CASE 4

COMPANY NAME
Blue Heights Realty
And Development
Corporation
 Herrera inherited 1.5 hectares of the land from his
father. A few years later, after reaping substantial
commissions from commodities trading, he purchased the
idle land (0.7 hectares) adjoining the inherited property. The
land was on high grounds and overlooked some of the well-
known resorts in Calamba. Herrera was confident that the
resort would compete favorably against the established
ones in the area.
Herrera wrote the Ministry of Tourism a formal letter requesting approval for the
establishment of a resort at his 2.2 hectare land. In due time, after complying with all the
“paper requirements”, the Ministry of Tourism granted Blue Heights Corporation to open a
resort. Among other conditions, the Ministry of Tourism, in consultation with Herrera,
provided that the resort should only have the following facilities:
 Three (3) one-room bamboo cottages
 Three (3) rest houses
 Adult and children swimming pools
 Tennis court
 Horseback riding facilities
 Restaurant
Halina Mountain Resort was first launch on July 1977, by
Victor F. Herrera Sr., chairman of the board of Blue Heights
Realty and Development Corporation. The company had an
authorized capital stock of P1 million and paid-up capital of
P900, 000.
The corporate board is composed of the following:
 Mr. Victor E. Herrera, Sr. – Chairman
 Mrs. Patricia F. Herrera - Vice – Chairman
 Mr. Victor F. Herrera, Jr. – Director
 Mr. Venancio F. Herrera – Director
 Mr. Vicente F. Herrera - Director
 He applied for a 1.3 million loan from Far East Bank and
Trust Company but he wondered whether the bank would
recognize the merits of his proposal. His estimates for the use of
the loan are as follows:

Construction of a restaurant and

3 one-bedroom cottages P 700,000
Swimming pools (for adult and children) 350,000
Purchase of furniture and equipment 250,000
P1,300,000
 The loan application was accompanied by a project
study which was prepared by a research outfit in Makati.
Herrera believed that a good location and first class facilities
are strong factors in favor of Halina Mountain Resort
projected profitable performance. He also believed that his
son, Jun Herrera could ably act as a general manager of the
resort and that some of the relatives who were residing in
Calamba could be relied upon for other key positions.
ESTIMATED ANNUAL INCOME ON GATE RECEIPTS P112, 030.00
ESTIMATED ANNUAL INCOME ON SWIMMING POOL FACILITIES P105, 540.00
ESTIMATED ANNUAL INCOME ON COTTAGES RECEIPTS P189, 900.00
ESTIMATED ANNUAL INCOME ON RESTAURANT RECEIPTS P048, 000.00
ESTIMATED ANNUAL INCOME ON PAVILION RECEIPTS P060, 000.00
ESTIMATED ANNUAL INCOME ON DRESSING ROOM RECEIPTS P021, 624.00
TOTAL P537, 094.00
EXPENSES:
SALARIES EXPENSE P87, 000.00
MISCELLANEOUS EXPENSE P44, 574.62 P131, 574.62

ESTIMATED TOTAL GROSS RECEIPTS P537, 094.00

LESS: ESTIMATED ANNUAL EXPENSES P131, 574.62
P405, 519.38
LESS: ANNUAL AMORTIZATION (5years with interest) P300, 000.00
TOTAL ANNUAL NET RECEIPTS P105, 519.38
STRENGTH
1. The first resort with a restaurant inside
2. First resort to be reached from Manila
3. Will boost tourism in Laguna

WEAKNESSES
1. Lack of budget
2. Family-owned which may result to relationship-
conflict
OPPORTUNITIES
1. Tourism
2. High demand
3. Good water supply
THREATS
1. Competition
2. Near highway prone to road expansion
3. Natural disaster
4. The resort is near a creek
 How will Blue Heights Realty and Development Corporation be
able to convince the Far East Bank And Trust Company to grant
their loan application, in order to establish their proposed project?

 The Halina Mountain Resort in Bucal, Calamba, Laguna faced

economic problems in their business, the competitive
environment, in the midst of price standardization, and lack of
marketing strategy.
STATEMENT OF THE PROBLEM
Mr. Herrera is thinking of appointing
his son Jun as a general manager
without considering whether his son
could effectively manage the
proposed project.
 Blue Heights Realty and Development
Corporation would pledge to Far East Bank and
Trust Company to make an agreement that the
land will stand as a collateral for the loan
 Mr. Herrera could borrow budget for
establishing the Halina Mountain Resort to his
relatives and friends
 Mr. Herrera could propose the project to
another person that can be his partner and
help financially for establishing the resort
 Mr. Herrera should assign other experienced
personnel to handle the business and have
some expertise to run the resort
 Conduct a meeting within the corporation
 Plan the estimated budget
 Hire expert research group to evaluate the proposal
 Set meeting between the Blue Heights Realty and
Development Corporation and Far East Bank and Trust
Company
 Hire a new manager who is more experienced and has
expertise in running the business
1. Blue Heights Realty and Development Corporation
would pledge to Far East Bank and Trust Company
to make an agreement that the land will stand as a
collateral for the loan
2. The company should gather enough information on
how to handle their business professionally
3. The company should not put into a position the
family member to avoid conflicts within the family
 Acabado, Maya
Cano, Sherilyn
Cansicio, Jolina
Odtuhan, Mary Rose