A strategic management paper for Concepcion Industrial Corporation / Jason M. Lim.

Thesis (M.A)--Pamantasan ng Lungsod ng Maynila, 2023.

A strategic management paper presented to the Faculty of the PLM Business School--Graduate Program in partial fulfillment of the requirements for the degree Master in Business Administration.

This strategic management paper covered the operations of Concepcion Industrial Corporation. The company is the pioneer and the leading air conditioning and refrigerator company in the Philippines. The company was incorporated primarily as a holding company on July 17, 1997. As of December 31, 2021, the company has seven principal subsidiaries and two affiliate companies. Since the establishment of the company in 1962 by the founder, Mr. Jose Concepcion Sr., the organization attained various licensing contracts with known brands such as Carrier, Toshiba, Kelvinator, and Midea, to name a few. The company is registered in the Philippines Stock Exchange. Aside from air conditioning and refrigerators, the company also provides business industry solutions such as escalators and elevators. The company also receives various awards and recognition from the industry, such as the Most Trusted Brand Award from Reader's Digest. The company has received the award in the past 17 years. CIC also receives the 2015 Asia Pacific Entrepreneurship Award and National Customer's Choice Annual Awards. The company operates on two primary business segments: the consumer business, formerly called CLS business, and the commercial business, formerly known as BIS/Alstra business. This strategic paper focuses only on the CLS business segment, focusing on residential air conditioning and refrigeration products.

Using Porter's Five Forces Model, the paper evaluated the industry and competitive environment of residential air conditioning and refrigerator units. The industry has intense competition due to the need for product differentiation and aggressive competitor pricing. Brand loyalty is also identified as a critical factor in the industry. Technological advancement, particularly having the most energy-efficient product, is the most considered by the consumers in this industry. Due to these factors, Concepcion Industrial Corporation got a weighted score of 3.51 in the External Factor Evaluation (EFE) matrix, which means that the organization's business model is well adapted to the external factors identified to meet the opportunities and overcome any threats in the industry.

In terms of the company's internal capability in comparison to the direct competitors, which are Panasonic Manufacturing Philippines Corporation and LG Electronics Philippines, Inc., CIC ranked first using the Competitive Profile Matrix (CPM) with a total weighted score of 3.85 based on the critical success factors identified on the residential air conditioning and refrigerator industry. The total weighted score in CPM is supported by the Internal Factor Evaluation (IFE) matrix, in which the company garnered a total weighted score of 3.1 1. the assessment scores mean that the company has a strong position and financial performance compared to those in the industries. However, the company should pay attention to the identified weakness in the company to maintain market dominance. With the combination of EFE and IFE scores in the Internal-External (E) matrix, the company falls under Quadrant I or the grow and build region. In the SPACE Matrix, which establishes the type of strategy dimension that CIC should take, the company got a competitive position (CP) of -1.4, and Financial Position (FP) of 6.2 for the x-axis, and a Stability Position (SP) of -2.6, and Industry Position (P) of 6.6 for the y-axis. By getting the total score for the x and y-axis, Concepcion Industrial Corporation falls under the aggressive region. For the Grand Strategy Matrix (GSM), CIC falls in Quadrant I with a solid competitive position and rapid market growth. Upon tallying the identified strategies, the most appropriate strategies that Concepcion Industrial Corporation should consider are market penetration and product development.

Product development received the highest total attractiveness score of 5.56 on the Quantitative Strategic Planning Matrix (QSPM), which was used as the primary decision matrix to prioritize the strategies Concepcion Industrial Corporation must implement. CIC should also combine market penetration in the company's strategic objective with the attractiveness score of 4.90 to maintain its dominance in the industry and further increase CIC's market share.

If implemented with due diligence, the identified strategies will help Concepcion Industrial Corporation penetrate the market further and maintain being the leader in residential air conditioning and refrigerators in the Philippines. The strategy will yield Php 826 million in net income by the end of 2023 and a 10% increase annually from 2024 onwards. The strategy will also help the company increase its market share by 10% at the end of the fiscal year 2025.