Status, Problems, and Prospects of Ornamental Garden Businesses in Guiguinto, Bulacan

Date

3-2011

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Mar B. Cruz

Committee Member

Jewel Joanna S. Cabardo, Mario V. Perilla, Reynaldo L. Tan

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Abstract

This study generally aimed to describe and analyze the status, problems and prospects of the ornamental garden businesses in Guiguinto, Bulacan. Specifically, the study was intended to accomplish the following objectives: (1) Present the structure, conduct and performance of the garden businesses in Guiguinto, Bulacan, (2) Identify the problems, weaknesses and gaps in garden businesses in Guiguinto, Bulacan, (3) Identify prospects for garden businesses in Guiguinto, Bulacan, (4) Discuss the success factors for garden businesses in Guiguinto, Bulacan, and (5) To recommend courses of action that would address the problems and prospects identified.

It aimed to present the current status of the ornamental garden businesses in Guiguinto by profiling the key players in the industry and using Michael Porter’s Five Forces Model which tackled the threats of new entrants, intensity of competition, presence of substitutes, and bargaining power of suppliers and buyers in the industry. Cost and Return Analysis was used in order to properly evaluate the profitability of the industry. Strengths and Weaknesses Analysis was also used in order to evaluate the internal factors that affected the players in the industry and the industry as a whole.

The profiling garden businesses and owners in this study revealed that engaging in this type of business is easy. It doesn’t require large capital and high educational attainment for garden owners and mostly, the garden owners learned the practices and technical knowhow of operating their businesses through experience. Majority of the gardens were family businesses and were existing for more than five years already. It was the main source of income for almost all garden owners and for them; it was not only the profits that make them stay in the industry but also their personal inclination and interest in gardening.

Assessment of the four functions of business also revealed the problems encountered by the garden businesses. In production, problems that were identified were increasing cost of raw materials, increasing trend of conversion of land rented by the gardens into residential houses, and weather (i.e. too much rain and sunlight). In marketing, increasing level of competition and low sales were the major problems. For financial aspect of the business, lack of capital and lack of bookkeeping were identified as problems while in personnel management, lack of discipline of workers were encountered by the garden owners.

Competitive forces in the industry also showed that there was high rivalry between the players since the entry and exit barriers were low. Increase in competitors was happening due to low capital requirement in starting the business. It was also found out that bargaining power of buyers and suppliers were both high giving the garden less power in dictating prices of raw materials and their products. Though there were no substitutes for the products, seasonality of demand affects the performance of the industry.

Analysis of strengths (strong points) and weaknesses (weak points) revealed other problems in the industry mainly; lack of government support and changing climate. Nonetheless, it also revealed some strengths and opportunity for the industry like fast production and increasing demand for landscaping.

Cost and Return Analysis was also done and showed that profitability of medium-scale gardens were higher compared to small-scale gardens, however, although the difference in profit is just small, the upside potential of medium scale on profit were much higher than small-scale gardens. Furthermore, gardens that offer landscaping services have higher profitability compared to those who do not offer the same services. It was also found out that the large portion of cost of operation for gardens was captured by raw materials and labor expenses.

Key success factors were also identified. It was found out that those gardens with good facilities and equipments, good location, good customer relationship, and large capital are most likely to prosper in the industry. Gardens with these traits were earning more sales and therefore profit in the industry.

Through different analyses, the major problems that were found were (1) availability and increases in prices of raw materials, (2) conversion of land rented by gardens to residential houses, (3) weather and climate (i.e. climate change, typhoons, floods, etc), (4) lack of good facilities, (5) intense competition, (6) fluctuating sales and seasonality of demand, (7) lack of working capital, (8) lack of bookkeeping, (9) lack of support from local government unit, and (10) lack of information dissemination of Research & Developments.

Prospects were also identified, mainly: (1) increasing demand for landscaping in urban and rural areas in the Philippines, (2) increasing environment awareness in relation to climate change, (3) export market development, (4) potential value adding processes for plants, (5) increasing ease of communication through E-commerce, and (6) technologies and development of new types and varieties of plant.

Overall, status of the garden businesses in Guiguinto, Bulacan is still good, however decline in growth of the industry would be felt due to competition and limited market that are reached by the gardens. Nonetheless, there are still many prospects for the industry especially on development of potential markets for landscaping domestically and live plants in the export market. Steady growth of market and performance by gardens are expected. Courses of action were recommended based on the problems and prospects identified in the industry.

Language

English

LC Subject

Plants, Ornamental, Garden ornaments and furniture, Small business--Management

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2011 M17 B38

Notes

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Document Type

Thesis

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