Thesis, Graduate(Master in Management)--University of the Philippines Mindanao, December 2007

In today's complex and highly competitive business environment brought about by the advent of globalization and information age, budget-oriented or forecast-based planning methods are insufficient for a medium size company like Steniel Mindanao Packaging Corporation (SPMC), a corrugated carton box manufacturer in Davao City, to survive and much less prosper. It is in this context that SPMC chose the strategic planning process as a tool in defining its objectives, assessing both the internal and external environments, and formulating, implementing and evaluating strategies. This plan will serve as blueprint in guiding the activities of SMPC in accomplishing its stated objectives. From the evaluation of the company's internal environment, it has identified the following significant strengths and weaknesses: Strengths- Brand equity, high customer service levels, good rapport with customers, and fast response on customer needs. Weaknesses-Poor financial position due to lack of working capital, losing market share on all-in business, 28 percent downtime of corrugator, and additional waste of 0.5 percent. Likewise, from the evaluation of the company's external environment, it has identified the following opportunities and threats: Opportunities- Four percent growth in the banana exports, six percent growth in the banana chips exports, five percent growth in the canned tuna exports, presence of direct mango exporters, and the farm expansion of Chiquita-Unifrutti Corporation and Del Monte Fresh Produce for pineapple. Threats ? Entry of new converters in Davao and General Santos Cities, entry of new corrugating plant in Davao City, ban on aerial spray of insecticides, China increasing hectarage on banana, scarcity of tuna catch, shortage of paper supply and declining profits due to strong peso. Combining the strengths, weaknesses, opportunities and threats plus considering the Vision, Mission, and Goals resulted in the identification of the two strategic proposals namely; market penetration and working capital improvement. To operationalize these strategies, the following objectives and action plans were formulated for each of the major functional areas: Marketing will achieve a sales growth of 44 percent in 2008 and eight percent growth from 2009 to 2012. Production will maintain the current waste level of ten percent and reduce manufacturing costs by two percent per year. Finance will improve working capital by P50 million in 2008, increase yearly at the rate of two times the increase in the sales revenue projections per year. Human Resources shall maintain the three percent employee turnover rate. The current control systems o Daily Business Status Report (DBSR) and the Monthly Business Review (MBR) will continue to be the primary monitoring tools to ensure that the company reaches its intended goals.