Thesis (Master in Management) -- University of the Philippines Mindanao, June 2016.

ARA Enterprises is a family-managed sole proprietorship under the category of Micro, Small, and Medium Enterprises (MSMEs). It is engaged in the Wholesale and Retail of construction materials and concrete products. Since its establishment in 1991, it is already serving the government as its major client. In fact, of total revenue, government accounts for 90%. With this too much exposure to government, any changes in government policy will have a huge impact in the overall performance of the firm. In case of the Philippines, it is an open secret that government policy is inconsistent. The Priority Development Assistance Fund (PDAF) issue is among the inconsistent policy of the government that has significantly affected the enterprise. Furthermore, the cost associated in complying with regulations and the different interpretation to the law pertaining to government procurement policy is affecting the administrative and operating expense of the enterprise. In this light, a strategy is needed to reduce the share of government to toal revenue from current 90% to 50% without compromising the growth in government sources. In conducting the strategic management process, the framework by Fred David will be the main tool. David?s framework is relatively easy and widely accepted by practitioners. Additionally, David?s framework will be coupled with management tools to deepen the analysis. The first step in identifying the appropriate strategy is to conduct an audit of external environment, in chapter 2. This will help in assessing the opportunities and threats offered by external factors. For the enterprise, the robust construction activity both in the housing market, real estate market, and increasing government expenditure in infrastructure both in its locality and nationally are among the identified sources of opportunities. On one hand, the relative volatility of the global economy and the increasing competition within its locality are among the identified sources of threats. In order to portray a clear impact of these factors to the enterprise, an External Evaluation Analysis (EFA) was conducted. The second step in the process is to conduct an audit of its internal environment, Chapter 3. This will aid in evaluating the strengths and weaknesses of the enterprise. This is important; it will have an impact in responding to its external environment. For the enterprise, its being an accredited supplier with the government and the availability of a credit line facility are its strengths. However, too much exposure to government and the unavailability of store are identified as the weaknesses of the enterprise. Similarly in the first step, an Internal Factor Evaluation (IFE) was conducted to clarify the current standing of the enterprise. The third step is to identify the Vision, Mission, and Goal of the enterprise, Chapter 4. This will be the overarching guide in pursuing the priorities of the enterprise. For the enterprise, it does not have any of the said principles explicitly. In order to explicitly come with the said principles, Key Informant Interviews and focus group discussions were conducted. Finally, the Vision, Mission and Goal of the company were formulated to serve as the guide for its operations. The final step in identifying the strategy of the enterprise, chapter 6, coherent with its principles, is to conduct a Strength-weakness-Opportunities-Threats Analysis (SWOT Analysis) and QSPM analysis. With the help of the said management tools, 3 strategies were identified. These are (1) Market Expansion Strategy, (2) Market Integration Strategy, and (3) Market Penetration Strategy. The identification of these strategies was further deepened with its corresponding financial projection and implication of the enterprise. If fully implemented, the strategies will result into increase in revenue. For the first year alone, revenue is projected at PhP 60 million with a conservative annual increase of 10%. Furthermore, net profit will be at 17% to 20% within 3 years. Finally, the total investment and capitalization of PhP 7 million is projected to be recovered fully on the second year. The implementation of the identified strategies must be coupled with concrete and measurable programs. This guides the enterprise in implementing the strategies, in chapter 6, the programs were outlined. Furthermore, Chapter 7 will outline the monitoring tool for the enterprise. This is essential to measure and monitor the implementation of the strategy. Hence, success can be identified.