Phinma SM Presentation Final

7/31/2019 Phinma SM Presentation Final

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What should be the appropriate corporate

portfolio structure for Phinma ?


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Population

101.8M

81.1M

Age Structure

UrbanizationAround 25% of population in

Philippines consists of 05-20

age group with increasing

percentage growth

in urban

area

Philippines Environment


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Unemployment Rate % Job Prospects Optimism

GDP Real Growth % Population below Poverty Line %

7.3%

2.9%

32.9%

41%

7.3

9.6%

Philippines Environment


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CAPTIALINTENSIVE

INUSTRY

BUSINESSMED

ECONOMICALHIGH

OPERATIONALLOW

FINANCIALLOW

POLITICALMED

Capital Intensive Industry Risks 1960s


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CAPTIALINTENSIVE

INUSTRY

BUSINESSHIGH

ECONOMICALHIGH

OPERATIONALLOW

FINANCIALHIGH

POLITICALLOW

Capital Intensive Industry Risks 1990s


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SERVICEINDUSTRY

REGULATIONS

ECONOMICAL

OPERATIONAL

TECHNOLOGICAL

Service Industry Risks


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Business StrengthDiversified Business

Technological Position

Intl Collaboration

Streamline Opt

Margins

Economical

Infrastructure

IndustryGrowth

Technology

High EndTech

Political

Import heavytech

Social

High skilledlabor

Business & Industry Factor Energy Sector


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Factor Weight Rank Weighted Score

Market Attractiveness

Raw Material 0.2 3 0.6

Heavy Engineering/Infrastructure 0.15 3 0.45

Profitability 0.2 5 1

High Skilled Labor 0.1 3 0.3

Growth 0.2 4 0.8Size 0.15 3.5 0.525

Total 1 3.675

Business Strength

Diversified Portfolio 0.15 4 0.6

Margins 0.2 1 0.2

Technological Position 0.25 4 1

International Collaboration 0.3 3 0.9

Streamlined Operation 0.1 5 0.5

Total 1 3.2

Business & Industry Factor Weights Energy Sector


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Business StrengthOperation Management

No of Hotels/ Critical Mass

International Exposure

Lowest Rates

Margins

Important Sites

Economical

Tourism / GDP

Infrastructure

Technology

Reachabilityvia Tech

Political

GovernmentSupport

Social/Env

PristineNature

Hospitality

Business & Industry Factor Tourism Sector


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Size 0.3 5 1.5

Government Support 0.2 4 0.8

Infrastructure 0.1 3 0.3

Reachability via Technology 0.15 4 0.6

Pristine Nature of Tourism 0.1 3 0.3

Growth 0.15 4 0.6

Total 1 4.1

Business Strength

People/ Operations Management 0.1 4 0.4

No of Hotels/ Critical Mass 0.15 2 0.3

International Experience 0.05 2 0.1

Lowest Rates 0.15 2 0.3

Margins 0.3 1 0.3

Presence at Important Sites 0.25 1 0.25

Total 1 1.65

Business & Industry Factor Weights Tourism Sector


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Business StrengthDistribution

Economies of Scale

Capital Intensity

Margins

Technology

Economical

HousingNeeds

Technology

TechnologyAvailability

Political

Governmentlaws/Compe

tition

Social

Low SkillLabor

Business & Industry Factor Roofing Sector


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Low Skill Labor 0.3 4 1.2

Technological Availability 0.2 3 0.6

Foreign Competition 0.2 2 0.4

Growth of Housing Needs 0.2 4 0.8

Market Size 0.1 3 0.3

Total 1 3.3

Business Strength

Distribution 0.25 2.5 0.625

Economies of Scale 0.3 3.5 1.05

Capital Intensity 0.15 3 0.45

Margins 0.15 4 0.6

Technology 0.15 3 0.45

Total 1 3.175

Business & Industry Factor Weights Roofing Sector


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Business & Industry Factor BPO Sector

Business StrengthNiche SectorOperational

Efficiency

Margin

EconomicalLow Price

HighUnemploy

ment

Technology

Connectivity

Political

TaxHoliday

SocialEnglish

Quotient

Low WageRate


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Growth Rate 0.2 5 1

Government Policies 0.25 5 1.25

Human Resource 0.35 4 1.4


Pricing0.1 4 0.4

Total 1 4.35

Business Strength

Market Size 0.3 1 0.3

Margins 0.25 3 0.75Sector 0.15 5 0.75

Intangible Assets 0.2 4 0.8

Technology 0.1 3 0.3

Total 1 2.9

Business & Industry Factor Weights BPO Sector


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Business & Industry Factor Education Sector

Business StrengthInfrastructure

Spending Job FocusAdditional Revenue

Marketing

Economical

UnemployabilityRising

Economy

TechnologyJob

Restructuring

Political

GovernCompetiti

veness

Social

JobProspects


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Student Enrollment Growth .25 3 0.75

Job Prospectus .35 3 1.05

Primary Education .20 3 0.60

Teachers .10 4 0.40

Government Competiveness .10 4 0.40

Total 1 3.2

Business Strength

Economies of Scale 0.25 2 0.50

Job Alignment 0.35 4 1.40Management 0.20 3 0.60


Marketing 0.10 3 0.30

Total 1 3.2

Business & Industry Factor Weights Education Sector


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Business & Industry Factor Real Estate Sector

Business StrengthGovernment

Network FundRaising CapacityNiche Segment

Economical

RisingEconomyInterest

Rate

TechnologyNew

Architecture

PoliticalLaws

Regulations

SocialPreferenceSpending

Power


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Demand 0.35 4 1.4

Home Loan 0.1 4 0.4

Availability of Land 0.15 4 0.6

Connectivity 0.1 4 0.4

Cost0.05 3 0.15

Government Regulations 0.25 5 1.25

Total 1 4.2

Business Strength

Fund Available 0.20 5 1.00

Political Network 0.30 5 1.50

Operational Efficiency 0.20 4 0.80

Sector Competition 0.15 4 0.60

Marketing 0.15 4 0.60

Total 1 4.5

Business & Industry Factor Weights Real Estate Sector


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Mckinsey Multi-Factor Matrix

Industry Attractiveness

B

i

z

S

t

r

e

n

gt

h

Philma

EduBPO

High Medium Low

High

(3.33 5)

Medium

(1.66 3.33

Low(0-1.66)


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What should be the next step for Phinma ?

Next Step ?


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1) Invest in energy sector

(S1,O2, O4)

2) Invest in BPO Sector (S2, O1,O3)

3) Invest in hotel management

(S2, O5)

4) Invest in real estate business

(S4, O2)

1) Status Quo on hotelretail construction

(S2, S3, T4)

1) Status Quo on roofingindustry ( W4, T1, T4)

Strengths1) Investment Acumen

2) Operational Skills

3) International Collaboration

4) Strong government relations

5) Diversified energy business

Weakness1) Globally non-diversification

2) Decentralized Management

3) Limited funds

4) Historic problem with high debt-

equity ratio

Opportunity1) Weak Exchange Rate

2) Growing Economy

3) High English Quotient

4) Energy supply less than

demand

5) Increasing hotel investment

Threat1) Increasing Financial

Leverage

2) Global supply/market

3) Raw material availability

4) Less profit in hotel building

Strategic Options


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B

iz

S

t

r

e

n

g

t

h

Philma

EduBPO

High Medium Low

High

Medium

Low

Biz & Economic

Considerations

Growing Philippines

Economy Energy Supply less

than energy demand

Diversified energy

business

. Invest in Trans Asia

Future Investment Strategy for Philma


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B

iz

S

t

r

e

n

g

t

h

Philma

EduBPO

High Medium Low

High

Medium

Low

Biz & Economic

Considerations

Growing Philippines

Economy High English Quotient

Excellent Operational

Skills

. Invest in BPO



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B

iz

S

t

r

e

n

g

t

h

Philma

Edu

BPO

High Medium Low

High

Medium

Low

Biz & Economic

Considerations

Excellent Operational

Skills Increasing hotel

investment

Declining profit in

hotel construction

Less risky operational

business

. Invest in Hotel

Management but the

money generated from

business only not in hotel

construction



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B

iz

S

t

r

e

n

g

t

h

Philma

Edu

BPO

High Medium Low

High

Medium

Low

Biz & Economic

Considerations

Growing Economy

Align with PhilmaPhilosophy

Economies of scale

Operational excellence

. Invest in Education



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Our Framework ?

Next Step ?


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DEMAND/SUPPLYRISK

FINANCIALLEVERAGE

RAW MATERIALVOLATILITY

NEGATIVEDOLLAR

EXPOSURE

Framework 1 Risk Profile ?

OPERATIONALRISK

TECHNOLOGICALSHIFT

INTERNATIONALEXPOSURE

DOLLAREXPOSURE

BPO TA Energy

/


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BPO

Philma

Edu

Risk

R

ew

a

r

d

Framework 1 Risk/Reward Profile


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TA ENERGY BPO

EDUCATION

TOURISM

ROOFING

REALESTATE

Framework 1 R-Square Balancer

k bl i h i i f k


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1) They are very objective in nature

2) They do not consider the inter-relationamong SBUs

Framework 2 Problems with existing frameworks

k 2 f li C l i l


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Framework 2 Portfolio Correlation Balancer

Correlation (r)

T

o

ta

l

S

t

r

e

n

g

t

h

High (2) Medium ( 1) Low (0)

High

(11-25)

Medium

(2.75 11)

Low

(1-2.75)

Step 1: Multiply Biz

Strength & Industry

Attractiveness Weight

Step 2: Find multiple

correlation between theSBUs. Add 1 to r i.e.

make r positive

Step 3: Map the values on

graph

. Now decide


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Thank You

Date post:	05-Apr-2018
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Phinma SM Presentation Final

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