A Case Study on Sierreza: A social Enterprise

Date

8-2022

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Dinah Pura T. Depositario

Committee Member

Loida E. Mojica, Renen Szilardo C. De Guzman, Mar B. Cruz

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

There is a growing inclination toward the creation of social enterprises in the Philippines in search of sustainability, particularly at a time when aid from conventional, humanitarian, and government resources is limited. According to NEDA, around 7% of registered businesses around the country are social enterprises as of July 2019. In addition, most social enterprises in the country work with Filipino Indigenous communities with the primary goal of not only providing livelihoods but also maintaining their culture and indigenous practices. The general public has developed an interest in social entrepreneurship as their interest in unconventional and sustainable enterprises has increased.

Sierreza is the first zero-waste cafe in Los Baños, Laguna, advocating for sustainable agriculture and providing assistance for Indigenous farmers from Cordillera and Sierra Madre IP communities (Biscochom 2018). In the year 2018, Sierreza was launched as a start-up artisan cafe,

serving a seasonal menu heavily influenced by the availability of its partner farmers' harvest. By the time the pandemic struck, the government had imposed lockdowns and strict health protocols, resulting in the closure of Sierreza's physical store in Laguna and its branch in Quezon City. This forced them to change their business model to agricultural trading under which they delivered the farmer’s produce to their institutional and household buyers. With the challenges posed by the COVID-19 pandemic, the social enterprise encountered problems related to a decline in profitability. Thus, this research was conducted in order to develop a strategic plan that would help Sierreza in becoming a financially viable social enterprise.

The specific objectives of the research are to: 1) Present the historical background of Sierreza and its business model; 2) Describe Sierreza’s five business functions- general management, marketing, operations, human resources management, and finance; 3) Analyze the most critical business issue Sierreza is facing and its implications for the company; 4) Analyze the motivations among institutional buyers for purchasing Sierreza’s products and their product specification requirements, and 5) Recommend strategies that Sierreza and its supplier-farmers can utilize to meet the needs of its buyers.

Articles published about the enterprise and records from Siereza were utilized to gather information. Interviews were conducted with three indigenous farmers from Daraitan, Sierreza’s three institutional buyers, and the owner Ms. Cherrys Abrigo. A three-day on-site visit was also organized by the researcher to get a better understanding of the farmer’s production, post-harvest process, and the problems and challenges the business is facing in marketing the farmers’ produce. Other important information were collected from internet sources of different government institutions like the Department of Agriculture (DA), the Bureau of Agricultural Statistics (BAS), and the Philippine Statistics Office (PSA). The total population of Indigenous Farmers residing at Brgy. Daraitan, Rizal was obtained from the National Commission on Indigenous People (NCIP). Collected data were analyzed using Internal and External Factor Evaluation, SWOT analysis, Personal Entrepreneurial Competencies Self Rating, and the Balanced Scorecard.

Results showed that the top three motivations of Sierreza’s two institutional buyers are (1) quality, (2) support for the advocacy of sustainable agriculture and preserving the environment, and (3) concern for indigenous farmers. One of Sierreza’s institutional buyers, Healthy Options affirms providing clean, organic, and sustainably sourced fresh produce to its customers. This is one of the motivations why they buy from Sierreza. They believe that the farmers are only performing natural and sustainable farming practices. Healthy Options are strict in its product and delivery specifications. Farms are audited once a year to validate if their partners are applying organic farm practices. Produce is also tested for pesticide residue in their own in-house laboratory. They expect clean and dry produce to be placed in crates and also offer to provide their own packaging to sell it at a premium price. Another institutional buyer is Good Food Corporation, which aims to transform consumers into co-producers and stakeholders in the food production system through Community Shared Agriculture. Go Food Corporation is also a social enterprise and an Institutional buyer of Sierreza since its inception. They expect almost minimum product standards and delivery specifications from Sierreza. They work with a similar model and understand the struggles of a micro-enterprise.

Sierreza's mission was assessed using Fred R. David's 9 key components of a Mission statement. This is to validate whether they were complying with their responsibilities in accordance with their mission as a social enterprise. The presence of three out of the nine essential elements in a mission statement was considered not a good indicator of a well-written mission statement and this was mainly due to an indeterminate vision statement. Their lack of coherence and focus in their vision and mission statement causes them to struggle in aligning their services with accomplishing their social mission and at the same time keep the business financially viable.

Data from Sierreza and the researcher's observation were used in the SWOT. Failure to keep tracl of Sierreza's financial records hinders the entity from assessing its financial performance. Sierreza's social aspect was assessed through the following considerations: (1)behavioral change in relation to environmental issues (2) providing education to improve living standards, and (3) raising living standards for indigenous society needs. Results showed that Sierreza has established a community dedicated to advocating for sustainable agriculture dedicated to preserving the environment and aiding the community of indigenous farmers. Sierreza's efforts in sustainable agriculture include zero waste packaging materials (using banana leaves and newspapers). Moreover, in collaboration with partner organizations such as UPLB EconSoc and student volunteers from UPLB, the social enterprise creates learning opportunities for indigenous people through outreach projects. This kind of initiative created an avenue for learning and development for the indigenous farmers in Daraitan. Sierreza's strong working relationship with the indigenous community was centered on the farmers' personal development and the achievement of a vision of making the farmers self-sufficient in the near future. Sierreza fulfilled all the social indicators mentioned above but failed to focus on its financial aspect.

Sierreza's failure to leverage an organizational mission to communicate identity, distinctiveness, and purpose imposes performance issues within the enterprise. The main strategic issue that has been identified is the lack of focused, social enterprise-oriented mission. Sierreza keeps struggling to define and meet the scope of its operations. A poorly defined scope of operations caused the enterprise. This led the team down a weakened team communication resulting in high employee turnoverm an unproductive path toward performing their business functions and a decline in profitability.

Following the relaxation of COVID 19 restrictions, Sierreza experienced a decline in profitability ass people began to buy from their local wet markets. The occurrence has been observed to affect even Sierreza's institutional buyers.

The SWOT Matrix showed the alternatives formulated from the given factors to address Sierreza's current strategic issue. A structured Strategy map was made which includes financial perspective, customer perspective, process perspective, and learning and growth perspectives. The recommended balanced scorecard for Sierreza includes targets and measures to make sure to achieve the growth and profitability of the enterprise. When followed, this opens more revenue opportunities, improved supply chain management, and increased inventory returns.

Language

English

LC Subject

Social entrepreneurship--Case studies, Farm produce--Philippines--Marketing

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2022 M17 M88

Document Type

Thesis

This document is currently not available here.

Share

COinS