Food Rich Case

STRATEGIC MARKETING MANAGEMENT CASE ANALYSIS FINAL EXAMINATION

Foodrich Philippines Inc. (FPI)*

Atty. Lemuel Esmero, Chairman then President, sat down with his management team, which includes Mr. Lorenzo Nayve, new President, to review the current situation and map out their strategies. Esmero felt that he is already too old to manage and worried about of the company the remaining years to realize the vision of FPI; hence, he personally recruited Nayve to lead the Foodrich Philippines Inc. because of his hands-on experience about the needs and wants of the market. Nayve was the Chief Operations Officer of Fidisco Biscuits and turned the company from near bankruptcy into one of the most profitable companies in the Philippines. Nayve found the opportunity attractive for a number of reasons. First, with an improving economy, Filipinos have more money to buy the food they want and where they get them, if offered with more choices. The increasing level of disposable income and changing lifestyles of most Filipinos have been the main reason for their steady integration of dining out way of life. As reported in the papers, food is the Filipino family’s main expense comprising of 50.45% and 54.65% of the total family expenditures in 2003 and 2006, respectively. Second, the new market segment -- higher number of sickly people due to high intake of sugar and cholesterol -- means that there is a substantial market for health conscious individuals. This segment has not yet been tapped to any considerable degree. Third, Esmero is willing to extend capital outlay even reaching the point of selling some of his prime properties located in Cebu, Baguio, Tagaytay, Bukidnon and Davao. Fourth, the consolidated net sales when compared to last year hit P2.5 billion, representing a growth of almost 48 percent. The strong sales growth could be attributed to upsurge orders from Japan, Thailand and South Korea. Net profit margin for 2006 stood at 5.5 percent, a little higher than the...