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

Confidential.

Mango makes the country competitive in the world market. The mango industry supports 2.5 million farmers and contributed 12.5 billion per year in gross value added (GVA). SODACO is a corporate farm owning 2,800 hectares of mango farms with 70% productive trees. Wholesale and retail activities are being handled by its marketing arm in Davao and Manila. The company was able to establish a brand in the market for fresh and processed products. SunGee became well known in the market through mango and durian. But sustaining the brand as well as maintaining customer's loyalty became a problem for the marketing people. The seasonality of mango hinders the company from producing all year round considering the location of the farms which is not ideal for off-season production. As a result, there was no continuity of supply and buyers tend to look for other suppliers who can offer them continuous supply of fresh mangoes. The main objective of this study is to know how the company can sustain its brand in the market. And whether venturing into trading and sourcing mango is feasible for the company. To be able to identify the strategies for the company, internal and external assessment were conducted. Upon assessing the company's internal environment, the strengths recognized were: 1) has five (5) big mango plantations and the largest durian plantation in Mindanao; 2) established a brand name "SunGee" in the market for fresh fruits; 3) strong technical group with complete post-harvest facilities; 4) the company is liquid and can still accommodate external financing with an equity multiplier of 2.94 in 2003, 2.90 in 2004 and 2.78 in 2005 respectively; and 5) policies and procedures were already in place in all areas of operation thus providing the company order and direction. The weaknesses are: 1) sales and profit growth is decreasing during off-season; 2) the location of the farm is not ideal for off-season mango production; 3) the company has conservative financial policy; 4) the company has no promotional campaign programs for its products; and 5) limited market of fresh and processed products for both local and export. The opportunities available are: 1) off-season production of mango fruits is technologically possible in Southern Mindanao which is suggestive of a continuous supply of the crop throughout the year; 2) expanding export demand of all grades of mango; 3) possibility to negotiate for higher prices from customers/buyers during off-season and/or in relation to volume; 4) strong demand of fresh fruits and vegetables in the groceries and supermarkets; and 5) active support from related government agencies and Mango Industry Council. The threats recognized are: 1) more established relationship between buyers and sellers who has been ion the mango trading market for a long time; 2) direct growers by exporters such as Dole-Stanfilco; 3) problems with residue levels which is very critical in Japan; 4) price wars among competing mango growers and sellers that has been hurting the industry in general; 5) big traders who tries to control the market price of mango; and 6) apprehensions of suppliers/growers to sell to big companies because of the stringent mango classification. The internal and external factor evaluation matrices resulted in the IFE score of 2.60 and EFE score of 2.75 which are both above the average implying that SODACO is internally strong and the company has the capacity to respond to the threats of the industry. The corporate objective of the company was formulated through the joint efforts of the Executive, Management and Operations Committee. The triple bottom line concept of sustainability as applied when the vision, mission and goals of the company was created. Using the SWOT matrix, the following strategic options were generated for this study: 1) Increase mango production by investing in more inputs to produce during off-season; 2) Middle East is a good market for all grades of mango; 3) Producing whole year round would mean continuity in promoting the brand; 4) Increase in production and quality of fruits will follow sales and profit growth; 5) Source or trade mango fruits during off-season; 6) Coordinate with the right government agency for promotion and referrals; 7) Lease mango farms; 8) Market development; 9) Build domestic market for Sungee mango; 10) Accredit farms/contractors; 11) Assure market for all mango harvest; 12) Give a premium price over market on local and export grade mangoes; 13) Provide technical support to production and post-harvest concerns for quality assurance; 14) Establish relationship with wholesalers and retailers. By employing the Quantitative Strategic Planning matrix (QSPM), the relative attractiveness of each alternative was identified. The most attractive strategy for the company is to source or trade mango fruits during off-season. With this strategy, the company can buy fresh mango from other farms following certain guidelines that will be discussed in the succeeding chapters. To achieve the strategic choice, various programs and control systems should be implemented in the areas of organization, operation, marketing and finance. It is important to determine who will handle the operation, pertinent guidelines and policies that will be followed, the distribution systems and monetary considerations.