A Case Study of Real Fresh Dairy Farm, Inc. in Bay, Laguna

Date

4-2010

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Carolyn V. Melgar

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Abstract

Milk is known to be an almost perfect single food possessing almost all the nutrients that man needs. It is high in nutritive value and is needed by every growing individual. Undoubtedly, Filipinos recognize how nutritious and health beneficial milk and milk products are, but still, it has never been an important part of their diet. Consumption of milk in its liquid fresh form declined through time and is surpassed by consumptions of alternative non-alcoholic drinks. This is aggravated more by the incapacity of the country to supply its own milk. As the Philippine dairy possesses few small dairy farms and few milk processors, their milk produced even if collected centrally are still inadequate and cannot saturate the market. It is unfortunate that only few local dairy farms are playing in this opportunity-filled industry. Among such few players in this small sector of Philippine agriculture is the Real Fresh Dairy Farm Inc. (RFDFI) in Bay, Laguna.

This study aimed to determine and assess the current status of RFDFI operations, which should lead to identification of strategic issues through bridging the gaps in the external and internal environment of the company. Specifically, this study aimed to: (1) evaluate and analyze the business environment of RFDFI; (2) evaluate and analyze RFDFI’s four business functions; (3) present and discuss the main business issue(s) which has a company-wide implications and define the problems relevant to those business issue(s); (4) generate and evaluate alternative solutions to identified problem(s) and be able to identify the best solution using appropriate analytical tools and criteria; and (5) design an implementation plan for the best solution identified.

Primary data were gathered through key informants such as Mr. Oliver A. Costa, RFDFI’s farm engineer. Information were also sourced from Mr. Adolfo Ebuen, RFDFI’s general manager, Mr. Felipe Bince III, RFDFI’s corporate treasurer and few technical people such as Dr. Abraham Tandang. Dr. Olivia Emata, the farm’s consultant was also interviewed. Secondary data were sourced from books, journals, and magazines in the Animal Science Library; unpublished undergraduate, masters and PhD BS ABM Special Problems and others from CEM; World Wide Web; statistics and other publications from the different related sectors of the government. The 2008 Philippine Dairy Situationer was sourced from Mr. Rene de Guzman of National Dairy Authority (NDA) after a graduate school seminar held at the Animal Science Lecture Hall of UPLB.

In assessing the over-all performance and status of RFDFI, an internal assessment (strengths and weaknesses; IFE) was conducted to determine and analyze its performance in each of the four business function. This study also used an external assessment or industry analysis in which RFDFI is situated in and conducted an EFE matrix.

The Philippine dairy industry in general is a promising industry. The insufficient local supply of milk opens doors to anyone interested in dairying to profit and help in the economy. Government support is present. More so, with the increasing concern of the people to wellness, milk has a lot to offer especially through value-adding. The emerging trends towards fastfood consumption and the changing lifestyle of the people also increase the demand for food items which complements with milk and milk products. Coffee consumption is also growing. Together, the western food culture cuts across Philippine borders as it established its existence in the Filipino food tradition. However, along with opportunities are threats besetting the industry. As Filipinos at large are milk non-drinkers, non-alcoholic alternatives are competing with it. Such alternatives to milk and milk products and the established Filipino attitude towards dairy products consumption are threatening the players.

RFDFI is a new player in the industry. Established in 2006 without a single knowledge in dairying, former Sen. Magsaysay Jr. and friends who are also politicians and businessmen founded the business primarily aiming to increase milk availability and consumption in the country prior to mere profiting. Their existence is more because of social responsibility. Due to that, the farm is intensively focusing on the production aspect of the business through increasing milk production and cow heads. On the average, they are producing 580-585 kilos of milk a day. This in turn will be processed by UPLB DTRI under a toll processing contract. All of the processed milk will be immediately delivered to distributors and school/ university customers. Such simple scheme of the business along with its noble aspiration makes it neglect its other business functions. Intensive marketing/ promotions is not a strategic option to rapidly penetrate the market. The financial status of the company is just starting to profit at about 2%. Formal structuring of the business is undeveloped making company-wide implications. Thus in this assessment, it was found out that the main issue of RFDFI is the unorganized and undefined business functions. The researcher recommended RFDFI to re-organize its structure first and define its business functions for a clear and distinct definition of tasks.

The researcher then addressed the next strategic issue of how will RFDFI penetrate the market and increase its market share given the under maximized raw milk intended for processing. Using the TOWS matrix, possible strategies/ alternatives were formulated and by using the QSPM tool for analysis, the product development strategy was chosen. It will be implemented through collaborative forces in marketing, finance, production, personnel and even research and development. Monitoring, control and evaluation tool was also formulated to see whether the strategy will be well-implemented in alignment with the formulated goals and objectives. Finally, future plan strategies were also recommended, such that when RFDFI has its own processing plant, further product development and partnership with dairy farm cooperatives could be implemented. In case the chosen strategy did not work well, a contingency plan of market development will be implemented.

Language

English

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2010 M17 D56

Notes

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Document Type

Thesis

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