A strategic management paper for LAN Astute Logistics Inc / Jeffrey L. Arellano.

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.

The logistics and brokerage industry is a flourishing sector nowadays as a result of the growth in export and import transactions, the rise of E-commerce industry and on-demand deliveries and emergence of technological advancement in all sectors. According to a report released by TESDA in 2019, the logistics industry in the Philippines is valued at USD4.3 trillion as of 2019 while globally the market size grew to over USD357 billion.

As a major component of the Philippine Economy, the logistics and brokerage sector is bound to adopt to changes and major developments from time to time. As the Philippine economy grows, demands for logistics and brokerage services grows exponentially. Ergo, industry players must continuously adapt to the increasing demand and continuously improve their services to ensure client retention and increase in market share.

For this strategic management paper, the identified competitors of LAN Astute Logistics Inc. according to the management of the company are All Transport Network Inc. and Lalaine Logistics Inc. The logistics and brokerage industry were analyzed using the Porter's Five Forces which are rivalry competition, threats of new entrants, bargaining power of suppliers, threat of substitutes and bargaining power of buyers. These five forces were strictly looked into in relation to the industry and the companies operating in such industry. The impact of these forces was rated whether high, moderate, or low impact.

LAN Astute Logistics Inc.'s' business operations were analyzed for both Internal and External factors to get a complete and vivid picture on the current standing of the company both financially and operationally. For the purposes of this paper the internal analysis factors that were considered are Culture, Management, Financial, Operations, Management Information System and Research and Development. While the External analysis factors that were considered are Economic, Competitive, Legal, Political and Government. Social, Cultural and Demographics and Technological forces.

The results of the findings and examination of the industry's internal and external factors concerning the chosen company were further analyzed using 5 matrices which aims to come up with the best strategy that the company should employ based on the facts presented in this paper. These matrices were conducted /made to analyze the industry competition, company and service segment performance and identify possible growth and new opportunities.

The top three strategies that were chosen according to the results of the matrices were the following:

1. Establish a complete and fully integrated trucking business segment.
2. Venture in the warehousing service facility business segment.
3. Development of a specific service for E-commerce and on-demand deliveries.

These three strategies were thoroughly examined and graded through the Quantitative Strategic Planning Matrix (QSPM) to check their relation and impact in accordance with the identified Strengths, Weaknesses, Opportunities and Threats. Corresponding to the result of the QSPM, the winning strategy was identified to be to establish a complete and fully integrated trucking business segment. In alignment with the chosen strategy, the strategy map was crafted to have a logical connection between financial, customer, internal, Learning and growth and community and social responsibility in relation to the chosen strategy. The map will help the company communicate how value is expected to be created across the organization. The Financial Projections were crafted in line with the three-year financial statement of the company adding up the financial impact of the chosen strategy. The purpose of this is to validate if the financial objective identified will be met. To successfully execute the winning strategy, the company will have a capital expenditure of P3.5M to have a complete set of transportation equipment that they would need to cater to the needs of their clients. Based on the financial projections, Income before tax will have an average increase of 32% for the 3-year period, which is 28% higher than the target based on the financial objective established. For the Net income, an average increase of 29% was projected for the 3-year period, which is 45% higher than the target based on the financial objective established. On the financial position side of the business, total assets are projected to increase by an average 3-year rate of 33% with a corresponding average increase in the total net equity of 38% for the same period.

Lastly, the action plans were constructed to have coordinated cross-functional programs that will ensure successful launching of the strategy. Action plans were crafted with direct coordination among the main functional teams or groups in the company who will work together to ensure the success of the chosen strategy and to be able to meet the set objectives.

In conclusion, this paper will be a helpful tool for LAN Astute Logistics Inc. to have a clear view of the industry in general and the impact of the forces that affect the business operations, This paper will aid the company to vividly adopt to the changing needs of the industry and come up with strategy that is financially sustainable to them.