III-CMA Megaworld Strategic Plan

UNIVERSITY OF MAKATI
College of Business and Financial Science

Bachelor of Science in Management Accounting
MEGAWORLD CORPORATION
____________________________
STRATEGIC PLAN
Presented to
The Faculty of the Marketing Department
____________________________
In Partial Fulfillment
of the Requirements for the Degree
BACHELOR OF SCIENCE IN MANAGEMENT ACCOUNTING
____________________________
By
Mary Daisyrie G. Carlos

Christaline Anne D. Lacap
Jermie B. Zafra
January 2021
(For Academic Purposes Only)

TABLE OF CONTENTS
EXECUTIVE SUMMARY 4
I. INTRODUCTION 6
II. COMPANY BACKGROUND 9
A. History 9
B. Vision and Mission 10
C. Objectives 11
III. EXTERNAL ENIVROMENTAL ANALYSIS 12
A. Demographic Segment 12
B. Economic Segment 13
C. Political/Legal Segment 15
D. Socio-cultural Segment 17
E. Technological Segment 18
F. Global Segment 19
IV. INTERNAL ANALYSIS 21
A. Strengths 21
B. Weaknesses 26
C. Financial Statement Analysis 27
V. COMPETITIVE ANALYSIS 32
A. SWOT Analysis 32
A.1 External Factor Evaluation Matrix (EFEM) 32
A.2 The Internal Factor Evaluation Matrix (IFEM) 38
B. BCG Matrix Analysis 39
A Strategic Management Paper on MEGAWORLD CORP. 2

For Academic Purposes Only
C. Company Competitive Index 40
C.1 Key Competitors of Megaworld 40
C.2 Key Success Factors 42
VI. STRATEGIC OBJECTIVES 46
VII. STRATEGIC ACTION PLAN 48
VIII. APPENDICES 50

EXECUTIVE SUMMARY
Megaworld Corporation, the country’s top township developer, engages in
the development of large scale, mixed-use planned communities or townships that
integrate residential, commercial, leisure and entertainment components in the
Philippines. The company envision as someone who uplift lives, has impact to the
society and help shape the nation.
The property industry has been strong for over the decade and become one
of the main drivers of GDP growth. However, they are facing a crisis and
developers are facing up to 30% drop on sales this year because of number of
unforeseen events brought by the pandemic. According to Central Bank (BSP),
residential property prices grew 27.1% year-on-year in June 2020, following the
increase of 12.4% in the first quarter of this year.
Other external factors property developers face includes, rapid
development of technology, high demand of BPOs and new implement laws and
regulations. Overall responsiveness of Megaworld to its external environment is
above average. Its EFEM rating is 3.24 due to its continuous innovation, excellent
development and effective strategies in exploiting opportunities or defending
against threats.
The real estate industry is led by Ayala Land, Megaworld and Robinsons
Land Corp. These companies were chosen on the basis of the similarity in their
business portfolio. Megaworld is a clear market leader based on CSF rating 4.05.
Ayala land, that is close from Megaworld’s rating, has CSF rating of 3.97. There is

an existing threat for Megaworld to be replace as market leader. Internally, the
company shows an effective strategy that makes the company market leader in
real estate industry. The result of IFEM is 3.05, which is above average, create a
competitive advantage against its competitor.
Market development, product and service development, defensive
strategies and management development will be most appropriate strategy for the
company to achieve its strategic objective.
Market development strategies will begeared to address emerging market
s by improving company’s website, participating actively in social networking sites,
communicating with future markets and incorporating virtual services in able to
boost sales and expand its market. Product and service development strategies
includes surveying and interviewing customers for products review that will use to
testify and promote to potential customers, and strengthening customer
relationship. Defensive strategies will be complemented by expanding the market
and continuing innovation and the management development includes free
training, seminars, government-mandated and voluntary benefits to employees.

I. INTRODUCTION
Megaworld is one of the leading property developers in the Philippines and
is primarily engaged in the development of large-scale, mixed-use, master planned
townships that integrate residential, commercial, and office developments.
Townships typically also have educational, medical, and other civic facilities that
support the respective market of each development. The Company’s real estate
portfolio includes residential condominium units, subdivision lots and townhouses,
as well as office projects and retail space. The Company has three primary
business segments: (1) real estate sales of residential developments, (2) leasing
of office space, primarily to BPO enterprises, and retail space, and (3)
management of hotel operations. As Megaworld expands its operation, the
competition among its industry becomes more extensive and vigorous. Which
means there is an in dire need to come up with a more precise strategy formulation
that would result to competitive advantage. To guarantee that the company can
maintain its name and reputation in the market, a strategic plan is formulated.
This strategic plan is created to examine and assess the internal operations
and environment the Megaworld’s Corporation. It also analyzes the information
relevant to the company’s current strategies which is necessary to determine
where does the company leading to. This document contains company’s
background which discusses the brief history and nature as a company, the
mission, vision and values of the company, and also their objectives which will be
focused on the efforts of the company to be continuously be an integral part of the
Filipino way of life.

This strategic plan aims to provide ways on how the company will be able
to sustain its well-established brand name and reputation, improve its residential
market network and become a more successful in the industry of real estate, and
have an advantage amongst its competitors by focusing on areas that need
improvement. This is also beneficial in determining which part of the business
operation should be prioritized by the company.
The document includes a study of the major strength and weaknesses
affecting Megaworld’s corporation as well as the opportunities and threats that may
affect it in the future in the form of a SWOT analysis. To gain an advantageous
market position the study also includes competitive analysis which consist of the
internal factor evaluation matrix (IFEM), the external factor evaluation matrix
(EFEM), the Boston consulting group matrix (BCG), and the company
competitiveness index (CCI). It will be use to assess the competitors’ strategies
that can be used to formulate company’s own value-creating strategies that will
provide the best possible high-quality developments offered to customers. After
gathering and analyzing the results from the data gathered on the environmental
and competitive analysis, strategic objectives will be provided which contains the
possible objective that the company may pursue. Then, a strategic action plan will
be made which includes the step-by-step process that the company may use in
attaining the strategic objectives.
The time period that this strategic analysis covers started in the beginning
of the school year up until the end of the first semester and will be submitted on
the 16th of December. This strategic plan was prepared by the following students:

[1] Carlos, Mary Daisyrie [2] Lacap, Christaline Anne [3] Zafra, Jermie from III –
CMA of the University of Makati. It is important to remember that this strategic plan
is made for academic purposes only and is not intended to be used for other
purposes.

II. COMPANY BACKGROUND
A. History
Megaworld Corporation, the country’s top township developer, engages in the
development of large scale, mixed-use planned communities or townships that
integrate residential, commercial, leisure and entertainment components in the
Philippines. The Company was founded by Andrew Tan and incorporated under
Philippine law on August 24, 1989 and is based in Makati City, Philippines. The
Company was formerly known as Megaworld Properties & Holdings, Inc. and
changed its name to Megaworld Corporation in August 1999.
The Company initially established a reputation for building high-end residential
condominiums and commercial properties located in convenient urban locations
with easy access to offices as well as leisure and entertainment amenities in Metro
Manila. Beginning in 1996, in response to demand for the lifestyle convenience of
having quality residences in close proximity to office and leisure facilities the
Company began to focus on the development of mixed-use communities, primarily
for the middle-income market, by commencing the development of its Eastwood
City township. In addition, the Company engages in other property related activities
such as project design, construction oversight and property management. In 1999,
Eastwood City Cyberpark became the first IT park in the Philippines to be
designated a PEZA special economic zone. The Company is presently engaged
in property-related activities such as project design, construction and property
management. The Company’s real estate portfolio includes residential

condominium units, subdivision lots and townhouses, condominium hotel projects
as well as office projects and retail spaces.
Since its incorporation in 1989, the Company and its affiliates have 4,300
hectares of landbank, 26 townships and integrated lifestyle communities and
launched approximately 722 residential developments, and 3637 Megaworld
Hotels hotel keys. Megaworld was listed on the PSE on 15 June 1994, and as of
11 January 2017, had a market capitalization of ₱42,879,124,919, based on a
price of ₱3.95 per common share on such date.
B. Vision & Mission Statement
Vision Statement
We uplift lives, impact society and help shape the nation.
Mission Statement
• We pioneer concepts that promote integrated lifestyles in the townships
we build.
• We advocate responsible stewardship of the environment.
• We deliver long-term value for our employees and shareholders.
• We spur economic growth all over the country.
Values
• Integrity
• Creativity and Innovation

• Excellence
• Love for the company
C. Objectives
To Our Stockholders.
Megaworld pledges to live up to your trust and expectations through a
consistently outstanding performance geared to deliver earnings and
growth. It is committed to repay your long-term investment of capital in the
Company with unrelenting efforts to build a legacy of profitability that will
benefit you and the next generation through a continued appreciation in
share values.
To Our Customers. Megaworld aims to ensure your utmost satisfaction
through high quality products conceived in the spirit of innovation and born
out of continuous research and development. It gives priority to the
continuous upgrading of the skills and expertise of its key people so that
they can provide you with service of the highest quality.
To Our Employees. Megaworld endeavors to be a Company where you
can build a long-term fulfilling career. It will shape a corporate culture that
values fairness, promotes teamwork and productivity and ensures job
security and advancement as a reward for loyalty and performance.

III. EXTERNAL ENVIROMENTAL ANALYSIS
A. Demographic Segment
Demographic Segment are the most easily understood and quantifiable elements
of the general environment. Demographics include elements such as population’s
size, age structure, geographic distribution, ethnic mix, and income distribution.
In the past decade, the real estate industry’s steady growth is attributed to
the increase in demand for residential and commercial properties driven by various
factors. According to a report by Leechiu Property Consultants these demand
drivers include [1] rising urban population growth, [2] housing needs of BPO
employees, [3] and remittances from overseas Filipino workers (OFWs).
LEVEL OF URBANIZATION IN EACH

120
100
80
60
40
20
PHILIPPINES REGION
Aside from NCR, which is classified as entirely urban, four other regions
posted a level of urbanization higher than that of the national level (51.2 percent).
These were CALABARZON (66.4 percent), Region XI (63.5 percent), Region III

(61.6 percent), and Region XII (51.6 percent). In 2010, the same five regions
posted the highest level of urbanization. Needless to say, Megaworld has an
advantage of upscaling their operation in this region.
Meanwhile, according to Global Property Guide, there are three identifiable
segments in Manila’s housing market:
• The high end. Local high-earners and expatriates occupy this segment.
• The middle tier. The mid-end condominium sector, with monthly
amortization of around PHP10,500 (US$200), presently requiring a
dispensable income greater than PHP34,962 (US$680), to obtain a housing
loan of PHP2 million (US$38,800). This segment has been targeted by
many developers, and is attractive to overseas foreign workers (OFWs).
• The low end. This is where the mass of the population lives.
B. Economic Segment
The economy affects all industries, from suppliers of raw materials to
manufacturers of finished goods and services. Key indicators include interest
rates, unemployment rates, consumer price index, GDP, net disposable income.
Real Estate, Renting and Business Activities was among the main drivers
of GDP growth however developers are facing up to 30% drop on sales this year
because of number of unforeseen events brought by the pandemic. The 30% sales
dropped can be bearable for companies with strong financial standing like the

Megaworld but for small players, it could be more. However, even with the impact
of the pandemic, there’s a strong possibility that the real estate industry will still
thrive during these trying times. Despite the fact that several segments such as
commercial (malls) and hospitality (hotels and resorts) took a massive, direct hit
when this health crisis erupted, some believe that real estate will remain resilient
while others bank on its stability as an asset class. It should be noted that prior to
the outbreak of the COVID-19 pandemic, real estate is regarded relatively as a
strategic asset class as it can offer stable returns, passive income, diversification,
and leverage.
According to Central Bank (BSP), residential property prices grew 27.1%
year-on-year in June 2020, following the increase of 12.4% in the first quarter of
this year. Based on the latest Residential Real Estate Price Index (RREPI), the
12.4 percent growth is faster than what was reported same time last year of 10.2
percent. It is also higher than the previous quarter’s (end-December 2019) 3.3
percent. Price of condominium units were up 23.6 percent year-on-year in the first
quarter. Single detached/attached houses also went up by seven percent while
townhouses increased by 5.5 percent. Prices of duplexes, in the meantime, grew
by 38.3 percent. Duplexes account for only 0.3 percent of total housing units.
According to international property consultant Knight Frank's latest Global
Residential Cities Index, Manila leads the annual world rankings for the second
consecutive quarter with price growth of 22% in the year to March 2020. Budapest
continues to lead European cities with growth of 16%. Zagreb and Warsaw make
up the trio of Central and Eastern European cities in the top ten.

Nationwide residential construction is actually weak, meaning there is a low
employment, with the total number of approved residential building permits falling
slightly by 0.4% y-o-y to 114,449 units in 2019, based on figures from the Philippine
Statistics Authority (PSA).
C. Political/Legal Segment
Political segment result from the processes and action of government bodies that
can influence the decisions and behavior of firms. Legal segment includes the
official outcomes of political processes as manifested in laws mandates,
regulations, and court decisions - all of which can have a direct bearing on a firm’s
profit potential.
Megaworld Corporation engage in the development, leasing and marketing
of real estate. The company initially established a reputation for building high-end
residential condominiums and commercial properties located in convenient urban
locations with easy access to offices as well as leisure and entertainment
amenities in Metro Manila.
1. INTER-AGENCY TASK FORCE For the Management of Emerging
Infectious Diseases (OMNIBUS GUIDELINES)
One of the implemented guidelines of IATF is that all public and private
construction projects shall be allowed subject to strict compliance with the
construction safety guidelines issued by the DPWH for the implementation of
infrastructure projects during the COVID-19 pandemic. This guideline may

negatively affect the company and may cause the delaying of their projects
because of the limited manpower that can work in the workplace.
2. Republic Act No. 6552, also known as the “Realty Installment Buyer
Protection Act” and more commonly known as the “Maceda Law”
is an act to protect real estate buyers with regards to installment payments.
Since installment payments and real estate transactions need to have a clear set
up between the buyer and developer, the law clearly states the time frame when
the installment payments should be made. The law also states that the seller can
cancel contract if the buyer is not able to settle the installment payments once the
grace period expires after the buyer receives the notice of cancellation. This act
may help the company to avoid fraudulent buyers.
3. Presidential Decree No. 957 (P.D. 957) also known as “The Subdivision
and Condominium Buyers’ Protective Decree”
P.D. 957 states that buyers can halt their payment after giving due notice to
the developers and acquiring clearance from the Board, and they can also ask for
the reimbursement of their total payment including amortization interests. During
this challenging time the common problem of the most buyers is the delayed
turnover of their condominiums. This law can cause a negative factor in the
company and may incurred loss because they need to reimburse the total payment
of their buyer. This law also affects their condominium projects because as time
pass by the value of condominium depreciates.

4. REPUBLIC ACT No. 9856 Section 1- "The Real Estate Investment Trust
(REIT) Act of 2009"
In January 20, 2020, the government finally released the revised
Implementing Rules and Regulations (IRR) of the Real Estate Investment Trust
Act of 2009, removing stringent tax and minimum public ownership requirements
that prevented the wider use of REITs.
This will allow companies to list property assets on the Philippine Stock
Exchange as stand-alone vehicles. Colliers believe that it will redefine the
Philippine real estate market. “The implementation is likely to develop the country’s
property and capital markets.” REITs should also stoke the construction and
infrastructure sectors which have significant multiplier effects to the economy.
D. Socio-Cultural Segment
Sociocultural segment captures a society’s culture, norms, and values. Because
sociocultural not only are constantly in flux but also differ across groups, strategic
leaders need to closely monitor such trends and consider the implications for firm
strategy.
1. Robust E- commerce market·
Ever since community quarantines are implemented, and as for the fear of
getting infected of the outraging coronavirus, more and more of consumers resort
to online shopping. This demand resulted for many entrepreneurs to also shift in a
digital space and for some to even launch their own businesses. This strong e -

commerce market is an advantage for lessors and real estate companies, such as
Megaworld, as the increasing need for warehouses, distribution centers and
logistics demand.
2. BPO Companies to pursue outside the metropolis
With the increasing rental rates in Metro Manila the Philippines’ business
process outsourcing (BPO) industry is pursuing to decentralize operations to
secondary cities. The company should consider them for immediate expansion in
provincial townships as BPO companies are one of the biggest markets of
Megaworld.
E. Technological Segment
Development in technology lead to new products and services and improve how
they are produced and delivered to the end user. Innovations can create entirely
new industries and alter the boundaries of existing industries.
Urban developer Megaworld Corporation investing US$5 million with AGILE
Digital Ventures in a newly-established wholly-owned subsidiary that will
spearhead its investments and ventures into digital innovations and technology.
Since 2018, they have been looking for investment opportunities on an app that
will enable their retail partners sell and deliver their products online and on-
demand. They have talked to several potential partners, but eventually, they
decided to build their own. The company has initially allocated a three-year capital
expenditure budget of US$5 million (approximately P250 million) to build its first

start-up project for three years. The first start-up investment is called PICK.A.ROO,
an all-in-one, on-demand premium lifestyle delivery app. Their main goal is to help
retailers smoothly migrate to the digital platform especially during this challenging
time. Using the app, customers can purchase products ranging from food, gadgets,
hardware, kitchenware, children’s toys and stuff, pet care, personal care,
medicines, office and school supplies, hotel dishes, liquor, to COVID-19 essentials,
from over 300 local and international merchants. Orders may either be delivered
on-demand, or on a later schedule. Customers may choose among regular
delivery, drive-through, or takeaway pick-up for their orders. Aside from
PICK.A.ROO, the company is also looking for other investment opportunities in
digital technology platforms that will further boost Megaworld’s core businesses.
F. Global Segment
Globalization provides both opportunities to access larger potential markets and a
broad base of production factors such as raw materials, labor, and technical
professionals.
Megaworld International is a division of Megaworld Corporation that is
focused on marketing the company’s real estate projects and those of its
subsidiaries to Filipino communities worldwide. Megaworld International brings
you the best real estate choices from the largest developer in the Philippines.
Megaworld International is proud to be present in more than 60 countries in
Europe, Middle East, North America and Asia Pacific. Megaworld International has
the widest range of home and condominium projects among all property

companies in the Philippines through the Megaworld group of companies making
it the supermarket of homes.

IV. INTERNAL ANALYSIS
A. Strengths
1. Established track record as a market innovator
The Company anticipated market trends earlier than other companies in the
Philippine property development industry. Although the Company initially focused
on the high-end residential property market, it was among the first in the
Philippines to identify the growing demand for community township developments,
particularly for middle income buyers, and to introduce flexible design options and
payment plans. In 1996, the Company was also the first to develop offices with the
infrastructure capable of supporting expanding IT and BPO businesses. As a
result, the Company developed the Eastwood City CyberPark and was
instrumental in working with the Government to obtain the first PEZA-designated
economic zone specifically for technology and BPO-based companies. Also, in
1996, the Company was the first Philippine property company to develop an
international sales network targeting overseas Filipinos for residential sales. In
2005, the Company introduced development plans for the first major mass transit-
oriented residential community in the Philippines, with inter-connections to two
main mass transit systems and a land transportation hub. The Company’s ability
to anticipate market trends and understand the needs of real estate consumers
continue to assist it in its efforts to accurately predict trends in market demand,
levels of supply and to plan and design its property developments accordingly.

2. Strategic landbank
The Company either owns or has development rights to approximately
3,650 hectares of land located throughout strategic locations in the Philippines.
Where the company does not own or lease the land, it has entered into joint
development agreements with the landowners to develop their land in exchange
for a percentage of the revenue from sales or leases of the completed units. Joint
development agreements are a costless and effective way for the Company to
acquire land development rights in desirable areas of Metro Manila at a fixed cost.
The Company continues to consider strategic land banking either through
additional joint development agreements or property purchases which we believe
has a capability to sustain the development of its current portfolio of projects for at
least the next 10 years.
3. Strong Financials Growth and Profitability
The Company has shown a strong financial performance over the last few
years. In financial year 2018-2019, its net income increased by 21.87% to reach
₱19.3 Billion while in the previous financial year i.e. 2017-2018, it had recorded a
growth of 15.51%. The Company is in sound financial condition with a debt-to-
equity ratio of 0.71 as of December 30, 2019. The Company faces profit drop to
₱5.88 billion in the six months ending June after the ongoing coronavirus crisis
pulled down its business, but not as bad as it had anticipated. Because their strong
financial standing puts them in an exceptionally good position to weather the crisis
and take advantage of the opportunities that will arise once recovery begins and

that its financial strength enhances its ability to invest in new projects while
continuing to develop existing projects.
4. Strong and Diverse Portfolio of The Business Units
The Company’s property portfolio includes a balance between income from
residential sales and recurring income earned from commercial and office
developments. The Company’s diverse project portfolio is designed to both limit
earnings volatility from potential property market fluctuations and to allow it to enjoy
growth upside. The Company’s community township portfolio includes a stable
revenue base of long-term leases from major international BPO tenants as well as
retail tenants. The Company expects to benefit from existing long-term BPO lease
arrangements while attracting new BPO tenants. The proximity of BPO tenants to
retail and entertainment properties within the community township allows the
Company to benefit from the complementary revenue stream from its retail and
commercial leases. As a result of stable earnings from rental investments in the
BPO market and residential sales, the Company has been able to keep its debt to
equity ratio low, particularly during the Asian financial crisis, when a number of
highly leveraged property development companies went bankrupt.
5. Well Established Brand Name and Reputation
The Company has completed a number of high-quality residential
condominium projects, townhouse projects, office projects and leisure and
commercial developments throughout Metro Manila. As a result, the Company has
developed a strong brand name and reputation as one of the Philippines’ leading

property developers with the credibility of delivering high quality developments.
The Company has been named by Superbrands, an independent organization
which identifies and recognizes the most highly acclaimed brands throughout the
world, as one of the Philippines’ top brands. The Company has also received ISO
9001: 2008 series certification, which covers all aspects of the Company’s
operations, including its planning, design, project management and customer
service operations, for quality control and systems management. As with other
property developers in the Philippines, the Company pre-sells its residential units.
Since pre-selling is an industry practice, buyers place great importance on the
track record and reputation of developers to reduce the completion risk relating to
their properties.
6. Strong residential marketing network
The Company maintains an in-house marketing and sales division staffed
by a trained group of property consultants who sell residential properties
exclusively for the Company. All property consultants undergo intensive training
prior to embarking on any sales activity and the Company provides an on the job
skills enhancement program for its marketing and sales professionals to further
develop their skills. In 1997, the Company was the first Philippine property
company to create an international marketing and sales division specifically
targeted at overseas Filipinos, and sales to this group have increased each
succeeding year. The Company’s international marketing and sales division is
comprised of 13 regional offices worldwide. The Company’s extensive residential

marketing network enhances the Company’s brand recognition and its ability to
pre-sell residential units.
7. Experienced management team that is also focused on
complementary businesses that promote synergies
The Company has an experienced management team with a proven ability
to execute the Company’s diverse business plans. Its Chairman, Mr. Andrew Tan,
has extensive experience in real estate and other businesses. Further, the
Company’s management has consistently executed complementary business
plans among the Company’s associates. For example, a number of the Company’s
developments house restaurants owned and operated by one of its associates.
The Company believes that the residential, BPO office, retail and hospitality
components within its mixed-use township developments benefit from the market
experience and knowledge that its key members of management possess and the
business relationships they have developed in the various industries in which they
are involved.
8. Strategic Location and Landscape
In 1996, Megaworld’s pioneering integrated township was born – mega-
community designed to allow residents to live, work, play, and learn in one setting.
This concept become the standard for other property developers that arise in the
subsequent years. After three decades, Megaworld has earned distinction of being
the country’s largest developer of integrated urban townships and lifestyle
communities. It is also notable that the development of more office space and

townships outside Metro Manila of Megaworld has expanded in recent years.
Starting in Cebu, Central Visayas in 2012, Megaworld has since expanded its
office development activities to reach Iloilo, Davao, Laguna, Pampanga, Western
Visayas and Cavite. This expansion encourages locals to experience enhance
quality of lifestyle and economic activity.
B. Weaknesses
1. Lack of adequate global distribution capability
The Company has division called Megaworld International that markets
their real estate product to Filipino communities worldwide. However, they do not
export their products nor own a property in other country. The law on owning
property in other country may be the same to the law in our country which
foreigners cannot own land.
2. Not Liquid Asset
The cash is a liquid asset that you can buy anything from anyone anywhere.
The real estate property isn’t a liquid asset; it means that you have to sell it to make
it liquid in order to make purchases that you like.
Sometimes, when it comes to liquefying your real estate asset, the market
doesn’t provide you the rate that you want. You have to sell your asset at a lower
rate in case of an emergency.

3. Difficult to Transfer Ownership
When it comes to transferring the ownership of a real estate property, then
it involves so many people and other institutions. Sometimes it takes years to
transfer the ownership from one generation to next. The more family members and
relatives are involved, the longer it would take because you would have to bring
everyone on the same page.
C. Financial Statement Analysis
A conduct of a financial statement analysis identifies the key financial
strengths and weaknesses of a particular company by properly establishing
relationship between the items in the balance sheet and the income statement.
With that in mind, the researchers were able to come up with an analysis of
significant amounts that were provided in the annual report of Megaworld.
1. Horizontal Analysis
The researcher has employed horizontal analysis technique in order to compare
current period with the prior period each item in the financial statements of
Megaworld. The peso increases or decrease is computed and expressed in
percentage or as ratio to be more meaningful.
Consolidated Statement of Income from 2018 to 2019
(Please refer to the next page for the illustration)

The consolidated statement of income shows that revenues and income of
Megaworld actually increased by 17.21% during 2019 and the increase by 15.9%
of cost and expenses did not significantly affect the net profit of the current year
which posted an increase of 21.87%.
MEGAWORLD CORPORATION AND SUBSIDIARIES

(A Subsidiary of Alliance Global Group, Inc.)
CONSOLIDATED STATEMENTS OF INCOME
December 31, 2019 and 2018 (Amounts in Philippine Pesos)
2019 2018 Peso Change % Change

REVENUES AND INCOME
Real estate sales P 42,603,984,572 P 38,035,548,060 P 4,568,436,512 12.01%
Rental income 16,814,091,846 14,264,916,931 2,549,174,915 17.87%
Hotel operations 2,543,769,508 1,519,423,405 1,024,346,103 67.42%
Equity share in net earnings (losses)
of associates -58,832,233 92,307,592 -151,139,825 -163.73%
Interest and other income - net 5,409,726,260 3,515,014,728 1,894,711,532 53.90%
67,312,739,953 57,427,210,716 9,885,529,237 17.21%
COSTS AND EXPENSES
Cost of real estate sales 23,379,819,000 20,521,249,555 2,858,569,445 13.93%
Hotel operations 1,381,156,765 820,752,636 560,404,129 68.28%
Operating expenses 13,912,479,751 11,244,991,807 2,667,487,944 23.72%
Interest and other charges - net 3,261,597,997 3,296,326,497 -34,728,500 -1.05%
Tax expense 6,081,657,290 5,544,362,408 537,294,882 9.69%
48,016,710,803 41,427,682,903 6,589,027,900 15.90%
PROFIT FOR THE YEAR BEFORE
PRE-ACQUISITION INCOME 19,296,029,150 15,999,527,813 3,296,501,337 20.60%
PRE-ACQUISITION LOSS (INCOME)

-
OF SUBSIDIARIES -166,475,960 166,475,960 -100.00%
NET PROFIT FOR THE YEAR P 19,296,029,150 P 15,833,051,853 P 3,462,977,297 21.87%
2. Vertical Analysis
The researchers have used vertical analysis to each line item on Consolidated
Financial Position and are stated as a percentage of a sum total of which that item
is a part. The information provided may indicate an altered business model that
requires a different amount of ongoing funding. (Please refer to the next page
for the illustration

MEGAWORLD CORPORATION AND SUBSIDIARIES

(A Subsidiary of Alliance Global Group, Inc.)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
December 31, 2019 and 2018 (Amounts in Philippine Pesos)
ASSETS 2019 2018

CURRENT ASSETS
Cash and cash equivalents P 23,104,875,672 P 17,543,095,320 6.61%
Trade and other receivables - net 33,011,950,292 27,655,190,137 9.44%
Contract assets 10,857,180,128 11,131,863,695 3.11%
Inventories 102,845,390,540 100,662,575,544 29.42%
Advances to contractors and suppliers 12,269,532,205 8,949,748,055 3.51%
Prepayments and other current assets 8,417,232,219 9,204,913,382 2.41%
Total Current Assets 190,506,161,056 175,147,386,133 54.49%
NON-CURRENT ASSETS
Trade and other receivables - net 11,797,389,071 7,258,618,747 3.37%
Contract assets 7,785,824,559 11,095,415,992 2.23%
Advances to contractors and suppliers 3,044,295,238 2,821,521,059 0.87%
Advances to landowners and joint operators 7,058,884,461 6,910,177,902 2.02%
Financial assets at fair value through
other 4,498,219,487 4,474,947,699 1.29%
comprehensive income
Investments in associates - net 3,511,501,836 1,996,876,322 1.00%
Investment properties - net 110,890,939,193 103,122,073,532 31.72%
Property and equipment - net 6,702,251,003 6,170,052,573 1.92%
Deferred tax assets 308,797,093 284,888,412 0.09%
Other non-current assets - net 3,528,811,747 3,008,708,543 1.01%
Total Non-current Assets 159,126,913,688 147,143,280,781 45.51%
TOTAL ASSETS 349,633,074,744 322,290,666,914 100.00%
LIABILITIES AND EQUITY

CURRENT LIABILITIES
Interest-bearing loans and borrowings 14,502,531,496 12,019,703,268 4.15%
Trade and other payables 19,306,782,624 15,027,120,371 5.52%
Contract liabilities 1,703,947,321 2,663,104,996 0.49%
Customers’ deposits 10,716,803,253 9,286,219,447 3.07%
Redeemable preferred shares 251,597,580 251,597,580 0.07%
Advances from associates and other
related parties 2,914,882,801 2,885,463,118 0.83%
Income tax payable 257,776,843 207,162,344 0.07%
Other current liabilities 7,890,196,049 5,063,817,214 2.26%
Total Current Liabilities 57,544,517,967 47,404,188,338 16.46%
NON-CURRENT LIABILITIES
Interest-bearing loans and borrowings 36,753,944,493 38,620,908,482 10.51%
Bonds payable 24,623,883,690 25,102,042,365 7.04%
Contract liabilities 3,509,607,722 2,705,562,299 1.00%
Customers’ deposits 3,083,064,985 2,523,066,928 0.88%
Redeemable preferred shares 503,195,160 754,792,740 0.14%
Deferred tax liabilities - net 10,729,268,825 8,951,152,565 3.07%
Retirement benefit obligation 1,249,574,818 828,488,892 0.36%
Other non-current liabilities 6,770,494,579 6,660,043,772 1.94%
Total Non-current Liabilities 87,223,034,272 86,146,058,043 24.95%
Total Liabilities 144,767,552,239 133,550,246,381 41.41%
EQUITY
Total equity attributable to
the Company’s shareholders 178,464,085,321 163,854,891,426 51.04%
Non-controlling interests 26,401,437,184 24,885,529,107 7.55%
Total Equity 204,865,522,505 188,740,420,533 58.59%
0.00%
TOTAL LIABILITIES AND EQUITY P 349,633,074,744 P 322,290,666,914 100.00%

3. Ratio Analysis
A quantitative analysis of information in Megaworld financial statements was
constructed using the ratio analysis. These ratios were calculated from current
year numbers and were then compared to previous years of operation.
a. Liquidity Ratio
Liquidity Ratios are ratios that come off the balance sheet and hence measure the
firm’s ability to meet it short-term obligations.
Current Ratio
This ratio is obtained by dividing the "Total Current Assets" of Megaworld
by its "Total Current Liabilities". The ratio is regarded as a test of liquidity for the
company. It expresses the working capital relationship of the current assets
available to meet the company's current obligations.
Current Assets 190,506,161,056

Current Ratio = = = 3.31059
Current Liabilities 57,544,517,967
This means that in 2019, Megaworld had a strong financial position in the
market and that it has sufficient liquid assets to maintain its operations. 0.
Quick Ratio
This ratio is obtained by dividing the "Total Quick Assets" of Megaworld by
its "Total Current Liabilities". The ratio is regarded as an acid test of liquidity for a

company. It expresses the true "working capital" relationship of its cash, accounts
receivables, prepayments and notes receivables available to meet the company's
current obligations.
Quick Assets 56,116,825,964

Quick Ratio = = = 0.97519
Current Liabilities 57,544,517,967
The ratio obtained is a good indication, as quick ratio of 0.90 or 1.00 is the
acceptable ratio in most industries. From the result of the computation, Megaworld
have the capacity to pay its current liabilities if these were due immediately.
Debt to Equity Ratio
This ratio is obtained by dividing the "Total Liabilities" of by its "Total
Equity". The ratio measures how the company is leveraging its debt against the
capital employed by its owners. If the liabilities exceed the net worth, the creditors
have more stake than the shareowners.
Debt to Equity = Total Liabilities = 144,767,552,239

= 0.70665
Ratio Total Equities 204,865,522,505
This means that Megaworld has been hostile in financing its growth with
debt. This implies that for every peso of Megaworld owned by the shareholders, it
owes .70 to creditors.

V. COMPETITIVE ANALYSIS
A. SWOT Analysis
Researcher used the SWOT analysis to identify Megaworld's internal strengths
and weaknesses relative to the external opportunities and threats that surround
the residential real estate industry. The following are the strengths, weaknesses,
opportunities and threats identified after an extensive environmental scanning:
STRENGTHS OPPORTUNITIES
1 Established track record as a market innovator 1 Industry growth rate is increasing
2 Strategic landbank 2 Rising demand for condominiums
3 Strong Financials Growth and Profitability 3 Introduction of REITs in the Philippine market
4 Strong and Diverse Portfolio of The Business Units 4 Rapidly growing of technology
5 Well Established Brand Name and Reputation 5 Robust E-commerce market
6 Strong residential marketing network 6 BPO ompanies to pursue outside the metropolis
7 Experienced management team
8 Strategic location and landscape
WEAKNESSES THREATS
1 Lack of adequate global distribution capability 1 Uncontrollable economic forces such as
2 Not Liquid Asset unemployment, business consumer confidence.
3 Difficult to Transfer Ownership 2 Decline of international market due to pandemic
3 Irreversible climate change
4 Increasing intensity of competition
A.1 External Factor Evaluation Matrix
External Factor Evaluation (EFE) matrix method is a strategic-management tool
often used for assessment of current business conditions. The EFE matrix is a

good tool to visualize and prioritize the opportunities and threats that a business is
facing.
External factors assessed in the EFE matrix are the ones that are subjected to the
will of social, economic, political, legal, and other external forces.
Weighted
OPPORTUNITIES Weight Rating
Average
1 Industry growth rate is increasing 0.05 3 0.15
2 Rising demand for condominiums 0.15 4 0.6
3 Introduction of REITs in the Philippine market 0.03 1 0.03
4 Rapidly growing of technology 0.10 4 0.4
5 Robust E-commerce market 0.10 3 0.3
6 BPO ompanies to pursue outside the metropolis 0.13 4 0.52
THREATHS
Uncontrollable economic forces such as unemployment,

1 0.15 2 0.3
business consumer confidence.
2 Decline of international market due to pandemic 0.05 2 0.1
3 Irreversible climate change 0.12 3 0.36
4 Increasing intensity of competition 0.12 4 0.48
Total 1.00 3.24
The average total weighted score is 3.24
After we've rated the opportunity and threats, the total weighted average
score is 3.24. The result shows that Megaworld's strategies are effective in
exploiting opportunities or defending against threats. They can grab and meet the
opportunity and won’t be swayed by potential threat.
1. OPPORTUNITIES
Refer to a situation where there are potentials from developing into products or
services or other business opportunity.

Some of the external opportunities that the real estate business could use to its
advantage are as follows;
a. Industry Growth Rate Is Increasing
Because of the consistent growth of the real estate industry in line with strong and
diverse portfolio, and strong residential network of Megaworld, it could provide
competitive advantage by using this strength to match industry growth.
b. Rising Demand for Condominiums
According to Condominium Boom in Metro Manila (2011), demand for residential
condominiums in Metro Manila has been boosted by strong economic growth,
particularly by the rapid growth of business process outsourcing firms, including
call centers. Call center agents from a new breed of young urban professionals
has tremendous purchasing power as most of them work at night, they need
condominium units that are right next to their workplace. Megaworld’s strategic
locations are indeed a great contribution to suffice this demand.
c. Introduction of REITs in the Philippine Market
Net income paid out as cash dividends by REITs are exempted from corporate
income taxes. This is an opportunity to Megaworld as it gives returns a significant
boost because of the Philippines’ high corporate income tax rate of 30 percent.
Aside from tax savings, it will also allow them to raise capital that can be used to
pursue other opportunities to help profits grow. REITs being listed are liquid and

can be sold easily can also help the company to strengthen its weakness for not
having enough liquid assets.
d. Rapidly Growing of Technology
Megaworld has an opportunity to venture on “Virtual Reality or Augmented Reality”
just like what did the Engel & Völkers – a real estate company in America – do.
and Buyers are expected to use this technology to view homes benefitting them
spatial visualization without even actual attending to their chosen property. This
will save their time and money with a higher quality experience. In addition, data
gathered thru technology is easily accessible, making clients more knowledgeable
on the topic. It also allows clients to significantly narrow their searches, helping
them narrow their most important criteria.
e. Robust E-commerce Market
This strong e - commerce market is an advantage for lessors and real estate
companies, such as Megaworld, as the increasing need for warehouses,
distribution centers and logistics demand.
f. BPO Companies to Pursue Outside the Metropolis
With the increasing rental rates in Metro Manila the Philippines’ business process
outsourcing (BPO) industry is pursuing to decentralize operations to secondary
cities. The company should consider them for immediate expansion in provincial
townships as BPO companies are one of the biggest markets of Megaworld.

2. THREATS
Is a situation or scenario that puts the firm in uncompromising situation.
Some of the external threats that are out of the control of real estate business are
as follows:
a. Uncontrollable Economic Forces Such as Unemployment, Business
Consumer Confidence.
Consumer confidence among Filipino crashed to -54.5% on the third quarter
bogged down by lower income and high unemployment brought by the COVID-19
pandemic. Furthermore, because of health crisis and the subsequent ECQ, the
demand for housing and office space dropped, along with tourist occupancy in
hotels which has dropped to 35% from 71% at the end of 2019. The Philippines’
real-estate sector expects to see a sharp decline in sales in the short to medium
term.
b. Decline of International Market Due to Pandemic
There is an estimated 2.2 million of Overseas Filipino Workers (OFWs) globally
and with the COVID-19 pandemic bringing a significant portion of the global
economy to a halt, it was estimate that 300,000 to 400,000 OFWs are affected by
lay-offs and pay cuts, and some of them will require repatriation. At the end of
August 2020, there are now about more than 389,000 returning overseas Filipinos,
around 60% of whom are land-based workers coming from badly hit industries
such as logistics, construction, and the oil sector, while the rest are sea-based.

This repatriation is a potential threat of decline to international market and sales of
Megaworld as OFWs is one of their target markets.
c. Irreversible Climate Change
Climate change has a substantial impact on real estate industry [also] as
manifested across Europe, year 1980 to 2017 climate related extremes cause
them 453 billion economic losses. Individual buildings are directly damage - some
asset decreases its value, and some being rendered unusable. Megaworld being
located on Philippines – a highly vulnerable to the impacts of climate change and
the world’s most cyclone prone region – must continue its initiative to mitigate
climate change by implementing green building practices based on global standard
to cope up with this threat.
d. Increasing Intensity of Competition
Real estate industry has indeed an intense competition, competitors may have
substantially greater financial and other resources than the Company, which allows
them to do more aggressive marketing. Megaworld competes against a number of
residential and commercial developers and real estate services companies,
including Ayala Land, Inc., SM Prime Holdings, Inc., Robinson Land Corporation
and many more emerging estate companies. This competition from other real
estate developers and real estate services companies may adversely affect the
company’s ability to acquire and sell properties or attract and retain tenants.

A.2 Internal Factor Evaluation (IFE) Matrix
The Internal Factor Evaluation (IFE) matrix is another strategic management tool
used to analyze working conditions and strategic position of a business. It
evaluates how a company is performing with regard to identified internal strengths
and weaknesses of a company.
Weighted
STRENGTHS Weight Rating
Average
1 Established track record as a market innovator 0.14 4 0.56
2 Strategic landbank 0.11 3 0.33
3 Strong Financials Growth and Profitability 0.10 4 0.4
4 Strong and Diverse Portfolio of The Business Units 0.10 3 0.3
5 Well Established Brand Name and Reputation 0.07 3 0.21
6 Strong residential marketing network 0.10 3 0.3
Experienced management team that is also focused on 0.24
7 0.08 3
complementary businesses that promote synergies 0
8 Strategic location and landscape 0.12 4 0.48
WEAKNESSES
1 Lack of adequate global distribution capability 0.05 1 0.05

2 Not Liquid Asset 0.08 1 0.08
3 Difficult to Transfer Ownership 0.05 2 0.1
Total 1.00 3.05
The average total weighted score is 3.05
After we've rated the strength and weaknesses, the total weighted average score
is 3.05. The result shows that Megaworld is a strong competitor and can compete
above average against its competitor.

B. BCG Matrix Analysis
Residential lots and condominiums are categorized as stars as it was the main and
largest source of income of Megaworld. Base on their financial report in 2019, 65%
of their income is coming from Real estate sales.
Megaworld is also engaged in leasing of commercial space and offices and
operating hotel and resort around the country. As the second main sources of
income, it was typically bringing in more money that is needed to maintain their
market share.

Point-to-point Service transport hub in Iloilo, Chinatown Museum in Binondo and
The Newton of Excellence, a school established in Cebu, are the services
Megaworld has recently launched. These services have the potential to success
but requires more attention and capitalization for development and will be under
the Question mark.
Food and other services are in dog category as it’s just a complimentary service in
hotel operation of the Megaworld and does not have the potential to bring in cash.
C. Company Competitive Index
C.1 Key Competitors of Megaworld
COMPANY COMPETITIVE INDEX
MEGAWORLD AYALA ROBINSON

Key Success Factors WEIGHT
Rating Score Rating Score Rating Score
1 Adequacy in Capitalization 10% 5 0.5 4 0.4 4 0.4
2 Competitiveness in Pricing 20% 2.5 0.5 3 0.6 2 0.4
3 Accessibility of Site Locations 15% 4 0.6 4 0.6 4 0.6
4 Overall Project Quality 20% 5 1 4 0.8 3.5 0.7
5 Scope of Distribution Network 10% 5 0.5 3.8 0.38 3.5 0.35

6 Track Record of Developer 15% 4 0.6 5 0.75 3 0.45
7 Extent of Marketing Capability 5% 3 0.15 5 0.25 4.5 0.225
8 Market Share/Financial Position 5% 4 0.2 3.8 0.19 3.5 0.175
100% 4.05 3.97 3.3
The key competitors were limited to two – Ayala Land and Robinsons Land. These
companies were chosen on the basis of the similarity in their business portfolio.
1. Ayala Land
Ayala Land Inc., founded by Domingo Roxas and Antonio de Ayala in 1834 is the
largest property developer in the Philippines with a solid track record in developing

large-scale, integrated, mixed-use, and sustainable estates that are now thriving
economic centers. With 12,192 hectares in their land bank, 29 estates, and
presence in 57 growth centers across the country, it offers a balanced and
complementary mix of residential developments, shopping centers, offices, hotels
and resorts, and strategic investments. Construction and property management
services are led by our subsidiaries Makati Development Corporation and Ayala
Property Management Corporation, respectively. Ayala land is further divided into
commercial properties (Ayala Malls), corporate business (Laguna Technopark and
Ayala Businessscapes), geographic business (Cebu holdings) and residential
development. Its residential area is segmented by target market. Ayala land
Premier and Alveo land caters to the luxury sector with developments such
Serendra, while Avida land caters to the affordable segment with projects such as
Avida towers.
2. Robinsons Land
Robinsons Land Corporation (RLC), incorporated in 1980, is the real estate arm of
JG Summit. It is one of the Philippines’ leading real estate companies and most
reputable developers of mixed-use properties, office buildings, residential
condominiums, as well as land and estate developments, including socialized
housing projects located in key cities and urban areas nationwide. RLC also leads
in the development and operation of life style shopping malls and hotels. RLC
develops and sells its residential condominiums to upper scale, middle and low-
cost sectors. It also owns and operates 16 hotels in Metro Manila and other areas
of Philippines. In addition, the company's property portfolio includes 47 shopping

malls, 84 residential projects, and 17 office buildings. RLC has a wide geographical
reach as north as Ilocos and as south as South Cotabato. Most of its developments
are integrated in mixed-use properties strategically located in key cities and other
urban areas nationwide. The company has operations in China, Hong Kong, and
the UK. RLC is headquartered in Pasig City, Metro Manila, Philippines.
C.1 Key Success Factors
The researchers have identified eight (8) critical success factors (CSF) for a
developer to thrive and survive in the residential real estate industry. The
researchers have taken into consideration more than 20 factors and have
narrowed it down to eight which is the maximum requirement for constructing a
competitive profile matrix.
These factors are considered to be of primary concern both to the developer and
its target buyers. In this study, particular weights were assigned to ascertain the
importance of each in contributing to the success of the company.
1. Adequacy in Capitalization
The residential real estate industry is capital intensive. To put up a project needs
more than a million in capitalization to finance all expenses that are forecasted to
be incurred. Capitalization can be measured by the equity in its balance sheet and
through a leverage ratio (debt to assets ratio). Higher debt would limit future
borrowings or attract capital to fund future projects. Thus, this factor was given a
weight of 10%

2. Competitiveness in Pricing
One of the aspects at which a buyer looks into is how a unit is priced reasonably.
Our basis in comparing the prices are same area, completion, new established
buildings. This was given 20% weight by the researchers because of the
established price sensitivity of buyers and their willingness to buy a product that
will give them the greatest value for their money.
3. Accessibility of Site Locations
Another aspect that buyers consider is the proximity of their home to commercial
areas and educational institutions. Especially for urban dwellers, it is of importance
that they get to access anything they want in a fast and easy way. Hence, this
aspect was also assigned a weight of 15%
4. Overall Project Quality
Overall project quality means the quality of amenities and good property design
that the developer sells to buyers. The overall project quality gives an indelible
impression to buyers and makes them think if they would be willing to shell out a
huge amount of money to buy that one unit in that particular condominium. This
got a 20% weight because amenities add value to what is being sold by the
developer.

5. Scope of Distribution Network
An adequate number of internal and external sales personnel is necessary to move
inventories. Wide reach of distribution should extend to both local and international
buyers. This can be measured through number of international and local offices.
This was given a weight of 10% because the company should have adequate
number of sales people to build relationships with prospects and turn them to
potential buyers to generate revenues.
6. Track Record of Developer
Another factor that customers look upon is the track record of a developer. Buyers
tend to choose developers who have a name and a reputation over small scale
developers who are not known partly due to just a few developments. A 15%
weight was given to this factor because the industry is such a competitive arena.
It is a must to have an established name and reputation.
7. Extent of Marketing Capability
A company must advertise its developments through many forms of media to
strongly penetrate its it market. Through the media, the developments are exposed
to potential buyers and creates an impact in the buyers' minds. It was given a 5%
rating because, for companies to compete well, they have to allocate a budget for
marketing activities such as product promotion to increase brand awareness.

8. Market Share/Financial Position
A strong financial position is important to continue the operation of a business. It
must be able to generate income and pay off its liabilities on time. Because of this
it was given a weight of 5%

VI. STRATEGIC OBJECTIVES
The information gathered from the Company Competitive Index, BCG, IFE and
EFE matrices will be used to formulate the objectives and strategies for Megaworld
corporation.
Proposed Action Plan
1. For the company to boost sales with expanding their market and
distribution channel, the company pitched its product to a broader and
new segment of consumers (diversification)
a. Enhance website to include e-commerce capability and promote it as an
alternative distribution channel
b. Accelerate its digitalization programs and technology investments across all
its businesses to align with the changes in the behaviors and lifestyle of
different types of customers even post-pandemic
c. Strengthen their social media presence to improved product awareness and
make the company known to a broader audience (enhance publicity effort)
d. Continue to target OFWs abroad and encourage them to purchase a unit
for their family member as a form of lifetime investment
e. Locate distribution channels where competition is doing a poor job or where
there is an opportunity for expansion
2. For the company to satisfy and establish trust among customer and future
market, the company improve their current state by developing their
products and services

a. Continue to construct and offer new units with new and innovative
architectural design concepts which are to be priced lower than the
company's key competitors without incurring excessive construction costs
b. Suggest new uses for your existing product
c. Improve tenant experience and operation by directly engaging to them.
3. For the company to maintain their market position and keep them as
market leader in real-estate industry
a. Continue to grow its businesses.
b. Develop and introduce new development project formats.
c. Invest in market research
4. For the company to maintain healthy and satisfactory relations with the
employees and continuously seek to address their concern
a. Employees will acquire new skills and education that will help them grow
and to take part on company’s success
b. Increase employee engagement by making them feel valued

VII. STRATEGIC PLAN
The following are the detailed steps to implement the following recommendations
and plan of actions:
1. Boost sales with expanding their market and distribution channel
a. Improve the website to build its e-commerce capability by allowing for online
reservations that will allow for real time inventory monitoring and online
payment of reservations.
b. Be Active in Social Networks & Be Good. Social media enabled clients and
customers to review their business and performance, it made new inroads
to boost their sales as they can easily gather all reviews in one company
page, making the process of reviewing easier and more concise for
customers to follow.
c. Having a Good Communication and Patience. Everyone dreams of being
able to buy their own home, especially among Overseas Filipino Workers
(OFWs), who are oceans and continents apart from their loved ones so they
can improve their quality of life. Dealing or encouraging OFWs to invest a
property for their families is not easy especially if they want the best home
for them but if they feel valued, it is possible to convince them to buy.
d. Incorporate virtual imagery, 360-degree virtual tours, virtual reality and
immersive project apps that will catch customers and potential market’s
interest. This will allow them to view homes benefitting them spatial
visualization without even actual attending to their chosen property.

2. Satisfy and establish trust among customer
a. Surveying and interviewing the customers to discover new uses for their
product that enables them to promote to potential customers and expand
into new markets.
b. By strengthening customer relationships, companies protect their existing
market share by preventing current customers from jumping ship when a
competitor rolls out a hot new offer.
3. Maintain their market position and keep them as market leader in real-
estate industry
a. Expand the market of the company to areas outside the metropolitan that
are also developing fast and cater to the demands for residential
condominium units in these areas where small numbers of developers exist
since these areas are still considered as emerging business districts.
b. Continue to be innovative. Introduce new project with sustainable features
that has never been introduced in the market and incorporate technology
into product development.
4. Maintain healthy and satisfactory relations with the employees
a. Conduct free training and seminars that will provide a wealth of information
about topics and professional issues that may be use while in service on
the company.
b. Provide government-mandated and voluntary benefits to its employees
such as leaves, saving benefits, several loan options, medical benefits and
flexible working hours.

VIII. Appendices
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June. Retrieved from
https://businessmirror.com.ph/2020/08/13/megaworld-income-declines-by-
a-third-in-january-June
CEIC DATA. (2020, Sep 25). Philippines House Prices Growth. Retrieved from
https://www.ceicdata.com/en/indicator/philippines/house-prices-
growth/amp
Central Bank of the Philippines. (2020, September 24). Central Bank of
Philippines: Consumer Confidence Turns Pessimistic for Q3 and Q4 2020;
More Optimistic for the Next 12 Months. Retrieved from
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Consumer-Confidence-Turns-Pessimistic-for-Q3-and-Q4-2020-More-
Optimis--31351743/
Delmendo, Lalaine C. (2020, March 26). The Philippines’ housing market is now
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https://www.globalpropertyguide.com/Asia/Philippines/Price-History

DMCI HOMES. n.d. Your Easy Guide to Philippines Real Estate Laws. Retrieved
from https://leasing.dmcihomes.com/blog/guide-philippine-real-estate-
laws/
GradPhilippines. (2020). Megaworld Corporation. Retrieved from
https://gradphilippines.com/graduate-employers/megaworld-corporation
JG Summit Holdings, Inc. (2018). Robinsons Land Corporation. Retrieved from
https://www.jgsummit.com.ph/business-unit/robinsons-land-corporation
Liz Lucking, Liz. (2020, June 30). Manila was the Leading City for Price Growth in
First Quarter. Retrieved from
https://www.google.com/amp/s/www.mansionglobal.com/amp/articles/man
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Loyola, James A. (2020, August 5). Megaworld investing P250 M in tech startup.
Retrieved from https://mb.com.ph/2020/08/05/megaworld-investing-p250-
m-in-tech-startup/amp/Magtulis, Prinz. (2020, July 28). Pandemic tempers
hot Philippine property market. Retrieved from
https://www.philstar.com/business/2020/07/28/2031232/pandemic-
tempers-hot-philippine-property-market/amp/
Mayen, Jaymalin. (2020, September 7). Close To 7,000 OFWs Test Positive For
COVID-19; 180,000 Now Back in Their Provinces. Retrieved from
https://www.onenews.ph/close-to-7-000-ofws-test-positive-for-covid-19-
180-000-now-back-in-their-provinces

Megaworld Corporation. (2017, March 10). Megaworld Main Prospectus.
Retrieved from
https://www.megaworldcorp.com/investors/sites/investors/files/2018-
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III-CMA Megaworld Strategic Plan

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UNIVERSITY OF MAKATI

College of Business and Financial Science

Mary Daisyrie G. Carlos

(For Academic Purposes Only)

II. COMPANY BACKGROUND 9

B. Vision and Mission 10

III. EXTERNAL ENIVROMENTAL ANALYSIS 12

IV. INTERNAL ANALYSIS 21

C. Financial Statement Analysis 27

A.1 External Factor Evaluation Matrix (EFEM) 32

A.2 The Internal Factor Evaluation Matrix (IFEM) 38

B. BCG Matrix Analysis 39

A Strategic Management Paper on MEGAWORLD CORP. 2

C. Company Competitive Index 40

C.1 Key Competitors of Megaworld 40

C.2 Key Success Factors 42

VI. STRATEGIC OBJECTIVES 46

VII. STRATEGIC ACTION PLAN 48

A Strategic Management Paper on MEGAWORLD CORP. 3

Megaworld Corporation, the country’s top township developer, engages in

the development of large scale, mixed-use planned communities or townships that

integrate residential, commercial, leisure and entertainment components in the

society and help shape the nation.

unforeseen events brought by the pandemic. According to Central Bank (BSP),

increase of 12.4% in the first quarter of this year.

Other external factors property developers face includes, rapid

regulations. Overall responsiveness of Megaworld to its external environment is

development and effective strategies in exploiting opportunities or defending

A Strategic Management Paper on MEGAWORLD CORP. 4

an existing threat for Megaworld to be replace as market leader. Internally, the

competitive advantage against its competitor.

Market development, product and service development, defensive

company to achieve its strategic objective.

Market development strategies will begeared to address emerging market

s by improving company’s website, participating actively in social networking sites,

communicating with future markets and incorporating virtual services in able to

testify and promote to potential customers, and strengthening customer

relationship. Defensive strategies will be complemented by expanding the market

and continuing innovation and the management development includes free

training, seminars, government-mandated and voluntary benefits to employees.

A Strategic Management Paper on MEGAWORLD CORP. 5

Megaworld is one of the leading property developers in the Philippines and

is primarily engaged in the development of large-scale, mixed-use, master planned

townships that integrate residential, commercial, and office developments.

portfolio includes residential condominium units, subdivision lots and townhouses,

management of hotel operations. As Megaworld expands its operation, the

and environment the Megaworld’s Corporation. It also analyzes the information

relevant to the company’s current strategies which is necessary to determine

focused on the efforts of the company to be continuously be an integral part of the

Filipino way of life.

A Strategic Management Paper on MEGAWORLD CORP. 6

have an advantage amongst its competitors by focusing on areas that need

improvement. This is also beneficial in determining which part of the business

operation should be prioritized by the company.

The document includes a study of the major strength and weaknesses

affect it in the future in the form of a SWOT analysis. To gain an advantageous

competitiveness index (CCI). It will be use to assess the competitors’ strategies

provide the best possible high-quality developments offered to customers. After

attaining the strategic objectives.

A Strategic Management Paper on MEGAWORLD CORP. 7