Thesis (Master in Management)--University of the Philippines Mindanao, April 2015.

The Coop: The House of Dressed Chicken (The HDC), a dressed chicken and innards distribution company, is the first family business of the owners opened in 2001. It started as a dressed chicken distribution business for the Vitarich Corporation that was expanded as a dressing plant management provider of the Bounty Agro Ventures, Inc. (BAVI). The dressing plant management component was not a success given the complexity in managing human resources. The business component was closed down but it was eventually replaced with the management of trucking service from farm to the dressing plant of the BAVI. Other business diversifications initiated included establishing poultry of chicken layers, ballot and salted eggs production and distribution, and processing and distribution of chicken cut ups and processed chicken meat. The exposure of The HDC in the different levels of marketing channels of dressed chicken is characterized by both successes and failures. Investments were already made like the five units of vans which were contracted out by BAVI for its Chooks to Go business component. However, three of these vans are now out of operation with the closure of Chooks to Go branches. Aside from that, The HDC also raised the issue of nonpayment of some customers and market competition as the current concerns. The company is experiencing business difficulties with operating losses in its dressed chicken segment. The External Factor Evaluation (EFE) and Internal Factor Evaluation (IFE) supplemented with the Porter?s Five Forces of Competition and Competitive Profile Matrix (CPM) in the Input Stage revealed that the company failed to grab the opportunities in the market. The demand for dressed chicken is constantly increasing, not only in Davao Region but the whole world. The demand is high in Davao City and Davao del Sur which are the current target markets and the utilization rate of the company is low at 31.92%. It has resources which it can tap to broaden the business. However, the company is restricted with the low supply of chicken from its two suppliers, BAVI and Southern Ventures. It has resulted to a fluctuating contribution margin and net sales. The absence of the Vision, Mission, and Goals (VMG) of the company as well as a written financial policy and procedures manual can also be seen as weakness holding back the growth of the company. It does not have an existing compass to propel the company to achieve more. It is mainly sustained by the yearly planning conducted to set out yearly targets. Its unwritten financial policies and procedures are avenues for unstandardized transactions with its clients and other stakeholders. These predicaments can be addressed given the centrality of the power in the owners coupled with the willingness to establish the VMG and financial policy and procedures manual. To address the specified concerns, several strategies were looked into. The Matching Stage using Strengths, Weaknesses, Opportunities, and Threats (SWOT) Matrix and Strategic Position and Action Evaluation (SPACE) Matrix narrowed down the options to market penetration, organizational enhancement, and vertical integration. Further analysis using Quantitative Strategic Planning Matrix (QSPM) resulted to vertical integration as the chosen strategy. The insufficiency of supply of chicken in Davao City and Davao del Sur to address the increasing demand is the main deciding point. Ensuring a good and reliable source is vital for the business. And vertical integration is providing The HDC with the control over its supply. Its means additional supply for distribution and opportunity to penetrate the market. This will also allow them to increase their target market and include the rest of Davao Region. Aside from that, the company can also have the option of reaching out to possible global clients. The easing of trade barriers and the increase in economic integrations make up for a good opportunity to venture into exportation. The crafting of the VMG and the financial policy and procedures manual will sustain and advance the efforts in vertical integration. The conduct of the first strategic planning in June 2015 is a good start for the company to compete in the increasing market of dressed chicken. The involvement of the whole organization in the strategic planning is an integral part in making the organization dynamic and responsive to the changes in the market.

Confidential.