Republic of the Philippines

University of Rizal System

Binangonan, Rizal

College of Accountancy

ANALYSIS OF

Universal Robina Corporation

CLARINALYN B. BOCO

BSA 4-2
BACKGROUND

Universal Robina Corporation (URC) is one of the largest branded

consumer food and beverage product companies in the Philippines and has a

significant and growing presence in the ASEAN markets. URC is among the

Philippines' pioneers in the industry. It has been in operations for over 50 years

since John Gokongwei, Jr. established Universal Corn Products, Inc, a

cornstarch manufacturing plant in Pasig, in 1954.

URC is engaged in a wide range of food-related businesses, including the

manufacture and distribution of branded consumer foods and is also in

commodities namely sugar million band refining and flour milling and in Agro

industrial businesses of farms mainly hogs and animal feed milling and related

products.

URC is the leading branded snackfoods and beverage company in the

Philippines. URC is the first "Philippine Pan ASEAN Multinational" and has

proven itself to be a trailblazer in manufacturing with a strong and loyal consumer

base. The company has unswervingly showcased its innovation and excellence

through its groundbreaking products, wide distribution network, and effective

marketing. This is also evident in URC's formidable market leadership in

snackfoods and beverages.

John Gokongwei Jr. established a vision for URC to become one of the

leading pan Asian players in snack foods and beverages. This vision is gradually

being realized as URC has managed to transform itself from a Philippine

operation to a recognized Asian multinational with full scale operations in eight

countries outside the Philippines, and soon in emerging markets like Myanmar,

Laos and Cambodia. In addition, URC's products are already being exported to
mainstream markets in the US, Europe, Japan, Korea the Middle East and

frontier markets in West Africa, like Ghana and Nigeria.

URC has built three strong regional brands over the years; "Jack 'n Jill" for

snack foods, "C2" for ready to drink tea, and "Great Taste" for coffee, with these

brands becoming popular across the ASEAN region. URC's key to success is to

build very strong branding through a robust product innovation pipeline,

consumer-centric marketing and world-class manufacturing and supply chain

management. URC will continue to transform itself in line with the changing

external dynamics in line with increasing opportunities in Asia and beyond..”

MISSION

Universal Robina Corporation (URC) is one of the largest branded food

product companies in the Philippines and has a growing presence in other

ASEAN markets.

VISION

URC's vision is to be the best Philippine food and beverage company, with

a powerful presence throughout the ASEAN region, carrying a wide portfolio of

delightful brands of exceptional quality and value, equipped with efficient systems

and motivated people. We are committed in making lives a truly fun experience.
VALUES

Passion to Win: We build organizational capability by being entrepreneurial and

proactive, driven by a sense of urgency and purpose. We continuously challenge

ourselves to deliver world-class brands and consistently rally our people to strive

for excellence.

Dynamism: We cultivate a culture of innovation and productive working

relationships. We continuously find ways to improve organizational and people

capabilities to meet constantly challenging consumer needs.

Integrity: We are guided by transparency, ethics, and fairness. We build the

business with honor and are committed to good governance. Our processes and

products meet the highest standards. We are credible in our dealings with both

internal and external stakeholders.

Courage: We seize opportunities in building long-term, sustainable businesses.

We make tough people and business decisions to ensure competitive advantage.

Corporate history

On the other hand, a successful manufacturer controlling its own

production and distribution would command more profitable margins. Mr. John

decided to construct a corn milling plant to produce glucose and cornstarch,

Universal Corn Products (UCP), the first linchpin of the company that would

become the URC we know today.

For a time, business was good. However, Mr. John was still looking

ahead, working with an eye towards the future. While the business was doing

very well, it was producing essentially a commodity, which a customer could

easily access elsewhere. To stay ahead in the game, Mr. John had to diversify by

producing and marketing his own branded consumer foods, similar to the
multinational companies in the country like Nestle and Procter & Gamble. In a

sense, he wanted to put up the first 'local' MNC, borne out of their best practices.

Thus, in 1961, Consolidated Food Corporation was born. Their first 'home

run' product was Blend 45, the first locally-manufactured coffee blend, dubbed as

the "Pinoy coffee". This became the largest-selling coffee brand in the market,

even beating market leaders Cafe© Puro and Nescafe.

After coffee came chocolates. Nips, a panned chocolate was a staple of

Filipino childhood.

In 1963, Robina Farms started operations, beginning with poultry

products. This was also the beginning of the vertical integration of the Gokongwei

businesses, as the farms would be able to purchase feeds from UCP in the

future. Later that decade, Robichem Laboratories would be put up, to cater to the

veterinary needs of the farms businesses. Robina Farms expanded as it entered

the hogs business in the latter part of the 70s.

1966 saw the establishment of Universal Robina Corporation, which

pioneered the salty snacks industry through Chiz Curls, Chippy, and Potato

Chips, under the "Jack 'n Jill" brand. Other snack products would follow over the

years, as the company successfully introduced market leaders like Pretzels,

Piattos, and Maxx.

The coming decades saw more acquisitions and expansion. In the early

1970s, the family entered the commodities business through the formation of

Continental Milling Corporation, for flour milling and production. The late 1980s

brought the acquisition of three sugar mills and refineries, under URC Sugar.

These two businesses provided stable cash flows, and allowed for further vertical

integration in the supply chain, to help URC weather any volatility in the cyclical
commodities markets. In line with this strategy, the late 1990s saw the entry of

URC into the plastics business, through URC Packaging.

While the businesses became more diversified, the companies were slowly

integrated in order to streamline and minimize costs. In 2005, the present

structure of the group was completed. All the different companies are now

organized under the Universal Robina Corporation umbrella, divided into 3

focused groups:

• the Branded Consumer Food Group, comprised of BCFG Domestic

(including packaging) and International

• the Agro-Industrial group, comprised of Universal Corn Products, Robina

Farms, and Robichem

• and the Commodities group, with the Sugar and Flour divisions

STATEMENT OF THE PROBLEM

How will Universal Robins Corporation achieve its vision of becoming one

of the largest branded consumer food and beverage product companies in the

world by 2020?

OBJECTIVES

• To determine the factors that are responsible for the success of URC in

the Philippines for the past years

• To develop competitive strategy of Universal Robina Corporation

• Study what is the market situation in the Philippines and outside the

country

• To determine what the customers value in Universal Robina Corporation

SWOT

Strengths

• Broad Product Portfolio

• Market Leadership: Philippines

• Cost advantage

• Asset leverage

• Effective communication

• High R&D

• Innovation

• Online growth

Weaknesses

• Operational Performance

• Trade Receivables

• No online presence

• Not innovative

• Not diversified

• Poor supply chain

• Weak management team

• Weak real estate

Opportunities

• Growing Snacks Market

• Market Outlook: Chocolate Confectioneries

• Acquisitions

• Asset leverage

• Financial markets (raise money through debt, etc.)

• Emerging markets and expansion abroad

 • Innovation

• Online

Threats

• Changing Consumer Preferences

• Stringent Governmental Regulations

• Competition

• Cheaper technology

• Economic slowdown

• External changes (government, politics, taxes, etc.)

• Exchange rate fluctuations

• Lower cost competitors or imports

Strengths (S) Weaknesses (W)

INTERNAL
FACTORS
1. Broad Product Portfolio 1.Operational

Performance

2. Effective communication 2.Poor supply chain

EXTERNAL
FACTORS
3. Innovation 3.Weak Management

Team

4. Online growth 4. Not diversified

Opportunities (O) SO Strategies WO Strategies

1.Growing Snack 1. Engage in online 1. Engage more in the

Markets advertisements market

 2. Invest in other 2. Make other snacks

companies that are appropriate this

2. Emerging markets and
time
expansion abroad

3.Market Outlook:

Chocolate

Confectioneries

4. Online

Threats (T) ST Strategies WT Strategies

1.Changing consumer 1. Improve the product 1.Make actions and

preferences according to the gather information on

preferences of consumer your competitors

2.Competition

2. Choose the best 2.Comply with the

3.External changes
marketing strategy for the regulations of the
(government, politics,
company government the
taxes, etc.)
company is investing

4.Cheaper Technology

PROPOSED STRATEGIES:

1. Diversify the products of the company

2. Invest on a profitable company for returns

3. Enhance marketing strategy

4. Research on your edges against the competitors

ANALYSIS OF PROPOSED STRATEGIES

Diversify the products of the company

Advantages

a. More choices for the customer to choose on

b. Profits will increase

Disadvantages

a. Old products may not be improved

b. Some suppliers can’t comply

Invest on a profitable company for returns

Advantages

a. Source of income aside from the business itself

b. more profit

Disadvantages

a. Too much risk

b. Research for the investment will incur other costs

Enhance marketing strategy

Advantages

a. Customers will be persuade to buy products

b. The company’s profit will increase

Disadvantages

a. The cost during the development of the product

Research on your edges against the competitors

Advantages

a. The company will see what they can improve

b. You will be more knowledgeable

Disadvantages

a. The fees of the researchers for the project

CONCLUSIONS

In the Philippines, food and beverage companies are growing and

expanding. Many competitors are trying to enter the industry. Universal Robina

Corporation can become one of the most profitable food and beverage company

in the world in 2020 if they will continue to improve products and market their

products through media and other techniques.

RECOMMENDATIONS

I recommend that Universal Robina Corporation should develop new

products according to the taste of their consumers this date. They should also

keep their edge and study their competitors in order for them to focus on the

product that can give them more profitability.