Revamping MakroEvangelista, Marianne

Lim, EricOng, Valerie

Rocafor, ShirleyTeh, Germaine

Problem Trigger

“You have been appointed Vice President for Corporate Planning

by Makro”.

K I N DYou maybe Hans Sy appointed you Who appointed you? Why "you"? Is "you"

a leader? 

  maybe you were appointed by Makro Board of Directors

Why "you"? Are you a new or pirated employee? How long have you been in the corporation? Who was your previous employer? Were you promoted?

 

Have been maybe the appointment was made last year

When was the appointment done? Internet research on possible changes in Makro Structure

  maybe the appointment was made in the middle of acquisition

For what reason was "you" appointed? Internet research on possible changes in Makro Structure

  Maybe Makro was acquired by a corporation

When was the acquisition and by whom? Why was Makro acquired?

Research through internet news articles and interviews

Appointed maybe you were appointed by SM Management

Why were you appointed? And by whom?

Internet research

  Maybe you were appointed by Makro management

Why were you appointed? And by whom?

Newspaper articles/archives

Vice President maybe as VP, you have certain duties and responsibilities to both Makro and SM

To whom does the VP report to? What are the duties or responsibilities of VP CP?

Internet research on identity of VP CP

  maybe as VP, you are now under SM To whom does the VP report to? Internet research on the ownership of Makro

Corporate Planning maybe you're appointed to do long term Strategic plans

What are the future plans of Makro? Research through internet news articles and interview

  maybe to plan and direct business and organizational operations

What does the department contribute to Makro? What happened to Makro?

Research on Corporate Planning job description; research on internet articles

  maybe the Corporate Planner sets goals and realize goals

What is corporate planning? What does a corporate planner do?

Research on Corporate Planning job description; research on internet articles

  Maybe the Corporate Planner sets the growth plans of the company

What is corporate planning? What does a corporate planner do?

Research on Corporate Planning job description; research on internet articles

KIND Template

Vice President

maybe as VP, you have certain duties and responsibilities to both Makro and SM

To whom does the VP report to? What are the duties or responsibilities of VP CP?

Internet research on identity of VP CP

  maybe as VP, you are now under SM To whom does the VP report to? Internet research on the ownership

of Makro

Corporate Planning

maybe you're appointed to do long term Strategic plans

What are the future plans of Makro?

Research through internet news articles and interview

 maybe to plan and direct business and organizational operations

What does the department contribute to Makro? What happened to Makro?

Research on Corporate Planning job description; research on internet articles

K I N DMakro maybe Makro is losing money What is the financial standing of Makro?

Are they profitting or losing?Makro financial statements

  maybe Makro is like S&R but cheaper What exactly is Makro? Internet research on company profile from website

  maybe Makro is membership grocery shopping type of company

What is Makro specifically? What does it offer to its customers?

Internet research on annual report and internet research on company profile from website

  maybe Makro has been existing in the Philippines for more than 10 years

How long has Makro been in existing? Internet research on company profile from website

  maybe it is into retail and wholesale What industry does Makro belong to? Who are the main competitors of Makro?

Research on it articles of incorporation, research on the internet and Makro's website, and interviews

  maybe it is a local company Is Makro a local, international, multinational company? What size is Makro?

Newspaper articles/archives

  maybe it is a private corporation What is the vision/mission/goals of Makro? Where is its principal place of business?

Articles of incorporation and By-laws

  maybe it has been acquired by SM What is Makro Planning to do? What are their future plans? Did SM acquire Makro? Why?

Personal Interview with Makro employees and research on the internet

  maybe it is in liquidation Why did it liquidate? Did they encounter any problems?

Research through internet news articles

  maybe it has been in a process of selling-out

Why is it selling-out? Did they encoutner any problems?

Research through internet news articles

  Makro is an international Dutch chain of stores

Who owns Makro? Research through internet news articles and websites

  maybe majority shares were sold to SM

Who are the stockholders of Makro? Research through internet news articles

KIND Template

Makro maybe Makro is losing money

What is the financial standing of Makro? Are they profitting or losing? Makro financial statements

  maybe Makro is like S&R but cheaper What exactly is Makro? Internet research on company

profile from website

 maybe Makro is membership grocery shopping type of company

What is Makro specifically? What does it offer to its customers?

Internet research on annual report and internet research on company profile from website

Concept Map

12 Outlets

Class A, B, & C Growth in

Outputs

Continuous Increase in

Market share

VP- Corporate

Planner

Continuous

Increase in Market profits

whose market is

wh

ose

gen

eral

tas

k is

to

mai

nta

in

MakroWarehouse type Wholesale Store

Major customers are

hotels, restaurants, caterers and

sari-sari stores

fully by SM group of

Companies

Is a has

appointed a

acquired

and its

by

through andof

Background on MakroSelf-service wholesale

that sells to intermediaries and large commercial users on a membership basis.

Food and non-food products

Background on the Problem

Then •Previously owned by SHV Holdings N.V.,at 60 percent, SM Prime Investments of the Sy Group at 20 percent, and Ayala Corporation at 20 percent.

2004 •Ayala decided to go another direction as they sold their existing shares to the joint venture 

2006 •Makro plans to add smaller branches all over the Philippines•Makro planned on a reformatting of their existing stores that would give consumers a quick and easier time in shopping while having special packs and promos to increase sales.

2007 •In October 2007 (SM 2008 Annual Report, 2009), SM increased its ownership to 60 percent and consolidated with Makro.

Now •The SM group now holds 100 percent of Makro, having already converted 3 Makro outlets to SM Hypermarkets.

Main Customers of Makro

•Hotels•Restaurants•Catering Businesses

Food Products and Supplementary goods

•Traders Small retail outlets, neighborhood stores, kiosks, private entrepreneurs (resale of goods)

•Other Business Users

offices, service companies, government agencies, other organizations (professional use of office equipment, detergents, etc)

Revamping Makro:Strategic Management Process

Vision and Mission

Vision

• To be the leading cash and carry distributor of Food and Non-Food products

Mission

• The distribution of products with excellence in price, quality, and variety to professional customers, offering them advantages and opportunities to growth.

• The employment of good and knowledgeable staff who will be trained to realize the full potential of the Makro concept.

Objectives and Task of the Corporate Planner

Competitors

SNR

MakroCash and Carry

SM Hypermarkets

Strategic Map/Group

Strategic Objectives from SWOT Analysis

SOTo overcome

economic downturn and the limited

market by using core-business model of low

cost, low margin, adjusting structure for

innovation for local Philippine market.

WOAdjust

amenities and services fitting

for the local Philippine

market

STTo overcome

competitors, and similarly structured

companies with better adaptation towards the local Philippine market

WTAvoid attack by competitors and

similarly structured organizations with differentiation and

deeper understanding of the

local Philippine market.

General/Main StrategiesStrategy Formulation

1Research into the market and the channels it services and create a Makro Tracking Program

2Redefine focus of target segment

3Update the Corporate Identity

Corporate Level Strategies

Stability Strategy• Pause and Then Proceed

strategy may also be used considering that Makro did go through a turbulent experience with SM acquiring it.

• Makro may take the time to pause, do in depth market research first.

Growth Strategy• Horizontal Growth - “expanding the

company’s existing products into other locations and/or market segments.”

• introduce the selling of both bulk and non-bulk goods

• New Target Segment: sari-sari store market and the direct customers or the end-product users.

Competitive (Business Level) Strategies

Cost leadership

Differentiation• Using the Makro

Website as a new channel for buying products online

Tactics• Encirclement

• Greater product variety by offering non-bulk items

• Guerrilla Warfare• Aggressive

marketing/promotions

Functional Strategies

Marketingspearheading

the market research

Value-chain analysis

FinanceMinimize costs

and risks, feasibility and profitability of new programs

OperationsSupport by delivery,

packaging (products into

bulk), customer services

Human Resources

Training staff (delivery, online-

buying manager, customer service) to

handle any new technologies and overall

improvement

MISClose monitoring and management

is essential for the corporate

planner in order to keep tabs on the execution of

the strategic plan;

Development of Online-Buying

Function

Detailed Action Plan

Stability: Pause-Then-

ProceedTime

Frame1 to 2 months during Stabilization period

1 month

2 months

Measure

2 dealers from each category

Evaluation from all department

heads2 dealers from each category

ResponsibilityMarketing (Mr. Lim) and

Operations/Productions (Ms. Ong)

Marketing (Mr. Lim) and

Operations/ Productions (Ms.

Ong)

Maketing (Mr. Lim) and MIS (Ms.

Evangelista)

Action ItemAssess the

buying behavior of current hotel, restaurant and

caterers

Identify areas of improvement and

sucess for each part of the value chain

Assess the interface of Makro (products and services) with

its customers

Step No.

1

2

3

Detailed Action Plan

Growth Strategy: Horizontal

GrowthTime

Frame1 to 2 months

during Stabilization

period3 months3 months3 months

Measure

200 Sari-sari stores and 200 end-

product customersProgram pilot

testingProgram pilot testing10 Makro stores

ResponsibilityMarketing (Mr.

Lim)

MIS (Ms. Evangelista),

Marketing (Mr. Lim) and

Operations/ Productions (Ms.

Ong)

Operations/ Productions (Ms. Ong) and Human Resources (Ms.

Rocafor)

Operations/ Productions (Ms.

Ong) and Markeitng (Mr.

Lim)

Action ItemDo Market research

on buying behavior of new target

segment: sari-sari stores and end-

product consumers

Develop online-buying/ordering

function for existing market in the Makro

Website

Training and support of

Operations/ Productions staff

Introduce non-bulk products in the market to cater to new

target segment

Step No.

1

234

Detailed Action Plan

Competitive (Business Level)

Strategy and Tactics

Time Frame1 to 2 months

2 months

3 months

Measure

20 dealers

1000 site visits

10 Makro stores

ResponsibilityFinance (Ms. Teh)

and Marketing (Mr. Lim)

Marketing (Mr. Lim)Marketing (Mr. Lim) and Operations/ Production (Ms.

Ong)

Action Item

Assess the feasibility and incorporate into promotions

Promote of the new online-buying/ordering function in the Makro Website

Diversification into non-bulk product offering to cater to different markets - promotion

Step No.

1

2

3

Tactics

Strategy 1: Market Expansion by Abolishing Membership Requirement

• Makro stores are not open to the general public. They are currently marketing to traders, caterers, and complementary business users.

• The main competitors of Makro: SNR/Pricesmart, Cash and Carry, and SM Hypermarkets all have one thing common that Makro is that although all three are basically of the same product range, these companies do not require membership cards for customers to be able to shop.

Strategy 2: Increase Promotions: Sales Promotion and more Publicity/Public Relations

• Makro may be offering low prices just as much as Cash and Carry and SM Hypermarkets. However, it is not at all doing enough promotions targeted to the general public. Their existing marketing strategies, are of course, dependent on the media habits and lifestyle of their current market.

• SM Hypermarkets are more aggressive in their PR efforts such as events. Seen in their websites under the "Featured Events" side bar are only some of the events that enable SM Hypermarkets to gain more publicity from the market.

Evaluation and Control

End of PresentationThank you very much!