Midterm Activity - Group6

University of San Jose-Recoletos
School of Business Management
Accountancy and Finance Department
Group 6
Midterm Activity
3014
Members and Corresponding Task
BAYALE, OLIVE MARIE
Recommendation as consultant
CABINAS, JOSHUA JAMES
Layout/ market segmentation/ future competitive risk
CATAMCO, BRIZA
REACH relationship with customers
DABAO, CHRISTGER LUIS
AFFILIATION relationship with customers
LEYSON, LOVENIA JEAN
Type of business-level strategy
OTOC, JEFF KILE
RICHNESS relationship with customers

PRODUCT
BUSINESS-LEVEL STRATEGY: Cost Leadership Strategy

 Magnolia chicken is sold at P90 per kg from the previous P131 per kg tag, while
Bounty Fresh chicken is sold at P99 per kg. Consumers may now purchase
house-brand SM Bounty at P95 per kg with some being sold at P88 per kg for a
bundle of five whole dressed chicken. SM Bounty Chicken retailed in recent
weeks at P129 per kg.- 2019
 SMFI-Poultry start with the best feed, the top breed and continue with the most
efficient processing utilising the latest technology, research and development
down to innovative distribution and product presentation to the market, allowing
them to deliver the right sized chicken in the right quantity to the different
segments of the market.
REACH: The San Miguel Foods Corporation offers a wide range of high-quality
products including Magnolia chicken to households, institutions, and customers. They
provide an immediate distribution channel for retail stores so that the magnolia chicken
can be accessible to the consumers. Moreover, they focused on continuous
improvement and enhanced customer relationships. One way of attaining their
communication link and customer satisfaction is the advancements in information
technology. They establish channels for easy access and fast response to varying types
of customer needs and requests. Through strengthening the customer relation they
manage to gain product loyalty.
RICHNESS: Their richness strategy involves a broad range of high-quality food

products and services for households, institutional, and food service customers and
holds leading positions across various food categories. They have good advantage in
richness because they cater to a broad base of consumers. In addition to organic
growth, they continue to seek strategic acquisition and greenfield opportunities by
positioning their businesses in a way to best contribute to our country’s economic
growth and industrial development. They are continuing to expand their customer base
by identifying synergies across our various businesses and are pursuing plans to
integrate production and distribution facilities for both established and newly acquired
businesses to generate additional cost savings and efficiencies. San Miguel intends to
further enhance their market position in the Philippines by leveraging the company’s
financial resources and experience to allow it to continue to introduce new products and
services
AFFILIATION: The San Miguel Corporation’s Magnolia Chicken affiliates with the SMFI
(San Miguel Foods Inc.) where they control over 40 poultry processing plants
nationwide. They produce over 10,000- 50,000 healthy and well-maintained broiler
chickens daily. The SMFI’s processing consist of cutting, portioning, deboning,
marinating, and skewering in order to produce high quality products for consumers. The
marinating process utilizes refrigerated tumbling machines to achieve better marinade
pick-up and uniformity. In addition to this, plants that serve institutional and export
requirements, are equipped with vacuum packaging, shrink wrapping, inkjet labeling
machines and metal detectors for great packaging which can preserve the product well.
Not just producing a whole chicken but they also innovate certain flavors or what they
call “timplados” which consist of inasal flavor, barbeque, spicy, adobo, etc. The broilers
are not just well maintained but also nutrition enough as broilers are fed well and
sustained their diet for better growth. The Magnolia Chicken is preserved well as they
never fail in every meat inspection as they most likely produce high quality breeds for
consumers. The SMFI also believes that outsourcing is a viable and attractive model to
propel the company’s growth, it has built, through the years an extensive network of
third-party owned and operated facilities that include farms, hatcheries, processing
plants, warehouses, distributions which San Miguel Corporation doesn’t only focus in
sales or marketing but also in helping entrepreneurs who are willing to grow high quality
broilers.
Market Segmentation
In consumer markets, magnolia chicken applies on demographic factors and

consumption patterns. Considering the income of the targeted customer is a key factor
on achieving their goal which is to bring home the best quality of chicken products. Also,
having a variety of chicken cuts implies that they also considering the age of the
customers since some parts can be good or not, depends on the age. Consumption
pattern is also applied since the demands of chicken every holiday’s such as Christmas
and New Year significantly increase.
Competitive Risk
The price of bounty Fresh is almost close to Magnolia the reason why it is considered
as their major competitor in the business. The Department of Agriculture's (DA) Bureau
of Animal Industry has detected the presence of the highly infectious H5N6 subtype of
the influenza A virus in an egg-producing farm in San Luis town in Pampanga province
on 2020. This kind of event can trigger a significant risk to the magnolia chicken since
the customers will be very cautious and, therefore, will lead them to look for other
brands. Total domestic volume of chicken meat consumed in the Philippines from
January 2018 to January 2020 increased to 1.99 Million tons, which tells that there are
lots of customers.
Recommendation
As consultants, We would highly recommend to know your customers very well in order
for you to mitigate or prevent competitive risk. The more you know about your
customers, the more effective your sales and marketing efforts will be in maintaining
their expectations from your company. One of the tips on how to get to know your
customers is to conduct a customer surveys that could help you become aware with
things you may not know if there is something wrong with the product and including
human factors such as staff behaviour is insufficient weight to resolving the problems
caused by poor customer support. Not everyone complains when they are dissatisfied.
Instead, they tell someone else that may be their family or friends about their bad
experience and take their business elsewhere. Unless you proactively consult your
customers, you may never discover if you are going wrong. Furthermore, having the
most trusted partners equipped with technology that makes them competitive and
efficient will surely help them in coping with fortuitous events like viruses.
Sources
https://www.google.com/url?sa=i&url=https%3A%2F%2Ffanyv88.com%3A443%2Fhttps%2Fwww.sanmiguelfoods.com%2Fpage
%2Fabout&psig=AOvVaw3Yb8NYlVs1fG6uequcZKMs&ust=1614901452859000&source=imag
es&cd=vfe&ved=0CAYQjRxqFwoTCPDIw-6mle8CFQAAAAAdAAAAABAD
https://www.google.com/url?sa=i&url=https%3A%2F%2Ffanyv88.com%3A443%2Fhttp%2Fmommyfleur.com
%2F2017%2F07%2F24%2Foven-roasted-magnolia-chicken-for-the-win
%2F&psig=AOvVaw1LP0pyErHuFTCKQs5aFIUt&ust=1614901489515000&source=images&cd
=vfe&ved=0CAYQjRxqFwoTCIiEyIGnle8CFQAAAAAdAAAAABAR
https://businessmirror.com.ph/2019/01/21/hike-in-live-chicken-prices-may-be-temporary-ubra/
https://www.thepoultrysite.com/articles/san-miguel-transforms-farm-management-products-into-
future-success
https://www.thepoultrysite.com/news/2020/07/philippines-slaughters-over-38-000-chickens-in-
response-to-bird-flu-outbreak#:~:text=Philippines%20slaughters%20over
%2038%2C000%20chickens%20in%20response%20to%20bird%20flu%20outbreak,-The
%20Philippines%20has&text=In%20March%2C%20the%20DA
%20detected,12%2C000%20others%20had%20been%20culled.

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University of San Jose-Recoletos

School of Business Management

Accountancy and Finance Department

Members and Corresponding Task

BAYALE, OLIVE MARIE

CABINAS, JOSHUA JAMES

Layout/ market segmentation/ future competitive risk

REACH relationship with customers

DABAO, CHRISTGER LUIS

AFFILIATION relationship with customers

LEYSON, LOVENIA JEAN

Type of business-level strategy

OTOC, JEFF KILE

RICHNESS relationship with customers

BUSINESS-LEVEL STRATEGY: Cost Leadership Strategy

RICHNESS: Their richness strategy involves a broad range of high-quality food

In consumer markets, magnolia chicken applies on demographic factors and

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