The New Industry Analysis

UNIVERSITY OF CALOOCAN CITY
COLLEGE OF BUSINESS AND ACCOUNTANCY
Industry Analysis of
Gardenia Bakeries Philippines Inc.
A research paper Presented to the faculty of
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College of Business and Accountancy
Of University of Caloocan City
In Partial Fullfillment
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Of the requirements for the Degree in Bachelor of Science
In Business Administration Major in Financial Management
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By:
Daryl L. Gamara
FMGT 4-A
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October 2016
TABLE OF CONTENTS
I. Problems & Its Background

1.1 Brief background of the study 1
5
1.2 Objective of the study 4

1.3 Research Design and Methodology 4
1.4 Scope and Limitation 4
II. Identification of the Industry
2.1 Nature and use of products/Services of the Industry 5
2.2 Firms in the industry & location of their major
Operations and relative size of the firm 5
6
2.3 Nature of operations of firms within the industry 6

III. Industry problems
3.1 Marketing 7
3.2 Technical 7
3.3 Management 8
3.4 Financial 8
3.5 Socio-Economic 8
7
IV. Prospects of the Industry

4.1 Government regulations/law affecting the industry 9
4.2 Proposed government actions to help solve the industry problems 9
4.3 Pospects of the industry with the proposed government actions 9
4.4 Pospects of the industry without the proposed government actions 9
V. Market Industry
5.1 Demand 10
8
5.2 Supply 11
5.3 Supply-Demand Analysis 12
5.4 Marketing Strategies 13
5.4.1 Product 13
5.4.2 Prices 13
5.4.3 Promotions 14
5.4.4 People 15
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5.4.5 Place or Distributions 15

5.4.6 Swot Analysis 15
VI. Technical Analysis
6.1 Production Description 17
6.2 Production processes 18
6.3 Location 20
6.4 Layout 21
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6.5 Major Machinery & Equipment 22

6.6 Raw materials & Supply 22
6.7 Manpower 22
6.8 Utilities 23
6.9 Production capacity 23
VII. Management and Ownership Analysis
7.1 Ownership 24
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7.2 Form of business Organizations 24

7.3 Present Management & Staffing pattern 25
7.4 Compensation of Employees 26
7.5 Relationship with other companies 26
VIII. Financial Analysis
8.1 Financial Standing of players in the Industry 27
8.1.1 Capitalization 27
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8.1.2 Profitability 28
8.1.3 Liquidity 28
8.2 Sources of financing 29
IX. Conclusions 30
X. Recommendation 36
Bibliography 37
Appendices 38
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Chapter 1
Problem and its Background
Introduction
Gardenia Bakeries Philippines, Inc. operates as a bread manufacturing company.
It offers various bakery products, including loaves, buns and toasts, and snack cakes
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through supermarkets, groceries, convenience, and variety stores. The company was
founded in 1997 and is based in Bian, the Philippines with additional operations in
Singapore, Malaysia, and Thailand; and Asia. Gardenia Bakeries Philippines Inc. operates
as a subsidiary of QAF Ltd
Brief Background of the Study
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Most countries with developed economies, as well as a number of developing
countries, have strong bakery industries. Bakeries provide necessities to the population in
terms of bread and cake products. Almost every household relies on the consumption of
staple products such as bread, and so the baking industry is able to thrive with this large,
reliable demand. Bakeries require skilled bakers as well as other employees to serve
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customers, meaning the industry provides significant employment opportunities. Many
people in their later teen years take up apprenticeships in bakeries to learn the trade.
It is debatable as to whether or not bakeries will continue to thrive in today's
modernized world. This is for the most part down to the rise in the power of supermarket
chains. Many supermarkets now provide bread and other bakery products themselves -
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some even have their own bakeries in-store. This is bad news for independent bakeries
who struggle to compete with the supermarkets; they are unable to provide the same level
of convenience. That said, in most cases the quality of their goods is significantly higher
than those sold in supermarkets. It remains to be seen whether the bakery industry will be
able to survive when the major supermarkets have such great monopoly power.
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Objectives of the Study
The objective of the study is to assess the business operations, strategic planning,
performance and analyzing the nature of it. Another is to know the problems, and how
they will come up with that.The improvements and action they take. And also the
companys standing against the same industry.
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Research Design and Methodology
Research design used on this research is in Descriptive type. Case-study is
enclosing on this Research design. Aside from books, another source of information to
know the companys latest news is through internet.
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Scope and Limitations
The study for the Gardenia Philippines is conducted for enable us to know
their market plannings, operations and strategies that lead them to be the no. 1 bread
factory among the same industry here in the Philippines. This study is for Gardenia
Philippines, Star Avenue Laguna International Industrial Park (LIIP) Mamplasan Bian,
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Laguna, Philippines. The respondent of this study is limited only to employee of the said
company and to its business operation and strategies.
Chapter 2
Identification of the Industry
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This chapter presents the identification of the study of the company.
Nature and use of products/services of the industry
Gardenia Philippines offers a wide array of superior bakery products including
white, wheat and health breads, flavored loaves, pandesal and snack items like snack
cakes, muffins and toasts. Gardenia breads are known for their good taste, freshness,
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softness, oven-baked aroma and nutritive value. Gardenia, being a consumer-focused and
branded food company, is singularly driven in delivering superior consumer value
through providing consumers with superior products. Over the years, Gardenia has
gained wide acceptance and is now considered as the most widely distributed loaf brand,
reaching many part of the country.
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Firms in the Industry & Location of their major Operations & Relative size of the
firm
Gardenias roots go back to Singapore where, in 1978, it began as a humble in-
store bakery. Increasing demand led to the opening of Gardenias first-commercial bakery
at Pandan Loop in March 1983. Gardenia has since been the market leader in Singapore
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and has expanded its operations in Asia to countries such as Malaysia and Thailand with
the latest in the Gardenia chain of bakeries here in the Philippines.
It all began in 1997, QAF Limited through Gardenia International Pte. Ltd.
established Gardenia Bakeries Philippines Inc. and started construction of its bakery plant
in Laguna International Industrial Park (LIIP), Bian, Laguna.
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Gardenia Philippines started its operations in 1998 with the state-of-the-art bread
factory rated as one of the most modern large scale bread manufacturing facility in the
country. Its major, highly-automated equipment come from the best bakery equipment
suppliers from Germany, Holland, UK and USA making it the leading manufacturing
company in the Philippines.
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Over the years, Gardenia has gained wide acceptance and is now considered as
the most widely distributed loaf brand, reaching many parts of the country.
Nature of Operations of the firms within the industry
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Food processing defined as the methods or techniques used to transform raw
material into forms for human or animals consumption which utilize by food industry.
Food processing take clean, harvested or slaughtered and butchered product and uses it to
produce marketable food product. The concern of my report will focus on Gardenia
Philippines Bakeries Industry. Gardenia is a food processing which transformed from raw
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material (Flour) to final product (bread). Gardenia Bakeries Philippines inc. (GBPI) they
use to import milk only from particular countries such as USA, Australia and New
Zealand. Gardenia only uses premium ingredients from all over the world that under
strictly checking and testing to ensure the high-quality and safe bread product.
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Chapter 3
Industry Problems
This chapter discusses about the problems that the company encounter.
Marketing
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The Gardenia has a limited market location. Since they only sell their product on
leading supermarkets, groceries and cinvinienrt stores. They dont have a stand-alone
stores. And because of that they lower penetrating power to enter on a lower-end
economy or sachet market
Technical
32
Developments in technology lead to new products and services and
improve how they are produced and delivered to the end user. As the top-bread maker and
leader of bread manufacturing industry, Gardenia using state-of-the-art-bread
manufacturing plant is capable making 6000 loaves of bread per hour or nearly 150000
loaves per day. It is the equipment whereby almost untouched by human hands.
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Therefore, it ensures providing safe and best quality of bread product. The new plants
keep to current Good Manufacturing Practices (cGMP), and follow the highest globally-
accepted food quality and safety standards through the international Organization for
Standardization (ISO) and as well as Hazard Analysis Critical Point (HACCP).
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Management
The gardenias baking operation is fully automatic. Menaing they only need few
manpower to operate the whole manufacturing plant. But those employees are should be
fully trained in handling those machineries and equipments.
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Financial
The gardenia has no problem in terms of financial. Base on their financial state
they got a big sale for the past few years
Socio-Economic
36
The economy has an impact on all industries, from the suppliers of raw
materials to manufacturing of finished goods and services. Key economic indicators
include interest rates, gross domestic, retail price index, unemployment rates and
exchange rates. Philippines provide a growing market for premium food product.
Economy growth, and especially employment in services sector jobs, is driving demand
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for more convenient and prepared foods. Gardenia believes that the Gardenia's success is
brought regarding by the dedication and commitment of each member of the Gardenia
family. These dedications are leading Gardenia to be the no1 in bread industry. During
global economic crisis, the industry had a flat growth but Gardenia continue to grow by
two to four percent. Besides that, Gardenia take step further in encouraging micro-
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entrepreneurship and providing more opportunities for employment while making
Gardenia bread more widely available conveniently to customer.
Chapter 4
Prospects of the Industry
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This chapter explains the government regulation that affects the industry. It
includes the social responsibility of the company in the industry
Proposed government actions to help solve the industry problems
Government processes and legislation influence the environment regulations
with which industries must obey. This includes items such as government stability,
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taxation policy, and government regulation. Some of the products which required using
produce bread are under control by government. For example, flour, salt or sugar will be
the product control by every government. In last past few years, the price of these
controlling products had been increase. Indirectly affect all the bakery industry and
Gardenia is not be excluded. Price rising of particular product had increasing the
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production price of bread. Therefore, Gardenia force to increasing the bread price in order
to cover the cost. However, the rising prices have resulted in a decrease in total domestic
bread consumption. According to Umali Jr., president of Gardenia Bakeries Inc., the
prices of bread is depending on the prices of flour. The Gardenia expects continue
growing when the political spending and fairly better prices of ingredients
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Prospects of the industry with the proposed government actions
The government helps the Gardenia through subsidies. The government impose
subsidies to the raw materials such as flour and sugar. Subsidies lessen the cost of this
factors, even if it is small amount, in it is a big help to Gardenia.
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Chapter 5
Market Analysis
This chapter discusses about the standing of the industry in the market.
Demand
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To begin, we assume that Gardenia is part of a monopolistic competition in
Malaysia. Here, there would be several firms that are in the same industry producing
different types of products. Gardenia Bakeries will have to compete with the likes of
other firms; for instance The Italian Baker and High 5. Each of these firms produces a
wide range of bakery products including white and wholemeal bread. Bread is also
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assumed to be an alternative for rice, as rice is considered a staple for most Asian
countries (National Geographic Education, no date). Thus, the demand for bread is fairly
elastic as consumers have a wide range of bread to choose from. A change in taste and
preference may impact the quantity of bread provided by Gardenia Bakeries.
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To observe this, an interview with Don Yong; chairman of the Malaysian Institute
of Banking, suggests that more and more people are switching from white bread to
wholemeal bread (The Malaysian Times, 2012).
The Law of Demand states that, the higher the price of a good, the smaller the
quantity demanded; Ceteris Paribus. This will cause a rightward shift in the demand
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curve. Since the demand of bread is quite elastic, a small increment in price of white
bread may have a drastic change in quantity demanded. As a result, consumers may
switch to wholemeal bread or decide not to buy at all. Here, a rise in demand for
wholemeal bread will cause a rightward shift in the demand curve forming a new
equilibrium in the supply-demand graph.
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Supply
The Law of Supply states that quantity of goods supplied will increase when the
price of the good increases. This is done to maximize the profits that can be obtained
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from the sales. Factors that can affect the supply curve of producing bread are prices of
factors of production. Producing bread mainly consumes flour and sugar.
Prices of both sugar and flour are expected to rise due to peaks in global petrol
prices (The Strait Times, 2013). Recently, the Malaysian Government was urged to
reduce the sugar subsidy due to the increment of diabetics in the country (The Star
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Online, 2013). As a result, cost of production would increase for Gardenia Bakeries.
Expected price hikes will have an effect on the supply curve. Both of the factors may
cause the supply curve to shift leftwards. Gardenia Bakeries may have to reduce the
quantity of bread supplied in order to cut down costs.
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Effects of Subsidies on Quantity of Bread Produced
Supply-Demand Analysis
Due the rise in factors of production in the industry, the Philippine Government is
planning to introduce subsidies, price floors and price ceilings by 2015 (Channel News
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Asia, 2013). The implication of such government intervention may lead to problems such
as market failures. When supply does not meet the demands of consumers,
underproduction or overproduction arises where the Marginal Social Cost is not equal to
the Marginal Social Benefit. This is a form of market failure and results in a deadweight
loss and the society is at loss.
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Price ceilings or price caps imposed by the government are below the equilibrium,
it may lead to shortages in flour and sugar supplies for both consumers and firms. Price
ceilings of sugar prices are intended to prevent grocers from overcharging sugar to
customers. A reason for shortages is that firms are unwilling to sell sugar or flour at the
low price as maximum profits could not be attained. To top it off, some suppliers may sell
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sugar at a price higher than the price ceiling; this is called a black market. These
economic transactions take place illegally to meet demands of the public. As an effect,
Gardenia Bakeries may have to again reduce the quantity bread supplied of as demands
for sugar and flour supplies cannot be made. As a side note, the price ceiling will not
have a dire impact to the economy if it were to be above the equilibrium. The video
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below explains further the effects of price floors and who benefits from the government
intervent
Marketing Strategies
Product
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Product is anything that can be offered to a market for attention, acquisition, use
or consumption that might satisfy needs or wants. There are 2 types of product in general,
consumer products and industrial products. Consumer product is product bought for
personal consumption such as convenient product while Industrial product is product
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bought for further processing such as Raw materials. Product sold to Gardenia are under
Consumer produccts category
Price
Price is a value that when you purchase a product and services. Four elements in
marketing mix, price is the only element to produces revenue. Price is an essential
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element for buyer choice. It also have important role in a firm market share and
profitability. Besides that, it also can build the customer relationship andcreating the
customer value. Gardenia Bakeries is using competition-based pricingwhen setting price
of bread.
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Competition based pricing involve setting price basedon competitors cost, price,
strategic and marketing offerings. Gardenia Bakerieswhen setting the price for a kind of
bread such as the latest-one Butterscotch,Breakthru, Delicia, Twiggies and so on.
Gardenia will be comparing the productvalue with price of product. The price setting
must be set between the price ceiling and floor. Gardenia also has been considering the
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several of environment when setting prices. Gardenia has set the species price for the
reseller and gives the fairprofit, encourage their support and help them to sell the product
effectively.
Promotion
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Promotion means activities that communicate the merits of the product
andpersuade target customers to buy. A good promotion is very important for thegrowth
of the company. There are so many ways to promote a product. One of theways that
Gardenia had used to promote their products is advertising. Gardeniaadvertises their
products through various media like television, radio andnewspaper. Television
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advertising ia a main media used by Gardenia to promotetheir new products as television
advertising offers a good mass marketing coverage.Radio was also used by Gardenia to
remind existing customers about their productsas it is low cost. Besides, newspaper is
also an effective way to promote or advertisetheir new products as it offers good local
market coverage and it is able to reachspecific target market.
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People
The Gardenia needs only a few manpower to operate the whole manufacturing
plant, mechanical engineers for maintenance of the machineries and equipments, office
staffs and managers for internal control
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Place or Distribution
Place also called Distribution Decisions. It is developing product that cansatisfy
customers, but not enough guarantee to successful marketing strategies.Nowadays people
in Malaysia can find Gardenias product in any mini-market,supermarket (e.g:7-Eleven),
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hypermarket (e.g: Tesco, Giant) in any corner of Malaysia.According the research, all of
the supermarket and hypermarket did not haveany specialist to promote it. It is because
Gardenias product is the most of thepeople like to buy without any hesitation such like
thinking which bread thecustomer will buy. Gardenias product is any age of the people
such as Gardeniawhite bread is for any age of the people because all people such as low
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income andhigh income also will choose to buy gardenia because they want convenience
andswift breakfast and will not late for work. Squiggles and Twiggies are for childrenand
Gardenia Wholemeal bread is for senior citizen. Gardenia sells their productdirectly to
the reseller such as mini market and supermarket
SWOT Analysis
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Strengths
1. Perceived superior quality products (freshness and taste, awards)
2. Wide coverage and distribution, and top the line production (extensive territorial
distributors; 6,000 loaves per day)
3.Ability to make rapid expansion
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4. Supported by a conglomerate with proven market success (QAF Group)
5. Growing flank product lines
6.Multi-awarded company
Weaknesses
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1. Limited availability/penetration to lower-end market (sachet economy)
2. No stand-alone stores
Opportunities
1. Growing economy and rising middle class
2. Improvement on market coverage and distribution
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Threats
1. Convergence of competitors
2.Bargaining power of retailers
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3.Inflation and tariff
4.Global economic crisis
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Chapter 6
Technical Analysis
This chapter discusses the stages of production and all of the facilities of the
company.
Production Description
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Bread has been a staple food for us Filipinos in replacement for rice. Baking has
grown over the last century in the Philippines, from a relatively small industry to a large,
popular industry. Initially, the country featured mainly independent bakeries that serviced
cities and towns and provided employment to the local people. Nowadays, chain bakeries
have increased the number of bakeries in the Philippines and have also lowered the prices
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of bakery products. Due to the increased demand for bakery products from the population
in the Philippines, the baking industry has grown, leading to it providing greater
employment opportunities both in the bakeries and in central management.
Gardenia Philippines offers a wide array of superior bakery products including
white, wheat and health breads, flavored loaves, pandesal and snack items like snack
79
cakes, muffins and toasts. Gardenia breads are known for their good taste, freshness,
softness, oven-baked aroma and nutritive value. Gardenia, being a consumer-focused and
branded food company, is singularly driven in delivering superior consumer value
through providing consumers with superior products. Over the years, Gardenia has
80
gained wide acceptance and is now considered as the most widely distributed loaf brand,
reaching many part of the country.
Production Processes
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Gardenia using new facility features advance equipment that as globally-accepted
baking industry standard in processing. It produces baked bread following a unique
process. The whole operation of bread making is closely monitored by quality controllers
with trained. They inspection the whole process ensure quality breads are delivered to the
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market. Other than that, controllers are responsible to ensure that every loaf produced is
in best quality and meets customer expectations.
Automatic blending
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The production process starts with a Computerized system control. Begin
blending of the right amount of quality ingredients required. This helps to makes sure
equal goodness of every loaf.
Production of sponge mix
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The specially formulated Gardenia enriched flour, purified water, yeast, vitamins
and minerals are added together to form the sponge which released into a trough.
Fermentation room
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The sponge dough is then kept in a fermentation room, under controlled
temperature and humidity. Fermentation process helps develop a unique Gardenia bread
texture, aroma and taste.
Production of dough mix
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At this stage, the sponge is mixed again with other ingredients t form the dough.
Divider
The dough is then divided into the standard weight for each particular loaf and
conveyed to a rounder and checkweigher
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Intermediate proofer
The dough is then left to rest in the intermediate proofer for 10 minutes then just
being moulded and placed into the baking pans.
Final proofer
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At this final proofer stage, the yeast is allowed to rise further under controlled
temperature and humidity. Once the dough has risen to the desired height, it is ready for
baking.
Tunnel oven
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Gardenia breads are baked for about 20 minutes at a temperature. Around 200
degrees Celsius in the state-of-the art tunnel oven.
Bread cooler
Automatic slicer & bagger
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The bread to be kept in cooler for about an hour. After that ready to be sliced and
pack. Gardenia packaging mechanically before they are automatically sealed with kwil-
logs tags that are printed with the use-by dates. Gardenia delight's unique packaging. It is
in an unconventional way which colourful packaging is displayed in an upright position.
Besides that, Gardenia was use the G-lock in its packaging. G-lock is a clip that locks the
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Gardenia bread tightly in its package, sealing in the freshness and makes sure the bread
retains its flavour, aroma, and softness.
Location
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Star Avenue Laguna International Industrial Park Mamplasan Bian, Philippines
Founded in 1997
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Lay-out
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Major
Machinery
&
Equipment
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Gardenia product is made without human touch or intervention. They use a State-
of-the-Art machineries and equipments for their products to make it fresh and clean for
the sake of their customer. Those machineries and equipments was was imported from the
well known country such U.S.A., Germany U.K. etc.
Raw Materials & Supply
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Raw materials such as Wheat flour, Sugar, Salt and fermentation agents are
sourced from suppliers locally as per demand forecast by productionplant. There are
primarily two suppliers, domestic and international. Other supplies such as milks, butters,
chesse, etc. Are only imported from USA, Australia and New Zealand.
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Manpower
Since Gardenias principle is NO HUMAN TOUCH on making their product.
They only need few labors or manpower, with a shifting schedule, to operate the
machineries and equipments from Mondays to Fridays and Sundays. Saturdays are not
included because it is the day for the Gardenia Mechanical Engineers and other
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employees to do their job for weekly checkup maintenance of Machineries and
Equipments to maintain the good quality and freshness of their product
Utilities
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The Gardenia utilities and maintenance are needed to for the sake of company.
Every Saturday of the week, the Gardenias operation is stop due to weekly utility and
machineries and equipments inspection headed by the Gardenias mechanical engineers.
Production Capacity
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As the top bread maker and the leader of the bread industry, Gardenia is tend to be
more productive than other. The developments in technology, that improves the new
products and services,and by using State-of-the-Art facilities. Gardenias manufacturing
plant is capable for producing 6000 loaves of bread per hour or nearly 150000 loaves per
day.
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Chapter 7
Management and Ownership Analysis
This chapter discuss the presentation of ownership of. , it includes the
management pattern and their relation ship with other companies.
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Ownership
Gardenia Bakeries (KL) Sdn Bhd (GBKL) is a subsidiary of a food listed
company, QAF Ltd, who also operates Gardenia Singapore, Gardenia Philippines and
will soon be opening Gardenia bakery in Fujian, China.
GBKL is an associate company of Padi Beras Nasional Berhad.
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Gardenia Bakeries (KL) Sdn Bhd rolled the first loaf of bread off its line in 1986.
Within four short years, it became the bread market leader with an astounding 99 percent
brand recall rate and 80 percent top-of-mind recall.
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Gardenia's range of products grew and evolved through the years, becoming
better and better with each step. Leveraging on its brand strength, Gardenia now produces
a variety of baked products to satisfy consumers' demands.
Form of Business Organization
107
Gardenia Philippines is a business organization in the form of limited-liability
Company or Corporation specifically Stock corporation. They are headed by President,
General Manager and Director, Financial controller and four other board members.
Loans, Dental, Medical, Miscellaneous allowance, Education support Loans, Dental,
Medical, Miscellaneous allowance, Education support
108
Mangement & Staffing Pattern
Mr. Simplicio P. Umali Jr. - President, General Manager and Director
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Ms. Annah D. Suarez - Financial Controller
Ms. Au C. Tapia - Accounting Manager
Ms. Leth G. Catalan - Human Resources Manager
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Mr. Lito A. Soqueno - Sales Manager
Gardenia Bakeries Philippines Inc. Board Members*
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Simplicio P. Umali Jr.
Tan Kong King
Derek Cheong Kheng Beng
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Perfecto E. Mirador Jr.
Rosario S. Bernaldo
Compensation of Employees
113
Each employee of the Gardenia Bakeries Philippines Inc. Recievs equal
compensation based on their work. Aside from the salary mandated by the law. Gardenia
employees are entitled with frea lunch, which is bread everyday, medicard, free shuttle
service, Christmas bonus Loans, Dental, Medical, Miscellaneous allowance, Education
support
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Chapter 8
Financial Analysis
This chapter discusses the financial standing of .. It contains the companys
analyzed financial statement and sources of financing.
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Capitalization
Debt - Equity Ratio = Total Liabilities / Shareholders' Equity
271,850,000 447,053,000 = 0.61 or 61%
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The total liabilities of the Gardenia is only just 61% of its total Equities
Debt to asset = total debt/total asset
271,850,000 718,903,000 = 0.38 or 38%
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The total liabilities of the Gardenia bakeries is only just a 38% of its total assets
Capitalization ratio = total non-current liabilities / (total non-current liabilities + total
equity)
51,494,000 (51,494,000 + 447,053,000) 498,547,000 = 0.10 or 10%
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121
Profitability
Gross profit margin = (Sales COGS) SALES
(521,069,000 -226,958,000) 294,111,000 521,069,000 = 0.56 or 56%
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The gross profit margin of the Gardenia Bakeries is more than a half of its sales.
Rereturn on assets = net income after tax total asset
54,729,000 718,903,000 = 0.08 or 8%
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The total return on assets of the Gardenia bakeris is 8%, it is not good for the
gardenia since there are a manufacturing compopny.
Return on equity = net income after tax total equity
54,729,000 447,503,000 = 0.12 or 12%
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12% increase in the total shareholders equity.
Liquidity
Current ratio = current assets current liabilities
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362,838,000 220,356,000 = 1.65
The Gardenia has a good condition I terms of its liabilities. They can pay all of
their liabilities using all of its assets
Quick ratio= quick asset current liabilities
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284,184,000 220,356,000= 1.29
They can also pay it without their inventory
Dooms day ratio = Cash and Cash equivalents Current liabilities
127
109,052,000 220,356,000= 0.50
The Gardenia company can pay half of their liabilities using only the cash and
cash equivalents
Sources of Financing
128
Gardenia is a large scale bread manufacturing company. It needs a good source of
finance to maintain its operation. Gardenias sources of finance are Owners investment
or savings, short term and long-term bank loans.
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Chapter 9
Conclusions
This chapter discuss about the conclusion of the researcher in studying the
industry.
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Improvements, Strategies and Plan Control of Gardenia Philippines
New users can be in the form of new customers. Gardenia Bakeries, wit hits
sound financial position and affiliation, would allow it to either set up anew plant in
Mindanao area to capture the undeserved area. Not only would it create jobs, this strategy
would also allow Gardenia to minimize intermediaries, enabling better inventory and
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logistics control. Meanwhile, to capture non-users such as those who rely on rice,
crackers, cereal, corn or any readily-available food, Gardenia should craft and organize
marketing efforts to create a desire for the products. Dedicated salesmen should be
assigned on this particular project to facilitate feedback mechanism. One example of
creating a desire is by engaging the services of celebrities which the target market can
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highly associate them with. For increased/more frequent usage, Gardenia can find
creative ways on how to stretch use of its products, stepping out from its usual bread as
sandwich or merienda image.To defend its market share from cottage bakeshops as
well as the emerging franchise like Julies Bakeshop, Gardenia should further strengthen
its Gardenia Pushcarts to enable improved penetration on grassroots level. This, or
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Gardenia, if it would like to maintain its current branding and market image, can establish
a new company that would specifically cater the underserved market, reminiscent of
Jollibees Mang Pepe.On the other hand, behemoth conglomerates like San Miguel
Group,Gokongwei Group, or similar group that has the financial capability to develop
and distribute products to compete head-to-head with Gardenia should also be
135
considered. Gardenia should be mindful of any business dealings that might prelude this
to make pre-emptive counter-measure strategies. To protect its position in the market,
Gardenia should reinforce markets association with the product. Citing years of
relationship since 1997 would send a message to the consumers of the continuing
commitment of the company in ensuring quality food in every table, freshness in every
136
bite. Years of uninterrupted dominance in market would give Gardenia the advantage
over the new entrants.Finally, diversification of products could also be an alternative.
Entering the beverage or bread spread industries, while risky, would serve as flankersto
the core product line of Gardenia Bakeries.
Strategies
137
Pushcart Selling
For those short on startup funds, the company has started offering gigs as pushcart
salesmen. All that is needed to become a Gardenia pushcart seller is a barangay or NBI
clearance. The company will provide the pushcart, three sets of uniform, and even the P1,
000 worth of initial inventory.
138
The pushcart seller can get his bread daily either from the territorial distributor in
his area, or directly from the delivery personnel of Gardenia. A seller can earn P7.25 per
loaf of bread that they sell.
Gardenia Pedicart
139
The Gardenia Pedicart is for those who wish to venture in micro-entrepreneurship,
marketing fast selling Gardenia bread products primarily house-to-house in the mornings
and secondarily near market centers or palengkes, churches, community centers, office
clusters and other heavy commuter traffic areas during peak hours.
140
A franchise area will be designated by Gardenia to a Pedicart
distributor/franchisee without the need for a franchise fee, except for a minimal
investment on the cost of the pedicart and revolving fund to cover the daily merchandise
that will be sold.
141
Fresh Gardenia breads will be delivered daily to the franchisee and any unsold
bread will be replaced by the company with fresh stocks to ensure that only the freshest
breads are sold which is in line with Gardenias freshness guarantee and high quality
policy. This way, individuals, families, OFWs, housewives, others wanting to start a
business can have an opportunity venturing in this profitable project.
142
The pedicart will also provide the vending crew person or vendor an opportunity
to earn at least P300 for a half days work, and double the income with a second round in
the afternoon or early evening. This creates employment opportunities especially for
those looking for work or are underemployed
143
Effective evaluation and control plan
Good implementation needs buy-in from those who are to carry out the plan. The
best way to get their buy-in is to have them participate in the plans development. Thus
salespeople are more likely to accept the marketing plan if a sales representative
144
participated in its development and if the target volumes and prices are plausible. So the
planners first need is to sell the plan inside, not outside.
Control is the way that we catch failures in implementation or strategy. The
company may have implemented poorly, set the wrong marketing mix, aimed at the
wrong target market, or done poor initial research. Control is not a singular thing but a
145
host of tools for making sure that the company is on track. One of the five types of
marketing control system, needed by the companies to evaluate their marketing effort. Its
aim is to ensure that the company achieves the sales, profit and other goals established in
the beginning of the year
Annual-plan control
146
The basis of annual-plan control is managerial objectivesthat is to say, specific
goals, such as sales and profitability that are established on a monthly or quarterly basis.
Organizations use five tools to monitor plan performance. The first is sales analysis, in
which sales goals are compared with actual sales and discrepancies are explained or
accounted for. It comprises at least five performance gauging tools:
147
I. Sales analysis (comparing sales targets to actual sales and accounting for
discrepancies).
148
II. Market-share analysis (comparing the country's "sales" with those of its
competitors). The country should also compare its own sales to the total sales in the
global market and to sales within its "market segment" (neighboring countries, countries
which share its political ambience, same-size countries, etc.).
149
III. Expense-to-sales analysis demonstrates the range of costs - both explicit and hidden
(implicit) - of achieving the country's sales goals.
IV. Financial analysis calculates various performance ratios such as profits to sales
(profit margin), sales to assets (asset turnover), profits to assets (return on assets), assets
150
to worth (financial leverage), and, finally, profits to worth (return on net worth of
infrastructure).
V. Customer satisfaction is the ultimate indicator of tracking goal achievement. The
country should actively seek, facilitate, and encourage feedback, both positive and
negative by creating friendly and ubiquitous complaint and suggestion systems.
151
Profitability control
Profitability control and efficiency control allow a company to closely monitor its
sales, profits, and expenditures. Profitability control demonstrates the relative profit-
earning capacity of a companys different products and consumer groups. Companies are
152
frequently surprised to find that a small percentage of their products and customers
contribute to a large percentage of their profits
Efficiency control
153
Efficiency control involves micro-level analysis of the various elements of the
marketing mix, including sales force, advertising, sales promotion, and distribution. For
example, to understand its sales-force efficiency, a company may keep track of how many
sales calls a representative makes each day, how long each call lasts, and how much each
call costs and generates in revenue.
154
Strategic control
Strategic control processes allow managers to evaluate a companys marketing
program from a critical long-term perspective. This involves a detailed and objective
analysis of a companys organization and its ability to maximize its strengths and market
opportunities. Companies can use two types of strategic control tools.
155
Marketing audit
The marketing audit is, in some respects, the raw material for the strategic control.
Its role is to periodically make sure that the marketing plan emphasizes the country's
strengths in ways that are compatible with shifting market sentiments, current events,
156
fashions, preferences, needs, and priorities of relevant market players. This helps to
identify marketing opportunities and new or potential market.
Chapter 10
Recommendation
157
This contains about the recommendation of the researcher base on the
conclusion stated.
Gardenias sales plans, market plans, operational process, employees and
staffs. Makes the Gardenia for what it is right now. The no. 1 bread industry in the
Philippines. Aside from that, they are the one who leads in Baking industry Innovation.
158
They make their products by a highly state-of-the-art machines and equipments. No
human intervention so that the product they made has a quality, fresh, and healthy.
Gardenias product is sold on to leading super markets and convenient stores
nationwide. The only thing that I could recommend to Gardenia is, like Goldilocks and
Red Ribbon, I recommend them to establish their own pastryshop/bakeshop or what we
159
called Gardenia bakaries or stand-alone stores, all over the Philippines. I think it can
help the Gardenia in terms of allocation and distribution of product and it will improve
their sales which lead to them to be more Profitable.
160
161
Bibliography
Websites:
www.gardenia.com.ph
https://www.scribd.com/doc/289477682/Gardenia-Marketing
162
www.studymode.com/.../marketing-plan-for-gardenia
https://www.google.com.ph/url?
sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&uact=8&ved=0ahUKEwiol9vhvu
PPAhVHsVQKHeoqB-cQFgg4MAQ&url=http%3A%2F%2Fwikimapia.org
%2F790746%2FGardenia-Bakeries-Philippines-
163
Inc&usg=AFQjCNHCwnUvUw5Xj_2YG0TOOq_uZEVvMg&sig2=cOLcNeM7izWLGe
BouqYp9g
164
165
166
Appendices
167
168
169
170
171
172
173
174

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UNIVERSITY OF CALOOCAN CITY

COLLEGE OF BUSINESS AND ACCOUNTANCY

Gardenia Bakeries Philippines Inc.

A research paper Presented to the faculty of

College of Business and Accountancy

Of University of Caloocan City

Of the requirements for the Degree in Bachelor of Science

In Business Administration Major in Financial Management

I. Problems & Its Background

1.2 Objective of the study 4

2.3 Nature of operations of firms within the industry 6

IV. Prospects of the Industry

5.4.5 Place or Distributions 15

6.5 Major Machinery & Equipment 22

7.2 Form of business Organizations 24

Problem and its Background

Gardenia Bakeries Philippines, Inc. operates as a bread manufacturing company.

as a subsidiary of QAF Ltd

Brief Background of the Study

Most countries with developed economies, as well as a number of developing

customers, meaning the industry provides significant employment opportunities. Many

It is debatable as to whether or not bakeries will continue to thrive in today's

Objectives of the Study

companys standing against the same industry.

Research Design and Methodology

Research design used on this research is in Descriptive type. Case-study is

know the companys latest news is through internet.

Scope and Limitations

company and to its business operation and strategies.

This chapter presents the identification of the study of the company.

Nature and use of products/services of the industry

Gardenia Philippines offers a wide array of superior bakery products including

branded food company, is singularly driven in delivering superior consumer value

reaching many part of the country.

Gardenias roots go back to Singapore where, in 1978, it began as a humble in-

the latest in the Gardenia chain of bakeries here in the Philippines.

in Laguna International Industrial Park (LIIP), Bian, Laguna.

company in the Philippines.

Nature of Operations of the firms within the industry

Food processing defined as the methods or techniques used to transform raw

economy or sachet market

Developments in technology lead to new products and services and

leader of bread manufacturing industry, Gardenia using state-of-the-art-bread

Standardization (ISO) and as well as Hazard Analysis Critical Point (HACCP).

fully trained in handling those machineries and equipments.

they got a big sale for the past few years

materials to manufacturing of finished goods and services. Key economic indicators

entrepreneurship and providing more opportunities for employment while making

Gardenia bread more widely available conveniently to customer.

includes the social responsibility of the company in the industry

Proposed government actions to help solve the industry problems

Government processes and legislation influence the environment regulations

Prospects of the industry with the proposed government actions

factors, even if it is small amount, in it is a big help to Gardenia.

To begin, we assume that Gardenia is part of a monopolistic competition in

preference may impact the quantity of bread provided by Gardenia Bakeries.

wholemeal bread (The Malaysian Times, 2012).

equilibrium in the supply-demand graph.

factors of production. Producing bread mainly consumes flour and sugar.

quantity of bread supplied in order to cut down costs.

Effects of Subsidies on Quantity of Bread Produced

loss and the society is at loss.

personal consumption such as convenient product while Industrial product is product

Consumer produccts category