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Balanon, Lanilyn Joy

EMG-4 / 2008106114

Industry Overview
Heating, Ventilation, and Air Conditioning (HVAC) equipment implement heating
or cooling for residential, industrial or commercial buildings. The HVAC systems also
provide fresh outdoor air to remove interior airborne contaminants such as volatile
organic compounds and odors emitted from interior furnishings or various cleaning
chemicals among others.
The HVAC equipment are anticipated to penetrate into both residential and
commercial market segments in the coming years. The industrial segment is another
key segment that is expected to witness moderate growth over the forecast period. The
demand for air conditioning equipment was the largest globally and thus, this segment
dominated the HVAC equipment market in 2013.
The major factor restraining the growth of HVAC equipment market is high
energy consumption of HVAC equipment. The market opportunities in the coming years
are related to the growing trend of smart homes, development of energy efficient
systems and adoption of green technologies by HVAC equipment manufacturers.
Energy efficiency is thus one of the key concerns that global manufactures are focusing
on.
With an increase in new building construction inherently comes an increase in
new HVAC unit installation. In both residential and non-residential, HVAC equipment
installation will be on the rise in 2015:

Non-residential: According to an article in PM Magazine, the U.S.


Commerce Dept. reports that construction spending for
nonresidential projects through November 2014 rose 4.2% from the
year before, with lodging, office, commercial and sewage/waste
disposal construction rising 11.3%, 14.7%, 8.4% and 13.6%,
respectively.

Residential: After a yearlong study of its role in Residential


HVAC, ASHRAE announced a new emphasis on Residential, the
effects of which will take form as 2015 progresses.

Sources:
http://news.carrierenterprise.com/2015/12/21/changes-and-trends-for-hvac-in-2016/
https://www.wbdg.org/resources/hvac.php

Current Situation
There is a need to review the current distribution of the company to know if it is in
the same direction as to what is in market trend. Shown below is the percentage of total
sales for each classification for the year 2015.

YEAR 2015 TOTAL SALES


Residential; 1%
Industrial; 16%
Healthcare; 5%

Commercial; 78%

Figure 1.1 Total Sales per Classification for the Year 2015
Based on the graph, commercial buildings have the highest sales so it is
the current focus of the department. Moving forward, residential buildings can be the
target market of the company since there is a high potential based on the forecasted
construction and there is a vast decrease for commercial buildings.

Background of the company


The company XYZ specializes in the design and construction of air conditioning
and mechanical ventilation (ACMV) systems. The company is composed of qualified
engineers and consultants supported by an experienced team of skilled technicians.
Services offered:

Air conditioning and Ventilation Design


Chiller Installation
Air Handling Unit (AHU) Installation
Fan Coil Unit (FCU) Installation
Ducting works (G.I. / Pre-insulated PU)

Figure below shows the departments geographic reach for the year 2013 to
2015.

Metro Manila:
350
Batangas:
10
Cavite: 10

Bulacan:
4

Bacolod:
1
Cebu: 1

Problem statement

For the years 2009-2012, Company XYZ experienced an increase in actual


sales. However for the years 2013-2015, the company has incurred 8% decrease in
actual sales.

YEAR

Sales
(Actual)

Sales
increment/decre
ase

2009-2010

29,822,531.
00

2010-2011

42,049,768.
71

12,227,237.71

25,229,861.
48% 00

increase

2011-2012

64,336,146.
13

22,286,377.42

45,035,302.
88% 00

increase

2012-2013

99,721,026.
50

35,384,880.37

69,804,719 .
15% 00

increase

2013-2014

84,762,872.
52

(14,958,153.97)

89,001,016.
-3% 00

decrease

2014-2015

105,953,59
0.65

21,190,718.13

95,358,232.
12% 00

increase

Percenta
ge

Sales Target

Inc./Dec.

20,875,772.
00

SALES PER YEAR


120,000,000.00
100,000,000.00
80,000,000.00
60,000,000.00
40,000,000.00
20,000,000.00
-

Figure 2.1 Sales per Year

For the year 2009-2012 Company XYZ experienced the increased in sales,
however for the 2013-2015 incurred decrease in sales.

LOCATION OF CLIENTS

1% 5%0% 4%

Central Luzon
NCR
Northern Luzon
Southern Luzon
Visayas

89%

Figure 2.2 Location of Clients


Based from the figure above, the 89% of geographic reach of the department is
from NCR. The company can expand their geographic reach since there are lot more
locations for potential clients.
70%
60%
50%
40%
30%
20%
10%
0%

Figure 2.3 Average Sales per location in NCR


The figure shows the average sales per location in NCR. Majority of competitors
target market were also in NCR thats why the competition in the location is very tough
for them to win the biddings and Pasig City is the highest sales amongst them.

Objective of the study


1. Evaluate the companys current marketing and operational strategy
2. Identify the key areas/weak area in the companys operation
3. Identify the factors that are relevant to the success of this type of
industry/company
4. To create a strategy that will help the company achieve its target sales.

Scope and limitation


Examines the competitive positioning and short- to medium-term business
strategies of key industry players. Strategy is examines within the context of HVAC
industry forecasts, macroeconomic views and understanding of the wider competitive
landscape to generate company SWOT analyses. The latest financial and operating
statistics and key company developments are also incorporated within the company
profiles, enabling a full evaluation of recent company performance and future growth
prospects.

Input
Data
Gathering
from
interviews
Attending
meeting
with the
clients
Sales from
2009 to
2015

Process
Process
mapping
Why - why
diagram
Marketing
strategy
Benchmark
ing
Porter's 5
forces
SWOT
ServQual

Output
Assessmen
t on their
operations
How how
diagram
Strategic
plan
Factors to
achieve the
goal

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