A Case Study of KLT Fruits, Inc.

Date

5-2024

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Ma. Teresa A. Acda

Committee Member

Fitz D. Jimenez, Rolando G. Allam, Jr., Melodee Marciana E. De Castro

Restrictions

Restricted: Not available to the general public. Access is available only after consultation with author/thesis adviser and only to those bound by the confidentiality agreement.

Abstract

The Philippines is known as a tropical country, with banana, pineapple, mango, and calamansi being the top-produced tropical fruits, consumed either fresh or processed. Fresh fruits are often seen and purchased directly in local public markets and groceries, and some are even traded as export products to other countries. On the other hand, processed fruits have a fair share in fruit consumption. By transforming the fruits’ properties with proper processes and equipment, purees, concentrates, powders, jams, frozen, and leathers, among others, become available for consumers and for other manufacturers to be used as inputs to produce fruit-based products. The market for processed and frozen fruit products is expected to increase locally and globally, with 5.31% and 6.93% compound annual growth rates by 2028 to 2030, respectively.

KLT Fruits, Inc., a tropical fruit processing company operating for four decades in the industry, is the subject of this study. Specifically, this study intended to: (a) determine the current external environmental factors affecting KLT Fruits, Inc.; (b) identify the current situation of the company’s internal environment in terms of its four business functions namely marketing, operations, human resources, and finance; (c) assess its key business issues; (d) formulate alternative solutions to the determined business challenges; and (e) recommend plans for the company’s different functional areas in order to enhance overall performance. This study employed a descriptive design, specifically adopting a case study approach, to effectively achieve its objectives.

The conducted study used primary and secondary data, collected between February and May 2024. The primary data were collected through Key Informant Interviews (KII) with the management and officer employees of KLT Fruits, Inc. who consented and provided information on the different functions of the company. To acquire information pertinent to the industry and environment of the company, secondary data were primarily sourced from online resources. These resources included journals, articles, publications, and websites of the company and government agencies.

The external environment factors of KLT Fruits, Inc. were analyzed through macroenvironment and microenvironment. Macroenvironment factors involved political- legal, economic, social, technological, and environmental aspects, which all encompassed factors in PESTLE analysis. The microenvironment included the competitors, suppliers, and customers of KLT Fruits, Inc., whereas the data from these were used to accomplish Porter’s Five Forces analysis, determining the intense competition in the industry. Apart from these two tools for analysis, an external factor evaluation (EFE) matrix was also performed wherein opportunities and threats were identified and assessed. There is a high expected growth rate for processed and frozen fruits, increased consumer preferences for responsible food production, and import-dependent global regions which present as some of the opportunities for the company. However, threats cannot be overlooked as they might pose risks to the operations of the company negatively, including the price volatility of fruits, suppliers’ price sensitivity, food inflation, international disputes, and the competitive positioning of its competitor.

The study presented the profile of KLT Fruits, Inc. and analyzed the status of its internal environment across four business functions: human resources, marketing, operations, and finance. KLT Fruits, Inc., a family-owned corporation, was founded in 1984, which started from the Lao Tian family’s passion for developing food products. The company’s main office is located in Mandaluyong City, while its 1.8-hectare processing plant is strategically situated in an industrial estate in Dasmariñas City, Cavite. This plant can process eight product lines using over 11 types of locally sourced tropical fruits. KLT Fruits, Inc. has established both domestic and international markets, with export sales comprising 60% to 70% of the total annual sales, with destinations such as the USA, Korea, Japan, and the company’s major export market, China. Its mission is to process natural, safe, healthy, and quality food products to meet its customers' demands and expectations, and the company to become the leading food company producing and distributing industrial and institutional food products locally and globally.

Based on the information provided by the employees of KLT Fruits, Inc., supplemented by the official company website, the major strengths of the company include its established markets, supplier relations, accreditations (e.g., ISO, HACCP, GMP), and capacity in production. Its weaknesses encompass the high cost of sales, deficits, accumulated waste, limited commercial scope not being on retail, and its reliance on outsourced raw materials. These key internal factors were subjected to the internal factor evaluation (IFE) matrix, which is a tool to assess the internal position of the company.

As the internal and external assessments were done, it was determined that the organizational vision, that is to be the leading food company in the domestic and export market, is currently challenged. The study recommends short-, medium-, and long-term strategies to gradually position KLT Fruits, Inc. as the leading company amidst the current challenges that they have. The proposed short-term strategies include offering additional incentives for their seasonal employees and strengthening their online presence related to their marketing function. The proposed medium-term strategies are market development through expansion in the Middle East region and collaboration with the Department of Agriculture regarding its food waste processing hub. Lastly, the long-term strategies are product development by introducing a dragon fruit powder product line and tomato puree product line, backward integration through the acquisition of a mango-producing land in Davao, and forward integration by entering its fruit powder product line in the retail market in Metro Manila. These proposed strategies were recommended along with a detailed implementation plan, indicating the involved persons and activities for each strategy, and the expected timeframe to accomplish them. This strategic plan was developed while taking the organization’s vision into account, and it will help the firm gradually achieve its envisioned industry position in the future.

Language

English

LC Subject

Fruit trade--Philippines

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2024 M17 N63

Document Type

Thesis

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