involvement with the company operation. The directress added that officers having the position of secretary, treasurer and auditor are not directly performing their duties and responsibilities. The directress also performs the duties of secretary and collection officer. The president of the company also serves as the one responsible for the preparation of the financial statements subject to external audit and certification by a Certified Public Accountant (CPA). The company assigned the subject taught based on the teachers specialization. But, since the company hires few teachers, the teachers must taught specified subject for

47

the whole elementary course, e.g. a teacher with high skill level in teaching mathematics shall taught math subject from grade 1 to 6. The employee morale is high with regard to the directress due to her teaching experience. Nevertheless, with regard to the teachers, the employee morale is also high even though they have not yet passed the Licensure Examination for Teachers (LET) and do not have enough experience. The employee absenteeism is low because the dedication for teaching is high. And employee turnover is high because TLSLC, Inc. has provided as a training ground for the teachers applying to it. After passing the LET, the teachers who passed it make decision of moving to public schools. TLSLC, Inc. provides a reasonable compensation to their employees. Also, the management gives recognition for quality work contributed by the employees. Christmas gifts were also properly given to the company employees. The management control mechanism is effective. The directress makes frequent surveillance to the teachers performance to maintain a good quality education. Teachers are compelled to do their lesson plans in order for them to meet the required standards for teaching.

Marketing Markets served by TLSLC, Inc. are properly segmented into Nursery, Kindergarten, Pre-elementary and Elementary. Although the organization is not positioned well in the market, TLSLC Inc has the ability to compete to its competitors based on quality of education offered. The market share of the organization is increasing because from time to time, TLSLC Inc, are becoming more popular for its quality
48

education. This is evidenced by many students who won in different academic competitions. However, compared to its rivals, the promotion, advertising and publicity strategy of TLSLC is not enough. This is due to inadequacy of knowledge of manager about marketing.

Financial and Accounting

TLSLC, Inc is financially strong as indicated by financial ratio analyses. The organization can meet its short-term obligations as indicated by liquidity ratios. The institution can raise needed short-term and long-term capital through donations and advances from officers and investment by the owner. TLSLC, Inc has sufficient working capital for its daily operations. The only liability of TLSLC, Inc is short-term; this is coming from the acquisition of books. The historical trends of liquidity ratios are increasing. As time goes by, the organization is becoming more liquid. Leverage ratios with regard to debt-to-total assets and debt-to-equity ratio is decreasing while the equity ratio is increasing. This signifies that TLSLC, Inc is not financed by debt but rather by investments. The trends in activity ratios are decreasing. The effectiveness in using the resources of the organization is lesser compared to the previous year. This outcome may lead, to managers, to become more focus on using its resources effectively. Profitability ratios are also decreasing. This is due to the declining number of enrollees every year. TLSLCs ability to maintain its economic position in the growth of the economy and industry is becoming weak because of its decreasing trend in growth ratios.

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Productions and Operations The company has reasonable and reliable suppliers with regard to the purchases of books use in teaching. Books are properly assessed by the administration and teachers before it would be purchased. Facilities, equipment, machinery and office are all in good condition. The room facilities are assessed to be in good condition and conducive in learning. Machineries and equipment, such as computers, are good in physical appearance and programs are updated. The facilities and resources are strategically located. The reason is that it is conveniently accessed for efficiency purposes. Lastly, the company has a low technological competency. Although, they have internet services teaching process was still at its traditional style. Management Information System The TLSLC, Inc uses traditional information system or the so called manualbased system of storing information. The information stored by the organization includes payroll system, grading system, teachers assessment, receipt and disbursement, and students information. The principals secretary uses the information system to retrieve information such as when a student requests a certificate of good moral character, grades and other relevant information. Employees can get information from the payroll system. Furthermore, teachers can be evaluated based on previous assessment that was recorded. Data are always updated through continues addition of inputs coming from employees

50

and other sources. The Information system is said to be user friendly however, it is less efficient compared to those firms using advance technologies. SUMMARY AND CONCLUSION

Internal Strengths High teacher-to-student ratio that results to more effective teaching. High customer satisfaction because of quality teaching methods. Well established relationship with book suppliers. High employee morale. The school premise and location is conducive for learning. The company can meet short-term obligation. Most of the companys assets are financed by the owners. The management is effective in generating profit. Efficient utilization of companys resources.

Internal Weaknesses High employee turnover. Irregular delegation of authority and responsibility. Lack of marketing efforts. Limited sources of capital investment because the company is a close corporation. Lack of sports facilities and sports related programs/activities. The company incurs negative growth in revenue and in net income.
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Internal Factor Evaluation Matrix

Key Internal Factors Strength High teacher-to-student ratio that results to more effective teaching. 1:15 High customer satisfaction because of quality teaching methods. Well-established relationship with book suppliers. High employee morale. The school premise and location is conducive for learning. The company can meet short-term obligation. Current Ratio: 877% Most of the companys assets are financed by the owners. Equity Ratio: 97.43% The management is effective in generating profit. Net Profit Margin: 29.36% Efficient utilization of companys resources. Accounts Receivable Turnover: 12.96% Weaknesses High employee turnover of 100% w/in 5 years. Irregular delegation of authority and responsibility. Lack of marketing efforts. Market Share: 8.36% Limited sources of capital investment because the company is a close corporation. Lack of sports facilities and sports related programs/activities. The company incurs negative growth in revenue and in net income. Growth in Revenue: -41.09%, Growth in Income: -20.63%

Weight

Rating

Weighted Score 0.48 0.27 0.20 0.12 0.09 0.32 0.28 0.40 0.28

0.12 0.09 0.05 0.04 0.03 0.08 0.07 0.10 0.07

4 3 4 3 3 4 4 4 4

0.10 0.04 0.06 0.05 0.02

1 2 1 2 2

0.10 0.08 0.06 0.10 0.04

0.08

0.08 2.90

Total 1 Table 3. IFE Matrix

The most important factors to be considered to become successful in this business are: High teacher-to-student ratio (0.12 weight) because teachers will regularly monitor performance of each students and High employee turnover (0.10

52

weight) because teachers seek for greater opportunity. Also take into consideration the major strengths (4.0 rating) which are: High teacher-to-student ratio, Wellestablished relationship with book suppliers and Financial Stability. The school is having major problem (1.0 rating) on High employee turnover, marketing efforts and negative growth in revenue and in net income. Overall, the total weighted score is 2.90 which is above the average of 2.5. This indicates that the business is doing well in taking advantage of internal strengths and reducing internal weaknesses.

KEY INTERNAL STRATEGIC ISSUES Employee turnover Marketing efforts Employee benefits and incentives Teacher-to-student ratio

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CHAPTER VI STRATEGY FORMULATIONS

STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS MATRIX STRENGTHS--S High teacher-tostudent ratio that results to more effective teaching. High customer satisfaction because of quality teaching methods. Well established relationship with book suppliers. High employee morale The school premise and location is conducive for learning. The company can meet short-term obligation. Most of the companys assets are financed by the owners. The management is effective in generating profit Efficient utilization of companys resources WEAKNESSESW High employee turnover. Irregular delegation of authority and responsibility Lack of marketing efforts Limited sources of capital investment because the company is a close corporation. Lack of sports facilities and sports related programs/activities The company incurs negative growth in revenue and in net income.

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OPPORTUNITIESO 1. Increase availability of qualified teacher because of abundant supply of fresh graduates of Bachelor of Science in Elementary Education (e.g. graduates from the newly branch of NEUST in Talavera). 2. The school is located relatively far from the road which ensures the students safety. 3. With the aid of technology, the company could increase accessibility through establishing net working site on which they promote their services. 4. The fluctuation of tax rate imposed by government agencies does not influence them. 5. Availability of book suppliers that allow the school to choose the best of quality books at a reasonable price. 6. Increase in market size due to conversion of agricultural areas into residential areas.

SO STRATEGIES 1. Increase employee benefits and reward to attract qualified teachers.(S4, S8,O1) 2. Offer High school curriculum. (S5, S9, O6, O8) 3. Avail of cash discount on books to maximize the use of funds. ( S3, S6, S9, O5)

WO STRATEGIES 1. Recognized accomplishment of their students or alumni through print advertisements. ( W3, W6, O7) 2. Provide additional incentives to employees to increase employee retention and to attract qualified teachers.(W1, O1)

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7. Increase in popularity because of excelling in different competitions in higher level such as national level quiz bee. 8. Increase in students by adding high school department if there is available capital investment. 9. High student transferees from public school because of unsatisfactory facilities. THREATST 1. Possible loss of competitive teachers in the school because a lot of newly hired teachers treat the institution as a stepping stone for them to enter in the public school. 2. Increasing number of competitors due to rising number of private school in the locality. 3. New government regulations/policies that may affect the company. It may result to higher cost of compliance and if not complied, may result to decreased customers/students. ST STRATEGIES 1. Continue providing quality education and stability assurance on management matters to increase customer loyalty. ( S1, S2, S5, T2, T4) 2. Increase employee satisfaction and competitiveness by continuous training and seminars to increase employee retention. ( S1, S4, T1, T2) 3. Adapting to technological changes through the use of generated funds. ( S8, T7) WT STARTEGIES 1. Additional advertisement cost to invite more enrollees. ( W3, W6, T2, T4) 2. Improve Facilities for recreation. ( W5, T2)

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4. Decrease in customer loyalty due to false notion that there will be changed in administration. 5. The area around the school is included in the flood prone area. 6. Increases degree of government intervention due to accreditations achieved. 7. Decrease in competitive advantage due to failure to adapt to technological changes. Table 4. SWOT Matrix

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Strategic Planning Action Evaluation (SPACE) MATRIX Financial Strength Ratings Return on investment of 21.29% for 2010 Total Equity to Total asset ratio of 97.43% Current ratio of 877% which is significantly higher than standard of 100%. Working capital of P271,156.10 Decrease in operating expenses of P49,358.94 Shorter collection period of 28 days 2.0 4.0 6.0 3.0 2.0 4.0

21.0 Industry Strengths Ratings Educational institutions are tax exempted New players in the market cannot easily enter due to government requirements needed. There is less politics and government intervention in private school industry. 4.0 8.0 3.0 1.0

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Environmental stability Ratings High student transferees from public schools to private schools because of unsatisfactory facilities. Filipinos consider education as the best way to alleviate poverty Potential growth in demand because of population growth every year of 5.56%. -4.0 9.0 Competitive Advantage Ratings High customer satisfaction because of quality teaching methods. School premise and location is conducive for learning. High resource utilization : fixed asset turnover of 0.90 times and total asset turnover of 0.70 times. -5 -10 Conclusion ES Average is -9.03= -3.0 FS Average is +21.06= 3.5 CA Average is -10.03=-3.33IS Average is +8.03= 2.66 Directional Vector Coordinates: X-axis: -3.33 + (+2.66) = -0.67 Y-axis: -3.0 + (+3.5) = +0.5 The school should pursue Conservative Strategies. -2 -3 -2.0 -3.0

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THE STRATEGIC POSITION AND ACTION EVALUATION MATRIX FS

(-0.67, 0.5)

CA

IS

Figure 4. SPACE Matrix

ES

The company, being in the conservative quadrant (upper-left quadrant) of the SPACE Matrix, should pursue conservative strategies which often include market penetration, market development, product development, and concentric diversification. It also implies that the firm should stay to their basic competencies and not taking excessive risks.
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GRAND STRATEGY MATRIX

RAPID MARKET GROWTH

QUADRANT II Market Penetration Product development

WEAK COMPETITIVE POSITION

STRONG COMPETITIVE POSITION

SLOW MARKET GROWTH

Figure 5. Grand Strategy Matrix

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The industry has an annual growth of 5.56% which could be considered to have rapid market growth. The assessment on external environment of TLSLC, Inc. indicates that it is weak. As a result of the evaluation, the suggested strategy to be pursued by TLSLC, Inc. must come from quadrant II which is characterized by rapid market growth and weak competitive position. Although the industry is growing, the firm is unable to compete effectively. This would result for the firm to determine why the current approach is ineffective and how the company can best improve its competitiveness. The strategies that can be pursued by the firm are the intensive strategies (market penetration and product development in particular).

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QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM)

STRATEGIC MANAGEMENT Key factors Opportunities 1. Increase availability of qualified teacher because of abundant supply of fresh graduates of Bachelor of Science in Elementary Education (e.g. graduates from the newly branch of NEUST in Talavera). 2. The school is located relatively far from the road which ensures the students safety. 3. With the aid of technology, the company could increase accessibility through establishing net working site on which they promote their services. 4. The fluctuation of tax rate imposed by government agencies does not influence them. 5. Availability of book suppliers that allow the school to choose the best of quality books at a reasonable price. 6. Increase in market size due to conversion of agricultural areas into residential areas. 7. Increase in popularity because of excelling in different competitions in higher level such as national level quiz bee. 8. Increase in students by adding high school department if there is available capital investment. 9. High student transferees from public schools to private schools because of unsatisfactory facilities.
Weight Product Development Market Penetration

AS

TAS

AS

TAS

0.11

0.11

0.44

0.08

0.08

0.24

0.03

0.09

0.12

0.03

0.07

0.21

0.14

0.10

0.10

0.20

0.06

0.06

0.24

0.04

0.16

0.04

0.05

0.05

0.20

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Threats 1. Possible loss of competitive teachers in the school because a lot of newly hired teachers treat the institution as a stepping stone for them to enter in the public school. 2. Increasing number of competitors due to rising number of private school in the locality. 3. New government regulations/policies that may affect the company. It may result to higher cost of compliance and if not complied, may result to decreased customers/students. 4. Decrease in customer loyalty due to false notion that there will be changed in administration 5. The area around the school is included in the flood prone area. 6. Increases degree of government intervention due to accreditations achieved. 7. Decrease in competitive advantage due to failure to adapt to technological changes.

0.05

0.11

0.22

0.44

0.03

0.12

0.03

0.12

0.12

0.48

0.06 0.01

2 3

0.12 0.03

3 2

0.18 0.02

0.05 1.00

0.10

0.15

Strengths 1. High teacher-to-student ratio that results to more effective teaching. 1:15 2. High customer satisfaction because of quality teaching methods. 3. Well-established relationship with book suppliers. 4. High employee morale. 5. The school premise and location is conducive for learning. 6. The company can meet short-term obligation. Current Ratio: 877% 7. Most of the companys assets are

0.12 0.09 0.05 0.04 0.03 0.08

2 3 4 3 2 3

0.24 0.27 0.20 0.12 0.06 0.24

3 4 3 1 3 1

0.36 0.36 0.15 0.04 0.09 0.08

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financed by the owners. Equity Ratio: 97.43% 8. The management is effective in generating profit. Net Profit Margin: 29.36% 9. Efficient utilization of companys resources. Accounts Receivable Turnover: 12.96%

0.07

0.14

0.07

0.10

0.30

0.20

0.07

Weakness 1. High employee turnover of 100% w/in 0.10 5 years. 2. Irregular delegation of authority and 0.04 responsibility. 3. Lack of marketing efforts. Market 0.06 Share: 8.36% 4. Limited sources of capital investment because the company is a close 0.05 corporation. 5. Lack of sports facilities and sports 0.02 related programs/activities. 6. The company incurs negative growth in revenue and in net income. Growth in Revenue: -41.09%, Growth in Income: 0.08 -20.63% Sum Total Attractiveness Score 1.00

2 2 3

0.08 0.12 0.15

1 4 2

0.04 0.24 0.10

0.06

0.04

0.24 3.79

0.16 4.69

AS = Attractiveness Score; TAS = Total Attractiveness Score Attractiveness Score: 1=not attractive; 2= somewhat attractive; 3=reasonably attractive; 4=highly attractive.

Table 5. QSPM

In the above QSPM, two strategic alternatives product development and market penetration are being considered by the group. Product development strategy includes, but not limited to, providing tutorials for students. On the other hand, strategies on market penetration can be carried out through intense marketing efforts.

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Several factors have no effect on the choice being made, so dashes are recorded in roles. Other factors such as decrease in customer loyalty due to false notion that there will be changed in administration greatly affect the choice being made, so a high attractiveness score was recorded. The sum total attractiveness score of 4.69 indicates that market penetration is more attractive strategy when compared to product development strategy.

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CHAPTER VII RECOMMENDATIONS

RECOMMENDED REVISED VISION STATEMENT

TLSLC as one of the countrys best provider of quality education and perpetuator of childrens moral values.

RECOMMENDED REVISED MISSION STATEMENT

TLSLC Inc. provides well balanced pre-elementary and elementary educational programs in our curriculum that will develop individuals to become God-loving, self reliant, creative, environmentally and socially responsible, and equipped with functional intelligence and moral values. We will emphasize training for our teachers; adapt to technological changes; furnish best-in-class service and support; and to grant both employees and customers with opportunities for growth and enrichment.

RECOMMENDED STRATEGIC OBJECTIVES

Strategies should be designed: To support and to accord with organizational structure, vision and mission; To properly communicate with key employees; To efficiently allocate and utilize the organizations limited resources;
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To attract and retain skilled teachers and other personnel; To redirect marketing efforts; To improve and maintain competitive position and financial stability; and To delegate authority and responsibility of every staff so that they can work efficiently and develop harmonious relationship within the organization.

RECOMMENDED STRATEGIES

Based on the matrixes prepared and examined, market penetration is the best strategy that should be implemented by the company. It implies that the company must seek to increase market share for present services in present market. It includes the following: Increase marketing effort by allocating funds for advertising. Creating a good corporate image by recognizing school and student achievements. Taking advantage to new technologies that will enhance their marketability.

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CHAPTER VIII STRATEGY IMPLEMENTATION PROGRAMS After the interview and observation conducted by the researchers on the Three Little Star Learning Center Incorporated, the gathered information was assessed and evaluated critically. Based on the results of strategy evaluation, the researchers identifies some of its internal strengths and weaknesses aligned with its external opportunities and threats, then it was matched using different strategy formulation tools (SWOT, SPACE, GRAND matrixes). The results were product development and market penetration and these two strategies is further assessed and evaluated using a decision tool (QSPM) that results to the best strategies of using market penetration. Therefore, the companys market penetration aims to gain more competitive advantages on its quality education on their present market with its present services offered through intensive marketing and advertising efforts.

ACTION PLAN The researcher examined the companys management, marketing, production and operation, finance and accounting, and management information system issues that are critical to effective strategy implementation.

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MANAGEMENT PERSPECTIVES

Management issues central to strategy implementation include establishing annual objectives, devising policies, allocating resources, matching structure to strategy and linking performance and pay to strategies. Managers and employees are motivated more by perceived self-interest than by organizational interests. Thus, it is important that key persons must be involved in formulation of strategies.

ANNUAL OBJECTIVES

LONG TERM COMPANY OBJECTIVES Increase the market share to 13% and company gross revenues increase by 60% in two years through intensive market penetration. (Current revenues are 940,000)

Operation Annual Objectives Provide at least one transport service vehicle this year for students.

Finance Annual Objectives Reduce average collection period to 20 days this year.

Marketing Annual Objectives Establish advertising expense by 5% of previous gross revenue this year.

Employee Annual Objectives Decrease employee turnover by 30% this year.

Figure 6. Annual Objectives

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POLICIES Company Strategy

Increase the market share to 13% and companys gross revenue increase by 60% in two years through intensive market penetration. Supporting Policies 1. The school must show its student achievement through print

advertisements.(This policy could increase the competitive image of the TLSLC, Inc thereby enhancing its market share.)
2. The school must support company advertising of 5% of revenues of gross

revenue.(This policy could allow the company to established good reputation.)

3. The school must adhere to the standards set by government authorities.

(This policy could help assure customers that the company is consistent with its service standards.)
4. The school must increase its employee benefits and rewards.(This policy

could able the school to retain competitive teachers.)

5. Establish a strict credit policy that is shorter than the current average

collection period.
6. The service vehicle must be used only for school related activities so that the

cost of gasoline, maintenance and other related expenses can be directly attributed to the school.

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ORGANIZATIONAL STRUCTURE

PRESIDENT

VICE PRESIDENT

TEACHER-INCHARGE KINDERGARTEN

T1

T2

T3

T4

T5

T6

TEACHER-INCHARGE PREELEMENTARY

UTILITY PERSONNEL

Figure 7. Proposed Organizational Structure

OPERATION PERSPECTIVES Production/operations processes comprise more than 70% of firms total assets. This theory is also applicable to the company, because based on its financial position it is obvious that its noncurrent assets in 1,000,000 over a 300,000 current assets, whereas all of its non-current asset are used in the companys operation. Since the TLSLC, Inc. is a service industry, the operation process comprises inputs such as facilities, teaching materials, competitive teachers, to gain an output of quality education.

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The adjustment of this aspect of organization to strategy implementation is to add on its current operation a service vehicle that will transport student from their houses to school or vice versa every school day. This step will add confidence to the parents on their childrens safety from traveling. This will increase revenue to the school and will also build strong customer loyalty thereby increasing its competency. This would also build the companys image that will help crucially on their pursuit of its market penetration strategy.

HUMAN RESOURCE CONCERNS TLSLC, Inc. when implementing strategies must consider the capacity and behavior of its human resource. Problems that may arise in implementing strategies can usually be traced to one of three causes: (1) Disruption of social and political structure, (2) Failure to match individuals aptitudes with implementation tasks, and (3) Inadequate top management support for implementation activities. Disruption of social and political structures that accompany strategy execution must be anticipated and considered during strategy formulation and managed during strategy implementation. Also, TLSLC, Inc. management should considered

compensation of their workforce. TLSLC, Inc. may use methods that match employees with strategies to be implemented. This method includes developing leadership, offering career development activities, promotions, job enlargement, and job enrichment.

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During meeting and assembly, the presiding officer should do a lot of chatting and informal questioning to stay abreast of how things can build support for strategy implementation efforts by giving a few orders, to probe and clarify until a consensus emerges. Perhaps the best method for preventing and overcoming human resources problems is to actively involve as many or all employees as possible in the process. Although time-consuming, this approach builds understanding, trust, commitment, ownership and reduces resentment and hostility. The good strategy formulation and implementation resides in people.

MARKETING PERSPECTIVES

The company currently has no fixed marketing and advertisement on its present operation. But as the circumstances provided, the company must allocate fund on its marketing and advertising to implement its market penetration strategy in order to achieve its aims to increases is gross revenue and its market share in the said area. The market penetration strategy is an intensive strategy that requires marketing and advertising effort. The management allocates its 5% of its gross revenue of the previous year in order to have funds for implementing the strategy. The company can implement many ways to market and advertise its operation and name. The company can distribute leaflets to houses in order that the community will have information on the services, rates of tuition, its quality and benefits like
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proving better discounts against competitors provided by the company. This will give the companys the advantage of being known to many that can gain the interest of communities on the said school. The company can also recognize the achievement of its student on some prestigious contest that the school is a participant by making banner/tarpaulin and placing it on some crowded places that people can see. This advertising strategy has an effect of saying to people how the school prioritizes on its quality education that results to achievement.

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FINANCE/ACCOUNTING PERSPECTIVE

THREE LITTLE STARS LEARNING CENTER, INC. (Pro-forma)Statement of Financial Position Year 1 ASSETS Current Assets Cash and Cash Equivalent Accounts Receivable Non-Current Assets Library Classroom Chairs and Tables Jitney (XLT) Service car Toys and Furniture Computer Accessories Copying Machine Audio/Video System Air conditioning Units TOTAL ASSETS LIABILITIES AND EQUITY Current Liabilities Accounts Payable - books Equity Member's Donated Capital Donated Capital Advances from Officers Add: Excess of Receipts over Disbursements TOTAL LIABILITIES AND EQUITY 51,587.30 1,138,583.01 88,730.16 440,531.83 1,719,432.30 1,764,808.49 77,793.65 96,468.25 278,571.44 464,285.71 51,556.35 154,246.03 40,238.10 105,753.97 98,015.87 1,366,929.38 1,764,808.49 88,575.31 309,303.80 397,879.11

45,376.19

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THREE LITTLE STARS LEARNING CENTER, INC. (Pro-forma) Statement of Comprehensive Income Year 1 Revenue: Tuition Fees(Cash and On Account) Miscellaneous Gross Revenue Expenses: Salaries and Wages Employee Benefits Repair and Maintenance Supplies Expense Light and Water Expense Permits and Licenses Communication Expense Insurance Expense Charitable Contribution Gasoline and Oil Advertising Expense Depreciation Expense Total Expenses NET PROFIT 527,675.20 13,930.80 6,000.00 65,789.29 37,529.76 32,075.00 1,960.32 87,182.54 2,063.49 19,366.90 47,260.73 25,100.00 865,934.03 362,844.86

998,699.53 230,079.37 1,228,778.89

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THREE LITTLE STARS LEARNING CENTER, INC. (Pro-forma)Statement of Financial Position Year 2 ASSETS Current Assets Cash and Cash Equivalent Accounts Receivable Non-Current Assets Library Classroom Chairs and Tables Jitney (XLT) Service car Toys and Furniture Computer Accessories Copying Machine Audio/Video System Air-conditioning Units TOTAL ASSETS LIABILITIES AND EQUITY Current Liabilities Accounts Payable - books Equity Member's Donated Capital Donated Capital Advances from Officers Add: Excess of Receipts over Disbursements TOTAL LIABILITIES AND EQUITY 63,492.06 1,401,332.94 109,206.35 542,193.02 2,116,224.37 2,172,071.99 55,847.62 95,746.03 118,730.16 342,857.16 571,428.57 63,453.97 189,841.27 49,523.81 130,158.73 120,634.92 1,682,374.62 2,172,071.99 109,015.77 380,681.60 489,697.37

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THREE LITTLE STARS LEARNING CENTER, INC. (Pro-forma) Statement of Comprehensive Income Year 2 Revenue: Tuition Fees(Cash and On Account) Miscellaneous Gross Revenue Expenses: Salaries and Wages Employee Benefits Repair and Maintenance Supplies Expense Light and Water Expense Permits and Licenses Communication Expense Insurance Expense Charitable Contribution Gasoline and Oil Advertising Expense Depreciation Expense Total Expenses NET PROFIT 649,446.40 17,145.60 6,000.00 65,789.29 46,190.48 32,075.00 2,412.70 87,182.54 2,539.68 23,836.19 61,438.94 25,100.00 1,019,156.82 493,186.43

1,229,168.65 283,174.60 1,512,343.25

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CHAPTER IX STRATEGY EVALUATION AND CONTROL

EVALUATION The evaluation of companys strategy encompasses factors that are considered necessary for mission achievement and long-run success. Strategy evaluation is based on both quantitative and qualitative criteria. The measurement is based on the services they provide that equals or exceeds a customers quality, price, and other expectations. Since the company is small, the manager often communicates daily with other personnel and does not need extensive evaluative reporting system. Evaluation may be performed by comparing actual results with budgeted results. The company is doing fine as a quality provider of education the management priorities quality services than gaining profit. The company is satisfied with their financial performance. The companys net revenue is expected to be P362,844.86 next year
and P493,186.43 for the 2nd year.

In terms of employee performances, the company must set standards as the basis of comparison. Teachers can be evaluated based on number of hours actually worked and based on feedback or comments of the students and co-teachers. The evaluator can also attend the actual class for personal observations. The relative market share must be evaluated also. It can be done by comparing the market that the company holds with the market or industry it belongs. As shown from the above information, the company is not doing well it occupies only small portion (only 8.36%) of the market. By implementing the strategy formulated, the

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companys relative market share is expected to increase by 30% per year for the next two years. Other important factor in strategy evaluation is the customer satisfaction in terms of service quality. The effectiveness of strategy could be reflected by the feedback from customers and even from the employees. These feedbacks could be either positive or negative which includes customer complaint, increase/decrease in enrolees, and others.

Control Strategy control should be designed to encourage behaviors that will result in outcomes that generate organizational success. An effective control requires accurate forecasting. The company should assess progress toward mission establish operational targets of total customer satisfaction and environmental and social responsibility. The companys management must set high performance standards and communicate them to others (from top to bottom). The employees and other people involved must be aware of and understand the policies or standards in order to promote harmonious operations. People who have participated in setting targets generally attempt to achieve the results to affirm that the plans were well founded so participant of all the employees is encouraged. The control measures must be fair, and personnel must obtain the appropriate skills for their jobs. They must be properly equipped with tools, resources, information, and authority to be able to perform their part effectively.

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The company should also provide, on a continuing basis, the feedback (both positive and negative) to the appropriate personnel. It must be prompt and helpful to allow the said personnel an opportunity for early adjustment.

CONTINGENCY PLAN

TLSLC, Inc. should have the resources or money that will serve as a contingency fund. It can be done by appropriating a 10% of its net income every year. This fund will serve as a support for the contingency plan that will be implemented if the current strategy will not give favorable results.

If the increase in net profit did not cover the amount spent in advertisement, the company should modify its approach in choosing effective advertisement scheme. Instead of using digitally printed banners/tarpaulins, the company may use manually painted tarpaulin or give only high degree of advertising efforts on the area in which their market share is relatively lower than its competitors to avoid excessive spending in advertising.

If the actual number of enrolees exceeds what is being expected, the company should use its contingency fund and excess capacity to improve their facilities and hire additional teachers or personnel, if necessary, to properly accommodate all the students.

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If market penetration strategy is not effective or produces unexpected results that caused more expenses, the company must consider the alternative strategy which is the product development; they may offer tutorials that may increase revenue thereby increasing net income. But they must ensure that the increase in net income can cover the additional salaries that will be given to the teachers.

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References
Strategic Management Concepts and Cases by Fred R. David, 12th Edition, copyright 2009 Strategic Management Concepts and Cases by Fred R. David, 13th Edition, copyright 2010 Cost Accounting by Michael R. Kinney and Cecily A. Raiborn, copyright 2011 Foundation of Financial Management by Block/Hirt/Danislsen, 13th Edition, copyright 2010 www.wikipedia.com

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APPENDIX

Pictures

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