Asirius Philippines Inc.

Asirius Philippines, Inc.
University of the Philippines Visayas Cebu College

Gorordo Avenue, Lahug, Cebu City
In Partial Fulfillment of the Requirements in Management 190

Strategic Management
ASIRIUS PHILIPPINES INC.

Strategic Management Paper
Submitted by:
Chin, Heno Rey

Gerodias, Dimples
Gorrero, Marchie Dawn
Llanera, Mary Ann
Marquez, Vincent Mc Eduard
Plaza, Gea
Submitted to:
Prof. Rhenozo Barte, C.P.A.
March 22, 2010
i
ACKNOWLEDGEMENT
The proponents of this Strategic Management Paper would like to extend

their deepest gratitude and sincere appreciation to the following people who
contributed in the completion of this paper:
First would be to Ms. Vera Cruz, Business Manager of Asirius Philippines,

Inc., who gave her consent for the company to be the paper’s subject, and for her
support in giving all the necessary information that helped in the analysis and
formulation of strategies.
To Ms. Maria Lilibeth Sayson, Asirius’ Finance and Administrative Officer, and
to Mr. Rail Letigio, Asirius’ Marketing Executive, for being our panelists of this paper’s
presentation and defense.
To Mr. Erwin Llanera, for his assistance in setting an interview with the
representatives of the company.
To Mr. Adrian Bono for being our consultant for the IP PBX Systems.
Researchers are also thankful to the family of Mary Ann Llanera and to the
family of Heno Rey Chin, for providing the researchers a very comfortable and
accommodating place to work, and for the laptops that the proponents used which
maximized working time.
Special thanks also to Prof. Marilou G. Busano, C.P.A. for her tips and advice
on the financial analysis and projections made in this paper.
The researchers would like to thank Prof. Rhenozo Barte, C.P.A. for his
enduring patience and hands-on support in the development, improvement, and
completion of this paper.
Most of all the researchers would like to extend their special and highest
thanks and glorification to God for the gift of knowledge and good health that He
showered to each Mgt. 190 Group 4 member.
And to those people who also helped the researchers but were not mentioned
above, the researchers also extend their biggest thanks for every help they had
contributed to the completion of this study.
ii
TABLE OF CONTENTS
EXECUTIVE SUMMARY............................................................................................................ vi
I. Introduction........................................................................................................................ 1
A. Company Background................................................................................................1
B. Research Design and Methodology............................................................................1
C. Statement of the Problem and Objectives...................................................................2
II. External and Industry Analysis.........................................................................................3
A. Economic Forces........................................................................................................3
B. Social, Cultural, Demographic, and Environmental Forces.........................................5
C. Political, Legal, and Government Forces....................................................................5
D. Technological Forces..................................................................................................6
E. Industry....................................................................................................................... 7
1. Definition of the Industry.........................................................................................7
2. Market Analysis......................................................................................................7
3. Operations Analysis................................................................................................9
4. Finance.................................................................................................................11
III. Internal and Company Analysis......................................................................................12
A. History...................................................................................................................... 12
B. Ownership................................................................................................................ 12
C. Management............................................................................................................. 12
D. Organizational Structure...........................................................................................13
E. Human Resource......................................................................................................13
F. Mission Statement....................................................................................................13
G. Vision Statement.......................................................................................................14
H. Objectives.................................................................................................................14
I. Code of Ethics..........................................................................................................14
J. Strategies.................................................................................................................14
K. Market Analysis........................................................................................................15
1. Products................................................................................................................ 15
2. Price..................................................................................................................... 16
3. Promotion.............................................................................................................16
4. Channels of Distribution.......................................................................................16
5. Customer and Target Market................................................................................16
6. Competition........................................................................................................... 16
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L. Operations Analysis..................................................................................................17
M. Description of Competitive Advantage......................................................................18
N. Financial Analysis.....................................................................................................18
IV. Strategy Formulation, Implementation, and Evaluation................................................21
A. Input Stage...............................................................................................................21
1. External Factor Evaluation Matrix.........................................................................21
2. Internal Factor Evaluation Matrix..........................................................................23
3. Competitive Profile Matrix.....................................................................................25
B. Matching Stage.........................................................................................................26
1. Strength, Weaknesses, Opportunities, and Threats Matrix...................................26
2. Strategic Position and Action Evaluation Matrix....................................................27
3. Boston Consulting Group Matrix...........................................................................30
4. Internal-External Matrix.........................................................................................31
5. Grand Strategy Matrix...........................................................................................32
C. Summary of Possible Alternatives................................................................................33
D. Decision Stage.............................................................................................................34
1. Quantitative Strategic Planning Matrix..................................................................34
V. Strategy Implementation.................................................................................................36
A. Suggested Vision, Mission, and Objectives..............................................................36
B. Marketing.................................................................................................................. 37
C. Management and Human Resource.........................................................................40
D. Finance..................................................................................................................... 41
E. Operations................................................................................................................ 42
F. Management Information Systems and Research and Development.......................42
G. Long Term Strategies...............................................................................................43
VI. Strategy Evaluation: Monitoring and Control................................................................45
VII. Financial Projections.......................................................................................................46
A. Income Statement.....................................................................................................47
B. Balance Sheet..........................................................................................................47
C. Cash Flow Statement...............................................................................................47
D. Financial Ratios........................................................................................................47
E. Revised Projections with IP PBX as a Standalone Business....................................48
F. Revenue Analysis with Additional Employees...........................................................49
VIII. References....................................................................................................................... 51
IX. Appendices....................................................................................................................... 52
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A. Appendix A: Definition of Terms...............................................................................52

B. Appendix B: Existing Organizational Structure..........................................................53
C. Appendix C: Proposed Organizational Structure.......................................................54
D. Appendix D: Consolidated Balance Sheet (2006-2008)............................................55
E. Appendix E: Consolidated Statement of Income and Changes in Retained Earnings
(2006-2008)...................................................................................................................... 56
F. Appendix F: Asirius Philippines, Inc. Financial Ratios (2006-2008)..........................57
G. Appendix G: IT Industry Competitors’ Comparative Balance Sheet (2008)...............59
H. Appendix H: IT Industry Comparative Income Statement (2008)..............................61
I. Appendix I: Industry Financial Ratios (2008).............................................................62
J. Appendix J: Asirius Philippines, Inc. Projected Income Statement Without IP PBX
Operations (2010).............................................................................................................64
K. Appendix K: Asirius Philippines Inc. Statement of Cash Flows (2009)......................65
L. Appendix L: Asirius Philippines Inc. Balance Sheet (2009).......................................66
M. Appendix M: Asirius Philippines Inc. Projected Income Statement With IP PBX
Operations (2010).............................................................................................................67
N. Appendix N: Asirius Philippines Inc. Projected Statement of Cash Flows With IP PBX
Operations (2010).............................................................................................................68
O. Appendix O: Asirius Philippines Inc. Projected Balance Sheet With IP PBX
Operations (2010).............................................................................................................69
P. Appendix P: Asirius Philippines Inc. Projected Financial Ratios (2010)....................70
Q. Appendix Q: Revised Asirius Philippines, Inc. Projected Income Statement for
Standalone IP PBX Operations (2010).............................................................................72
R. Appendix R: Revised Asirius Philippines, Inc. Projected Income Statement with IP
PBX Operations (2010) Scenario 3..................................................................................73
S. Appendix S: Revised Asirius Philippines, Inc. Projected Income Statement with IP
PBX Operations (2010) Scenario 4..................................................................................74
T. Appendix T: Balanced Score Card............................................................................75
U. Appendix U: Interview Highlights with Ms. Vera Cruz...............................................76
V. Appendix V: IP PBX Demand Research...................................................................81
W. Appendix W: Project Linked Proposal.......................................................................84
v
EXECUTIVE SUMMARY
Asirius Philippines, Inc. is an IT company aiming to provide exceptional

services and leading edge products to their customers inside and outside the
Philippines. The company is an IBM Authorized Training Provider and a training
provider for business enhancement solutions, as well as a service provider for
troubleshooting and repair, and a reseller of hardware and other computer
peripherals.
Currently, the company has a very strong internal position with its excellent
instructors which contributed to their high ratings of 98.5% and above. The company
also has good liquidity and profitability figures. Lastly, strong brand equity brought
about by satisfied customers allowed the company to have linkages and network in
the IT industry. However, the company needs to address sustainability issues, such
as their dependence on IBM sales, and their lack of instructors and substitutes.
Financially, the company is also poor in utilizing its fixed assets to generate more
sales. The company also sometimes experiences no training for a few months.
In the study of the IT and Communications industry, it has been discovered

that there is strong growth in this sector, especially in Cebu which is fast becoming a
business and services hub. Along with this is the untapped demand for cost effective
IP PBX systems, especially in hotels, schools, call centers, and in other business
establishments. On another point, the industry is also in need of enhanced business
training to complement IT products and services, one which TESDA is also trying to
address. New trends also include Virtualization, a technology mastered by IBM.
Nevertheless, the company still needs to manage their volatility in FOREX, cultural
differences in training, and the Cebu City government’s demands for growth. Asirius
should also be concerned with the shortage of labor in the IT industry, and the entry
of Right Computer Systems (RCS), their first direct competitor, in the Philippine
market.
After a careful analysis of the business and the industry, two alternatives were
suggested by the matching matrices: concentric diversification and product
development. The first alternative is to enter the IP PBX market, and the second is to
create IBM package trainings. The first alternative was chosen after taking into
consideration its effects on the internal and external environment of the company.
Asirius will then position itself as a low cost provider of IP PBX services
primarily targeting the medium size market. Direct selling will be employed by the
company, while a cost based pricing will be used. Financial projections show that the
accompanying strategies in selling IP PBX system will improve the profitability and
efficiency of the company, resulting to a net income of Php 2,176,255.60 by the end
of 2010. Quality will be the main focus of control measures, as well as the feedback
of customers to ensure satisfaction from the signing of contract deal to post sales
evaluation.
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I. Introduction
A. Company Background
Asirius Philippines Incorporated is an Information Technology business which

offers technological products and services. The company has 3 sources of income:
training, services, and products. Training more or less accounts for 70% of the
company’s net income, 20% for services, and 10% for products. Services include
technical support and troubleshooting, while products such as POS Hardware and HP
printers are sold. In Cebu, the company currently holds office at Unit 4E JL Millennium
Bldg, Don Jose Avila Street, Capitol Site, Cebu City 6000 Philippines.
Asirius is an IBM partner for training. IBM has four systems namely: System P,
X, I and System Z for mainframes. System P is a type of processor that runs UNIX
while System X is a server for Linux. IBM System I integrates a combination of related
database to create a better program for security, web services, networking and storage
management capabilities. Asirius handles the trainings primarily for the Systems P,
and I and X Systems.
In the Philippines from 2000-2008, Asirius was the only partner for IBM training.
In the year 2009, Right Computer Systems, Inc. in Manila began to handle System I,
so there are two IBM partners presently. Asirius now aims to handle more System I
trainings to level the competition, because RCS is beginning to handle System P.
Moreover, Asirius’ market is not just the Philippines. It also holds trainings in Thailand,
Vietnam, and Singapore; whenever the IBM training partners for those countries are
unavailable or very expensive, then companies in need of training have to source out
from other ASEAN countries like Asirius Philippines Inc. On another point, the
company also handles business enhancement training.
Presently, the company wants to put a training center in Cebu, and have more
training for business enhancement such as crisis management training for companies.
In the future they also want to explore training in countries outside ASEAN, and be an
IBM service partner for repair.
B. Research Design and Methodology
In order to get sufficient information, the group did an interview with the general
manager and co-owner of Asirius, Ms. Vera Cruz. Furthermore, the group researched
more about the company and other related topics in the industry in its website and
other internet sites for the entire IT industry as well. Supporting documents were also
gathered through brochures and other printed materials given by the company, and the
available data of the Securities and Exchange Commission for competitors. (For the
interview, please refer to Appendix U: Interview Highlights with Ms. Vera Cruz)
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C. Statement of the Problem and Objectives
Problem
This STRAMA paper recommends strategies and general and specific programs
of action for Asirius, for the purpose of maintaining sustainable success and securing
its future as a leader in the Philippine IT industry.
Specifically, this case study also aims to answer the following questions:
1. What market segments should Asirius tap in order to increase its sales and
market share, and improve its financial health?
2. How should the company develop its three operations (training, services, and
products) to become more profitable?
3. Is there a need for the company to establish new offices in order to maintain
current customers and penetrate other locations?
4. How will the company manage its present employees in order to serve all
customers? Is there a need to hire new employees?
5. How will the company guard its market share utilizing a full account and
acknowledgement of its internal competencies?
6. What long term strategies should the company adopt in order to sustain
growth?
Objectives
This case aims to address the following concerns:

1. To make a comprehensive general plan of action for Asirius that would
sustain or even surpass its projected growth by first analyzing the
strengths, weaknesses, and implications derived from its current business
model or strategies,
2. To recommend strategies to be implemented within three years that would
counter or proactively address various concerns,
3. Address other specific concerns in relation to the recommended strategies
such as;
a. Proper delegation of tasks within the organization
b. Enhancing efficiency in training and other services
c. Improving sales for their retail products, or explore other profitable IT
products
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II. External and Industry Analysis
In order for Asirius to explore strategies, it needs to examine its external environment
in order to identify potential opportunities they could take advantage of. Moreover,
the company should also be mindful of threats, in order for them to proactively
manage it, or minimize its effects.
A. Economic Forces
Past Performance of the Economy
Sales and services of Asirius are highly dependent on the performance of

IBM. If IBM sales are down, performance of Asirius is also down. This happened in
2009 when Asirius held no training during the months of June and July when usually,
sales or enrollees during these months increase. Moreover, since IBM is an
international company, conversion of currencies is susceptible especially when
training is done outside the country. The Philippine peso was one of Asia's top-
performing currencies in 2007, which is bad for the company since their trainings are
valued at a higher price in other countries. Economy grew at a rate of 7.3%, its
fastest pace in 31 years, despite the slowdown in the U.S., the Philippines’ main
trading partner. (White, 2010)
During 2001 to 2009, there has been modest annual growth driven primarily
by the expansion in the services sector of the Philippines, in which the company’s
training is part of. Deregulation in air transport and communications, massive
infrastructure programs, reforms in the financial sector and the strong inflow of OFW
(overseas Filipino workers) remittances have all contributed to the surge in services.
The report also added that growth in IT-related business, telecommunications, and
tourism paved the way for macroeconomic stability and higher growth during the
period due to sector-specific reforms. Infrastructure development helped upgrade the
transportation sector in the country and also helped the country avoid the recession.
(Thai Press Reports, 2010)
Economic Forecast
Business Monitor International (BMI) a leading, independent provider of

proprietary data, analysis, ratings, and forecasts, expects the total size of the
Philippines’ IT market to increase from US$1.2bn in 2005 to around US$2.3bn in
2010, with growth driven by increasing demand from SMEs, in addition to an evolving
business process outsourcing (BPO) sector. Call center services remain the largest
sector in the local IT industry, accounting for around 63% of the sector’s total
workforce currently. Regional IT initiatives should also encourage vendors to look
beyond the main established locations. Over the forecast period, core service
offerings are likely to expand to include more technical support services, while, at the
same time, there will be demand for software to cut call center costs. New demand
3
for applications will come particularly from banks, financial institutions, and telecoms.
(The Philippines Information Technology Report, 2010)
A study also done by a Canada-based research firm, XMG, said that the
average growth of IT labor in the Philippines stood at 10 percent in the last 10 years
and is predicted to grow at a "steady" 3 percent in the next five years. Despite the
increase, the XMG study revealed an insufficient skilled labor pool to sustain the
country's total IT growth, which is projected to accelerate by 30 percent to 35 percent
year-on-year through 2010.
According to its statistician, Benedict Dormitorio, there is a clear need to

establish additional training institutions and ladderized degree programs offered by
existing universities to boost the dwindling talent supply, due to the growth of the
Philippine offshoring industry and migration of IT skilled workforce to countries
such as the United States, Singapore, Canada, the Middle East and Europe.
(Pinaroc, 2010)
"There is a clear need to establish additional training institutions and

ladderized degree programs offered by existing universities to boost the dwindling
talent supply, due to the growth of the Philippine offshoring industry and migration of
IT skilled workforce to countries such as the United States, Singapore, Canada, the
Middle East and Europe," XMG statistician Benedict Dormitorio said.
In addition, the Cebu City has become an international IT center which also
continues to radiate its influence to the rest of the Visayas and Mindanao regions. It
must be noted that for the last four decades after World War II, the City of Cebu has
metamorphosed as the center of education and culture; the hub of sea and air
transport; and the center of trade and commerce. With Cebu City developing into a
polar growth center (a positive change in the level of production of goods and
services in an area, higher than that of the surrounding region), providing relief for in-
migration into the Metro Manila Area into a considerable degree, it has absorbed the
burdens of a high rate of in-migration from all over the Visayas and Mindanao. (Cebu
City Gov, 2007)
Despite of lack of proper coordination of development program and economic

activities within the Metro Cebu Area, the presence of other growth centers in the
outlying areas; the continually aggregating economic activities within Cebu City
through additional investment inputs; increasing and improving exports; the
establishment of more industries in Mandaue City; and, the implementation of
government infrastructure projects have contributed to additional opportunities for
employment and income, consequently enlarging the consumer base. Hotels,
schools, call centers have began expanding their operations in Metro Cebu and new
service businesses in need of telecommunications and IT services and products
continue to arrive. (Cebu City Gov., 2007)
Among the IT and communications products highly in demand today is the IP

PBX system. IP PBX is a digital adaptation of Private Automated Branch Exchange
(PABX) systems which are analog systems that interface with POTS (Plain Old
4
Telephony System) lines to manage incoming, outgoing, and intra-organization calls

to reduce the number of POTS lines needed by the company as well as
interdepartmental calls that ordinarily would have gone through POTS. VOIP (Voice
Over Internet Protocol) supports this system. Based on phone research conducted
on 360 companies that purchased graphic ads in the DPC Yellow Pages, the
proponents gathered that only about 13% of companies’ trunk lines are Hotlines or
feature Interactive Voice Response systems, a common feature of non-legacy PBXs,
and that about 49% of ads refer to more than one telephone number. (Please refer to
Appendix V: IP PBX Demand Research) Also, the survey showed that certain
industries were more likely to have a PABX system installed, like Hotels (20/20),
Schools (2/6), and Automobile Dealers (4/10), higher than the average 13%. New
companies in these industries about to gain entry in Cebu are highly in need of IP
PBX systems. (Starfish Research, 2008)
B. Social, Cultural, Demographic, and Environmental Forces
The Philippines is now the third-largest English speaking country in the world.
The country’s BPO sector is forecasted to earn $1 billion by 2010 (White, 2010).
Filipino IT specialists are capable of teaching on all parts of the globe any course
related to their field. The language has been one of the major factors in choosing IT
trainers since most terms used in the field are in English. According to Ms. Vera
Cruz, students from Thailand and Vietnam treat Filipino instructors with high regard
because of the perception that Filipinos are good and skilled in IT related matters.
However, Singaporeans and Indians tend to have superiority complex, thus may
often look down on Filipino instructors.
Authorized Training Providers in the Philippines are backed by the resources

of IBM. Whenever a particular country’s instructors are not available, IBM imports
other IBM instructors within the ASEAN region. In other words, each instructor’s
teaching commitment extends through all ASEAN countries. As Asirius instructors
experienced, there is a need to adjust to different cultures they will be exposed to. As
what Ms. Cruz pointed out, and as what her other IBMers experienced, Indians are
the most curious of almost anything about the equipments, processes, etc. during the
training period. They are also the most easily annoyed that each instructor tries hard
to be patient and calm whenever conflicts arise.
One of the reasons why fast adjustment to social and cultural differences is
needed is that instructors are being evaluated by each trainee they handle. Any
rating below 98% will be questioned by IBM and three such ratings will be subject to
starting from the first step towards becoming an instructor (e.i. authorization
process).
C. Political, Legal, and Government Forces
The government of the Philippines also provides IT services and trainings to

its public. TESDA for example gives technical trainings quite comparable to some of
the courses Asirius offers. Since TESDA is government-owned institution and offers
5
free or minimum payment for technical trainings, private IT agencies such as Asirius
will be definitely affected in terms of pooling enrollees, provided as well that TESDA
continuously enhance and follow technological developments. Essentially, they can
become a competitor of Asirius, but may also be an opportunity for the company to
tap once they become TESDA accredited. They would then be able to send their
instructors to train in TESDA for a fee, or TESDA may sponsor their scholars to
attend in Asirius training.
Ms. Vera Cruz, the business manager of Asirius experienced firsthand that
some government employees, particularly in Cebu City Hall, insist to them that there
was something wrong with their financial statements since they claim that earnings
should increase yearly. Though other companies might not have experienced this,
government agencies concerned with the auditing of financial statements should
have all the knowhow of how the economy works and how all these are reflected in
the financial statements. Moreover, Securities and Exchange Commission does not
have that much specific categorization of industries. The company is having a
difficulty in identifying what type of industry they belong, since it is associated with
education and IT at the same time.
D. Technological Forces
Information Technology industry is highly susceptible to change in terms of

product development. Continuous advancement in products and services offerings
drives the competition up and is closely linked to customer satisfaction. One of the
benefits of advancement in IT is the ability of each member of the organization to
virtually communicate with their bosses or customers. Asirius at present does not find
more offices necessary to handle trainings and do corporate meetings since all
employees communicate through mobile phones or internet.
The business of Asirius is dependent on new purchases/updates of IBM

Systems. When a new course or product is introduced by IBM, they allow Asirius
systems administrators, programmers, etc. to be trained locally and abroad. At
present, online systems training is not so popular in the Philippines, though outside
the country it is, because the training is complicated and requires hands on teaching
of the instructor. In addition, large infrastructure is needed to put up this kind of
service. However, IBM offers online training service in other countries at a premium
price. On another point, IBM now is pioneering a new technology called
Virtualization, which is essentially two operating systems in one computer. This new
technology is expected to create a wave within the competition; IBM’s Virtualization
technology is rivaled but not matched by HP for example. And as a pioneer, they
have the advantage of pricing high and capturing greater market share.
6
E. Industry
1. Definition of the Industry
Information technology (IT), as defined by the Information Technology

Association of America (ITAA), is the study, design, development, implementation,
support or management of computer-based information systems, particularly
software applications and computer hardware. IT deals with the use of electronic
computers and computer software to convert, store, protect, process, transmit, and
securely retrieve information. Unlike other common industries, the IT industry is
knowledge-based. Efficient utilization of skilled labor forces in the IT sector can help
the economy achieve a rapid pace of economic growth. The IT industry helps many
other sectors in the growth process of the economy including the services and
manufacturing sectors (Information technology Industry). Recently, the
communications industry has been paired up with the IT industry, thus forming a
larger industry called IT and Communications Industry.
Asirius does not belong to a specific industry as far as the classification by the
SEC is concerned. This is because, the company primarily offers IT training (e.i OS
courses), secondarily service (e.i troubleshooting), and lastly retail products (e.i PC,
printers, etc.). Training alone may classify them under the education and services
industry. However, the closest industry of the company is the Information Technology
and Communications industry. Most of comparison analysis is based on the
companies belonging to the IT industry whether it is offering wholly training/services
or combination of training/services and retail.
2. Market Analysis
a. Product/Services
The products in the IT and Communications industry continue to develop as

there is large investment in technology for each company. Moreover, as innovation
continues, product life cycle is shortened. Hardware products consist of servers,
personal computers, laptops/notebook, printers, storage devices, monitors, speakers,
scanners, projectors and accessories. Software products include Microsoft products,
IBM products and Alliance Software. Training includes Information-related training,
like handling different types of operating systems and basic administration training.
Training, services, and products become obsolete over time, thus the need for
continuous innovation to service the demand of customers.
b. Price
Pricing strategy in this industry also depends on the products and services
offered. Computer hardware and software products are more or less dependent on
the quality and newness of the technology offered, while services like troubleshooting
or computer repairs depend on the level of restoration, or the difficulty of the problem.
7
Price for the training services differ on the level of teaching and depend on the
portfolio and courses designed for the customers.
c. Promotion
Many companies entering in this industry rely mostly on the internet. They
create a well developed website that customers can easily access. Companies
entertain some customers through sending emails. Inquiries about the company can
be answered through it. However, direct selling is also relevant. IT companies will go
directly to establishments and institutions to introduce products and services of a
certain company. Most of all, referrals through word of mouth are being encouraged
because it is inexpensive yet reliable.
d. Channels of Distribution
Distribution channels of the industry can be found in almost every corner,

through virtual offices in websites. Companies selling computer hardware and
software also set up stores in malls and public places. It starts from a manufacturing
company to a wholesaler to a retailer and finally to a consumer. Training on the other
hand is rendered and consumed at the same time, as well as services such as
network set-up and assembly.
e. Customer and Target Market
The industry’s target market and customers are those agencies who need IT-
related products. This includes banks, government agencies, telecommunication
network, airline companies, etc. Almost every time industry needs IT and
communications product and services. They also cater to individuals and public
organizations to market the product.
f. Competitive Forces Analysis and Porter’s Five Forces Model
Bargaining power of buyers
Bargaining power of buyers in this industry for the hardware and software
products is high since customers can switch products from one supplier to another.
However, with regard to training, bargaining power of buyers is moderately low
because customers will choose what credible companies they want to conduct the IT-
related training needed for a certain institution.
Bargaining power of supplier
Bargaining power of supplier for the hardware and software products is

moderately low because companies can afford to switch suppliers offering the
products, unless one company has monopoly of the quality of technology, such as in
the case of IBM for virtualization. In training, the instructors and the corresponding
8
education devised for such training are the suppliers, and with the shortage of quality
IT labor force, bargaining power is quite high.
Threats of new entry
Threat of new entry for hardware and software products is high since the
industry can be entered easily. It does not need very high capitalization as long as a
company has the connection with big companies that supplies IT-related products.
For the training, threat of new entry is low since companies have to maintain strong
partnership with a company in an IT training sector and meet all their requirements.
Threat of substitutes
Threat of substitutes is low because there are no alternative industries

offering products that are considerably match with this IT business. In terms of
services and training, threat of substitute is low also because there is a shortage of IT
professionals in the Philippines for the current year.
Rivalry among competitors
Competitors in this industry vary depending on the products and services

offered in the market. For the hardware and software products, competition is fierce
since many companies today are selling computer hardware and software items.
However, for the training offered in this industry, competition is low because some of
the company do not give IT-related trainings to customers. Only some companies
include it to their products and services.
g. Market Share
Based on the research, IBM has the highest market share in terms of offering
IT-related training. Next to IBM is Dell Education Services and the third highest is
New Horizons Computer Learning. This training includes Microsoft Basics Training,
System Courses, Linux Administration and End-User Training, etc. (About IBM,
2010). The proponents of this paper only found market share data for these
international companies.
3. Operations Analysis
a. Process
IT processes start with the push and pull forces of the market. For example,
nanotechnology was a technology that pushed to the market the miniaturization of
powerful computers. On the other hand, the market’s demand for storage devices
with higher memory caused such technologies to materialize, essentially pulled by
the market’s desires. Sourcing of materials for the technology comes next in inbound
logistics. After the creation of a product with that particular technology, the
development manufacturing process comes next. Initial testing, quality control, and
9
initial feedback from customers are also ideal in the development phase. Product and
service are then marketed initially to the business market, usually to the giant
manufacturers of hardware and software like HP and IBM, or they may also be
developed internally.
b. Inventory
IT products rarely have long lifespan in the market, as new technologies

render old ones useless. Efficiency in terms of usage and more customer-friendly
devices are the current thrusts of the industry. As such, inventory is held at a
minimum. IT services on the other hand cannot be stored, similar to characteristics of
any service. Only accompanying tools and equipment in rendering the service may
be stored.
c. Capacity
New IT products are produced in small quantities, but have high margins
through a market skimming strategy. Such products need to be perfected first, before
mass production, so capacity is usually low initially. On the other hand, relatively
common IT products for broad usage such as computer peripherals have high
capacity in terms of production, and may even reach the mass customization stage.
d. Technology
Economies of scale for the information technology industry are high. The
marginal cost of each unit of additional software or hardware is insignificant
compared to the value addition that results from it (About Information Technology
Industry, 2010). Technology, by itself, is the driving force of the IT industry.
e. Quality
Determinants of quality vary, but focus more on efficiency and durability of the
product. Quality is maintained through standards set by the companies, usually aided
by the specifications of customers. On the aspect of training, standards are usually
evaluated mainly on the feedback from students. As in the case of Asirius, the
passing percentage is set at 98%.
f. Workforce
The workforce in the IT industry requires a heavy investment for training since
the industry is knowledge based. Multi-skilled IT personnel are one of the company’s
greatest assets since these people fuel sales.
10
g. Research and Development
Since the industry is technology-based, there is a need for each company in

the industry to continuously develop and take hold new trends in doing operations to
be able to react rapidly in the competition. Typically, IT companies allocate majority
of their funds in this department, matching the needs of the market, and the
technology available.
4. Finance
For the purpose of financial comparison for the IT Industry, the proponents of
this paper chose three top-of-the-mind IT companies based in Cebu: Ng Khai
Development Corporation, Rhine Marketing Corporation, and Alliance Software Inc.
Rhine Marketing Corporation focuses in the retail of IT products, while Alliance
Software Inc. focus on IT Services such as in training. Ng Khai Development
Corporation does product selling and IT services, usually bundled in a package, as in
the case of their Microsoft 7 offering. These three companies are comparable to
Asirius Philippines Inc. in the field of IT services and products, but do not actually
present a direct threat to the company. Only RCS caters to the same market for IBM
training. Nevertheless, these companies compete with Asirius in their products, and
also provide troubleshooting services, PC assembly, and network training which
Asirius also offers. As such, they are classified as second level competitors of the
business, and warrants a financial analysis to compute for industry standards (Please
refer to Appendix I: Industry Financial Ratios (2008)).Two ratio computations are
given, since Alliance posted negative income for the year 2008, in order to see ratio
changes without being affected by Alliance’s negative figures.
a. Growth
Based on the three companies, plus the financial data of Asirius, product
sales increased by 10.57% in 2008. Service income grew at 18.77%, while total sales
increased by 15.06%. Cost of goods sold increase by 10.57%, while cost of service
has a higher increase of 19.70% if Alliance is not included. Net income is reduced by
9.48% based on the four companies.
b. Profitability
Gross profit margin is at 25.86%, with higher margins for the products sales
than service income. Net profit margin is -26.25% with Alliance, but still retains a
positive figure of 8.94% without Alliance. ROE and ROA gives positive figures of
10.56% and 14.31% respectively, but if Alliance is included, ROE is reduced to
-4.83%. With the inclusion of alliance, basic earning power and opening profit margin
both give negative figures as well.
c. Liquidity
11
Both the current ratio and the quick ratio of the industry are set at 80 plus
levels, because of the very high liquidity figures of Asirius. But with the inclusion of
Asirius, these are reduced to 65.68 and 63.80 respectively.
d. Leverage
Ng Khai’s large liabilities, together with that as well of Alliance resulted to

higher industry average for leverage. This is despite the fact that Asirius registered
even less than 1% for the Debt-to-Total-Assets and Debt-to-Equity Ratio, averaging
at 97.75% and 124.73% respectively.
e. Efficiency
Inventory Turnover is at 27.01x, while Fixed Assets Turnover is 8.01x without

Alliance and 11.60 with Alliance. Total Assets Turnover is at 1.36X, down from 1.68x
if Alliance is not included in the computation
III. Internal and Company Analysis
A. History
Asirius Philippines, Inc. is an IT company offering mainly services as an IBM

authorized training partner. Certified since 2000, the company handled several
offices in South East Asia, such as Indonesia, Singapore, and Philippines. The
Singapore-based company hired Filipino employees who eventually became partners
and owners of the business, when the company chose to shut down operations due
to problems in getting capital when they initially went public in Singapore. To date the
company still offers its services in the Philippines primarily in Cebu and Manila, and
conducts also training services in other ASEAN countries.
B. Ownership
Asirius was previously a Singaporean company owned by Choo Boon Siong,

the company’s founder in 2000. After the company experienced pecuniary crisis with
each of its branches closing down, Ms.Vera Cruz adopted the business in 2005 and
made it a Philippine company. She now owns 10-12% of total equity with four other
people contributing to its capital.
C. Management
Asirius adopts a centralized system of management wherein Vera Cruz

makes all managerial decisions. She is also a full time instructor as well as being the
manager which may be disadvantageous for the company since she may have
trouble juggling both tasks. Conflict on what to prioritize might be a problem. Asirius
is also considered as a ‘mobile’ or ‘virtual’ business since they seldom meet
personally unless during planning and urgent matters. Instead, they communicate
12
through e-mail, calls and text messages. Also, some of her staff is given Sun Cellular
plan numbers so they can easily communicate with each other.
D. Organizational Structure
(Please Refer to Appendix B: Existing Organizational Structure)
The company has a relatively flat organizational structure. Asirius is headed by Ms.
Vera Cruz, the business manager, and also an IBM Systems trainer. Four
departments consist of the Finance and Administration, Marketing, Technical
Support, and Education for training, each headed by their respective personnel.
E. Human Resource
Asirius Philippines Incorporated is composed of six personnel with two of

these functioning as trainers. A current partner aside from Vera Cruz is her sister
Aileen Cruz. Next in line would be Kheang Tan, an Australian entrepreneur, but
Cambodian by descent followed by Juvy Gallur. Fifth would be Ken Sarmago who
also contributed to the capitalization of Asirius Philippines. And last on the list is
Josephus Pesirla who also handles trainings for both Linux and basic Unix IBM.
Handling the marketing side of the business is Rail Letigio who is in charge of
creating new accounts and the maintenance of loyal customers. Maria Lilibeth
Sayson primarily handles the financial and administrative aspects of the business.
Budget allocation as well as daily operations are within this executive’s scope of
responsibility. Rolly Aragon is in charge of technical support and so matters
pertaining to hardware and software repairs belong to his line of work. Josephus
Pesirla, on the other hand, is the one conducting basic training on services for IBM,
and other new topics added to their program.
F. Mission Statement
Asirius has built its business around a core group of dedicated professionals
to add leverage to your business through the strategic use of Information
Technology. Commitment to confidentiality, long-term relationships, professionalism,
rapid response, efficiency, thoroughness, and achieving effective results are at the
core of our philosophy and way of thinking.
The company’s mission statement lacks a statement on what market it wants to

serve, although they clearly stated the good culture of the company which makes it
more attractive for the employees and potential investors. Information on how they
would treat their internal and external stakeholders is lacking as well.
13
G. Vision Statement
To promote the knowledge of the Filipino in IT.
Currently the vision statement stated by Ms. Vera Cruz during the interview
presents an end goal of the company, but lacks any information as to what they want
the company to be in the future.
H. Objectives
We aim to provide quality IT services to our valued customers and provide

total IT solutions that will reduce the operational costs while increasing efficiency of
the companies we serve.
The above objective is more of like a mission-vision statement of the

company. However, it is good to note that the company included in their objectives
their desire to satisfy the needs and wants of their customers. In terms of long term
plans, the company wants to have a training center here in Cebu. Although this is an
attractive option for the company, there is lesser incentive to do so since it would
entail large capitalization in constructing such building. Furthermore, the current set-
up of trainings in the client’s premises is already working for the company. However,
in the future, their own training center may also lessen their transportation expenses,
and allow them to organize training functions of their own. Moreover, another long
term plan for the company is to expand its operations outside the ASEAN nations,
and to someday become an IBM authorized partner for services such as in repair.
I. Code of Ethics
Ms. Cruz is very lenient with her employees, and even allows them not to be
physically present for work when there are lesser tasks at hand. However, she
requires them to be present when urgent things come up. Aside from that
commitment, she expects honesty and continued communication from her
employees.
J. Strategies
As an accredited IBM training partner, Asirius Philippines, Inc. is able to

capture individual and business partners because of the established and trusted
name of IBM. The training or course is owned and sponsored by IBM. It is also IBM
that develops courses. Whenever a new course is developed, Asirius sends
representatives to be trained. In turn, the trained representative gets certified to teach
the new course wherever the customer wants the training to be done. As with the
pricing of the company, courses that are more difficult and require more number of
days for the training are priced higher than the easier courses. Moreover, should
there be any instance that an Asirius instructor is sent to other ASEAN countries by
IBM, the company pitches the lowest bid price so that other countries will have the
14
incentive to get their service, without necessarily compromising the quality. On the
perspective of the company, costs of accepting training services are being weighed
in such a way that total profit for each training class is twice the cost of handling it. If
profit does not double the cost, that class is not accepted or be deemed pending for
more enrollees on that particular schedule. This effectively ensures that the company
will operate profitably.
As what can be noticed, training is dependent on the number of enrollees IBM

gives to Asirius, without disregarding the promotional aspects of the business.
Because of this, the company has to put more effort in boosting the sales of its retail
products or have more service calls for repair, so that in times when IBM sales are
down, it can still generate income from its other operations.
The retail products are not the core business of the company; however, it
adds to its profitability since IT solutions are a big investment on the side of the
customers. The company also does not keep inventory in its office and rely more on
point-of-sales sales such as cashiers. On the positive side, storage cost is at the
minimum, but the opportunities in sales are reduced. Since the company has only
one office, it should see to it that there is enough inventory so that when the
customer needs the product, they can readily pick it up at the company address.
K. Market Analysis
1. Products
Asirius currently sells computer products such as laptops, printers, cartridges,

etc. although these are not the focus of the company’s marketing and sales team.
Asirius adopts a just-in-time inventory system wherein the products are ordered from
the supplier only when a customer requests for it.
Service
About 70% of the business is devoted to its services which is the most
profitable sector of Asirius. They offer IT trainings, personal development trainings
and business enhancement trainings. Furthermore, Asirius has long established a
strong partnership with IBM Learning Services, delivering world-class training for
IBM’s System P, I and System X machines.
There are two types of trainings: public and private. Public trainings are open
to all and are usually in tune with the annual schedule of training programs Asirius
gives to IBM. Private trainings, on the other hand, are exclusively for one company
and are usually scheduled in between or in lieu of cancelled public training programs.
The company also offers services on troubleshooting and technical support

services, which they also market to their previous customers and existing network.
Service is made on need basis only.
15
2. Price
Prices are dependent on the type of training being availed. Advanced courses
are relatively priced higher than the basic courses. Primarily, the company only
accepts trainings that can give them a return that is twice that of the total expenses
incurred to have the training. If there are foreign companies in need of training, what
Asirius usually does is engage in a bidding process wherein the lowest bidder is the
one chosen to handle the training program. For example, they always make sure that
they are able to price the training package at a much lower rate than that of
Singapore. On the other hand, services are priced according to the extent of the
problem that needs to repaired, while products are priced based on costs from
suppliers plus an additional margin.
3. Promotion
The company’s partner, IBM, mainly does the promotional activities for
Asirius. The firm simply provides IBM with their schedule for trainings and it is up to
IBM on how to get an audience for all programs.
Furthermore, Asirius also maintains its very own website in case there are
interested customers who would want to avail of a training program but does not
know how to get one. Vera Cruz also uses word-of-mouth type of advertising. She
distributes messages to her previous acquaintances and invites them to a public
training program although negotiations would still lie in the hands of IBM. Still,
brochures and flyers of the company’s services are distributed to reinforce these
promotion techniques.
4. Channels of Distribution
Services are done on company training centers, both here in the Philippines
and abroad. ‘Distribution Channel’ for the service is the website and other
communication devices where schedules for training are posted and reserved. On
the other hand, the company’s products are distributed primarily through their office
near Capitol, where pick-up of ordered items is made.
5. Customer and Target Market
Asirius targets companies primarily in the IT industry and others that are in
need of trainings. Usually Asirius provide their services to banks such as Unionbank,
BPI and RCBC. Other government offices like COMELEC are also being catered to
along with other private firms like San Miguel, Coca-Cola and Lufthansa Teknik. PC
Assembly, troubleshooting services, and selling of products are not targeted
exclusively, and they even serve the needs of their indirect competitors.
6. Competition
16
Asirius has no direct competition in terms of their services except for RCS
which is also an IBM partner Asirius is known for giving a better quality when it
comes to its trainings. In fact, its competitor, RCS, has not passed the 98% rating
that the IBM requires from its partners.
Other services and trainings in the IT industry here in Cebu can also be
considered as competitors like that of Ng Khai Development Corporation. Asirius
competes with these firms in terms of services such as network set-up and
troubleshooting but not in the training aspect since Asirius primarily caters only to
IBM customers while Ng Khai focuses on Microsoft. Asirius also considers TESDA a
competitor since it also offers courses such as Linux training, Windows and etc.
although the company can also ally with them since Asirius is TESDA accredited.
The company can actually partner with TESDA so they can send its scholars to
Asirius for trainings.
Competitors Profile
Companies Trainings Services Products

Asirius YES YES YES
RCS YES YES YES
TESDA YES
Alliance YES YES
Ng Khai Dev Corp YES YES
Rhine Marketing YES
Based on the competitor’s profile, both Asirius Inc., and Right Computer
Systems offer trainings, products and services in which other companies do not.
TESDA has the trainings only and Rhine Marketing offers products only. However,
Alliance and Ng Khai offers services and products that are in-line with IT business.
These companies however are not direct competitors of Asirius since the company
focuses more on the training, particularly those pertaining to its accreditation from
IBM.
L. Operations Analysis
Asirius Philippine Incorporated continuously looks for unaddressed needs in

the IT market, which becomes the basis for their operations. Since they are currently
focused on trainings, the company makes sure that its schedules are properly
organized in order to accommodate more training opportunities. The entire process
of planning of trainings up to getting the feedback of the trainees is closely
monitored, so as to improve efficiency, which also reduces costs. For example, the
practice of holding multiple trainings in one out-of-town area reduces transportation
costs, essentially giving the business economies of scale. Existing courses are also
properly evaluated to fit the needs of the trainees, and are revised and upgraded in
17
order to incorporate updates with new IBM systems. However, in terms of workforce,
the company still needs to make sure that they can sustain possible increase in
demand for training, or find substitutes in case of unavailability of trainers, especially
since they only have two active instructors. Moreover, there was a time in the
previous years that the company did not have training for one to three months,
despite earlier scheduling, which was due to the decreased sales of IBM, and
consequently, reduced instances of training for IBM customers.
In terms of products, the company rarely maintains inventory, which reduces

its storage costs. They are still able to deliver on time, due to strong supplier
relationship, thus still ensuring customer satisfaction. However, lack of inventory may
also mean that the company may forego opportunities to sell urgently needed
computer peripherals.
M. Description of Competitive Advantage
Asirius prides itself with a distinctive mix of skills and knowledge that are hard
to replicate. The company’s advance trainings are its pride since these are what
make Asirius unique from the rest. Also, it distinguishes itself from the rest through
the quality of their trainings measured through excellent instructors. They have also
maintained the IBM passing rate of 98% or better, something that RCS, their closest
competitor, is struggling with. Furthermore, the company’s long list of satisfied
customers has built strong brand equity for the company, which also extends their
linkages and network for future customers. However, the company doesn't have a
strong competitive advantage in the distribution channel of their products, nor do they
have experience for it.
Ng Khai has a competitive advantage in the distribution channel, while Rhine

Marketing has more than 30 years experience in dealing with retailing, something
that Asirius doesn't have. Nevertheless, quality of Asirius' training in IBM is a strong
advantage for the company, coupled with their linkages and network that they have
built over time with each satisfied customers. They can tap these customers for more
product offerings in the future.
N. Financial Analysis
(Please refer to Appendix F: Asirius Philippines, Inc. Financial Ratios (2006-2008))
In terms of liquidity, Asirius has no problem since its Current Ratio in 2008 is
256.63 and is well above the industry average. This is primarily due to the fact that
Asirius has very little debt, and as such its Current Assets are sufficient to cover its
liabilities, with or without the need to sell its inventories. The Quick Ratio is also the
same, still with an increasing trend, with 250.12 in 2008 which is above the industry
average either with or without including Alliance in computation of the industry
average (Separate ratios without the inclusion of Alliance is computed, since they
18
have poor financial figures which may skew industry averages). It is safe to say that
the company can readily meet its short term obligations.
In terms of leverage, the company’s Debt-to- Total Asset Ratio is decreasing

from 2007-2008 and the year 2006 has zero Debt-to-Total Asset Ratio because
Asirius has no debt or given liabilities. This decreasing trend is good in the side of the
company especially that in 2008 it has 0.31% which is below the industry average. Its
Debt-to-Equity ratio is the same with the Debt-to-Total Asset Ratio which is zero in
2006 and the trend from 2007-2008 is decreasing and below the industry average,
without Alliance which is 223.66%, and with Alliance 125%. From the result of the
leverage ratios, it can be seen that Asirius did not rely heavily on debt in financing its
business operations or in expansion. However, this may also mean that the company
did not take advantage of leverage opportunities due to very low debt.
In terms of activity ratios, the Inventory Turnover ratio is good, which has
increasing trend from 2006-2008, and in the year 2008 it has 56.60x which is above
the industry average. This means that the company is selling its inventory faster
compared to the industry. The Fixed Asset Turnover also has an increasing trend,
but in the year 2008 it is only 5.83x which is below compared to the industry average,
both without Alliance which is 8.01, and with Alliance which is 11.60. This means that
the Asirius did not fully match the growth of its fixed assets with the growth in sales.
This is also the case for the Total Assets Turnover ratio which shows a decreasing
trend from year 2006-2008, with a ratio of 1.15 in the year 2008 that performed below
the industry average, without Alliance which is 1.68, and with Alliance which is 1.36.
This means that the company was not able to successfully generate enough sales to
match the size of its assets.
Based on the profitability ratios, the trend in Gross Sales Margin is increasing
in 2006-2007 but declined a little bit towards 2008. However, this is still good since
the ratio in 2008 which is 34.42% is higher than the industry average ratio with or
without Alliance in the computation for the industry average. In the Gross Service
Margin, the ratio is also decreasing from 2006-2008, but still it is still performing
above the industry average The Gross Profit Margin of the company is increasing
from 2006-2007, but declined on 2008 from 29.07% to 23.64% which is below the
industry average with or without Alliance. However, this is not far from the industry
average, and may still be worked on by the company. On a more positive note, both
Opening Profit and Net Profit Margin performed well above the industry averages,
posting 24.04% and 24.84% respectively. This holds true whether or not Alliance is
included in the computation. Furthermore, Return on Total Assets increased from
2006-2007 but decreased from 2007-2008 to 28.63%, but is still above the industry
averages. The same holds true for ROE, pegged at 28.72%, and for the Basic
Earning Power at 27.70%. All in all, the company was able to have positive results
and consistently performs at par or even better than the industry standard in terms of
profitability. However, despite its strong showing compared to the industry, it should
be noted that over time the strong ratios of the company in profitability is declining.
As such there is more incentive to control operating expenses, and improve sales.
19
In terms of growth ratios, Product Sales is decreasing from 2007-2008 from

41.36% to 25.55%, but is still above the industry average, without Alliance which is
10.57%, and with Alliance which is 11%. The same holds true for the growth in
Service Income, Total Sales, and in Net Income. Specifically, net income growth may
still be above the industry average, but it sharply declined to 7.24% from an 81.85%
growth previously. It should also be noted that Product Sales has higher growth rates
than Service Income. On the other hand, the trend of Cost of Goods Sold, Cost of
Service and Cost of Sales are increasing from 2007-2008 and their results in year
2008 perform above the industry standards. This implies that the company needs to
control the costs of their products and services. All in all, the company still needs to
improve its growth figures, such as through increasing sales and reducing cost of
sales, in order to combat decreases in its growth rates.
The company’s Equity Multiplier also shows a significant increase from year
2006 to 2007 but decreased a bit in 2008. This figure at 1.0039 is below the industry
average without Alliance which is 3.24, and with Alliance which is 2.25. This means
that the company can still take advantage of more leverage. Lastly, its Modified Du
Pont figure in 2008 was positive 0.29. Even though it is smaller compared to the
previous years, it still performed above the industry average, without or without the
inclusion of Alliance in the computation. This is a good sign for the company since
this figure measures the company’s operational efficiency, asset use efficiency, and
financial leverage all at once.
During the interview, Ms. Cruz also mentioned some concerns such as the
delay in collecting payments from IBM trainings, which resulted to increases in their
Accounts Receivable. There is also a delay in the reporting of financial statements,
which also delays their evaluation of the previous fiscal year 2009.
20
IV.Strategy Formulation, Implementation, and Evaluation
A. Input Stage
1. External Factor Evaluation Matrix
Weighted
Key External Factors Weight Rating
Score
Opportunities
Growth in IT and Communications Industry 0.15 4 0.60
Untapped demand for IP PBX 0.25 3 0.75
Joint training with TESDA 0.05 2 0.10
Virtualization technology 0.10 4 0.40
Strong need for business enhancement training 0.07 4 0.28
Threats
FOREX volatility 0.05 3 0.15
IT labor shortage 0.15 2 0.30
Cultural challenges in training 0.03 4 0.12
Cebu City government demand for growth 0.05 4 0.20
Entry of RCS, first direct competitor 0.10 4 0.40
Total 1.00 3.30
Asirius have readily taken advantage of several opportunities and minimized

several threats, which were all given a rating of 4. Among these is the growth in the
IT industry that they have long tapped, through providing both products and services
that would cater to the need of the business market. They also adapted quickly to the
new technology of virtualization by revising their entire curriculum to fit the needs of
their students in training. Also, they were able to spot the growing demand for
business enhancement training, through providing crisis management and personnel
management training to business as well starting in 2009. In terms of threats, Ms.
Cruz remained oblivious to cultural challenged in training, and focused instead on
maintaining excellent communications between her and her students to ensure
understanding and maintain the quality of instruction. City Hall’s demand for
continuous growth was also properly explained by the business, albeit not proactively
so. As of the moment, there is no data as to the comparison of Cebu and non-Cebu
demand, except for the fact that Cebu has the highest regional growth rate. There is
more incentive to focus in Cebu, whether in products and services, especially since
they have high transportation costs. They need to look within their closest market first
and realize that Cebu offers plenty of opportunities in the IT industry that they could
tap. A key threat as well is the entry of RCS into the market as an IBM authorized
trainers, in which the company differentiated itself through the quality of the training.
On another point, the company still needs to address the shortage of labor in
the IT industry, as it could limit their expansion or even reduce their current IT
employees due to the huge demand for them as well. Apart from that, they also need
to explore the possibilities of conducting joint training with TESDA to increase their
number of trainings. Both factors are given a 2 because of the relatively lack of
21
attention given to these factors. Lastly, the company still needs to look into the
volatility of the Philippine Peso which affects their pricing abroad. Justifying a rating
of 3, they may also want to tap the gap in supply and demand in the IP PBX system,
where strong growth is expected. Overall, the company maintains a very good
external position with a weighted score of 3.30 for its key external factors.
22
2. Internal Factor Evaluation Matrix
Weighted
Key Internal Factors Weight Rating
Score
Strengths
Brand equity 0.13 4 0.52
Quality instructors 0.25 4 1.00
Varied offerings 0.05 4 0.20
Good liquidity and profitability 0.08 3 0.24
Linkages and network 0.10 4 0.40
Weaknesses
Dependency on IBM sales 0.12 1 0.12
Training downtime (2009) 0.10 2 0.20
Lack of instructors and substitutes 0.07 2 0.14
Sharp decline in net income growth 0.05 2 0.10
Poor Asset Turnover Ratio 0.05 2 0.10
Total 1.00 3.02
The company’s major strength that would greatly impact its success would be
its excellent instructors. Having high ratings of 98.5% and above, Asirius would be
known for its quality of instruction, and as such this factor is given a rating of 4. The
customer satisfaction also builds up brand equity for the company, which also further
expands the company’s linkages and networks, both factors also representing a
major strength for the company, with a rating of 4. The company’s varied offerings
also reduce the risk of the company. For example, if service income goes down, then
at least product sales will serve as a buffer. This strength is also classified as a major
strength as it serves well in minimizing threats such as decreases in demand. Lastly,
the company’s good liquidity and profitability is only considered a minor strength,
since the company can still improve on maximizing revenues, and needs to reverse
decreasing increases in the said ratios.
On another point, the company’s dependence on IBM is considered a big

factor to consider, which reduces instances of training in the event that the demand
of IBM products goes down, as what had happened in 2009. This makes it a major
weakness for the company, with a rating of 1. Moreover, training downtime may give
some slack for the company, but it is actually lost opportunity since the company
essentially stops its major operation for at least a month, wherein no trainings are
held. This is also coupled with the lack of substitute instructors. In the event one of
the instructors gets sick, then the other instructor will have to bear all the additional
workload. As such, both factors are considered minor weakness, with a rating of 2.
Downtime in training is mainly due to the fact that IBM's sales went down last year.
No additional sales for mainframes means lesser requests for trainings, except for
IBM updates only. On the other hand, lack of instructors or substitute instructors is a
problem when opportunities for training do go up, or when one of the instructors gets
sick or becomes unavailable. As of the present moment, both factors maintain the
status quo: limited trainings and limited instructors. However, this is not financially
good for the business, since operations are not maximized, and human resource
23
personnel sustainability is compromised. Both weaknesses should be addressed if

future expansion and efficiency for operations is desired.
Financially, poor asset turnover must be addressed by the company in order to justify
their investments in such assets which failed to pull in subsequent increases in sales.
Lastly, although it is above the industry average, the decrease in net income growth
needs to be analyzed by the company and seek more ways to reduce operating
costs and explore more sales opportunities. Both financial factors therefore receive a
rating of 2 for minor weakness. Overall, the company has a very strong internal
position, with a weighted score of 3.02 out of 4 in its ratings for strength and
weaknesses.
24
3. Competitive Profile Matrix
Critical Success Factors Asirius RCS

Weight Rating Score Weight Rating Score
Updated Curricula 0.25 4 1.00 0.25 4 1.00
Quality of Training 0.15 4 0.60 0.15 2 0.30
Market share 0.40 4 1.60 0.40 2 0.80
Brand Equity 0.15 4 0.60 0.15 2 0.30
Experience 0.05 4 0.20 0.05 1 0.05
Total 1.00 4.00 1.00 2.45
The CPM Matrix above clearly shows that Asirius has a clear edge as compared to
RCS, it direct competitor. It should be noted that while Asirius has lots of competitors
in the IT industry, it is only RCS which competes with it directly in its training
services. It is assumed that being both authorized IBM trainers, both companies must
comply with updating of their curricula, and as such both are given a rating of 4. In
terms of quality of training however, students of RCS have been known to complain
about the quality of training, which also reduces the said company’s brand equity.
This low rating is also due to the fact that RCS entered the market only late last year,
and as such still lacking in experience. Moreover, as of the present time, Asirius also
has the upper hand in market share, as they also serve the ASEAN market as well.
These factors are then given a lower rating of 1 to 2 for RCS, but it should be noted
that RCS is still a newcomer, which may explain its lower ratings. Overall, Asirius
remains very competitive as a company in the first level of competition.
25
B. Matching Stage
1. Strength, Weaknesses, Opportunities, and Threats Matrix
Strengths Weaknesses
1. Brand equity 1. Dependency on IBM
2. Quality instructors sales
3. Varied offerings 2. Training downtime
4. Good liquidity and 3. Lack of instructors and
profitability substitutes
5. Linkages and network 4. Sharp decline in net
income growth
5. Poor asset turnover ratio
Opportunities SO Strategies WO Strategies
1. Growth in IT and 1. Concentric 1. Expand business
Communications Industry Diversification in the IP enhancement training
2. Untapped demand for IP PBX market by offering additional
PBX (S1,S2,S3,S5,O1,O2) courses and increase
3. Joint training with TESDA sales (W2,W4,W5,O5)
4. Virtualization technology
5. Strong need for business
enhancement training
Threats ST Strategies WT Strategies
1. FOREX volatility 1. Differentiate from RCS 1. Explore online training
2. IT labor shortage by offering IBM package programs (W3,T2,T3)
3. Cultural challenges in trainings with additional
training perks, product
4. Cebu City Government development
demand for growth (S1,S2,S5,T4,T5)
5. Entry of RCS, first direct
competitor
An examination of the company’s internal and external environment allowed

the proponents of this case to initially brainstorm strategies that would take advantage
of or solve factors in their external and internal environment. It can be noted that the
company’s strong internal and external positioning would allow it to explore diverse
options for growth. As such, they could expand in the IP PBX market through
concentric diversification, or choose to explore product development by offering IBM
training packages. They could also offer additional courses in business enhancement
training to ride on the increase of demand for this, or explore online training programs
that addresses both labor shortage and lack of instructors. Overall, the proponents of
this paper believe that pursuing the concentric diversification would not only take
advantage of opportunities and strengths, but also addresses threats and weakness of
the company, essentially making this a good alternative for the company’s growth and
expansion.
2. Strategic Position and Action Evaluation Matrix
26
The Space Matrix allows the company to examine all at once its financial
strength and competitive advantage, as well as consider its industry’s strength and
environment stability, in order to preview correct types of alternatives they can take.
In finances, the company’s very good profitability and above industry average
Modified Du Pont figure shows that the company has an overall good performance
financially. This entails a high rating of 6. Good liquidity is given a score of 5, which
is above average as well. The only thing that the company must consider is the
decreasing growth rates that it has, especially in terms of net income. While it’s a
positive growth rate, such decline must still be examined by the company,
especially if they have targeted higher growth rates in their planning for that period.
The IT industry’s strength is also again examined in this matrix, with

emphasis on its rapid growth and emerging opportunities in communications
technology, as evidenced by the IP PBX system demand. Emerging market
opportunities in Cebu is also a plus factor, since it is the base of the company’s
operations, highlighting the company’s option of investing in this City with the
highest regional growth. As such, these factors are given an above average rating
of 6 and 5.
Environment Stability must also be considered by the company. First, the high
barriers to entry of IBM authorized training shields the company from the entrance
of more competitors. Even RCS struggles with quality in this area, and may even
be a potential reason for them to exit the market. This entails a rating of -2,
interpreted to be an above average rating in the negative axis. This reasoning also
supports the lack of competition in Systems P training, giving an even higher rating
of -1. However, the factor that the company must be concerned about is the high
obsolescence of IT products and services, thus necessitating constant update of
curricula. This factor is given a below average rating of -4.
Last to be given consideration is the competitive advantage of the company,

all of which given a high rating of -1 or -2 in their axis. Quality training, excellent
instructors, and unrivaled brand equity of the company are its best assets.
Financial Strength Rating
27
Good liquidity 5.0

Very good profitability 6.0
Above industry average Modified Du Pont 6.0
Decreasing growth rates 3.0
Total 20.0
Industry Strength
Rapid growth in IT industry 6.0
Emerging opportunities in communications technology 6.0
Emerging market opportunities Cebu 5.0
Total 17.0
Environment Stability
High barriers to entry for training -2
High obsolescence both in products and services -4
Low rivalry for Systems P training -1
Total -7
Competitive Advantage
Quality training -1
Excellent instructors -2
Strong brand equity -1
Total -4
Conclusion
ES average is -7/3=-2.33 IS average is 17/3=5.67
CA average is -4/3 =-1.33 FS average is 20/4= 5.00
X axis -1.33 +5.67 = 4.34
Y axis -2.33 +5.0 = 2.67
28
FS
9
8
7
6
5
Conservative 4 Aggressive
3
2
CA 1 IS
-9 -8 -7 -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 7 8 9
-2
-3
Defensive -4 Competitive
-5
-6
-7
-8
-9
ES
After mapping the X and Y axis scores of the company in consideration of the four
factors, the strategic action type of the company can then be examined. The figure
above shows that the company is advised to adopt aggressive strategies; including
backward, forward, and horizontal integration, market penetration, market development,
product development, and diversification (related or unrelated).
29
3. Boston Consulting Group Matrix
2.
4.
Asirius RCS
The BCG matrix shows the company’s position compared to its direct
competitor, RCS, in terms of growth and market share. It should be noted that Ng
Khai Corporation, Alliance Software Inc., and Rhine Marketing Corporation are not
included in this analysis since they are not direct competitors of the company, since
the company is focusing primarily on IBM trainings as of the present time. The matrix
above shows that Asirius has high growth rate, which pertains mostly to the high
growth rate of the industry that it belongs. Furthermore, its market share is high as
well in terms of its training services, as they are the only provider of IBM mainframe
trainings up to 2009 in the Philippines, and still maintains the highest quality of
instruction. On the other hand, RCS also shares Asirius high growth, but still lags in
terms of market share because it just recently started having trainings for IBM
customers, and serve only a few companies to date. Still, the proponents of this
paper recommend that additional information should be gathered to verify this claim.
Suffice to say, Asirius is classified as a Star, and should pursue integration
strategies, intensive strategies, and diversification options to build and grow their
company.
30
4. Internal-External Matrix
IFE Total Weighted Score

Strong Average Weak
4.0 3.0 2.0 1.0
I II III
EFE Total Weighted Score
Strong
3.0
IV V VI
Average
2.0
VII VIII IX
Weak
1.0
The IFE and EFE scores are mapped out in this matrix. Both scores, the IFE
(3.02) and EFE (3.30) show an excellent management of the firm’s internal and
external environment. As such, these above average scores render the company to
be at Cell I. This belongs to the division for grow and build strategies. Such strategies
include Backward, Forward, or Horizontal Integration, along with Market Penetration,
Market Development, and Product Development, together with both types of
diversification. Furthermore, it can be said that the company should actively utilize its
assets to explore sales opportunities that they could tap. Aggressive exploration of
such expansion strategies should be done for greater growth.
31
5. Grand Strategy Matrix
STRONG COMPETITIVE POSITION

WEAK COMPETITIVE POSITION
RAPID MARKET GROWTH
II I
1. Market Development 1. Market Development
2. Market Penetration 2. Market Penetration
3. Product Development 3. Product Development
4. Horizontal Integration 4. Forward Integration
5. Divestiture 5. Backward Integration
6. Liquidation 6. Horizontal Integration
7. Concentric Diversification
III IV
1. Retrenchment 1. Concentric Diversification
2. Concentric Diversification 2. Horizontal Diversification
3. Horizontal Diversification 3. Conglomerate Diversification
4. Conglomerate Diversification 4. Joint Ventures
5. Divestiture
6. Liquidation
SLOW MARKET GROWTH
Asirius’ high growth marks also the strength of the industry that it is in.
Together with a strong competitive position based on quality of training and even above
average finances, this would place the company at Quadrant 1, which means that the
company can act aggressively to spur growth prospects. Recommended strategies
include forward, backward, and horizontal integration, along with market penetration and
market development. Product development and concentric diversification may also be
explored as what was earlier suggested as well in the TOWS matrix which were
recommended as SO and ST strategies respectively.
32
C. Summary of Possible Alternatives
Strategies Matrices
TOWS Space BCG IE Grand Total
Forward Integration No Yes Yes Yes Yes 4
Backward Integration No Yes Yes Yes Yes 4
Horizontal Integration No Yes Yes Yes Yes 4
Market Penetration No Yes Yes Yes Yes 4
Market Development No Yes Yes Yes Yes 4
Product Development Yes Yes Yes Yes Yes 5
Related Diversification Yes Yes Yes Yes Yes 5
Unrelated Diversification No Yes No No No 1
Retrenchment No No No No No 0
Divesture No No No No No 0
Liquidation No No No No No 0
The table above shows the consensus of all interpretations in the different
matrices: that the company should adopt aggressive, or grow and build strategies. As
such, integration, intensive, and diversification strategies are frequently mentioned.
Taking into account Space, BCG, IE, and Grand Strategy Matrix, one could see that all
are tied with a score of 4. Thus, the TOWS scores was put into play in order to see
other strategies. As what can be remembered, the TOWS matrix suggested product
development through offering IBM training packages, and concentric or related
diversification through entering the market for IP PBX in Cebu. As such, these two
alternatives were given another point, and will be the two most feasible and attractive
strategies that the company can explore, with regard as well to the matrices which also
suggested those alternatives.
33
D. Decision Stage
1. Quantitative Strategic Planning Matrix
Product
Concentric
Development
Diversification
(Package
(IP PBX)
Training)
KEY FACTORS WEIGHT AS TAS AS TAS
Opportunities
Growth in IT and Communications Industry 0.15 4 0.60 3 0.45
Untapped demand for IP PBX 0.25 4 1.00 1 .0.25
Joint training with TESDA 0.05 1 0.05 3 0.15
Virtualization technology 0.10 - - - -
Strong need for business enhancement
training 0.07 2 0.14 4 0.28
Threats
FOREX volatility 0.05 - - - -
IT labor shortage 0.15 4 0.60 2 0.30
Cultural challenges in training 0.03 1 0.03 3 0.09
Cebu City government demand for growth 0.05 4 0.20 3 0.15
Entry of RCS, first direct competitor 0.10 4 0.40 2 0.20
1.00
Strengths
Brand equity 0.13 3 0.36 4 0.52
Quality instructors 0.25 3 0.75 4 1.00
Varied offerings 0.05 4 0.15 2 0.20
Good liquidity and profitability 0.08 - - - -
Linkages and network 0.10 4 0.40 3 0.30
Weaknesses
Dependency on IBM sales 0.12 4 0.48 1 0.12
Training downtime 0.10 4 0.40 3 0.30
Lack of instructors and substitutes 0.07 4 0.28 1 0.07
Sharp decline in net income growth 0.05 - - - -
Poor Asset Turnover Ratio 0.05 - - - -
Total 1.00 5.84 4.38
The matching stage of strategy formulation guided the proponents of this

paper to recommend two most viable alternatives: Concentric diversification through
entering the IP PBX market, and product development through offering IBM training
packages. Specifically, the first alternative requires the company to add another
product line in its product offerings which is the IP PBX. This would mean studying the
growing demand for this product, and to market this new product well to generate high
sales. On the other hand, the second alternative espouses that the company follow the
footsteps of premium management trainings which are given through packages. In this
setup, the company will be organizing everything including the venue and the other
perks along with the training. For example, they can market an IBM training that would
be held at Parklane International Hotel, constituting a three-day training which would
also offer these IT personnel sent for training a time to unwind and relax.
34
The QSPM matrix then evaluated the two alternatives based on their
attractiveness when aligned with the company’s internal and external factors. There is
the golden opportunity of tapping into the demand for IP PBX which was evidenced by
the survey conducted by the proponents of this paper, as well as the researches which
showed that the growing number of schools, hotels, hospitals and other businesses
which can be tapped for this product offering. On the other hand, the second
alternative can only take advantage of joint training with TESDA, which is possible to
integrate in their packages, and may also have business enhancement training. Both
alternatives score highly when tapping into the growth potential of the entire IT
industry.
In terms of the threats, the second alternative received very low scores such
as 2, because labor shortage in the IT department might delimit their training plans.
Conversely, the IP PBX system does not require a great deal of skill in installation and
can manage this threat. Moreover, cultural differences in training may be solved with
the second alternative since it will be based in Cebu; while growth in sales favor the
first alternative since it is an entirely new market, whereas the second is only tapping
an existing market in which RCS is still a direct competitor.
On the internal environment, one could see that the two alternatives are more
or less evenly matched in terms of strengths with a little tilt in favor for the second one,
because of the high quality of instruction that Asirius has. Varied offerings which saved
the company from decreases in sales of other offerings is trait of the first alternative,
since it expands the company’s market and thus reduces the risk of the business.
Linkages and network can be taken advantage of by the company, especially with this
new product offering. Lastly, the weaknesses of the company greatly reduce the
attractiveness of the product development alternative, since dependency on IBM sales
might reduce the demand for the said package trainings, if IBM sales also go down.
Lack of instructors and lack of substitutes for existing instructors also reduces the
attractiveness of the second alternative, making the first one more feasible. Suffice to
say, concentric diversification gained a significantly higher score of 5.84, making this
the best immediate strategy for Asirius to implement.
V. Strategy Implementation
35
Asirius’ recommended strategy for concentric diversification by selling IP PBX

systems is the primary strategy of the company. However, the two alternatives
evaluated earlier are not mutually exclusive, and as such training and other services
will continue, albeit IBM package training should be done only in the ling run or after
three years. However, the following strategies will discuss on the implementation of
the IP PBX implementation, also with suggestions on training, as well as to address
the objectives and other concerns of the firm.
A. Suggested Vision, Mission, and Objectives
After the analyses of Asirius’ existing mission and vision statements, the
proponents of this group recommend the following mission and vision statements as
well as objectives for the company:
Vision
Asirius aspires to be a leading IT and Communications company: From
Cebu, to the World.
Mission
Asirius provides leading edge products and exceptional services in IT to
its customers both in the Philippines and abroad. The company is
dedicated to quality and customer satisfaction, offering services such as
training and troubleshooting, and offering world class products such as
IP PBX systems. The company also endeavors to upgrade the skills of
its people in order to exceed customer expectations, and to cement its
role in empowering the Filipino through Information Technology.
Objectives:
1. To increase net income by at least 50% for the year 2010.

2. To increase market share in the Philippines by 10% for the year 2010.
3. To drive down cost by at least 20% for the next fiscal year.
4. To increase number of employees for sustainability.
36
B. Marketing
Segmenting, Targeting, and Positioning
Segmenting
Asirius Philippines Inc., as a provider of IT solutions, may target a broad

range of organizations in need of such IT solutions to improve their overall efficiency.
Geographically, the organization can seek to stake a claim first in the province of
Cebu and the Philippines as a whole, in which previous services have already been
rendered by the company. The nature of the company’s business or the operations of
this organization also provide further segmentation. It can segment the market further
according to course trainings, service assistance, and retail products, depending on
the needs of the customers. Organizations in need of IT solutions can be further
subdivided according to company size, nature of business, and based on their
varying needs for specific IT solutions. According to company size, the market can
be segmented according to SOHO (Small Offices and Home Offices, 10 lines), Small
and Medium Businesses (20 lines), Large Businesses (50 lines), and finally, the
Enterprise (200 lines), with the number of line pertaining to the need for IP PBX
systems. These segments can be characterized by the number of employees
belonging to these types of operations, which is an indication of what IT solutions
they need. For the example, SOHO is operating with fewer employees compared to
the Enterprise, which employs several employees, which implies that there is a
greater need and incentive for the latter to invest in integrated communications
solutions rather than the former. Moreover, Enterprises may also have several
branches in different locations within a specific area, as compared to SOHO, and
Small and Medium Business, demanding a greater need for a system that would
coordinate these different branches for their operations. Further, the nature of their
business, or the operations of these organizations also provide further segmentation,
allowing the company to evaluate which kind of businesses are better suited as
customers for IT solutions, such as call centers, schools and hospitals, ISP providers,
etc. Lastly, it should be noted that intermediaries or resellers for these IT solutions
may also be considered as a viable market because they are still considered as
buyers of the company’s services. Operations are not limited to the location within
Cebu since the company has the ability or has tried to expand across the country. In
addition, the company can segment the market further according to how the
customer, whether an organization or individual, will use the service/ product. For
instance, some companies train their employees to improve overall productivity of the
business. On the other hand, some individuals enroll in these trainings for career
advancement or personal inclination to the field.
Targeting
In line with its mission to maintain its competitive advantage in the industry by
continuously providing reliable software/hardware products as well as IT training and
services, Asirius is recommended to develop or modify its products and services, to
establish itself as the primary provider of IT solutions. In order to get a foothold on
the market, the company is recommended to target the following segments:
37
1. Business Market for Training Services
As the pioneering company for IBM solutions in the Philippines, it would be

best for the company to first target this market for two important reasons. First, it
would be best if the company establish itself as a partner to these intermediaries,
rather than just a direct supplier of products and services, so as to fully take
advantage of the logistical and network competencies that these long-existing
companies have. Some companies do not only send one employee to be trained but
most of them send two or more. In this regard, sales and profit of the company as
well as productivity will be fully maximized for each company partner.
2. Business Market for IP PBX Solutions
The organization should focus more on targeting schools, hotels, hospitals

and other business in Cebu, because they are in need of integrated communications
solutions among their different departments and campuses, and the large number but
narrow scope of their operations fits well with process automation. In terms of
company size, SME’s and Large businesses can be initially approached.
Positioning
One of the distinguishing aspects and competitive advantage of Asirius is its

authorization from IBM to market the former’s training services, making the
company’s promotion quite easier. Moreover, there is only one direct competitor in
the country, making it easier to establish a name. However, the company should
clearly distinguish its role in the competition so as customers will know the
company’s primary products. As a pioneering IBM authorized training partner,
Asirius can position itself as an organization providing the highest quality IT training
programs having the most up-to-date and state-of-the-art technology. Being an
organization with majority ownership of Filipinos, the company can use this as a
competitive edge towards giving its local customers the touch of Filipino hospitality.
Moreover, the high regard of its foreign customers towards IT education of Filipinos
will help the company boost its sales.
Also, in terms of the IP PBX market, Asirius can position itself as the local
alternative of IP PBX in Cebu and the Philippines as a whole, while providing product
quality that is at par with their national and international competitors, and at the same
time proving reliable support services, warranty, and maintenance.
38
Marketing/Sales Objectives
A. Short Term Objectives (Next six months of operation)
1. Asirius is to have at least 5 IP PBX sales over the next six months starting 2010,
preferably for at least Medium size organizations, with also a few for SOHO.
B. Long term Objective (by the end of 1 year)
1. Cater to at least one Enterprise size client (such as contact center) for IP PBX
solutions.
Product
The company’s IP PBX offering will be called Project Linked!, emphasizing on

the connectivity business solution that it provides (See Appendix W: Project Linked!
Proposal)
When purchasing pre-made PBX systems, installation is always a concern,

which is not always available for non-enterprise level purchases. Asirius will offer
installation, 6 months support as well as a training and familiarization seminar for the
system’s users as well as administrative functions for IT personnel. This will give the
clients convenience and ease since everything from installation to training of the
proper use of products will be provided by the company.
In cases a customer buys IP PBX products, the company can further

maximize the opportunity by recommending to the client to avail of the company’s
IBM training courses. In this way, there will a broader range of customer networks
which can help the company establish a stronger hold in the industry.
Price
Price is based solely on the mark-up decided by the company, taking into
account a desired level of income that would cover labor, miscellaneous expenses,
and a significant net income. Itemized expenditures of the project cost will not be
revealed to clients, only the package price will be shown, as well as a comparative
pricing with that of the competitors, showing a great percentage of cost savings.
Promotions
Personal selling is recommended for both direct clients as well as the

business market. As such, it would be appropriate for that the company develop an
IP PBX department that will spearhead the negotiation, especially with the marketing
and sourcing managers of the mentioned interested intermediaries. To do this
however, the presentation must not only be done in paper, but should be coupled
39
with actual demonstration using the IP PBX demo box to illustrate the features of the
integrated communications systems. In addition, advertising through the internet is
also recommended, as well as the enhancement of a company website to serve as
an easy portal for potential clients to explore the company’s products and services.
Further, the website will also contain several drop-down configuration questions,
which will query the customized needs of the customer, and automatically compute
the estimated costs as well.
Place/ Distribution
Coupled with the direct and personal selling promotions strategy of the
company, the company should make sure that the IP PBX product solutions they are
currently focusing on should be made available to target consumers in the most
efficient way. For the primary target market, it will be up to the intermediary to
maintain most of the logistical functions, although direct support services must be
done by Asirius employees themselves, knowing the full feature of the IP PBX
system. For other clients however, the value chain will be direct from the company to
the client itself.
C. Management and Human Resource
The company has currently five staff, with Ms. Vera Cruz as the business
manager. Moreover, only two instructors handle the training courses which
sometimes include international travels. The tendency in this set up is that their
potential customers will not be accommodated immediately and they have to wait for
the available instructors. At worse cases, they might go to other training agencies.
Thus, there is need to hire more instructors. However, the company should see to it
that these people are trained well by IBM and maintain the standard that the
company requires.
The proponents of this case also suggest that the company should have
proper delegation of responsibilities so that efficiency in handling business matters
will be maintained. The group also noticed that Ms. Cruz is doing multi-tasking. For
instance, as a business manager, she also handles training and has to travel on
different locations. To be able to get more employees and instructors, the company
should put more budget in training employees. They can also probably join in job
fairs especially in trusted universities and not just rely on the desire of current
customers to be part of their team. They should also construct effective job
specifications so that applicants will be screened well and the department can easily
determine who are committed and will stay longer in the company. For the existing
employees, the company should reward the incremental progress they make so that
they will all the more be motivated to stay in the company and do better in their job.
Showing a genuine interest in health and wellbeing is one way of highlighting that the
employer cares about the employee, giving employees more reason to care about
the organization. This also ensures that absenteeism is reduced to a minimum.
Ensuring that staff are healthy can also help increase productivity – not only
increasing profit, but also staff motivation. Schemes that offer private medical
40
treatment ensure employees who have not previously been able to access private
treatment may have the chance to experience this in the company. The company
should always strive to make the work meaningful, challenging, and offers training
and development opportunities, management that assists and supports, explicit
awareness of life beyond the office, an array of core benefits and the power of
choice.
With regard to the communication network of the company, there are not
much personal meetings that they have to be reachable on their mobiles or emails.
This strategy is quite risky especially when there technical problems in their mobiles
occur. However, with the nature of their work, their mobility gives them investment
savings. To be able to address the company’s synergy, the employees should meet
and keep each other posted of the current happenings of the company through
personal meetings and weekly reports at least once a week, but daily for urgent
matters. There should also be persons in charge in the office even though other
members travel to teach.
The organizational structure of the company needs to be revised as it is better

to have a small number of well-organized levels to avoid bureaucracy, and speed up
communication and delegation in the organization. In the recommended structure,
there are only three levels, with four distinct departments. Two new departments are
added namely the training operations and products and services departments. Under
training operations will be two IBM trainer and one business enhancement trainer.
Moreover, products and services department will be composed of technical support
specialist and an IP PBX expert. (Please refer to Appendix C: Proposed
Organizational Structure)
D. Finance
The company wants not only to focus its IT training services in Asia but also
to penetrate the other markets. In order to achieve this goal, they must remain ready
for any change and continue to develop its strength. They should utilize their
resources well, use their money wisely and control its expenses and costs. For
additional projects that Asirius plans, especially in teaching new training courses and
additional programs together with the existing one, they can use their opportunity to
borrow money from trusted financial institution; however, they should not rely heavily
on debt to support their projects, but they can still do so because of their current low
level of debt. In terms of controlling the costs the management can designate
financial specialist to monitor the company’s finances; however, management should
take part in the review process. Still it is important to have financial tools such as
NPV to better forecast the feasibility and profitability of the company’s projects,
especially the additional revenues that Asirius receives from its customers. The cash
flow statements will also help the company identify if money is utilized wisely.
To be able to decrease the accounts receivable in the products, the company

can shorten the credit policy into 30 days at most and increase the interest rates
41
once payment is overdue. An interest rate of 2-3% can perhaps encourage the
creditors to make certain that they pay on time or before the due date. For the
services such as troubleshooting, the company will retain the cash to cash basis
since the service is done immediately. Meanwhile, to address the increase in AR for
the IBM trainings, there should be a written memorandum of agreement from both
parties, stipulating that the customer will pay Asirius 30% as deposit and pay the
remaining balance after the 30-day period. Such there be any instance of delay,
customer will pay 7 percent interest per month. This will ensure that the customers
pay on time and in return, would help the company improve its cash spending.
With regard to the issue on excess cash, the company can use the money
wisely by investing in mutual funds. This will help the company generate more funds
and additional income since invested money will not be idle. In addition, the company
can use the excess cash by putting more investment in training its employees or
hiring new ones as they only have a few.
The company must also make sure that their accompanying financial
statements are updated, and that these should contain reports on why sales went
down or increased, so as to avoid being asked by City Hall why their sales behaved
that way. Constant updating of complete financial information will also greatly help
the company in its planning of financial objectives.
E. Operations
Since there is limited number of employees at present to manage the overall

operation of the company, there should be proper delegation of tasks. The company
should maintain a number of people to be on the main office to service the buyers of
hardware and software products and answer the customer queries. There is also a
need to have employees to man the logistical functions. The proponents also
suggest that the company rent in the short run a bigger space so that there will be
shared facilities for trainings and store, however in different rooms. In this way,
operating expense will be minimized and more people will be able to manage the
office.
F. Management Information Systems and Research and Development
Research and Development
In terms of product development, the company is dependent on its suppliers,

particularly IBM. Because of this it has to search for other possible market given the
products available. The company then should search more on the cultural differences
for their long run ASEAN market to be able to cope with their values and preferences.
Moreover, it should also seek to develop more related courses since the company
already established a name in the industry. Moreover, continuous evaluation by the
customers will help the company identify the areas it should improve.
42
For the IP PBX, the company needs to constantly update itself with new
features on their existing products so as to keep customer satisfied that they are
having the most updated IP PBX systems.
Management Information System
MIS of the company is vital in pooling new customers and retaining current
ones. It can be use to update them of the upcoming trainings, workshops, and
seminars. Because of this, there is a need for investment in the databases for the
company. The group also suggests that the company develop a computerized
inventory system for easy tracking of sold and unsold products, for the IP PBX. This
way, it would be easy for the company to detect saleable and unsalable products.
Aside from the above mentioned recommendations, the group also

recommends that the company enhance its current website and put a little more
thrust on sophistication and detailed product/service offerings, like detailed schedules
for training. For instance, the company should post the schedules and payment
processes of each course and some introduction about what that course is about. It
should also include automated application forms for the convenience of the
customer. In addition, the company should put more details on the background of the
company for investment purposes as well as to fully convince the viewer of how
reliable the company is, and a little about career opportunities in the company to
attract IT professionals to team up with them.
G. Long Term Strategies
In the long-run, it will become necessary for the company to explore other
growth opportunities among of which is to expand their market in the IBM training
services, like outside of ASEAN. They may also consider being an IBM authorized
service partner for repair, but only after the successful implementation of the IP PBX
operations, while at the same time looking for other markets outside of Cebu for both
products and services . However, it should be kept in mind that expansion to other
geographical areas are only deemed feasible depending on the kind of customized
needs the client has, whether or not it is in line with the ability of the business to
produce and develop, and whether or not the company has the logistical capacity to
deliver.
Other issues that the company needs to deal with are the ever persistent
threat of competitors, and as such, there is a need for the company to expand its
competitive advantage. New suppliers for cheaper IP phones as well as other
hardware should continually be sourced, in order to maintain its competitive pricing
for the entire IP PBX system. Other differentiating factors such as service value to
clients should be enhanced, including features, interface, technical support, training,
and warranties. In training, the company must make sure to maintain their quality
scores and pursue aggressive promotion strategies in order to guard their market
share against RCS. The suggested IBM package trainings may now be implemented
43
in the long run, or at least three year after the initial implementation of IP PBX
operations.
44
VI.Strategy Evaluation: Monitoring and Control
It is necessary for the company to come up with a contingency plan in order

to avoid possible pitfalls, like failure to have the desired number of IP PBX sales per
month. As such, it may then be necessary for the company to hire a marketing
representative who will be tasked to personally and aggressively sell the IP PBX
system, and at the same time do the product demonstration for clients. Having on-
call IP PBX and software developers may also be necessary, in anticipating more
sales regardless than what was projected.
(Please refer to Appendix T: Balanced Score Card)
45
VII. Financial Projections
For the purpose of projections, the financial statements of Asirius Philippines Inc. for
2009 was computed, before the projections for the year 2010 was done. Two
projections were done, with the first showing normal growth projections, and the
second showing the financial projections with company sales for the IP BX System
for the year 2010.
Assumptions for regular projections:
 Sales growth is based on the average growth rate for 2006-2007 and 2007-
2008
 Cost of product sales is increased based on average growth rate, without
large (5% above) deviation from cost of sales to sales proportion
 Constant inventory practice of the company is maintained, at Php 62, 023.
 Service income growth is based on the average growth rate for 2006-2007
and 2007-2008
 Cost of service is increased based on average growth rate, without large (5%
above) deviation from cost of service to service income proportion
 Salaries, 13th month pay, rent expense, light expense, water expense,
SSS/Philhealth/Pag-ibig expense, are increased according to average
inflation of the Philippines from 2005-2009, pegged at 5.65% (2005-2006 at
6.20%, 2006-2007 at 2.80%, 2007-2008 at 9.30%, and 2008-2009 at 4.30%,
computed average inflation rate at 5.65%)
 Communications, taxes and license, training expense, and representation
expense are grown according to average growth rate of these expenses for
2006-2007 and 2007-2008
 Depreciation cost is constant at Php 70,000 per year
 Accounts Receivable is projected in proportion to sales, computed by the
average proportion of AR-Trade to Sales for 2006-2008 (21.41%)
 Furniture and fixtures as well as office equipment is expected to grow at 10%
per year with prior consultation. Average growth rate is not followed since it
would require an increase of almost 200% per year.
 Accrued expense payable is increased by the average growth rate for 2006-
2007 and 2007-2008 (12.00%)
 Capital stock is held constant at Php 880,000.
Assumptions for IP PBX Operations, starting at 2010:
 Additional sales of Php 1,856,685 are forecasted. This is based on one

contract sale sold for Enterprise (200 extensions) at Php 991,337, two
contracts for Medium to Large Offices (50 extensions) at Php 301,337, and
two contracts for Small Offices (20 extensions) at Php 131,337
 Additional cost of products sold is 45% of the total contract price value
 Additional salaries for two personnel (IP PBX technical personnel) is assumed
to be Php 15,000 per month
46
A. Income Statement
The company is projected to earn Php 1,515,078.85 in 2010 without sales coming
from IP PBX (Please refer to Appendix J: Asirius Philippines, Inc. Projected Income
Statement without IP PBX Operations (2010)). On the other hand, the company is
expected to earn Php 2,176,255.60 with IP PBX, thus giving an additional income of
Php 661,176.75 or a 43.64% increase (Please refer to Appendix M: Asirius
Philippines Inc. Projected Income Statement With IP PBX Operations (2010)).
B. Balance Sheet
Apart from the projections for the increase in furniture and office equipment, there will
be an additional fixed asset purchase for the company. This will be for an IP PBX
Demo Equipment, valued at Php 46,500. This includes the hardware component plus
two IP phones. Total assets, and total liabilities and equity are computed to be Php
6,493,971.23. (Please refer to Appendix O: Asirius Philippines Inc. Projected Balance
Sheet with IP PBX Operations (2010))
C. Cash Flow Statement
Cash balance end is computed to be Php P3, 993,566.33. Purchase of the IP PBX
system will be sourced from the cash in bank at the end of 2009.
D. Financial Ratios
Liquidity ratios for the company will continue to increase, while leverage ratios
will continue to decrease, due to the small liabilities incurred by the company, with a
corresponding small growth.
On the other hand, activity ratios of the company will improve greatly due to
the additional sales generated by the company for the IP PBX. It should also be
noted that if only normal growth is expected for the company’s existing products and
services, Fixed Asset Turnover and Total Asset Turnover will be decreasing.
In terms of profitability, Gross Sales Margin, Gross Profit Margin, Opening

Profit Margin, and Net Profit Margin are all expected to increase, except for Gross
Service Income Margin which is trending down due to the large increase in Cost of
Service, attributed to the large average growth rate of Cost of Service assumed
earlier in projects. Without the IP PBX sales, Gross Profit Margin will go down for the
company, while Net Profit Margin will increase at a decreasing rate. ROE, ROA, and
Basic Earning power will also increase, pegged at least at 32% level for all ratios. All
three ratios will also be trending down if normal growth projections will only be
considered by the company.
47
Service Income and Cost of Service will remain the same in terms of growth,
but Product Sales and Cost of Product Sales will be increasing, with 72.40% increase
in the former and 50.55% for the latter. Net income is expected to increase by
79.05% in 2010. Growth for total sales is also expected to be reduced in future
projections without additional sales. Lastly, the Modified Du Pont figure of the
company is expected to increase to 0.34, as compared to 0.28 in 2009, and 0.29 in
2010. Note that 2009 projections without IP PBX sales will result to a reduced Du
Pont figure. It can therefore be safely said that the company’s profitability, efficiency,
and leverage will be improved upon implementation of the IP PBX Operations.
E. Revised Projections with IP PBX as a Standalone Business
In order to examine the viability of IP PBX as a standalone business, the

projected income statement for 2010 was revised in order to see potential earnings
on this operation alone. This assumes that sales will only be for the purchased IP
PBX Packages. Furthermore, the company will be providing salaries to the two
personnel, with 13th month bonuses of 1/12 the previously forecasted amount.
Projected expenses for communications, depreciation, and taxes and licenses will be
retained. SSS/Philhealth/Pag-ibig costs will only be 2/7 of the cost (assume two
employees only, apart from the regular 7 employees), while travel expenses and
training expense is assumed to be at Php 30,000 and Php 10,000 respectively. Also,
it is assumed that the company need not maintain a physical office, since dealings
with customers will be at their offices since direct selling will be the primary
promotional strategy. As such, rent and utilities expense is assumed to be zero.
With the revised projections for revenues and expenses, the standalone IP
PBX business will still earn a decent Php 323,388.47 in net income. This is in spite of
the fact that the huge communication expense for the entire business of Php
125,778.70 will not be reduced at all. Lastly, given the entire initial investment of Php
46,500 for the IP PBX demo system, then the Return on Investment can be
computed. ROI is at 695.46%. (Please refer to Appendix Q: Revised Asirius
Philippines, Inc. Projected Income Statement for Standalone IP PBX Operations
(2010))
48
F. Revenue Analysis with Additional Employees
Scenario Number of Operations Details Net income

Employees Generated per
Employee
Scenario 1 5 No IP PBX Sales Php 303,015.77
Scenario 2 7 With IP PBX Sales, 2 Php 310,893.66
Technical Specialists
hired
Scenario 3 9 With IP PBX Sales, 2 Php 188,472.84
Technical Specialists
and 2 additional
trainers hired
Scenario 4 9 With IP PBX Sales Php 314,566.31
and additional 75%
service income from
training, 2 Technical
Specialists and 2
additional trainers
hired
The table above shows the net income to employee ratio in 4 different
scenarios. Using MS Excel, the proponents were able to compute for profit generated
per employee. The first situation, Scenario 1, is the normal projections, in which the
company has 5 employees with no IP PBX sales. This will have a ratio of Php
303,015.77 per employee. Scenario 2 was the earlier projected income statement
with IP PBX sales wherein 2 technical specialists are hired, which brings in Php
310,893.66 per employee, higher than the first projections.
On another point, the strategy of adding trainers to the company is validated

in the third and fourth scenario. This was earlier suggested to combat problems in
succession, such as when trainers resign or become temporarily available like in
times of sickness. With 2 additional trainers on top of the 7 employees with IP PBX
sales, the company is expected to generate Php 188,472.84 per employee on the
average (Assume Php 20,000 per month salary, with other expenses constant). This
is actually quite low, but did not yet take into account additional service income
derived from additional trainings because of the increase in the number of
employees. It should be noted that with just two trainers, the company is able to have
numerous number of trainings accounting for more than 70% of their sales.
Therefore, it is logical to assume increases in service income as well. This is shown
in Scenario 4, where it is assumed that the additional 2 trainers will increase the
number of trainings, with the assumption that service income will increase only by
75%, along with a similar increase to the cost of service. This is actually a very
conservative assumption, since it is logical to assume that additional two trainers
bringing up the total to four would merit a 100% increase ideally. Still, a 70% increase
49
would bring up the profit per employee ratio to Php 314,566.31, higher than any of
the four scenarios. (Please refer to Appendix R: Revised Asirius Philippines, Inc.
Projected Income Statement with IP PBX Operations (2010) Scenario 3 and
Appendix S: Revised Asirius Philippines, Inc. Projected Income Statement with IP
PBX Operations (2010) Scenario 4)
50
VIII. References
 About IBM. Retrieved March 17, 2010. < http://en.wikipedia.org/wiki/ibm>

 About Information Technology Industry. Retrieved March 18, 2010.
<http://www.economywatch.com/business-and-economy/information-technology-
industry.html>
 About Information Technology. Retrieved March 17, 2010.
<http://en.wikipedia.org/wiki/Information_technology>
 Cebu City Gov., 2007. Cebu’s Growth Potential. Retrieved 05 May 2008 <
www.cebucity.gov.ph>
 Cravens, David, et al; Strategic Marketing; 8th Edition; McGraw-Hill; 2006
 David, Fred; Strategic Management; 12th Edition; Pearson Education South Asia
Pte Ltd.; 2009
 Pinaroc, Joel; Philippines Faces IT Skills Shortage. Retrieved March 15, 2010.
<http://www.businessweek.com/globalbiz/content/apr2008/gb2008044_807790.ht
m>
 Starfish Research; Statement of Demand for IP PBX Solutions; 2008
 Thai Press Reports. Retrieved March 15, 2010.
<http://www.allbusiness.com/economy-economic-indicators/economic-conditions-
growth/14046847-1.html>
 The Philippines Information Technology Report. Retrieved March 15, 2010.
<http://www.wtexecutive.com/cms/content.jsp?
id=com.tms.cms.section.Section_bookstore_philippinesit>
 White, Thomas; Philippines: Uniquely Rising from Its Past. Retrieved March 15,
2010. <http://www.thomaswhite.com/explore-the-world/philippines.aspx>
51
IX.Appendices
A. Appendix A: Definition of Terms
IP PBX- is a digital adaptation of Private Automated Branch Exchange (PABX)

systems which are analog systems that interface with POTS (Plain Old Telephony
System) lines to manage incoming, outgoing, and intra-organization calls to reduce
the number of POTS lines needed by the company as well as interdepartmental calls
that ordinarily would have gone through POTS. It utilizes the internet with VOIP
supporting the old PBX system.
Information Technology- is "the study, design, development, implementation,

support or management of computer-based information systems, particularly
software applications and computer hardware.
Hardware- parts of a computer that are tangible like circuits, displays, power
supplies, cables, keyboards, printers and mice.
Software- refers to parts of the computer which do not have a material form, such as
programs, data, protocols, etc.
Training- portfolio of technical training and education services designed for

individuals, companies, and public organizations to acquire, maintain, and optimize
their IT skills.
IBM(International Business Machines)- manufactures and sells computer

hardware and software (with a focus on the latter), and offers infrastructure services,
hosting services, and consulting services in areas ranging from mainframe
computers to nanotechnology. It has been well known through most of its recent
history as the world's largest computer company and systems integrator.
Systems-courses offered by IBM
Linux-one of the most prominent examples of free and open source software
collaboration; typically all the underlying source code can be used, freely modified,
and redistributed, both commercially and non-commercially, by anyone under
licenses.
UNIX-commonly used to describe any operating system that conforms to UNIX

standards, meaning the core operating system operates similarly to the original UNIX
operating system.
AIX (Advanced Interactive Executive) - name given to a series of proprietary

operating systems sold by IBM for several of its computer system platforms, based
on UNIX System V
52
B. Appendix B: Existing Organizational Structure
Vera Cruz
Vera Cruz
(Business
(Business
Manager)
Manager)
Rail Letigio Beth Sayson Rolly Aragon

Rail Letigio Beth Sayson Rolly Aragon Josephus Pesirla
Josephus Pesirla
(Marketing (Finance and (Technical
(Marketing (Finance and (Technical (Education)
Executive) Admin Officer) Support) (Education)
Executive) Admin Officer) Support)
53
C. Appendix C: Proposed Organizational Structure
CHIEF
CHIEF
EXECUTIVE
EXECUTIVE
OFFICER
OFFICER
Vera Cruz
Vera Cruz
TRAINING
TRAINING PRODUCTS
FINANCE OPERATIONS PRODUCTS
FINANCE OPERATIONS AND SERVICE
MARKETING AND ADMIN HEAD AND SERVICE
MARKETING AND ADMIN HEAD HEAD
EXECUTIVE OFFICER Josephus Pesirla HEAD
EXECUTIVE OFFICER Josephus Pesirla Rolly Aragon
Rail Letigio Beth Sayson Rolly Aragon
Rail Letigio Beth Sayson
BUSINESS
BUSINESS TECHNICAL
ENHANCE- TECHNICAL IP PBX
ENHANCE- SUPPORT IP PBX
IBM MENT SUPPORT SPECIALIST
IBM (2) MENT SPECIALIST SPECIALIST
TRAINERS TRAINER SPECIALIST Adrian Bono
TRAINERS (2) TRAINER (1) Adrian Bono
Marti Ballesteros (1)
Marti Ballesteros
54
D. Appendix D: Consolidated Balance Sheet (2006-2008)

CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, FISCAL YEARS 2006-2008
2008 2007 2006

ASSETS
Current Assets
Cash in Bank P1,766,501.65 P939,528.43 P451,510.59
A/R-Trade 657,906.95 170,171.97 40,000.00
Merchandise Inventory 63,023.00 63,023.00 62,023.00
Total Current Assets 2,487,431.60 1,172,723.40 553,533.59
Non-current Assets
Furniture and Fixture 307,077.26 454,350.00 89,148.18
Office Equipment 445,289.30 654,346.00 732,675.45
Total Non-current Assets 752,366.56 1,108,696.00 821,823.63
Less: Accumulated Depreciation 140,000.00 70,000.00 0.00
Non-current Assets, Net 612,366.56 1,038,696.00 821,823.63
Total Assets 3,099,798.16 2,211,419.40 1,375,357.22
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accrued Expense Payable 9,692.86 8,654.34 0.00
Total Liabilities 9,692.86 8,654.34 0.00
Stockholders Equity
Capital Stock 880,000.00 880,000.00 880,000.00
Retained Earnings 2,210,105.30 1,322,765.06 495,357.22
Total Stockholders Equity 3,090,105.30 2,202,765.06 1,375,357.22
Total Liabilities and Stockholders Equity P3,099,798.16 P2,211,419.40 P1,375,357.22
55
E. Appendix E: Consolidated Statement of Income and Changes in Retained Earnings

(2006-2008)

CONSOLIDATED STATEMENT OF INCOME AND CHANGES IN RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, FISCAL YEARS 2006-2008
2008 2007 2006

Sales P3,572,323.94 P2,845,420.18 P2,012,850.15
Less: Cost of Sales
Purchases 2,342,662.48 1,772,129.12 1,611,026.47
Inventory, Beg. 62,023.00 62,023.00 62,023.00
Total Goods Available for Sales 2,404,685.48 1,834,152.12 1,673,049.47
Less: Inventory, END 62,023.00 62,023.00 62,023.00
Total Cost of Sales 2,342,662.48 1,772,129.12 1,611,026.47
Gross Income-Sales 1,229,661.46 1,073,291.06 401,823.68
Add: Training Service Income 10,468,789.89 8,685,345.00 7,610,498.00
Less: Cost of Service 8,379,800.31 6,406,393.80 5,460,358.56
Gross Income-Service 2,088,989.58 2,278,951.20 2,150,139.44
Total Gross Income 3,318,651.04 3,352,242.26 2,551,963.12
Less: Operating expenses
Salaries and wages 1,200,000.00 1,200,000.00 1,053,294.27
13 Month 100,000.00 100,000.00 84,000.00
Rent Expense 240,000.00 240,000.00 199,020.00
Light Expense 54,000.00 54,000.00 28,126.63
Water Expense 4,200.00 4,200.00 865.00
Communications 135,805.05 164,794.42 149,722.20
Taxes and Licenses 28,560.00 25,500.00 19,059.48
SSS/Philhealth/Pag-ibig 90,540.00 90,540.00 79,788.00
Travel Expense 340,000.00 306,800.00 265,573.91
Training expense 140,645.00 244,000.00 188,028.69
Representation Expense 27,560.75 25,000.00 4,566.00
Depreciation Expense 70,000.00 70,000.00 24,915.73
Total Operating Expense 2,431,310.80 2,524,834.42 2,096,959.91
Net Income From Operation 887,340.24 827,407.84 455,003.21
Retained Earnings, Beg. 1,322,765.06 495,357.22 40,354.01
Retained Earnings, End P2,210,105.30 P1,322,765.06 P495,357.22
56
F. Appendix F: Asirius Philippines, Inc. Financial Ratios (2006-2008)
Industry Average
Industry Average with
2008 2007 2006 without Alliance
Alliance Software
Liquidity Ratios Formula Software
Current Ratio CA/CL 256.63 135.51 - 86.74 65.58
Quick Ratio (CA-Inventory)/CL 250.12 128.22 - 84.38 63.80
Leverage Ratios Formula 2008 2007 2006 Industry Standard Industry Standard
Debt-to-Total Assets Ratio TD/TA 0.31% 0.39% 0.00% 50.75% 0.98
Debt-to-Equity Ratio TD/SHE 0.31% 0.39% 0.00% 223.66% 1.25
Asset Management Ratios Formula 2008 2007 2006 Industry Standard Industry Standard
Inventory Turnover Sales/FG Inventory 56.68 45.15 32.45 27.01 27.01
Fixed Assets Turnover Sales/FA 5.83 2.74 2.45 8.01 11.60
Total Assets Turnover Sales/TA 1.15 1.29 1.46 1.68 1.36
Profitability Ratios Formula 2008 2007 2006 Industry Standard Industry Standard
Gross Sales Margin (Product Sales-COGS)/Product Sales 34.42% 37.72% 19.96% 27.88% 27.88%
Gross Service Margin (Service Income-Cost of Service)/Service Income 19.95% 26.24% 28.25% 13.33% 19.10%
Gross Profit Margin (Total Sales-Cost of Sales)/Total Sales 23.64% 29.07% 26.52% 24.27% 25.86%
Opening Profit Margin EBIT/Sales 24.04% 28.18% 21.66% 15.06% -25.65%
Net Profit Margin NI/Sales 24.84% 29.08% 22.60% 8.94% -26.25%
ROA NI/TA 28.63% 37.42% 33.08% 10.56% -4.83%
ROE NI/Total Stockholders' Equity 28.72% 37.56% 33.08% 14.31% 19.92%
Basic Earning Power EBIT/TA 27.70% 36.26% 31.70% 10.80% -4.65%
Growth Ratios Formula 2008 2007 2006 Industry Standard Industry Standard
Product Sales annual percentage growth 25.55% 41.36% - 10.57% 10.57%
Service Income annual percentage growth 20.53% 14.12% - 12.02% 18.77%
Total Sales annual percentage growth 21.77% 19.82% - 9.32% 15.06%
Net Income annual percentage growth 7.24% 81.85% - -2.07% -9.38%
57
Cost of Goods Sold annual percentage growth 32.19% 10.00% - 10.64% 10.64%
Cost of Service annual percentage growth 30.80% 17.33% - 19.70% 8.41%
Cost of Sales annual percentage growth 31.11% 15.66% - 10.32% 4.20%
Other Ratios Formula 2008 2007 2006 Industry Standard Industry Standard
Equity Multiplier TA/CE 1.0031 1.0039 1.0000 3.24 2.25
Modified Du Pont Equation PMR x Asset Turnover x Equity Multiplier 0.29 0.38 0.33 0.14 0.20
58
G. Appendix G: IT Industry Competitors’ Comparative Balance Sheet (2008)
IT Industry Competitors
Comparative Balance Sheet
As of December 31, 2008
Ng Khai
Rhine Marketing Alliance Software,
Development
Corporation Inc.
Corporation
Assets
Current Assets
Cash 2,965,425.00 7,264,230.00 3,852,258.00
Trade Receivables 46,254,647.00 493,531,386.00
Other Receivables 14,360,043.00
Inventories 23,112,498.00 57,895,056.00
Prepaid Expenses and Other Current Assets 10,342,160.00 1,432,659.00 840,005.00
Total Current Assets 82,674,730.00 574,483,374.00 4,692,263.00
Non-Current Assets
Property, Plant and Equipment-net 32,537,103.00 73,659,692.00 223,716.00
Investments 9,145,700.00
Prepaid Benefit Costs 9,568,876.00
Deferred Tax Asset 78,014.00
Rental and Other Deposits 3,069,513.00
Advance to Stockholders 2,685,852.00
Advance to Affiliates 544,361.00
Investment in an Associate 4,509,360.00
Refundable Deposits 270,707.00
Other Assets 6,000.00
Total Non-Current Assets 32,543,103.00 95,521,795.00 8,233,996.00
Total Assets 115,217,833.00 670,005,169.00 12,926,259.00
Liabilities and Equity
Current Liabilities
Trade and Other Payables 63,250,933.00 54,559,759.00 2,260,425.00
Notes Payable 188,363,125.00
Accrued Expenses and other Payables 6,034,451.00
Income Tax Payable 1,424,622.00
Total Current Liabilities 63,250,933.00 250,381,957.00 2,260,425.00
Non-Current Liabilities
Accounts Payable-Others 28,095,000.00
Loans Payable 2,000,000.00
Cash Bond and Deposits 6,575,145.00
Due to Unrelated Parties 50,000,368.00
Unrealized Gross Profit on Installment Sales 168,211,116.00
Advances From Affiliates 28,602,449.00
Total Non-Current Liabilities 30,095,000.00 224,786,629.00 28,602,449.00
59
Total Liabilities 93,345,933.00 475,168,586.00 30,862,874.00

Stockholders' Equity 21,871,900.00
Capital stock 125,000,000.00 500,000.00
Reevaluation Surplus 25,742,568.00
Retained Earnings 44,095,015.00
Cumulative translation adjustment 889,129.00
Deficit (19,325,744.00)
Total Stockholders' Equity 21,871,900.00 194,837,583.00 (17,936,615.00)
Total Liabilities and Stockholders' Equity 115,217,833.00 670,006,169.00 12,926,259.00
60
H. Appendix H: IT Industry Comparative Income Statement (2008)
IT Industry Competitors
Comparative Income Statement
For the year ended, December 31, 2008
Ng Khai
Alliance Software,
Development Rhine Marketing
Inc.
Corporation Corporation
Sales P349,153,647.00 P535,361,805.00

Cost of Sales 318,538,073.00 318,855,041.00
Gross Profit on Sales 30,615,574.00 216,506,764.00
Add: Service Income/Revenue 6,820,063.00 P5,000,000.00
Cost of Service 6,362,731.00 3,467,789.00
Gross Profit on Service 457,332.00 1,532,211.00
Unrealized Gross Profit (126,733,814.00)
Realized Gross Profit on Current Year's Sales 89,772,950.00
Realized Gross Profit on Prior Year's Sales 77,730,827.00
Total Gross Profit on Sales and Services 31,072,906.00 167,503,777.00 1,532,211.00
Add: Other Income
Other Revenues and Gains 24,613,591.00
Other Expenses and Losses (11,571,119.00)
Interest Income 67,816.00
Total Other Income 13,042,472.00 67,816.00
Less: Operating Expenses 27,516,001.00
Selling 54,071,825.00
Collection 30,823,404.00
General and Administrative 70,484,399.00 8,697,379.00
Other Operating Expenses 290,750.00
Total Operating Expenses 27,516,001.00 155,379,628.00 8,988,129.00
Income From Operations 3,556,905.00 25,166,621.00 (7,388,102.00)
Equity in Net Income 13,435.00 796,565.00
Finance Cost (14,333,586.00)
Income Before Income Tax 3,556,905.00 10,846,470.00 (6,591,537.00)
Income Tax Expense 1,244,917.00 3,767,150.00
Net Income P2,311,988.00 P7,079,320.00 P(6,591,537.00)
61
I. Appendix I: Industry Financial Ratios (2008)
Industry
Asirius
Ng Khai Rhine Industry Average Average with
Philippines,
Development Marketing Alliance without Alliance Alliance
Inc.
Liquidity Ratios Formula Corporation Corporation Software, Inc. Software Software
Current Ratio CA/CL 1.31 2.29 2.08 256.63 86.74 65.58
Quick Ratio (CA-Inventory)/CL 0.94 2.06 2.08 250.12 84.38 63.80
Leverage Ratios Formula
Debt-to-Total Assets Ratio TD/TA 81.02% 70.92% 238.76% 0.31% 50.75% 97.75%
Debt-to-Equity Ratio TD/SHE 426.78% 243.88% -172.07% 0.31% 223.66% 124.73%
Asset Management Ratios Formula
Inventory Turnover Sales/FG Inventory 15.11 9.25 - 56.68 27.01 27.01
Fixed Assets Turnover Sales/FA 10.94 7.27 22.35 5.83 8.01 11.60
Total Assets Turnover Sales/TA 3.09 0.80 0.39 1.15 1.68 1.36
Profitability Ratios Formula
Gross Sales Margin (Product Sales-COGS)/Product Sales 8.77% 40.44% - 34.42% 27.88% 27.88%
Gross Service Margin (Service Income-Cost of Service)/Service
Income 6.71% - 30.64% 19.95% 13.33% 19.10%
Gross Profit Margin (Total Sales-Cost of Sales)/Total Sales 8.73% 40.44% 30.64% 23.64% 24.27% 25.86%
Opening Profit Margin EBIT/Sales 9.50% 11.62% -147.76% 24.04% 15.06% -25.65%
Net Profit Margin NI/Sales 0.65% 1.32% -131.83% 24.84% 8.94% -26.25%
ROA NI/TA 2.01% 1.06% -50.99% 28.63% 10.56% -4.83%
ROE NI/Total Stockholders' Equity 10.57% 3.63% 36.75% 28.72% 14.31% 19.92%
Basic Earning Power EBIT/TA 3.09% 1.62% -50.99% 27.70% 10.80% -4.65%
Growth Ratios Formula
Product Sales annual percentage growth 1.81% 4.35% - 25.55% 10.57% 10.57%
Service Income annual percentage growth 3.51% - 32.28% 20.53% 12.02% 18.77%
Total Sales annual percentage growth 1.84% 4.35% 32.28% 21.77% 9.32% 15.06%
62
Net Income annual percentage growth -6.52% -6.92% -31.32% 7.24% -2.07% -9.38%
Cost of Goods Sold annual percentage growth 0.44% -0.71% - 32.19% 10.64% 10.64%
Cost of Service annual percentage growth 8.59% - -14.16% 30.80% 19.70% 8.41%
Cost of Sales annual percentage growth 0.58% -0.71% -14.16% 31.11% 10.32% 4.20%
Other Ratios Formula
Equity Multiplier TA/CE 5.2678 3.4388 -0.7207 1.0031 3.24 224.73%
Modified Du Pont Equation PMR x Asset Turnover x Equity Multiplier 0.11 0.04 0.37 0.29 0.14 19.92%
63
J. Appendix J: Asirius Philippines, Inc. Projected Income Statement Without IP PBX

Operations (2010)

PROJECTED STATEMENT OF INCOME AND CHANGES IN RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2010
2010 2009 2008

Sales P6,362,354.99 P4,767,430.44 P3,572,323.94
Less: Cost of Sales
Purchases 3,435,416.10 2,836,903.31 2,342,662.48
Inventory, Beg. 62,023.00 62,023.00 62,023.00
Gross Income-Sales 2,926,938.88 1,930,527.13 1,229,661.46
13 Month 111,619.23 105,650.00 100,000.00
Rent Expense 267,886.14 253,560.00 240,000.00
Light Expense 60,274.38 57,051.00 54,000.00
Water Expense 4,688.01 4,437.30 4,200.00
Communications 125,778.70 130,695.76 135,805.05
SSS/ Philhealth/ Pag-ibig 101,060.05 95,655.51 90,540.00
Travel Expense 379,505.37 359,210.00 340,000.00
Net Income From Operation 1,515,078.85 1,215,451.61 887,340.24
Retained Earnings, Beg. 3,425,556.91 2,210,105.30 1,322,765.06
Retained Earnings, End P4,940,635.76 P3,425,556.91 P2,210,105.30
64
K. Appendix K: Asirius Philippines Inc. Statement of Cash Flows (2009)

PROJECTED CASH FLOW STATEMENT
Cash Flow from Operating Activities

Net Income P1,215,451.61
Depreciation 70,000.00
Increase in A/R-Trade 362,799.91
Increase in Accrued Expense Payable 1,163.14
Net Cash Provided by Operating Activities 923,814.85
Cash Flow from Investing Activities
Acquisition of Property and Equipment 75,236.66
Net Cash Provided by Investing Activities 75,236.66
Cash from Financing Activities
Increase in Capital Stock 0.00
Net Cash Provided by Financing Activities 0.00
Net Increase in Cash 848,578.19
Cash, At Beginning of Period 1,766,501.65
Cash, At End of Period P2,615,079.84
65
L. Appendix L: Asirius Philippines Inc. Balance Sheet (2009)

PROJECTED BALANCE SHEET
AS OF DECEMBER 31, 2009
ASSETS
Current Assets
Cash in Bank P2,615,079.84
A/R-Trade 1,020,706.86
Merchandise Inventory 63,023.00
Total Current Assets 3,698,809.70
Non-current Assets
Furniture and Fixture 337,784.99
Office Equipment 489,818.23
Total Non-current Assets 827,603.22
Less: Accumulated Depreciation 210,000.00
Non-current Assets, Net 617,603.22
Total Assets P4,316,412.91
Liabilities
Accrued Expense Payable P10,856.00
Total Liabilities 10,856.00
Stockholders Equity
Capital Stock 880,000.00
Total Stockholders Equity 4,305,556.91
Total Liabilities and Stockholders Equity P4,316,412.91
66
M. Appendix M: Asirius Philippines Inc. Projected Income Statement With IP PBX

Operations (2010)

PROJECTED STATEMENT OF INCOME AND CHANGES IN RETAINED EARNINGS
2010 2009 2008

Sales P8,219,039.99 P4,767,430.44 P3,572,323.94
Less: Cost of Sales
Purchases 4,270,924.35 2,836,903.31 2,342,662.48
Inventory, Beg. 62,023.00 62,023.00 62,023.00
Gross Income-Sales 3,948,115.63 1,930,527.13 1,229,661.46
13 Month 111,619.23 105,650.00 100,000.00
Rent Expense 267,886.14 253,560.00 240,000.00
Light Expense 60,274.38 57,051.00 54,000.00
Water Expense 4,688.01 4,437.30 4,200.00
Communications 125,778.70 130,695.76 135,805.05
SSS/Philhealth/Pag-ibig 101,060.05 95,655.51 90,540.00
Travel Expense 379,505.37 359,210.00 340,000.00
Net Income From Operation 2,176,255.60 1,215,451.61 887,340.24
Retained Earnings, Beg. 3,425,556.91 2,210,105.30 1,322,765.06
Retained Earnings, End P5,601,812.51 P3,425,556.91 P2,210,105.30
67
N. Appendix N: Asirius Philippines Inc. Projected Statement of Cash Flows With IP PBX
Operations (2010)

PROJECTED CASH FLOW STATEMENT
Cash Flow from Operating Activities

Net Income P2,176,255.60
Depreciation 70,000.00
Increase in A/R-Trade 739,811.51
Increase in Accrued Expense Payable 1,302.72
Net Cash Provided by Operating Activities 1,507,746.81
Cash Flow from Investing Activities
Acquisition of Property and Equipment 129,260.32
Net Cash Provided by Investing Activities 129,260.32
Cash from Financing Activities
Increase in Capital Stock 0.00
Net Cash Provided by Financing Activities 0.00
Net Increase in Cash 1,378,486.49
Cash, At Beginning of Period 2,615,079.84
Cash, At End of Period P3,993,566.33
68
O. Appendix O: Asirius Philippines Inc. Projected Balance Sheet With IP PBX

Operations (2010)

PROJECTED BALANCE SHEET
AS OF DECEMBER 31, 2010
ASSETS
Current Assets
Cash in Bank P3,993,566.33
A/R-Trade 1,760,518.37
Merchandise Inventory 63,023.00
Total Current Assets 5,817,107.70
Non-current Assets
Furniture and Fixture 371,563.48
Office Equipment 538,800.05
IP PBX Demonstration Unit 46500
Total Non-current Assets 956,863.54
Less: Accumulated Depreciation 280,000.00
Non-current Assets, Net 676,863.54
Total Assets 6,493,971.23
Liabilities
Accrued Expense Payable 12,158.72
Total Liabilities 12,158.72
Stockholders Equity
Capital Stock 880,000.00
Total Stockholders Equity 6,481,812.51
Total Liabilities and Stockholders Equity P6,493,971.23
69
P. Appendix P: Asirius Philippines Inc. Projected Financial Ratios (2010)
Liquidity Ratios Formula 2010 2009 2008

Current Ratio CA/CL 478.43 340.72 256.63
Quick Ratio (CA-Inventory)/CL 473.25 334.91 250.12
Leverage Ratios Formula 2008
Debt-to-Total Assets Ratio TD/TA 0.19% 0.25% 0.31%
Debt-to-Equity Ratio TD/SHE 0.19% 0.25% 0.31%
Asset Management Ratios Formula 2008
Inventory Turnover Sales/FG Inventory 132.52 76.87 56.68
Fixed Assets Turnover Sales/FA 8.59 5.76 5.83
Total Assets Turnover Sales/TA 1.27 1.10 1.15
Profitability Ratios Formula 2008
Gross Sales Margin (Product Sales-COGS)/Product Sales 48.04% 40.49% 34.42%
Gross Service Margin (Service Income-Cost of Service)/Service Income 10.50% 18.15% 19.95%
Gross Profit Margin (Total Sales-Cost of Sales)/Total Sales 24.13% 22.39% 23.64%
Opening Profit Margin EBIT/Sales 25.95% 24.76% 24.04%
Net Profit Margin NI/Sales 26.48% 25.49% 24.84%
ROA NI/TA 33.51% 28.16% 28.63%
ROE NI/Total Stockholders' Equity 33.57% 28.23% 28.72%
Basic Earning Power EBIT/TA 32.85% 27.35% 27.70%
Growth Ratios Formula 2008
Product Sales annual percentage growth 72.40% 33.45% 25.55%
Service Income annual percentage growth 17.33% 17.33% 20.53%
Total Sales annual percentage growth 32.73% 21.43% 21.77%
Net Income annual percentage growth 79.05% 36.98% 7.24%
Cost of Goods Sold annual percentage growth 50.55% 21.10% 32.19%
70
Cost of Service annual percentage growth 24.06% 24.06% 30.80%

Cost of Sales annual percentage growth 31.11% 23.42% 31.11%
Other Ratios Formula 2008
Equity Multiplier TA/CE 1.0019 1.0025 1.0031
Modified Du Pont Equation PMR x Asset Turnover x Equity Multiplier 0.34 0.28 0.29
71
Q. Appendix Q: Revised Asirius Philippines, Inc. Projected Income Statement for

Standalone IP PBX Operations (2010)
Asirius Philippines Inc.

Projected Statement of Income and Changes in Retained Earnings
For the year ended December 31, 2010
Sales P1,856,685.00
Less: Cost of Sales
Purchases 835,508.25
Inventory, Beg. 62,023.00
Total Goods Available for Sales 897,531.25
Less: Inventory, END 62,023.00
Total Cost of Sales 835,508.25
Gross Income-Sales 1,021,176.75
Add: Training Service Income 0.00
Less: Cost of Service 0.00
Gross Income-Service 0.00
Total Gross Income 1,021,176.75
Salaries and wages 360,000.00
13 Month 30,000.00
Rent Expense 0.00
Light Expense 0.00
Water Expense 0.00
Communications 125,778.70
Taxes and Licenses 43,135.28
SSS/Philhealth/Pag-ibig 28,874.30
Travel Expense 30,000.00
Training expense 10,000.00
Representation Expense 0.00
Depreciation Expense 70,000.00
Total Operating Expense 697,788.28
Net Income From Operation 323,388.47
Retained Earnings, Beg. 3,425,556.91
Retained Earnings, End P3,748,945.38
ROI= Net Income =P323,388.47 =695.46%

Initial Investment P46,500.00
72
R. Appendix R: Revised Asirius Philippines, Inc. Projected Income Statement with IP

PBX Operations (2010) Scenario 3

Sales P8,219,039.99
Less: Cost of Sales
Purchases 4,270,924.35
Total Goods Available for Sales 4,332,947.35
Total Cost of Sales 4,270,924.35
Add: Training Service Income 25,219,832.68
Less: Cost of Service 22,571,869.98
Gross Income-Service 2,647,962.70
Salaries and wages 2,179,430.70
13 Month 111,619.23
Rent Expense 267,886.14
Light Expense 60,274.38
Water Expense 4,688.01
Representation Expense 298,110.15
Total Operating Expense 3,764,981.58
Net Income From Operation 2,831,096.76
73
S. Appendix S: Revised Asirius Philippines, Inc. Projected Income Statement with IP

PBX Operations (2010) Scenario 4

Sales P8,219,039.99
Less: Cost of Sales
Purchases 4,270,924.35
Total Goods Available for Sales 4,332,947.35
Total Cost of Sales 4,270,924.35
Add: Training Service Income 14,411,332.96
Less: Cost of Service 12,898,211.42
Gross Income-Service 1,513,121.54
Salaries and wages 2,179,430.70
13 Month 111,619.23
Rent Expense 267,886.14
Light Expense 60,274.38
Water Expense 4,688.01
Representation Expense 298,110.15
Total Operating Expense 3,764,981.58
Net Income From Operation 1,696,255.60
74
T. Appendix T: Balanced Score Card
Measures
Areas Strategies Objectives Actions/Initiatives
Targets Lag Lead
Increase partnerships and
Financial Increase sales broaden network clients Hire employees for direct selling & Increase in annual Tap into profitable market
improve MIS system revenue segments and develop
Sustained financial Continuous development of new product/service
growth Increase market share innovative and customizable initiatives
products/services
Expand to other Increase market share Offer IP PBX products to business
Customer market segments and school segments and improve Annual sales growth Increase in membership
product offerings and website and increase in cash processing requests
account accessibility
Develop
sophisticated IT Provide high quality Product demo and public trainings
solutions at a low products/services
cost
Create a distinction from
Internal Differentiate IT other companies providing Investing more in IT and innovation Increase in customer Review staffing to ensure
Process solutions offerings the same product loyalty adequacy in
Be the target market's first accommodating customers
choice when it comes to IT Providing installations, support
solutions providers services and maintenance
Learning Motivate, recognize Overall synergy within the Develop performance based Employee
and and retain staff organization compensation and career satisfaction and Decrease in turnover rate
Growth advancement opportunities involvement
75
U. Appendix U: Interview Highlights with Ms. Vera Cruz
Q: What’s the nature of the business of Asirius?
A: We have three sources of income: training, services, and products. Training more
or less accounts for 70% of our income, 20% for services, and 10% for products.
Asirius is an IBM partner for training. IBM has four systems: System P, X, I and Z for
mainframes. System P is a type of processor that runs UNIX, Asirius handles the
training for this software. In the Philippines from 2000-2008, API was the only partner
for IBM training. Then RCS came in 2009 to handle System I, so there are two IBM
partners now. We want to also handle System I training as well to level the
competition, because RCS is beginning to handle System P. Asirius’ market is not
just Philippines but we also hold trainings in Thailand, Vietnam, Singapore; whenever
the IBM training partners for those countries are unavailable, so they have to source
out from other ASEAN countries like Asirius Philippines Inc. We also try to price
below the competitor so those countries will have more incentive to get us. In terms
of services, we also do repairs on the side, including troubleshooting, also network
set-up. In terms of products, we also sell computer products such as printers and
cartridges, laptops, etc. But only upon request of those companies so we rarely
maintain inventory.
Q: How did you start?
A: It was a Singapore company before in 2000, but most of the partners are from
Cebu so it was transferred to Cebu. Most of the trainings are done in Quezon City, so
we just travel to those companies in need of training. We have public and private
classes; private training is exclusive to one company only, while public classes are
open to any company in which schedules of trainings are posted in the internet. I
handle the training for system administrator, programming, etc. I handle the
advanced courses, while another partner handles the basic ones.
Q: We’ve noticed in the website that you handle personnel training, is this part of the
business?
A: Yes, we also handle training on crisis management and personnel training,

motivational training, team building, conducted by one of our partners. It’s taught by
Marti Ballesteros. Essentially for managers outside Manila, since our partner also
holds training in Manila since she is based in Manila. So Asirius’ network was tapped
for this, as of late last year. However, it is not our main thrust.
Q: How about the products? Is it still continuing?
A: Products are not actually our focus. As of the moment, it is not the focus of our
marketing and sales team. For now, we give more attention to training. We also sell
POS (Point of Sales) products like those used by cashiers. We also supplied Alliance
Software Inc., giving both the software and the hardware. We pursue the products as
well because it goes hand in hand with our service; companies also ask printers,
cartridges, etc. Selling of products is also handled by our Marketing Executive, Rey
Letigio, apart from promoting our trainings.
Q: What’s your role in the business?
76
A: I’m the overall business manager, and at the same time part owner of the
company, around 10-12%. I started working as an employee of the company when it
was still a Singapore-based company. It was started by Choo Boon Siong, a
Singaporean. But in 2005, the company experienced financial difficulties, in getting
additional capital. They were hit by a crisis, so they had difficulty going public, which
is the usual path for Singaporean companies, so they had a problem with
investments. So, the company was planned to be closed, starting with the branch in
Indonesia. But it’s such a waste, so I saved the company and made it a Philippine
company. I conduct the advanced trainings; another partner, Josephus Pesirla,
handles the basics. Our Technical Support also handles the training for
troubleshooting if needed.
We actually appreciate that they allowed us to continue using the logo, etc, when the
company closed. Choo Boon Siong on the other hand started another company when
he closed the other branches. A current partner aside from me is my sister Aileen
Cruz. Another is an Australian, Kheang Tan, but he is Cambodian by descent. Juvy
Gallur is also one of our partners. Ken Sarmago as well. They contributed to our
capital. There’s also Josephus Pesirla, the other trainer, who handles Linux and
basic Unix IBM.
Q: What’s your competition?
A: We are not actually in direct competition with anyone. Except for RCS because
they are also an IBM partner, however their quality is poor. In fact, they were not able
to pass the 98% rating that IBM requires from its partners. We are also proud that we
have continuously conformed to the standards, the lowest that we got was 98.5%.
Other services and training in the IT industry can also be considered as our
competitors, like those based in Cebu. Perhaps for Ng Khai Development
Corporation, we only compete with them in terms of services such as in network set-
up and troubleshooting. But we don’t compete with them in training, because we offer
training for IBM customers, while Ng Khai focuses on Microsoft. Also, perhaps
TESDA is one of our competitors since they also offer courses such as Linux training,
windows training, etc. We can actually cooperate with TESDA because we are
TESDA accredited, they can send scholars to us for training, or we can conduct the
training ourselves if we go to their offices.
Q: What’s your competitive advantage?
A: Our knowledge and skills that we have is not very common, referring to the
training. The trainers and the quality of our training.
Q: What are your future plans?
A: We actually want to put a training center of our own here in Cebu. But it’s not
urgent because we usually just go to the companies’ location.
Q: How does the company earn?
A: We earn about 30% of the contract price for customers of IBM in need of training.
20% if just for updating, or trainings requested by other companies. Probably 40-60%
if we organize the place, etc., the additional earnings from commissions. In services,
it depends on the type of problem. For example, last year we had a lot of calls for
broken UPS, so it was just basic. For products, just a margin on top of our suppliers’
prices. We have more earnings from services, around 70% of our income.
Q: How do you do your promotions?
77
A: IBM requests our schedule every year. We plan it October and November. In
December, schedules are broadcasted. We also post the schedules in our website.
For basic troubleshooting, we give out flyers and brochures. Even if we do not sell
the software, since they can even download it for free, people still need training,
especially those using Linux. In our brochures, we give the training schedules not just
in the Philippines but it other countries as well.
Actually, there is less incentive for us to have promotions since IBM also helps in
contacting companies. On our end, we just focus on the said website, and referrals
through word of mouth.
Q: Who are your usual customers?
A: Usually banks, such as Unionbank, BPI, and RCBC, and government offices like
the COMELEC. San Miguel, Coca-Cola, and Lufthansa Teknik were some of our
previous customers.
Q: Why Linux/ UNIX and not Microsoft?
A: UNIX is and Linux has a better platform, and better security. Plus it’s free.
Microsoft may be more popular but it has more hackers as well.
Q: What do you value in the business?
A: We value our relationship with IBM. And we take care of it by maintaining quality.
Other non-performing IBM training companies have shut down in the previous years.
We take care of our brand equity as well.
Q: Who do you view as a threat?
A: If there are other providers of training, especially with IBM. Fortunately, we only
have one, RCS, and it is in Manila. We are like an outsourcing company, in providing
the training. Not so much with Ng Khai. They may offer training, but they focus more
on products and services.
Q: What do you view as a weakness of the company?
A: Perhaps the lack of trainers or lack of substitutes for trainers. Also, we have
replaced our admin personnel several times, but the partners are intact.
Q: What’s your current vision?
A: To promote the knowledge of the Filipino in IT
Q: How do you update yourself?
A: If there are other IBM updates for example, then we have more training, more
revenues. But in order to learn the updates, we need to sit in during IBM trainings to
learn new lessons we could teach.
Q: How big is the class?
A: Around three to five per class. In order for a class to be a private class, then we
require at least three people. Telecoms have bigger class size like Globe.
78
Q: Do you have any concerns with the economy?
A: During last year’s economic crisis, sales of IBM went down. So there are fewer
companies buying IBM mainframes, which translate to lower calls for training.
Frequency of classes went down last year (2009). But there are still trainings held for
those companies who want retraining, especially if their IT employees resign.
If the dollar goes up, then trainings outside the country is cheaper when purchased
by other countries, because the peso is lower in value. As much as possible, we try
to lower our rates compared to other IBM certified training providers. The lowest
bidder of the same quality wins.
Q: Do you have physical evidence for trainings?
A: We give out certificates of attendance to our student, but IBM takes care of the
certifications.
Q: What are some of your expenses?
A: Travel, meals and expenses of trainings, materials, etc. We also do not accept
trainings for a few people only. We choose trainings that will allow us not just to
recover our costs but also to get at least twice of what we spent.
Q: Socio-cultural trends?
A: Yes, the attitude of our customers. People from Manila tend to look down on
people from Cebu. Vietnamese people are very intelligent, and respect Filipino
trainers. Some other nationalities are hard to please, like Chinese and Singaporean.
Indians are intelligent, but they can be very arrogant. On the other hand Thais are
patient. It’s a challenge for us to overcome all cultural differences. We find easier
time teaching Cebuanos, Thai, and Vietnamese. But of course, we accept all training.
Q: Politico-legal concerns?
A: I’m actually bothered by the City Hall’s attitude that expects our sales to go higher
every year. But of course there are times that businesses go down. So we really
have to present proof.
Q: Any financial difficulties?
A: Last year, IBM delayed in giving their payments, probably because they had
difficulties. The latest payment was made 90 days after the training. So it was very
difficult for us to maintain a good cash position.
Q: Is there any technological trend that you are anticipating?
A: Virtualization. It’s like having an operating system inside another system, allowing
users to do multiple tasks without sharing of resources like memory. IBM already has
this kind of technology, as well as HP, but HP’s virtualization technology is not as
good. Virtualization actually forced us to revise our entire curriculum.
Q: What is your objective three years from now?
A: We want to be visible outside the ASEAN countries. However, we are limited by

our time, and the number of instructors. If possible, I’d also like to have personnel
79
and crisis management training marketed to SME’s. We are also exploring the
possibility of applying to be an IBM service partner for repair, to expand our services.
Q: You’ve mentioned that RCS is a direct competitor of the company. What more can
you tell about them?
A: Well, our direct competitor is just starting. On another point, they have struggled
with quality not just in terms of passing the standards, but also from the feedback I
hear from students. For example, in some advance classes that I teach, the students
were taught by RCS. They complained of learning little from the said training and the
lack of class decorum.
Q: Were you able to pay your debts or recover your investment?
A: Not yet, because payback of initial investment is long.
Q: Any other concerns on training?

A: It’s better to have trainings in Cebu, since we can save on costs. We really have
big transportation costs, as what can be seen in the financial statements.
Q: Have you heard of the latest demand for IP PBX systems?

A: Actually, yes. We receive calls requesting IP PBX systems. However, it is only
requested by small business requiring a few lines so we did not find it very profitable
at that time.
Q: How do you ensure quality aside from maintaining the passing percentage?
A: In terms of repairs and other services, we get the feedback from our customers
through the service report.
Q: How do you monitor your finances?
A: Through monthly sales reports and cost report
Q: Do you have any issues in terms of ethics in the company?
A: I am very lenient with my employees. They can take a leave if they want, as long
as there is no task at hand, but they should be present when urgent things come up. I
expect commitment, honesty, and continued communication. I encourage them to be
honest with me.
80
V. Appendix V: IP PBX Demand Research
A short telephone survey was conducted by the proponents of this paper to

determine classifications of businesses who are currently using PBX and/or IVR. The
first 300 companies (approximate from A-H) in the DPC Yellow Pages were called to
inquire whether they have the said systems. Only those companies with major box ads
(excluding line ads and bold line ads) are included in this survey, and as such is the
primary limitation of the survey. Though this survey is a broad way of measuring the IP
PBX demand, this survey still gives Asirius an idea of the business segments viable to
be targeted as possible clients for IP PBX, as well as have a bird’s eye view of the
percentage of the market who consider implementing IP PBX systems.
Below is the summarized finding of the research, with responses categorized by

businesses:
Business Yes NO Total

Adhesives & Glues 0 3 3
Advertising (All Sectors) 0 6 6
Air-conditioning (Contractors, Supplies and Part) 0 9 9
Airlines 2 2 4
Aluminum 0 2 2
Appliance 0 1 1
Appraisers 0 1 1
Architects 0 1 1
Attorney 0 2 2
Audiovisual Equipment & Supplies 0 3 3
Automobile Dealers 4 6 10
Automobile Parts and Supplies 1 6 7
Automobile Renting and Leasing 0 10 10
Bags-Paper and Specialty 0 2 2
Bakeries 0 1 1
Balloons 0 1 1
Banks 1 6 7
Barcode 0 3 3
Batteries-Automotive 0 4 4
Batteries-Dry Cell 0 1 1
Bearings 0 4 4
Beauty Salons, and Equipment and Supplies 0 2 2
Belting 0 1 1
Boat Builders 0 1 1
Boilers 0 1 1
Bolts ad Nuts 0 3 3
Box-Corrugated and Fiber, Packaging 1 2 3
Brakes- Brakes Lining 0 2 2
Call Center 1 0 1
Cans and Manufacturers 0 1 1
Car Rentals 0 1 1
81
Carbon Products 0 1 1
Carpets 0 4 4
Cellular Phones Shop 0 2 2
Cement 0 1 1
Cemeteries 0 3 3
Chairs and Table Rentals 0 1 1
Chemicals 2 6 8
Comfort Room-Portable 0 1 1
Computer Education-Training 0 1 1
Computer Equipment and Supplies 0 13 13
Construction Equipment 0 2 2
Container Shipping 0 2 2
Contractors and Builders 0 13 13
Cooling Towers 0 1 1
Copying Machines and Supplies 0 4 4
Courier Services 0 4 4
Credit Card and Other Credit Plans 0 2 2
Curtains 0 1 1
Dentists 0 1 1
Diesel Fuel Injection Equipment 0 1 1
Diesel Service 0 1 1
Doors 0 1 1
Druggists 0 1 1
Electric Transformers 0 1 1
Electrical Appliances 0 3 3
Electrical Supplies 0 9 9
Elevators-Freight and Passenger, Commercial and Industrial 0 3 3
Exhibit Services and Facilities 0 1 1
Exporters 0 1 1
Fashion Accessories 1 4 5
Feeds 0 2 2
Fiberglass Products 0 1 1
Fire Alarm System 0 2 2
Fire Extinguishers 0 2 2
Fire Fighting Equipment and Accessories 0 2 2
Fishing Nets and Supplies 0 1 1
Flavoring Extracts 0 1 1
Filters- Air and Gas 0 2 2
Flowers 0 5 5
Food Products 1 4 5
Freight Forwarding 1 2 3
Fruits and Vegetables 0 2 2
Funeral Directors 0 6 6
Furniture 0 9 9
Gas 0 2 2
Generators 0 3 3
Giveaways 0 1 1
82
Glass 0 13 13
Granite 0 1 1
Hardware 0 20 20
Hearing Aid 0 1 1
Heavy Equipment Rentals 0 5 5
Hose-Hydraulic 0 2 2
Hospitals 3 0 3
Hotels 20 0 20
Housewares 0 2 2
Hydraulic Equipment 0 1 1
Schools 2 4 6
31
Total 40 273 3
83
W. Appendix W: Project Linked! Proposal
ASIRIUS PHILIPPINES, INCORPORATED

4E JL Millennium Building, Don Jose Avila Street
Capitol Site 6000 Cebu City, Philippines
www.asirius-phil.com
Telephone numbers: +63-32 255-2166 (telefax)
Email Address for general information: [email protected]
84
I. Executive Summary of Project Linked!
A. Problem
Intra and inter-office communications are a critical aspect of any business. Company
stakeholders, employees, and clients constantly need to be able to collaborate and disseminate
information – and information is the lifeblood of any business establishment, from the smallest outfit to
the largest enterprise. Outdated methods of communication are inefficient and ineffective, and
companies that use these to coordinate the business can lose out on the savings and simplification that
more sophisticated solutions create. Despite their availability, better solutions are often overlooked
because of the lack of widespread awareness and the perception created by some solution providers
that solid, reliable, and flexible systems are too expensive for small and medium sized offices.
The end result of this is that some companies miss out on the increased productivity and
interconnectivity that is the hallmark of the information age.
B. Solution
Combining tried-and-tested PBX technology with exciting and innovative VOIP support, the
Asirius Philippines, Inc. Project Linked! IP PBX creates wonderful new possibilities and enhances
functionality at price points that were once within reach of only the wealthiest businesses. By merging
open source software with state-of-the-art hardware and cutting edge expertise, Asirius Philippines, Inc.
aims to offer the benefits of a modern digital PBX to clients at a cost much lower than that of the closest
competitors.
C. Costing
The final cost of the IP PBX system will vary greatly depending on the scope of the project and
factors like the number of extensions and features. A basic system for small and home offices with 10
extensions will cost Php80, 000.00, while a larger system for Medium to Large Businesses with 50
extensions costs Php330, 000.00. Every system will include Interactive Voice Response, Call Transfer,
Forwarding, Parking, Conferencing, and Fax and VoIP support.
D. Organization and Its Expertise
Asirius aspires to be a leading IT and Communications company: From Cebu, to the World.
Asirius provides leading edge products and exceptional services in IT to its customers both in the
Philippines and abroad. The company is dedicated to quality and customer satisfaction, offering
services such as training and troubleshooting, and offering world class products such as IP PBX
systems. The company also endeavors to upgrade the skills of its people in order to exceed customer
expectations, and to cement its role in empowering the Filipino through Information Technology, since
its existence in 2000.
.
85
II. Statement of Need
Effective communication among a business' constituents is an important key to its success, but
as the business grows it becomes harder to maintain communication while controlling costs. In addition,
when a business establishes multiple offices that are far apart, long distance calls become an inevitable
and costly part of growth. However, the increasing computerization of the workplace and rising quality
of Internet service create new solutions to old problems.
Voice over Internet Protocol (VoIP) is an important and exciting technology that allows voice
calls to travel over the Internet. The implications of this technology are staggering, considering that the
Internet has become a ubiquitous part of modern life; in fact, there are locations on Earth that do not
have telephone lines yet are connected via the Internet. For the mere cost of an Internet connection,
VoIP allows calls to be made to and from any location in the world that is connected to the Internet.
Getting the balance between too many phone lines and not enough can be difficult and can
cost more than a phone bill in terms of customer satisfaction, ease of communication, and lost
opportunities. Having too many lines to a particular department can be an unnecessary expense to the
business, while not having enough will cost the business in terms of customers who couldn’t weren’t
able to reach the right person.
Private Automated Branch Exchange (PABX) systems create an extension system for
businesses so that the entire business can be reached via the same number by providing each
department its own extension. By sharing phone lines throughout the business, questions get to where
they can best be answered, reducing the difficulty to the customer and lessening the number of phone
lines that the business pays for.
So far, proprietary systems and software have kept these solutions beyond the reach of most
small to medium companies, and have discouraged even bigger companies from implementing these
systems separately and reorganizing their businesses around these systems.
Incorporating both of these solutions into one system simplifies the process and creates more
functionality, by connecting your company’s VoIP capability and PABX system, long distance calls can
be made through the Internet to other offices in different geographical areas as local extension calls.
The Asirius Philippines, Inc. Project Linked! IP PBX offers the benefits and functionality of both VoIP
and PABX systems and is completely built on open source software to reduce costs.
86
III. Project Description
A. Objectives
 Share single or multiple phone lines with an entire business organization

 Reduce the business’ long distance charges
 Streamline communications and reduce expenses on communications by maximizing phone
lines and network resources and reducing the number of external phone lines
 Improve security and privacy within an organization by eliminating direct outside lines and
implementing security features like authentication and encryption
 Reduce costs due to multiple company-owned cellular subscriptions
B. Methods
An initial meeting between the manager of Asirius Philippines, Inc. and a representative from
the client will define the client's needs and requirements. The findings of this preliminary meeting will be
used by Asirius Philippines, Inc. technical staff to configure and tailor the Project Linked! IP PBX to the
client's exacting specifications of the IP PBX system, as well as discussion of the terms of contract, and
to gauge the ability of the IP PBX system to generate savings for the client.
As part of orientation with the technology, a demonstration will be made to the manager and IT
representative in charge of the project. The set-up and demonstration of the product will take about one
hour plus answering any questions.
Guided by the client’s input from the initial meeting, a system will be configured to meet the
client’s needs. From start to finish, the project will take about one month to complete, when the Project
Linked! IP PBX has been built and all customizations carried out it will be delivered, installed, and
deployed.
C. Administration
Orientation and simple administrative training is a part of the service package that Asirius
Philippines, Inc. offers. Administrative functions like changing extensions and simple troubleshooting
will be taught to the client’s IT representative.
D. Evaluation
The success of the project will be measured by the objectives set in the initial meeting
including:
Comparing the company’s long distance charges before and after installation
 The savings earned by reducing the number of telephone lines
 The stability of the system and the software configuration
87
IV. Features and Product Costing
Asirius Philippines, Inc. offers four IP PBX solution packages scaled to the needs of your
business: Small and Home Offices, Small Business, Medium and Large Business, and
Enterprise.
All our packages include features such as Interactive Voice Response (IVR), Call Transfer,
Forward, Conferencing, and Parking, Detailed Call Reporting, as well as being completely VoIP
ready.
Project Linked! IP PBX Package
Features:
ADSI On-Screen Menu System Dial by Name
Alarm Receiver Direct Inward System Access
Authentication Distinctive Ring
Automated Attendant Do Not Disturb
Blacklists Fax Transmit and Receive (3 rd
Blind Transfer Party OSS Package)
Call Detail Records Flexible Extension Logic
Call Forward on Busy Interactive Directory Listing
Call Forward on No Answer Interactive Voice Response (IVR)
Call Forward Variable Local and Remote Call Agents
Call Monitoring Music On Hold
Call Parking Music On Transfer:
Call Queuing Flexible Mp3-based System
Call Recording Random or Linear Play
Call Retrieval Volume Control
Call Routing (DID & ANI) Predictive Dialer
Call Snooping Overhead Paging
Call Transfer Protocol Conversion
Call Waiting Remote Call Pickup
Caller ID Remote Office Support
Caller ID Blocking Roaming Extensions
Caller ID on Call Waiting Route by Caller ID
Calling Cards Supervised Transfer
Conference Bridging Three-way Calling
Database Store / Retrieve Time and Date
Database Integration Trunking
88
VoIP Gateways
Voicemail
89
Pricing
Small and Home Office (10 Extensions) Php 81,337.00

Small Office (20 Extensions) Php 131,337.00
Medium to Large Offices (50 Extensions) Php 301,337.00
Enterprise (200 Extensions) Php 991,337.00
*prices inclusive of 12% VAT
V. Conclusion
It has long been every organization’s goal to become more efficient in the allocation of its resources
to minimize costs and reduce downtime to maximize work hours; thus improving its overall profitability.
In line with this, we at Asirius Philippines, Inc. believe that with your purchase of our Project Linked!
IP PBX system, your company will achieve a significant reduction in communication expenses, and make
communication easier across your organization.

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Asirius Philippines, Inc.

University of the Philippines Visayas Cebu College

In Partial Fulfillment of the Requirements in Management 190

ASIRIUS PHILIPPINES INC.

Chin, Heno Rey

March 22, 2010

The proponents of this Strategic Management Paper would like to extend

First would be to Ms. Vera Cruz, Business Manager of Asirius Philippines,

A. Appendix A: Definition of Terms...............................................................................52

Asirius Philippines, Inc. is an IT company aiming to provide exceptional

In the study of the IT and Communications industry, it has been discovered

Asirius Philippines Incorporated is an Information Technology business which

B. Research Design and Methodology

C. Statement of the Problem and Objectives

This case aims to address the following concerns:

II. External and Industry Analysis

Past Performance of the Economy

Sales and services of Asirius are highly dependent on the performance of

Business Monitor International (BMI) a leading, independent provider of

According to its statistician, Benedict Dormitorio, there is a clear need to

"There is a clear need to establish additional training institutions and

Despite of lack of proper coordination of development program and economic

Among the IT and communications products highly in demand today is the IP

Telephony System) lines to manage incoming, outgoing, and intra-organization calls

B. Social, Cultural, Demographic, and Environmental Forces

Authorized Training Providers in the Philippines are backed by the resources

C. Political, Legal, and Government Forces

The government of the Philippines also provides IT services and trainings to

Information Technology industry is highly susceptible to change in terms of

The business of Asirius is dependent on new purchases/updates of IBM

1. Definition of the Industry

Information technology (IT), as defined by the Information Technology

The products in the IT and Communications industry continue to develop as

Distribution channels of the industry can be found in almost every corner,

e. Customer and Target Market

f. Competitive Forces Analysis and Porter’s Five Forces Model

Bargaining power of buyers

Bargaining power of supplier

Bargaining power of supplier for the hardware and software products is

Threats of new entry

Threat of substitutes is low because there are no alternative industries

Rivalry among competitors

Competitors in this industry vary depending on the products and services

IT products rarely have long lifespan in the market, as new technologies

g. Research and Development

Since the industry is technology-based, there is a need for each company in

Ng Khai’s large liabilities, together with that as well of Alliance resulted to

Inventory Turnover is at 27.01x, while Fixed Assets Turnover is 8.01x without

III. Internal and Company Analysis

Asirius Philippines, Inc. is an IT company offering mainly services as an IBM

Asirius was previously a Singaporean company owned by Choo Boon Siong,

Asirius adopts a centralized system of management wherein Vera Cruz

(Please Refer to Appendix B: Existing Organizational Structure)

Asirius Philippines Incorporated is composed of six personnel with two of

The company’s mission statement lacks a statement on what market it wants to

To promote the knowledge of the Filipino in IT.

We aim to provide quality IT services to our valued customers and provide

The above objective is more of like a mission-vision statement of the

As an accredited IBM training partner, Asirius Philippines, Inc. is able to