BAMBOOCRAFT

INTRODUCTION

Bamboocraft is a family-run business that manufactures bamboo torches.

It was established by Philip Addan, a dentist, during 1970s. When he was still a
young boy, he toyed with a piece of bamboo and made a candleholder out of
it. He gave the candleholder as a Christmas gift to his friends and family and
surprisingly, his friends and family asked him to do more as a gift for clients. The
orders slowly increased, he spent less time to his dental clinic and started to
pursue this as a business. He started manufacturing bamboos in Balibago,
Angeles City. He continued to improve his product and the whole business every
now and then and later on, began selling bamboo torches internationally.
Suddenly, Mr. Addan suffered a heart attack and has to pass the authority to his
daughter, Cecilia. Cecilia handled the business very well. The business standing
increased and because of it, she tried to loan ₱11 million to expand their
manufacturing place. Unfortunately, something very tragic happened. Terrorist
attack USA last September 11, 2001 and they are very affected. All the
transactions to other countries were cut and suspended, and this was the
biggest dilemma that the company experience.

SWOT ANALYSIS

INTERNAL FACTORS

1) Financial resources
a) The initial capital to start up the business was not clearly stated in
the case, but it can be assumed that the profit Philip Addan got
from the bamboo candleholders and probably some from his
dental patients became his investment.
b) His major sources of income to continue the enterprise were the
private individuals, hotels, restaurants, other entertainment
establishments and his exports with different countries.
2) Physical resources
a) Philip started by setting up a small factory in Balibago, Angeles City
on 1973 but later on relocated its factory to a one-hectare property
in Sta. Maria, Bulacan. Later on the case, it is stated that they loan
 from a bank to purchase a two-hectare property in Sta. Maria,
Bulacan, too, to expand the torch factory.
b) Since the bamboos rotted, he decided to apply varnish to the
torches to make them more resistant to scratches. The bamboo,
then, had to undergo a drying process before being made into
torches. Before, they consumed a lot of space letting the bamboos
dry under the sun but later in the case, they procured a drying
machine to be used in drying bamboos during the wet season and
for an easier way to dry it even in dry season.
3) Human resources
a) The company has only five regular employees to run the business –
the President, the Vice-President, the Operations Manager, the
Administrative Manager, and the Finance Manager.
b) The company also hired 60 skilled and semi-skilled laborers for six
months to work the product and hires seasonal workers during peak
and wet season.
4) Access to natural resources
a) Bamboocraft products such as its torches are known internationally.
Their designs, quality, price and good services to their clients make
them attract more customers.

STRENGTHS

 The birth of bamboo torches – The sales grew when Philip Addan
introduced bamboo torches because the clients found the torches
different from the other torches that were used for lighting purposes.
 High sales during summer – Most clients order bamboo torches to brighten
the fiestas during summers.
 More space lead to more products – When Philip relocated the factory to
a larger land in Sta. Maria, Bulacan, they produced more products since
they have a larger area to do so and enough space for more workers and
employees.
 The use of chemical treatment and varnish – Chemical treatment was
used to prevent rotting or boring in products and varnish was utilized as
the solution to the problem of scratches on the products.
 Penetration to international markets – Half of their sales are from the
clients in the US and their products are also known in other countries.
Cecilia further participated in other international bazaars and caused
more foreign clients to notice their products.
  The purchase of drying machine – It was used to make the drying process
of the bamboos faster and to be able to dry bamboos even on wet
season.
 Division of work – There was an implementation to make the subordinates
organized and do well on their jobs where they’re good at.
 Cecilia’s educational background – Cecilia holds a degree on business
and management making her more capable of handling the business
well.

WEAKNESSES

 Period of production – It takes six months to process the orders. Soon in the
case, the clients wanted a shorter delivery time for the products that the
quality standards of the goods are disregarded just to comply with the
right shipment time.
 Dependence to customers – The firm only starts producing bamboos after
the clients have placed their orders.
 The supply of resources – Philip had to go to the mountains to get
bamboos. Moreover, wet season make it hard to find enough bamboos
to start the production.
 Easy decaying – Before the bamboos reached the homes of the
customers, or even during the shipping, the products decayed already.
 No advertisements – The enterprise is not engaging into any marketing
ads to attract more customers.
 Taxes due to exportation – They would have to pay taxes when exporting,
deducting their revenues.
 Liability – The company loaned ₱11 million from the bank to buy the
neighboring property for expansion.
 Returned goods – Customers were returning products that aren’t of high
quality – not durable and have decayed already, causing the company
to repeat these products interrupting the schedule of other products.
 Big orders – It cannot be done on a short period of time, just like what
other clients wish to. Subcontractors must be needed to comply with the
demand and meet the shipment time.

EXTERNAL FACTORS

1) Market trends
a) LED lights are now a trend used as outdoor lighting in some resorts
and hotels instead of traditional bamboo torches to avoid fire.
 2) Economic trends
a) The exportation of bamboo torches increased the customer and
revenue of the business.
b) The demand for bamboo torches grows rapidly every summer.
c) There is an insufficient supply of bamboos during wet season.
3) Demographics
a) The target customers of Bamboocraft are private individuals, hotels,
restaurants, resorts and other entertainment establishment owners.

OPPORTUNITIES

 Factory expansion – Cecilia loaned a huge amount of money to expand

the land that their factory utilize.
 Foreign market and international bazaars – They gain more clients and
investors in other countries.
 Summer and festivities – The demand for bamboo torches increased
during this time because it fit the scenery of the resorts and the themes of
some festivals.

THREATS

 Loan payment – The balance of the huge amount they are indebted must
be paid monthly.
 Recession of USA’s economy – Their regular clients from the US had yet to
order because of the terrorism attack resulting to inability to gain enough
revenue to pay debts and continue to business.
 Wet season – The enterprise had to maintain a steady supply of bamboos
to meet the clients’ orders; however, it is crucial to search for bamboos
during this season.
 Unexpected tragedy – Given that our country is prone to calamities,
typhoons can struck and devastate the bamboos in our forestry.
 Contemporary ideas and competitors – Year 2000 paved way to new and
modern ideas that can be utilized by other firms which greatly affect their
sales.

PEST ANALYSIS

POLITICAL FACTORS
  Taxation – The firm pays taxes for their exportation and revenue.
 Law for environment protection – Bamboo is still part of our environmental
resources and no law is passed to protect it from the people harnessing it
for commercial purposes.
 Trade protection and restriction laws – Exportation and importation of
goods must be following the laws of both countries involved in the
transactions.
 Employees’ salaries – The workers of the company deserve an adequate
amount of payment for the duty they’ve done.
 License – The business must only operate if it is legally and formally
licensed by the government.
 Terrorism defense – US might be have low defense against terrorism attack
and its allied countries might be the next target of attacks.

ECONOMIC FACTORS

 Seasonal workers – Having seasonal workers paved way to job

opportunities for unemployed people.
 Monetary exchange rate – The value of the product in Philippine peso
may be too cheap or too expensive for other countries.
 Demand – During summer, the orders for bamboo torches increased.
 Exportation – Philippine products such as bamboo torches will be
promoted and known worldwide.
 Economic growth – If the business continues to generate revenue, it will
contribute to the growth of the country’s economy.

SOCIO-CULTURAL FACTORS

 Lifestyle in USA – Americans demand for the product since their lifestyles
are having fun at the shore/resorts even at night.
 Aesthetic purposes – Bamboo torches can be used as an ornament in
festivals which adds up color to the celebration.
 Pattern buying – Some clients go back to buy the same design which the
firm can produce as early as possible.
 Internet – Some people spend their time engaging into Internet. They can
post or made a video about their products.

TECHNOLOGICAL FACTORS
  Chemical treatment – Resolve the problem against the rotting of the
product.
 Drying machine – It makes the operation still going on despite the wet
season.

RECOMMENDATIONS FOR BAMBOOCRAFT:

 Gain and negotiate with various possible local investors and use their
investment properly.
 Engage into local bazaars and persuade local buyers to buy and use the
product.
 Try exporting in the other parts of the world.
 Take note of the ideas, recommendations and other suggestions of your
clients that will help the company improve.
 Hire employees such as sales manager and marketing manager that can
help in selling and marketing the products.
 A furniture designer can also be hired to develop new design or new
product out of bamboo.
 Branches where individuals could walk in and buy can be developed.
 Research on other species of bamboos or other materials that are of
quality than the one they use.
 Send some employees or Cecilia herself can attend to seminars to gain
more knowledge in the industry.