PREPARED BY:

EARL JEREMIAH CRUZ

STRATEGIC
JOSE LUIS ANTON DAVID
ANGELO MENDIOLA
ANALYSIS
YAEL CHLOE CUNANAN CONTENT:

KATE MARIEL DIMATULAC I. STRATEGIC ANALYSIS

TRISHA MAE MACALINO II. SWOT ANALYSIS

DINA MARIE MAGLANQUE III. PEST ANALYSIS

KAELA MARIE SUVA IV. PORTER’S FIVE FORCES ANALYSIS

MARIA FIYA VICENCIO

I. STRATEGIC ANALYSIS
‘… a theoretically informed understanding of the environment in which an
organisation is operating, together with an understanding of the organisation’s interaction
with its environment in order to improve organisational efficiency and effectiveness by
increasing the organisation’s capacity to deploy and redeploy its resources intelligently.’
Professor Les Worrall, Wolverhampton Business School
“Strategic analysis (sometimes referred to as a strategic market analysis) is the process of
gathering data that helps a company’s leaders decide on priorities and goals, shaping (or
shifting) a long-term strategy for the business. It gives a company the ability to understand
its environment, and formulate a strategic plan accordingly. Strategic analysis is paramount
in any organization because it provides the context and backbone upon which the strategy
and overall position of the business is formulated.”
https://www.clearpointstrategy.com/
To improves its performance and achieve its desired goals and objectives, business
usually performs strategic analysis. It is the process of researching and gathering of
information regarding about the business environment both external and internal that
contributes and affects its operation. This is done to identify and evaluate areas that are
performing effectively, needs improvement and requires changes.
Common Attributes – lifted from www.cimaglobal.com
1. Identification and evaluation of data relevant to strategy formulation.
2. Definition of the external and internal environment to be analyzed.
3. A range of analytical methods that can be employed in the analysis.
Application
1. Answers organization’s questions
2. Use of defined tools for successful analysis
3. Collaboration of various individuals.
4. Commitment in completing the analysis.
5. Focus on strategy in achieving goals
6. Backward and Forward Looking
7. Involve leaders in making decisions
Analytical Methods
1. SWOT analysis
2. PEST analysis
3. Porter’s five forces analysis
4. Four corner’s analysis
5. Value chain analysis
6. Early warning scans
7. War gaming.
II. SWOT ANALYSIS
A. Definition
An analysis technique and process that helps to properly identify and understand
Strength, Weakness, Opportunities and Threats related to the business. It is widely used
because of its simple and easy approach in identifying the four areas that seeks to achieve
success. SWOT technique is applicable and utilize for a project, business activities, policy
making and the success of the business as a whole among others.
SWOT contributes in giving full awareness what are the factors or elements that can
affect decision making process and the ability to commit to one or more activities and
objectives. It assess the environment of the business – Strengths and Weakness focus more
on the internal aspect while the Opportunities and Threats are those factors influencing the
company from the outside of the business.
Examples of Internal Factors
Assets, Location, Workforce, Policy, Brand Image and Reputation, Cost Advantage
Example of External Factors
Trends, Competitors, Prices, New technology, Regulations
B. How to do SWOT? – As suggested by Business Queens Land
1. Determine and Specify the Objectives – ask how this SWOT analysis will be used and
beneficial, is it for changing processes, innovation, or introduction of new product line.
2. Understand the Business, Market and Industry – it can be done through research
inquiries and brainstorming from different perspective internal and external – like the
management, employees or customers.
3. List down the possible SWOT – by using the 2x2 Grid
Strength – Includes the advantages that the company have and where does it perform well
and what factors that distinguish the company from other within the industry.
E.g. Patent, Unique technology, strong brand
Weakness – Things that require improvement to stay competitive and achieve optimal
operation.
E.g. High Debt, Lack of Capital, Inadequate supply chain
Opportunity – positive chances and opening for the business to claim outside the entity
such as development and technology. Also, an external factor that can give a comparative
advantage.
E.g. Decrease in country tariff –minimize the cost of import and export
Threats – Obstacles an potential harm that may affect the business
E.g. Rising Costs, Increasing competition

4. Rank the Ideas and make a Debate – rank the ideas and determine which item must be
prioritized and requires more attention.
5. Develop a Strategy – after the brain storming and listing and when all questions are
answered it is the time to construct strategy to perform.
6. After develop strategy, the company must continue SWOT since there will be
changes within and outside the company.
C. EXAMPLE
STRENGTH
 What does your organization do better than other?
Fast-paced Growth- Due to the recent and successful Initial Public Offering of
MerryMart last year in the Philippines Stock Exchange, Merrymart have secured funding that
was used to open up different MerryMart stores throughout the Philippines.
 What are your unique selling points?
Wholesale Operations- The said Wholesale operations will commence in April at the
Tarlac which will cater bulk orders from NCR, Central and South Luzon.
 What is your organization competitive edge?
Injap Sia- the CEO of Merrymart is Edgar “Injap” Sia which is well known as a
successful entrepreneur. He is the brain behind the success of Mang inasal that made him
billionaire at the age of 34. Edgar Sia will be the navigator of the MerryMart to accomplish
its mission and vision.
WEAKNESS
What do other organization do better than you?
Market share- Considering Merry mart is new to the retail goods industry, The
Industry leading Puregold still holds majority of the market share as well as convenient
stores such as 7/11 and Alphamart
What elements of your business add little or no value?
Marketing- the Company doesn’t yet spend large amount of money to advertise their
company since there are focused on branch opening throughout the country.
What do competitors and customers in your market perceive as your weakness?
Limited Store Locations- as a new to the retail goods industry, Merrymart focuses to
open up their branch in larger markets such as in the NCR and other urban cities. Unlike
other competitors which do have multiple branches in provinces and rural municipalities.
OPPORTUNITIES
What political, economic, social, technological changes are taking place that could be
favorable to you? PEST
What new innovation could your organization bring to the market?
 Dark Grocery- In order to make their operation became more efficient despite of the
pandemic, Merrymart with the partnership with Foodpanda, offers its goods via online
portal that enables their customers to buy their necessaries at the comfort of their houses.
THREATS
 What political, economic, social, technological changes are taking place that
could be unfavorable to you
Inflation- The inflation rate in the Philippines have been constantly rising from the
past 2 years, If this crisis will continue, It will affect the purchasing power of the consumer
that will result to decrease in the sales and subsequently decrease in net income or even
net loss.
What is your competition doing that could negatively impact you?
Endorsement and Marketing- The heavy spending of competitors such as Puregold
and Alphamart on brand endorsement and advertisements will definitely create negative
impact to the merrymart as this will increase the popularity of their competitors which can
greatly affect Merrymart’s Sales and revenue.
III. PEST ANALYSIS

A. Definition
PEST analysis stands for political, economic, social, and technological. It is a
management method whereby an organization can assess major external factors that
influence its operation in order to become more competitive in the market. As described by
the acronym, those four areas are central to this model.
B. Why do a PEST analysis?
 Helps to evaluate how your strategy fits into the broader environment and
encourages strategic thinking
Changes outside your control are constantly influencing your business. If you
don’t take the time to identify and understand these external factors, you could
be leaving money on the table—or worse, endangering the business itself.
 Provides an overview of all the crucial external influences on the organization
How these factors could create opportunities or threats to your business.
  Supports more decisive and knowledgeable decision making
The more threats or risk factors in the market, the more difficult it is to do
business. By analyzing the market forces at play, the more strategic you can be
in your planning and decision-making.
 Assists planning, marketing, organizational change initiatives, business and product
development, project management, and research papers
Helps organizations strategically plan projects and initiatives so that you only
focus on projects that have the greatest chance of success. It also gives you the
tools to forecast changes so you can grow your organization with those
changes instead of working against them.
Political
 Political or politically motivated factors that could impact the organization.
 focuses on the areas in which government policy and/or changes in legislation affect
the economy, the specific industry, and the organization in question
 Includes Government policy, political stability or instability, bureaucracy, corruption,
competition regulation, foreign trade policy, tax policy, trade restrictions,
labor/environmental/copyright/consumer protection laws, funding grants &
initiatives, etc.
 What government policies or political groups could be beneficial or detrimental to
our success?
 Is the political environment stable or likely to change?
Example:

 Political Regulations - The regulations affect which products can be imported,

exported, and sold in stores. Stores offering food products must comply with health
guidelines proposed by the government.
 Taxes - If the government raises sales taxes, then it would increase the prices of the
product. Consequently, people would become picky in their choices, which means a
drop in total sales.
 Political Environment - If the political environment of the country changes like
protests, roadblocks or bans, then it would disrupt the supply chain of products and
services.
Economic
 Overall economic forces that could impact on your success. Targets the key factors of
interest and exchange rates, economic growth, supply and demand, inflation and
recession.
 Includes Economic trends, growth rates, industry growth, seasonal factors,
international exchange rates, International trade, labor costs, consumer disposable
income, unemployment rates, taxation, inflation, interest rates, availability of credit,
monetary policies, raw material costs, etc.
  What economic factors will affect us moving forward?
 How does the performance of the economy affect us at the moment?
 How are our pricing, revenues, and costs impacted by each economic factor?
Example:
 Unemployment- When people don’t have a job and their resources are limited, then
they would go on the saving mode. Few spending means less business activity.
 GDP - High GDP signals the consumers’ ability to spend more on offered products.
 Inflation - Rapidly rising prices not only affect the price consumers pay, they also
affect the cost businesses have to pay for materials and inventory

Social
 Social factors play an essential role in influencing the buying decisions of consumers
including consumer attitudes and lifestyle changes.
 These are the effects of people and groups influencing one another through culture
and subculture, social class, reference groups, and family.
Example:
 Health and Safety risk all along the supply chain - Covid 19 outbreak affected retailers
which was led to numerous workplace shutdowns and quarantines. The spread and
transmission of the virus is still rapid nowadays and it brings problems to the most
employers.
 Demographic Trends - Since the population of the Philippines is growing,
MERRYMART aims to cover all the grocery retail categories. They continue
developing their products to cater the needs of their consumer and achieve the goal
to improve profitability of businesses. Thus, old products will be abandoned and will
become outdated and other products will reach to its expiration date.
 Online shopping - The use of social media and e-commerce has encouraged online
shopping behavior among customers. It is very popular today because it is less hassle
for the consumers to buy from physical store instead, they engage to this kind of
platform.
Technology

 As we all know, technology changes very rapidly, and consumers are hungry to adopt
new technology. It involves understanding factors which are related to technological
advancements, rate at which technology gets obsolete.
 Technological factors are variables which relate to the existence, availability, and
development of technology. This could include things from computational power to
engine efficiency.
  How technology can either positively or negatively impact the introduction of a
product or service into a marketplace is assessed here.
 How will it affect business in the long and short term?
Example:
 Automation - The automation of many unskilled tasks can allow companies to replace
human production lines with entirely machine ones.
 A digital for easy browsing - It’s basically a digital catalogue for their products. Big
name companies are able to offer a selection online. The products are either shipped
to the customers’ home or the closest store for pickup.
 Social media marketing - The development of information and communication
technologies has led towards the adoption of innovative marketing techniques to
enhance collaboration with customers.
IV. PORTER’S FIVE FORCES ANALYSIS
A. Definition
Porter's Five Forces is a model that identifies and analyzes five competitive forces that shape
every industry and helps determine an industry's weaknesses and strengths. Five Forces analysis is
frequently used to identify an industry's structure to determine corporate strategy. Porter's model
can be applied to any segment of the economy to understand the level of competition within the
industry and enhance a company's long-term profitability. The Five Forces model is named after
Harvard Business School professor, Michael E. Porter.
It is also one way that helps to analyze your competition and understand your standing in
your industry. It is considered a macro tool in business analytics – it looks at the industry's economy
as whole, while a SWOT analysis is a micro analytical tool, focusing on a specific company's data and
analysis.

1. Threat of new entrants

The Threat of New Entrants exerts a significant influence on the ability of current
companies to generate a profit. When new competitors enter into an industry offering the
same products or services, a company’s competitive position will be at risk. Therefore, the
threat of new entrants refers to the ability of new companies to enter into an industry. The
less time and money it costs for a competitor to enter a company's market and be an effective
competitor, the more an established company's position could be significantly weakened. An
industry with strong barriers to entry is ideal for existing companies within that industry
since the company would be able to charge higher prices and negotiate better terms.
When competitive rivalry is low, a company has greater power to charge higher prices
and set the terms of deals to achieve higher sales and profits. This force considers how easy
or difficult it is for competitors to join the marketplace. The easier it is for a new competitor
to gain entry, the greater the risk is of an established business's market share being depleted.
Easy to build, less time and low cost = More competitors/New entrants
If more time and highly costs = Few competitors.
2. Bargaining Power of Supplier

 One of the forces in Porter’s Five Forces Industry Analysis Framework, is the mirror
image of the bargaining power of buyers and refers to the pressure that suppliers can
put on companies by raising their prices, lowering their quality, or reducing the
availability of their products. This framework is a standard part of business strategy.
 In an industry affects the competitive environment and profit potential of the buyers.
The buyers are the company and the suppliers are those who supply the companies.
 The bargaining power of suppliers is one of the forces that shape the competitive
landscape of an industry and help determine the attractiveness of an industry.
3. Bargaining Power of Buyer
It refers to the pressure that customers/consumers can put on businesses to get them
to provide higher quality products, better customer service, and/or lower prices.
COVID-19 has changed nearly every aspect of our daily lives, and consumer spending is no
exception. Due to this health crisis, there are layoffs, bankruptcy and temporary close of
business that causes unemployment. An individual buying behavior becomes more erratic.
They have reduced spending on all non-essential products and services.
The income of the buyers within the industry is low or in the middle especially this time of
pandemic. This means that there is a pressure to purchase at low prices, making the buyers
more price sensitive. This makes the buying power of buyers a weaker force within the
industry.

4. Threat of Substitute Product or Services

This refers to the chance that a potential customer will choose a substitute product/
service offered by other businesses rather than purchasing the product/ service in your
company. Possible substitute products/ services offered by other companies that can replace
a company’s product/ service can give threats to the latter company.
5. Rivalry among Existing Firms
This refers to the strengths and quantity of competitors that your company might
face/ encounter. Competition or rivalry among businesses arise when such entities offer the
same kind of product/ service or are with the same line of industry. When a company has
numerous competitors, the chances of it being at the top or in power is low. Conversely, when
a company has few or counted competitors, it can set its own power and may introduce
higher prices for its unique products. Consumers would tend to choose a company which
offers unique and high quality products/ service.
B. Example
1. Threat of new entrants
The capital requirements within the industry of Merry Mart are high, therefore, making it
difficult for new entrants to set up businesses as high expenditures need to be incurred. The
Estimated Investment Cost of 7-11 is P3.5M and up ; Ministop is 3M and up; MerryMart is 10-15M.
Capital expenditure is also high because of high R & D costs. Only a few of current brand names in the
industry are well known. In the industry of mart: 7-11, Ministop & AlfaMart. In the industry of
Grocery: Mall’s Grocery, Puregold, S & R. Therefore, it is safe to say that the threat of new entrants in
this industry is low as barriers to entry are high.
2. Bargaining Power of Supplier
Since Merrymart covers all the grocery retail categories from small, medium, and large
grocery retail formats like the MerryMart Grocery is a full-size supermarket that offers a wide variety
of food and non-food products and includes a broad selection of personal care products as well as a
pharmaceutical section. MerryMart Market is a medium format specialized grocery that offers a
larger selection of premium and imported grocery items and will feature a large fresh selection of
fruits and vegetables, as well as fresh seafood products. MerryMart Store is a small format household
essentials store with a unique three-in-one concept which combines a mini-grocery, personal care
shop and pharmacy in one store providing operational cost efficiency.
The number of suppliers in the industry in which Merrymart operates is a lot more than the
number of firms producing the products. Since MerryMart is a firm that sells different kinds of
products, it usually has a lot and different suppliers.
Merrymart is not only dependent on one or a limited number of suppliers. Their suppliers are
from local suppliers, distributors to multinationals. They select their suppliers based on specific
criteria, first and foremost based on the supplier’s product assortment and popularity or market
share of the supplier’s products in each subcategory it serves. In addition, the Merrymart selection
policy for suppliers includes consideration of the supplier’s location, brand reputation, capacity to
supply, ability to deliver on time and compliance with the Merrymart’s requirements.
It can have multiple suppliers within its supply chain. For example, MerryMart can have
different suppliers for its different geographic locations. This way it can ensure efficiency within its
supply chain. As the industry is an important customer for its suppliers, MerryMart can benefit from
developing close relationships with its suppliers where both of them benefit.
3. Bargaining Power of Buyer
Since there are still individuals who are afraid to go outside due to the Virus, Merrymart
improve its service by the “dark grocery” store concept which is a dedicated online shop for grocery
items that offer a 15-minute delivery service within a specific area. The new business will be operated
by its unit MerryMart Grocery Centers Inc. and Panda Mart, Foodpanda’s instant grocery delivery
services.
The quality of the products is important to the buyers, especially the products that we offer
are food and medicines, and these buyers make frequent purchases. This means that the buyers in
the industry are less price sensitive. This makes the bargaining power of buyers a weaker force
within the industry.

4. Threat of Substitute Product or Services

MerryMart offers retail or wholesale of high quality and known branded products for
everyday consumption, its potential substitutes are those products that are unbranded or are not
well known and those products that can be made at home/ DIY. Such substitute products may be
availed by customers in sari- sari stores or in small time groceries. However, it all boils down to
whoever the target market of such entities are. MerryMart’s target market are those from medium to
high income earners, hence, we can say that the threat of substitute product/ service is weak within
MerryMart’s industry. Comparatively, firms producing within the industry in which Merry Mart
operates, sell at a lower price but with insufficient/ low quality. This means that the target market of
MerryMart are less likely to switch to substitute products because such are not satisfactory in terms
of quality.
5. Rivalry among Existing Firms
The number of competitors in the industry in which Merry Mart operates are few and can be
counted. Merry Mart offers small (store), medium (market) and large (grocery) retail formats and
thus may seem to have multiple competitors. However, when analyzed, it only has few competitors
in terms of each retail format. When it comes to small retail format or a MerryMart Store, its
competitors are only 7/11, Alfamart, Ministop and Family Mart. While for medium retail format or
MerryMart Market, its competitors are only Mall Supermarkets, Puregold and Jumbo Jenra; for the
large retail format or MerryMart Grocery, the S&R and Landers are its only competitors. In summary,
there are only a few competitors where MerryMart’s industry operates because of high amount of
fixed costs and other expenses of establishing and operating it.