CHAPTER I

Business Description and Objectives

Chapter 1 will discuss the components of the business which includes the description, objectives,
structure and vision-mission. The Ansoff Matrix is prepared to provide the strategic framework for future company
growth.

A. Business Description

Accepting the challenge posed by the Export Management Program to create a product that will
promote social entrepreneurship, the proponents decide to make sustainable and eco-friendly bamboo parquet .
This product will be made from bamboo materials to be used as design, floor or wall material for the construction
industry. Bamboo is one of the Philippines most renewable and abundant resources. This material is eco friendly
because it is biodegradable and recyclable. It is environmentally sound since it is a healthy alternative to traditional
building materials where indoor air quality is a concern. With the use of Bamboo, one feels nature presence within
the place. Bamboo is composed of complex fibers that do not absorb moisture, extremely hard and scratch
resistant. Further, bamboo makes an exotic construction design material with its lush and different colors.

The chosen country for export is Dubai, United Arab Emirates because based on the research,
there is an increasing demand in the home construction/improvement industry. Dubai also allotted a budget for
global warming so most industries are looking for material efficiencies and green construction materials. The
researchers also wanted to show to the idea of sustainability by providing consumers a product that comes from
renewable material that can be turned into usable construction materials that lasts for a long period of time. The
company aims to reduce the alarming use of concrete that impacted the planet earth at critical levels, thus
making the ecosystem to continue to sustain the natural benefits of our environment. The researchers came up
with the idea to transform bamboo into structural tiles for home construction, improvement and aesthetics for
common benefit of clean and green living.

The company will be registered at the Securities and Exchange Commission with the business name of
“VKGO Corporation”. The company name was derived from the first letter of the proponents last name. The
company will create a logo that showcases Bamboo Parquet eco-friendly components to help promote
environmental sustainability and spread awareness on global warming by promoting the use of renewable
construction materials.

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 Figure 1.1 Company Logo

B. Business Objectives

The proponents come up with the following business objectives :

A. Offer an innovative and high quality green home construction material at a competitive price .
B. Capture a 1% market share in Dubai construction industry during the initial year of operation and
a .1% increase in the succeeding years.
C. Create and maintain an after customer service to sustain brand awareness and image
D. Produce environmental friendly design material from sustainable source of Bamboo.
E. Establish and be known as a green company that promotes high quality Bamboo parquet
F. Increase revenue and profit through an effective and efficient management of resources
G. Compliance with local and international regulatory standards in the construction industry

C. Business Structure

VKGO Corporation will be registered at the Securities and Exchange Commission with the following as
incorporators: and another possible partner. The researchers’ will form a corporation to limit the risks involved
and the liability of the incorporators. It is also a benefit to the company due to various reasons such as:
● The shareholders would not be liable for corporate debts
● The liability of the incorporators will only be to the extent of their contributions and investment
made to the company
● The profit would be equally distributed in the form of dividends as decided by the Board of
Directors
● The company will be able to raise additional capital by selling shares or bonds
● A corporation has unlimited life
A comparative analysis shows the incorporators choice of setting up a corporation which will be
registered with the Securities and Exchange Commission.

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 Table 1.1 Business Structure

Sole Proprietorship Partnership Corporation

Business Life Limited Life Limited Life – can be Unlimited Life –

dissolved renewable every 50 years

Liability Owner responsible up to Partners responsible up to Liable only to the extent

personal assets their of contribution to
personal assets unless corporation
“Limited Partner”

Capital Formation Limited to resources of Limited option to raise Many options to raise
the owner capital capital

Ownership Interest Non-transferrable Non-transferrable Transferrable

D. Company Location

Factory Location
The researchers compiled a number of potential locations for the factory and evaluate each based on the
following:
1. Property Cost – ability of the company to possibly acquire or make rental arrangement based on the its
market price or rental value.
2. Distance to Port – measure accessibility, travel time and port infrastructure to achieve smooth flow of
inbound and outbound logistics
3. Property Size – evaluate adequacy of spaces to accommodate both the manufacturing facilities and office
lay-out
4. Employees’ Wages – ability of the company to sustain employee’s compensation and benefit
5. Availability of Resources – evaluate continuous and sustainable flow of materials needed to make the
product

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 6. Manpower – determine availability of skilled manpower needed to make the product and assist on the
operational activities of the business.

The above variables will be used to assess and evaluate possible business location and will be given a score of
1 (one) for Very Good; 2 (two) for Good and 3 (three) for Fair. The location that will receive the lowest score will
be considered the most suitable for the company operations. The location matrix been prepared to summarize the
variables and score given to each location.

Table 1.2
Location Matrix

San Ildefonso, Bulacan New Clark City, Pampanga Tarlac City, Tarlac

PROPERTY COST 2 3 1

DISTANCE (to port) 2 1 1

PROPERTY SIZE 1 1 1

SALARY/WAGES 1 1 1

AVAILABILITY OF 1 1 2
MANPOWER

AVAILABILITY OF RAW 2 1 2
MATERIALS

TOTAL 9 8 8

Evaluation and analysis of the each variables:

a) Property Size / Cost - 1000 square meter property

Based on research done, the property rental of 1000 square meter property in San Ildefonso , Bulacan is
at P80,000 per month ; in New Clark City , it is at P150,000 per month while in Tarlac City, amount is at
P75,000 per month.

b) Distance to International Port – Subic FreePort

1. San Ildefonso , Bulacan is about 164 kilometer and will take approximately 3 hours of travel

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 2. New Clark City is approximately 113 kilometer and approximate travel time of almost 2 hours.

3. Tarlac City has an approximate 124 kilometer with almost 2 hours of travel time.

c) Salary/ Wages
All three locations belong to the same region which is Central Luzon and have to follow same amount of
minimum wage requirement of P349.

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d) Availability of Manpower
1. Bulacan – The population for working age group of 15-64 years is almost at 2 million.

2. Pampanga - The population for working age group of 15-64 years is at 1.7 million.

3. Tarlac - The population for working age group of 15-64 years is at almost 900 thousand.

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 e) Availability of Raw Materials

Though Bulacan and Tarlac has enough bamboo farmers, it is the province of Pampanga that
plays a significant role. The government of Pampanga province has approved the P9.5 million resources
for bamboo livelihood and expansion projects. They discussed about the reconstitution of the Pampanga
Bamboo Development Council (PBDC). The political leaders of Pampanga want to guarantee the success
of the bamboo development project which shall not merely promote livelihood opportunities, but shall
also serve as a lessening measure for climate change, disaster and shortage.

Even if the location matrix resulted to having same very good rating for New Clark City and Tarlac City, the
proponents choose the former as the company location due to its proximity to suppliers.

E. Vision Statement

VKGO Corporation aims to be a prime producer of high quality, sustainable, innovative and affordable
Bamboo construction design materials.

F. Mission Statement

It is to provide an alternative eco-friendly construction design material to help alleviate Bamboo farmers
quality of life and environmentally sound alternative to traditional building materials.

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G. Ansoff Matrix

Figure 1.11 Ansoff Matrix

The Ansoff Matrix is a quick and simple tool to evaluate the risks of growth. It is a tool that can be utilized
to help businesses determine how should the product approach the market and assess market potential. Ansoff
matrix can also be used to determine what strategies are needed to introduce a new product in an existing market.

Market penetration is a strategy that focus on expanding sales of an existing product in a existing market.
This type of strategy requires high level of competition, specifically on product quality and pricing. This is most
suited to companies who have strong brand names and been in the business for quite some time.

A strategy of product development is particularly suitable for a business where the product needs to be
differentiated in order to remain competitive. A successful product development strategy places the marketing
emphasis on research & development, give importance on customer feedback and be the first one to market this
kind of product. Product development is slightly riskier, because a new product is introduced in an existing
market.

Market development is a strategy where an existing product is introduced into an entirely new market.
This strategy is used by companies when they expand their business in order to cater to a bigger market base and
increase revenue.

Diversification is the riskiest of the four strategies as it focuses on a new, unproven product into an
entirely new market. Companies use this strategy to expand their business activities and not negatively react to
the same economic downturns with regard to their current operation. If the product takes a hit in the market, it
will then help offset company losses and keep its operation more viable. A business may also use diversification as
a growth strategy.

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 Based on the given definition of the various strategies under the ANSOFF Matrix, the proponents decided
to use Market Penetration to further aid the business with its potential growth or even further improvements of
the product. The existing product since there are competitors from other exporting countries such as China will be
introduced to an existing market and that market is residential construction/ improvement industry. The company
aims to consistently meet customer satisfaction without sacrificing quality of the product and also outperform
other products in the market. The Bamboo parquet are helpful to the environment which makes it innovative thus
making it affordable to customers and contributes to the promotion of green environment.

H. Conclusion

The proponents will form a Corporation and engaged themselves in the manufacture and export of
Bamboo Parquet to Dubai, United Arab Emirates. Bamboo Parquet is an innovative product that is affordable to
customers and will contribute to the promotion of green environment. The company business operations and
manufacturing facility will be located at New Clark City , Pampanga which conforms to its requirements in terms of
the accessibility to material suppliers, proximity to port, availability of needed manpower and affordable property
cost.
The chosen export country which is Dubai, United Arab Emirates shows in an increasing demand in the
home construction/improvement industry. It also advocates the promotion on how to control global warming and
encourage the use of green construction materials. Thru this product, the company envision itself to be a prime
producer of high quality, sustainable, innovative and affordable eco-tiles made from recyclable waste. The strategy
chosen is Market Penetration as it is expected to aid the business achieve potential growth.

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