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Strengthening Competitor Analysis of Philippine Enterprises Towards Improved Implementation of the New Export Development Strengthening Competitor Analysis of Philippine Enterprises Towards Improved Implementation of the New Export Development Plan 2008 -2010 Philippine Exporters Confederation, Inc. (PHILEXPORT) 3 rd Quarter General Membership Meeting Visayas Ballroom, Sofitel Hotel July 23, 2008

Outline of Presentation A. B. Background and Objectives Why Competitor Intelligence (The Development of Outline of Presentation A. B. Background and Objectives Why Competitor Intelligence (The Development of Vietnam Coffee Industry) C. UPS ASIA Business Monitor SME Survey D. Competitor Analysis Workshop E. Workshop Outputs Per Sector F. Implementation Strategy Papers G. Policy Reform Papers

A. Background and Objectives • Following the Philippine Export Development Plan 2008 -2010, there A. Background and Objectives • Following the Philippine Export Development Plan 2008 -2010, there is a need to strengthen public-private partnership capability in competitor analysis. • In view of the ASEAN 2015, there is a need to anticipate potential intra-ASEAN cooperation strategies proposed by various sectors (vis-à -vis China and India) and traditional trading partners such as the USA, Japan and EU. • A two – day training program was organized by the Partnership and Advocacy for Competitiveness and Trade (PACT) in cooperation with EDC to build up the capabilities of Business Development Managers in DTI – BETP and other key stakeholders in export development in undertaking competitor analysis.

 • Development of new training materials for Competitor Intelligence; • Facilitation of a • Development of new training materials for Competitor Intelligence; • Facilitation of a two (2) day training program for 50 participants; and • Writing of implementation strategy paper and policy reform paper for presentation to the Export Development Council (EDC)

 B. Why Competitor Intelligence? Development of Vietnam Coffee Industry • Strategy of Vietnam B. Why Competitor Intelligence? Development of Vietnam Coffee Industry • Strategy of Vietnam Coffee Industry: Ø Ø Quality Improvement for Vietnam coffee Production cost reduction Variety and product shifting, production adjustment to the demands Coffee consumption promotion in the domestic market as well as to great potential countries Ø Reorganization of product and export structure in a better scientific, modern, effective and steady way

C. Why Competitor Intelligence? UPS Survey of Asian SMEs 2008 • 1. Philippine SMEs C. Why Competitor Intelligence? UPS Survey of Asian SMEs 2008 • 1. Philippine SMEs seen by the region as the least competitive • 2. Philippine SMEs view single most effective issue to create a more conducive business environment is government’s addressing the political environment stability. • 3. Philippine SMEs rates difficulty in forecasting demand as its major problem in supply chain management (#1 in the region at 66% vs. average of 46%) need for competitor intelligence

C. Expectation on Regional Economic Growth from 2005 to 2008 Source: UPS ASIA BUSINESS C. Expectation on Regional Economic Growth from 2005 to 2008 Source: UPS ASIA BUSINESS MONITOR

C. SME Business Prospects from 2005 to 2008 Source: UPS ASIA BUSINESS MONITOR C. SME Business Prospects from 2005 to 2008 Source: UPS ASIA BUSINESS MONITOR

C. SME Business Prospects Source: UPS ASIA BUSINESS MONITOR C. SME Business Prospects Source: UPS ASIA BUSINESS MONITOR

D. Competitor Analysis Workshop: Objectives • • Workshop Schedules: June 3, 4 and 19 D. Competitor Analysis Workshop: Objectives • • Workshop Schedules: June 3, 4 and 19 Objectives of Training-Workshop 1. Identify competitive forces that define sectoral strategies; 2. Determine systematic tracking of competitors in selected countries; and 3. Conduct an industry analysis using Porter’s Five Forces Framework

D. Competitor Analysis Workshop: Workshop Mechanics • Participants were grouped into four corresponding to D. Competitor Analysis Workshop: Workshop Mechanics • Participants were grouped into four corresponding to four sectors namely Health and Wellness, Homestyle Furniture, Apparel and Food • Each group was asked to do business intelligence on their sector following Porter’s Five Forces Framework (Template 1) • Each group also submitted their recommended strategies (Template 2) • Outputs were presented on the third day for critiquing of the Resource Speakers

FIVE-FORCES ANALYSIS Besanko et al, Economics of Strategy (3 rd Edition), Wiley & Sons, FIVE-FORCES ANALYSIS Besanko et al, Economics of Strategy (3 rd Edition), Wiley & Sons, Inc. , 2004 Focus: RETIREMENT Characterization (Current) Future Trend Comments/Notes FACTORS AFFECTING RIVALRY AMONG EXISTING COMPETITORS · To what extent does pricing rivalry or non-price competition (e. g. , advertising) erode profitability of a typical firm in this industry? 1. Degree of seller concentration? The degree of seller (service provider / facilities developer and operator, etc. ) concentration can be considered as relatively insignificant considering that the retirement phenomenon has barely made its presence felt with the baby boomers (born between 1946 to 1964) just starting to retire. The target market of the PRA consists of the foreign retirees from Japan, South Korea, China (including Taiwan), the United States, and Europe. Demographic estimates project the number of retirees from these areas at close to 900 million cumulatively by 2015. During the First Philippine Retirement Industry and Investment Summit held in Makati City on July 3, 2006, the PRA launched jointly with the PRI its program to bring into the country some 859, 000 foreign retirees from its target market by 2015 or less than 1 retiree for every 1, 000 retirees from those areas. (Please see attachment with file name “PRA - The Market”. ) In the Philippines, there are only a few facilities devoted to foreign retirees. Except for a couple of Japanese-dedicated retirement facilities, the rest are basically real estate development projects with foreigners as additional market segment as exemplified by the proliferation of Korean enclaves in many residential communities. Most of the foreign retirees in the country are under radar with the exception of enrollees in the Special Resident Retiree’s Visa (SRRV) program of the Philippine Retirement Authority (PRA) which started way back in 1985 basically to generate foreign exchange while positioning the country as the preferred retirement destination in the Region. The country now competes mainly with Thailand Malaysia in attracting foreign retirees. There are no reliable figures to cite but the former is touted to have hosted some 20, 000 foreign retirees last year alone, while the latter, about 10, 000 or so. In comparison, the number of PRA SRRV enrollees has averaged around 600 annually from 1985 to 2005, picking up to about 1, 500 in 2006 and 2, 500 in 2007. However, foreign retirees who are not SRRV holders remain unaccounted for. In addition to Thailand Malaysia, the country can expect stiff competition from Panama, and now Mexico, as well as other Central and South American countries, in providing retirement haven to retirees particularly from the United States. In the case of Europe, its retirees flock to Spain and Portugal, and the more prominently emerging East European countries such as Bulgaria, etc. It is highly anticipated that the degree of seller concentration in the Region will dramatically increase as the baby boomers in the developed countries continue to increase. · The so-called “Retirement Industry” has yet to be officially categorized as an Industry by the NEDA, unlike Tourism Industry for example. Therefore, one may not find official figures or statistics relative to the Philippines pertaining to the so-called “Retirement Industry”. If a foreign retiree could be defined as a long-stay tourist, then the “Retirement Industry” might be considered as a subset or part and parcel of the Tourism Industry. Hence, this is a pregnant area for policy study and consideration.

2. Rate of industry growth? Since there is no official categorization of the so-called 2. Rate of industry growth? Since there is no official categorization of the so-called “Retirement Industry” as a separate Industry by the NEDA, it is difficult to cite a rate of industry growth. Even the forecasted industry growth rate for the Tourism Industry might not present as an appropriate indicator, assuming for the sake of argument that the so-called “Retirement Industry” is a subset or part and parcel of the Tourism Industry. Given the increasing and relentless downward fiscal pressure on the social security and medical insurance coverage or benefits accorded to the retirees universally being experienced now in the developed countries, the number of these retirees seeking a second home in overseas retirement haven, such as the Philippines where they can stretch the value of their retirement benefits coming from their country of origin, can only accelerate by leaps and bounds. Going by the PRA program, the number of SRRV holders is projected to reach a total of close to 1 million foreign retirees by 2015. With each retiree bringing in US$20, 000. 00 as required deposit and spending an estimated amount of US$1, 000. 00 monthly on the average, the program is expected to generate about US$44 billion in foreign exchange earnings or inward remittances and around 4 million jobs using the rule of thumb of 4 job opportunities created for each settled foreign retiree in the country.

3. . Significant cost differences among firms? Retirement facilities cater to three (3) levels 3. . Significant cost differences among firms? Retirement facilities cater to three (3) levels of caring for the retirees, to wit, Active Living, Assisted Living, and Nursing Home, and may consist of any of or all three (3) components, viz. , Housing, Healthcare, and Hospitality or Lifestyle. In turn, each of these facilities conforms to prescribed standards drawn up by the PRI and approved by the PRA and corresponds to high end, middle class, or low end target market. Necessarily, there are substantial cost differences among the firms representing the service providers / facilities developers and operators. (Please visit the PRA and the PRI websites at www. pra. gov. ph and at www. philretirement. org, respectively. ) For all intents and purposes, the Philippines as a retirement haven in the Region can only attract the middle class and low end target market. The high end market tends to gravitate towards more popular, convenient and “classy” or “ritzy” destinations where the retirees who can afford congregate. Even as competition heightens in the future among rival destinations in the Region, the firms with higher “value for money” or “value added” proposition will accentuate the substantial cost differences among firms. · Various websites of the PRA-accredited retirement facilities.

4. Excess capacity? For any of the three (3) components mentioned, no shortage is 4. Excess capacity? For any of the three (3) components mentioned, no shortage is anticipated to adequately service the requirements of the retirees within the foreseeable future. Over the medium term and the long pull, capacity would become critical particularly in the Healthcare component considering the worsening shortages in the supply of domestic healthcare workers with no end in sight. In addition, there is growing clamour for appropriate attention to be extended to destitute Filipino retirees. As their numbers pick up in the future considering the continuing abnormally high local birth rate, a point could be reached when foreign retiree’s admission into the country, whether or not PRA SRRV holders, might not be viable anymore due to capacity constraints. · A sophisticated simulation study needs to be undertaken in order to determine the saturation point foreign retirees, at which time it may no longer be feasible to accept them into the country. 5. Cost structure of firms: sensitivity of costs to capacity utilization? Intuitively, it is to be expected that the cost structure of firms involved in the so-called “Retirement Industry” should be sensitive to capacity utilization. The extent or ranges of such sensitivity, however, will have to be calculated using appropriate framework or formula. Package presented by PRA is less attractive, concerned with dollar deposits, no incentive package. Concerned only with location offer (real estate only? ) without relocation assistance and property search and other options. Intuitively, too, if and when theoretical saturation point is attained, the costs factors become immaterial. Low priced, incentive and painless package · The previously mentioned simulation study may incorporate this particular area of inquiry. · Compare Malaysia offer and USArizona

6. Degree of product differentiation among sellers? Brand loyalty to existing sellers? Cross-price elasticity 6. Degree of product differentiation among sellers? Brand loyalty to existing sellers? Cross-price elasticity of demand among competitors in industry? Very far from competitors’ package plans. Refer to Malaysia package. No branding offered yet as no package plan is offered. Painless retirement plan · Planningmyhome. com Foreign retirees have low switching cost from one country to the other. Philippine package cannot compare with what US, Spain offers. However, for Filipino balikbayans, there is a high switching cost because most balikbayans would want to retire in the Philippines and be close to their relatives. To complete in the future, the Philippines has to offer best health care packages, continuing education and other services like employment (for retirees). · Look at best places to retire article in google Yes. However, the packages offered by PRA are incomplete. Services and incentives are not defined at the PRA web. Prices and terms of reference need to be expounded, may need pre-exploration of the plans/packages · Priceline. comfor dummies on best places to retire Yes, but needs to do business planning especially on other services like packaged plans, employment services. 7. Buyers’ cost of switching from one competitor to another? 8. Are prices and terms of sales transactions observable? 9. Can firms adjust prices quickly? 10. Large and/or infrequent sales orders? For individual buyers, transaction is a onetime purchase while group buyers buy more retirement packages (ex. Korean retirees)

11. Use of facilitating practices (price leadership, advance announcement of price changes)? Use of 11. Use of facilitating practices (price leadership, advance announcement of price changes)? Use of online advertisements in their respective portals Dissemination of information through printed promotional collaterals/brochures specifying rates, discounts & incentives Private stakeholders have formed a network but information on pricing is limited · Cooperative pricing should be discussed strategically by PRA & PRI The Philippines is promoting the products and services offered by our own retirement villages. Hence, the thrust here is inbound not outward. Retiree-participants of the Philippine Retirement Authority’s (PRA) programs who intend to travel overseas are no longer required to accomplish and submit the Retiree’s Departure Form. This is in keeping with the Authority’s thrust of liberalizing its rules and regulations. www. pra. gov. ph 12. History of “cooperative pricing”? 13. Strength of exit barriers?

FACTORS AFFECTING THE THREAT OF ENTRY · To what extent does the threat or FACTORS AFFECTING THE THREAT OF ENTRY · To what extent does the threat or incidence of entry work to erode the profitability of a typical firm in this industry? 1. Over the past decade, the Philippines has become a retirement haven for thousands of foreigners, particularly the Japanese, Korean, and Northern Europeans. Along with Thailand Malaysia, the Philippines developed communications, infrastructure, and service delivery systems specifically geared to meet the needs of foreign retirees. According to the international database of the U. S. Census Bureau, there are 6. 4 million Koreans aged 60 and above. On the other hand, investors can choose from any of the PRA-designated priority locations to establish retirement facilities, namely National Capital Region (NCR), Baguio, Subic/Clark, Tagaytay, Cebu and Davao. Korea is one of the major retiree markets for the Philippines. The U. S. Census Bureau forecasts that by the year 2015, there will be 2. 5 million more Koreans over 60 years old to total 8. 9 million. http: //www. sbwire. com/ne ws/view/9260 www. pra. gov. ph

2. Importance of reputation or established brand loyalties in purchase decisions? The Philippine Retirement 2. Importance of reputation or established brand loyalties in purchase decisions? The Philippine Retirement Authority(PRA) will adopt a Country Branding Strategy for the Retirement Industry “The President declared the Philippine Retirement Industry as a Key Flagship Project – to be led by the Private Sector with strong support from Government. ” Second, the President declared “General Edgar B. Aglipay as the Retirement Industry Czar. ” And with those two simple declarations the President unleashed the momentum, which many see as a major opportunity, to transform the economy of the Philippines. ” Gen. Aglipay of PRA has been talking about the retirement villages currently under construction in the Philippines that are aimed at providing world-class facilities and services. This is a sectoral branding strategy that PRA is currently implementing to promote the Philippine retirement industry to the global market. Comment : The Philipppine government should adopt a specific country branding slogan for the retirement sector (Example of a country with a good slogan; . Hongkong’s slogan: Discover Hongkong : Live It, Love It(with popular movie endorsers advertised through online and offline media) Sources: http: //www. philippinere tirement. org/ www. pra. gov. ph

3. Entrants’ access to distribution channels? A Korean company has mapped activities to promote 3. Entrants’ access to distribution channels? A Korean company has mapped activities to promote the retirement program of the Philippines. Being in the travel business, Rakso, a Korean firm for instance, packages tour for Koreans who would like to see the Philippines. They are also eyeing at possibility of investing in real estate in the Philippines as part of their short term plan. Mr. Lee of Rakso pointed out in a presentation that one big resistance in investing in the Philippines is the ownership restriction because the Koreans value certificate of ownership. The public-private partnership promoting the Retirement industry has been informing foreign investors about recent developments that protects the investment of foreign investors through leasehold rights contract. Long-term leases allow the lessee to earn profit as he sells his leasehold rights to another person. The Philippine Retirement Authority (PRA) has been carving a niche for the Philippines in the global retirement industry. PRA was able to achieve this status thru the hard work of PRA’s employees, the support from friends in the media, its facilities and merchant partners, and accredited suppliers, and to the unwavering support of retirees based in different islands of the Philippines. Serving as distribution channels are Philippine companies offering products and services of interest to retirees. § a leading medical group which gives retirees discounts on selected medical procedures. § an insurance and investment company that offers investment products such as bonds and equity stocks. § land developers serving as accredited real estate organizations In the future, trading of leasehold rights among foreigners may become common and a day-to-day transaction. . http: //www. philippinere tirement. org/ www. pra. gov. ph

4. Entrants’ access to raw materials? Entrants/investors are constrained by existing requirements (restriction on 4. Entrants’ access to raw materials? Entrants/investors are constrained by existing requirements (restriction on land ownership foreign investors, only lease contract of 25 years in identified retirement sites such as Subic) 5. Entrants’ access to technology/ knowhow? STATE-RUN Philippine Retirement Authority (PRA) and Philippine Retirement Inc. (PRI) on Tuesday announced that major real-estate companies have expressed interest in investing in facilities catering to foreign retirees. Edgardo Aglipay, PRA chairman, said that big companies are set to put in more money to sustain the increasing arrivals of foreigners planning to retire in the country. These are Ayala Land Inc. Filinvest Land Inc. , Megaworld Corp. , Robinsons Land Corp. , SM Investments Corp. and a property firm led by tobacco magnate Lucio Tan. These firms are expected to account for a big slice of the $4 -billion target investment in the retirement industry. PRA recently issued standards for the accreditation of retirement facilities and services. These pertain to safety and security, financing, healthcare, insurance, emergency transportation and lifestyle. · Needs review on investment policies NOTE: In Malaysia, investors are allowed to invest and own businesses. Malaysia’s MM 2 H program allows retirees to reside on a long-term basis Source : http: //www. 12 retireinm alaysia. com · http: //www. manilatimes. net/national/2007/may/ 23/yehey/business/200 70523 bus 3. html COMMENT: Are these in place?

6. Entrants’ access to favourable locations? Philippines: PRA has identified the following as retirement 6. Entrants’ access to favourable locations? Philippines: PRA has identified the following as retirement areas : North Luzon Baguio Subic Clark Tagaytay Cebu Davao PRA’s marketing group has been providing support to entrants in terms of accessing these areas. For instance, a visit by a Korean group arranged last year was facilitated by PRA with the concerned buyers and service providers. http: //www. escapeartis t. com/efam/41/anual_r etirement. html 7. Experiencebased advantages of incumbents? Thailand has integrated medical tourism, spa and retirement villages infrastructure

8. Network externalities: demand-side advantages to incumbents from large installed base? Thailand maintains its 8. Network externalities: demand-side advantages to incumbents from large installed base? Thailand maintains its existing market share by working with strategic partners. This includes the conduct of viral marketing (word of mouth), relationship marketing, loyalty and reward campaigns to promote referrals and lead generation to encourage individuals who have previously travelled to Thailand repeat visitors to recommend the destination to family and friends · http: //www. tatnews. org /tat_corporate/3488. as p 9. Government protection of incumbents? There’s government protection of incumbents for major global players like Thailand Malaysia · In the Philippines, security is a major concern especially with the recent kidnapping of media personalities by the ABBU SAYYAF 10. Perception of entrants about expected retaliation of incumbents/ reputations of incumbents for “toughness”? Entrants should expect retaliation from incumbents because of competition for the global market share. · Effective strategies should be mapped out by entrants such as the Philippines (i. e PRA and new marketing agencies)

FACTORS AFFECTING OR REFLECTING PRESSURE FROM SUBSTITUTE PRODUCTS AND SUPPORT FROM COMPLEMENTS To what FACTORS AFFECTING OR REFLECTING PRESSURE FROM SUBSTITUTE PRODUCTS AND SUPPORT FROM COMPLEMENTS To what extent does competition from substitute products outside the industry erode the profitability of a typical firm in the industry? 1. Availability of close substitutes? Aging service technology or aging in place · Agingtech. org 2. Price-value characteristics of substitutes? Very expensive 3. Price-elasticity of industry demand? Telemedicine is very expensive 4. Availability of close complements? Close complements are services related to retirement such as healthcare for retirees (manage care programs for old aged people) 5. Price-value characteristics of complements? Varies depending on service providers

FACTORS AFFECTING OR REFLECTING POWER OF INPUT SUPPLIERS · To what extent do individual FACTORS AFFECTING OR REFLECTING POWER OF INPUT SUPPLIERS · To what extent do individual suppliers have the ability to negotiate high input prices with typical firms in this industry? · To what extent do input prices deviate from those that would prevail in a perfectly competitive input market in which input suppliers act as price takers? 1. Is supplier industry more concentrated than industry it sells to? Supplier would include construction services for the construction of retirement villages. Supplier base for the construction sector in the Philippines is more concentrated than the targeted retirement village sector. For other services, there is a need for integration like healthcare and lifestyle and other services. 2. Do firms in industry purchase relatively small volumes relative to other customers of supplier? Is typical firms’ purchase volume small relative to sales of typical supplier? For construction services related to housing/accommodation for retirees, the industry purchase is low compared to the construction sector’s other clients. Real estate such as condominiums are very rampant in key cities Type of housing for target clients need improvement in terms of offers other than condominium type of units.

3. Few substitutes’ of suppliers’ inputs? For healthcare services for retirees, the substitutes are 3. Few substitutes’ of suppliers’ inputs? For healthcare services for retirees, the substitutes are traditional and alternative medicine 4. Do firms in industry make relationship-specific investments to support transactions with specific suppliers? Lease type of investment for retirement villages for the meantime 5. Do suppliers pose credible threat of forward integration into the product market? Developers of retirement villages may switch to modern real estate housing in key cities 6. Are suppliers able to pricediscriminate among prospective customers according to ability/willingness to pay for input? Suppliers in the retirement villages are those, which provide housing/accommodation, lifestyle, and healthcare services. These include developers of retirement villages and providers of retirement -related business activities. Suppliers of such services are able to price-discriminate among prospective customers according to said customers’ ability/willingness to pay for said inputs because per cursory look at some initial information gathered on pricing for accommodation and other service packages in retirement villages, suppliers have a set price scheme foreign retirees /tourist clients which is of course higher than the price

FACTORS AFFECTING OR REFLECTING POWER OF BUYERS · To what extent do individual buyers FACTORS AFFECTING OR REFLECTING POWER OF BUYERS · To what extent do individual buyers have the ability to negotiate low purchase prices with typical firms in this industry? · To what extent do purchase prices differ from those that would prevail in a market with a large number of fragmented buyers act as price takers? 1. Is buyers’ industry more concentrated than industry it purchases from? No. Degree of buyers’ concentration vis-à-vis the industry it purchases from has to be based on a more thorough study. No concrete basis yet for making a substantive conclusion. The only concentration that could possibly be identified for the meantime is the OFW clientele that could be tapped as possible clients of the Philippine retirement industry in the future. 2. Do buyers purchase in large volumes? Does a buyer’s purchase volume represent large fraction of typical seller’s sales revenue? The Koreans have shown keen interest in purchasing retirement packages such as time sharing schemes in the Philippines’ prime retirement villages (such as Subic & Nasugbu’s Imperial Silver Town Retirement Village, which has a total land area of 35, 100 sq. m. , features retirement villas, condominiums, amenities like spa and gym, health clinic, tennis court, swimming pool and park/garden as developed by the Korean firm, Se Hyun Development, Inc. ) http: //www. news. ops. gov. ph/archives 2007/apr 28. htm http: //www. philippineretirement. org/clients/philippi neretirement/March 2007. pdf According to a press release quoted in the Manila Times, Koreans have picked RP as a retirement haven. The Philippines is most favored among retirees because it offers a retirement visa providing multiple entry and indefinite stay. Middle-class workers in their 30 s and 40 s who want a cheaper English-language education for their children are also looking to Southeast Asia. A Korean noted that its the tough life and soaring education expenses that prompted him to leave South Korea.

 Southeast Asia also attracts students who cannot afford the customary private tuition which Southeast Asia also attracts students who cannot afford the customary private tuition which supplements school lessons in Korea, or international schools in Western countries. The education ministry said 4, 011 Korean primary to high-school students headed to Southeast Asia in 2005 compared to 712 in 2001. Malaysia—with moderate prices and national fluency in English—receives about half of all Korean students in Southeast Asia, said Kim Young Jun, who arranges educational opportunities in Malaysia, Singapore and the Philippines. “Malaysia is more expensive than the Philippines but parents prefer the Islamic country which offers relatively good education programs, ” Kim said. Many students who choose to go abroad stay alone or with their mothers while fathers generally remain in Korea to work and support them, putting strains on families. To avoid the stresses of separation, Peter Jang, 42, decided to immigrate to the Philippines with his wife and two children in 2004. “In South Korea, I was in a difficult situation mainly because of high education expenses. Now I and my kids feel relaxed, ” he said. He lives in Antipolo City, earning about 2 million won a month by arranging golf tours for Koreans. Despite the warm winters and leisurely lifestyle, some emigrants come back after failing to overcome loneliness and language barriers. “For retirees, living abroad is not a recommended life. They cannot spend their remaining years only playing golf, ” said Kim Sun Kyung of the Korean Association of Retired People.

3. Can buyers find substitutes for industry’s product? Alternative or traditional medicine can be 3. Can buyers find substitutes for industry’s product? Alternative or traditional medicine can be a substitute 4. Do firms in industry make relationship-specific investments to support transactions with specific buyers? Yes. Hospitals may establish relationships with health management organizations or doctor’s associations abroad 5. Is price elasticity of demand of buyer’s product high or low? Low in the short term 6. Do buyers pose credible threat of backward integration? No 7. Does product represent significant fraction of cost in buyer’s business? Yes 8. Are prices in the market negotiated between buyers and sellers on each individual transaction or do sellers post a “take-it -or-leave it” price that applies to all transactions? ·

D. Summary of Workshop Inputs/ Presentations 1. Dr. Federico Macaranas Executive Director, AIM Policy D. Summary of Workshop Inputs/ Presentations 1. Dr. Federico Macaranas Executive Director, AIM Policy Center 1. Mr. Romeo Mascardo President, Society of Competitive Intelligence of the Philippines 1. Mr. Alwin Sta. Rosa AVP-Comptrollership, Business Excellence Officer, First Philippine Holdings Corporation Board Member, Knowledge Management Association of the Philippines (KMAP) 1. Mr. A. Francisco Mier Assistant Director General, Office of the Security Policy, National Security Council

Convergence for Competitiveness Dr. Federico M. Macaranas ü Identified the different milestones that serve Convergence for Competitiveness Dr. Federico M. Macaranas ü Identified the different milestones that serve as the push factor for competitive intelligence such as the: 1. 2. 3. 4. 5. 6. ASEAN Integration by 2015 (FTAs and RTAs by 2013) Upper 3 rd in Competitiveness Indices by 2010 PEDP (latest) commitments by 2010 National S&T Targets by 2010 SME Development Plan by 2010 Philippine Services Roadmap

Convergence for Competitiveness Dr. Federico M. Macaranas ü Determine systematic tracking of competitors in Convergence for Competitiveness Dr. Federico M. Macaranas ü Determine systematic tracking of competitors in select countries though Business Intelligence Porter INDUSTRY STRATEGY INPUTS NCC DEMAND Business Intelligence: SUPPLIERS 4 Inputs • HR • Management • Energy • Infrastructure Cost Structure -labor -electricity -transportation, etc. + Coopetition +Technology & Innovation

Leveling Expectations Dr. Federico Macaranas Self • • More learning techniques on information gathering Leveling Expectations Dr. Federico Macaranas Self • • More learning techniques on information gathering & sharing. Deeper awareness & appreciation of Business Intelligence • To find new market and suppliers • To apply Business Intelligence.

Sector • • • More ethical approach for government & private sector in gathering Sector • • • More ethical approach for government & private sector in gathering & sharing of information. To use Business Intelligence as a guide for product development/inno vation. Thru updated/ relevant/ dynamic Business Intelligence. • For the government units to be equipped to better cascade information to clients. • For sector to effectively tap Business Intelligence as a tool for increasing/ maintaining market share and tapping new markets • To help all sectors become globally competitive

Philippines • • Improve Business Intelligence for Phil. Exporters. • • To create national Philippines • • Improve Business Intelligence for Phil. Exporters. • • To create national awareness on the value of Competitor Intelligence To relate macro-economic information of competitor countries to adjust Philippine prices Increased competitiveness of the Philippines year after year. For government units to have unified Business Intelligence efforts Make us a of Policy Business Intelligence as a tool for Competitiveness (Infrastructure/ Resources)

Business Intelligence Practices in the Philippines Mr. Romeo Mascardo • Competitive intelligence is a Business Intelligence Practices in the Philippines Mr. Romeo Mascardo • Competitive intelligence is a systematic and ethical program for gathering and analyzing information about the competitive forces and general business trends to further your own company’s/country’s goals. • “What information are we going to gather? ” and “Where do we get data and information? ” • The competitive intelligence cycle are: Plan, Collect Information, Analyze, and Communicate • Key Intelligence Requirements: – Strategic decisions and actions – Early warning topics – Description of key players in the marketplace

Strengthening Competitor Analysis: Practical Applications Mr. Alwin Sta. Rosa • Defined Premium Value Creation Strengthening Competitor Analysis: Practical Applications Mr. Alwin Sta. Rosa • Defined Premium Value Creation as a value increment brought about by consistently performing beyond expectation, by excellent resources and processes to deliver expectations and by exceptional strategies that are well communicated • Presented experiences of First Philippine Holdings Corporation in integrating business intelligence in its systems and processes. • Presented experience of PCASTRD in the conduct of its Strategic Planning using business intelligence in the formulation of its Plan

Towards a First World Social Brain Mr. A Francisco Mier • Defined “Social Brain” Towards a First World Social Brain Mr. A Francisco Mier • Defined “Social Brain” as a network of high powered think tanks and R&D centers in support of a National Vision . • Network – are individuals and groups actively exchanging and sharing knowledge • High powered - able to influence decision-making in the highest levels of the business, civil society and state sectors of the nation. • Think tanks - academic and non-academic groups/organizations conducting research on wide ranging issues and disseminating their outputs for use by their principals, special publics or for information of the general public. • R&D centers - organizations dedicated to generating, conceptualizing and testing ideas on new products/services that could eventually be commercialized or made available to the consuming public. • National Vision - a commonly agreed upon and time-bounded description of the end-state/end-goal for the Filipino nation

E. Workshop Output: Home-Style Furniture Threats to Profit Force Current Future Internal Rivalry High E. Workshop Output: Home-Style Furniture Threats to Profit Force Current Future Internal Rivalry High Entry High and increasing Substitutes and Complements Low but increasing Supplier Power Medium and increasing Buyer Power High

E. Workshop Output: Apparel Threats to Profit Force Current Future Internal Rivalry High and E. Workshop Output: Apparel Threats to Profit Force Current Future Internal Rivalry High and increasing Entry High Substitutes and Complements Low Supplier Power Medium and increasing Buyer Power Medium High

E. Workshop Output: Food Threats to Profit Force Current Future Internal Rivalry Low Medium E. Workshop Output: Food Threats to Profit Force Current Future Internal Rivalry Low Medium and increasing Entry Medium and increasing Substitutes and Complements High and increasing Supplier Power Low Medium to high Buyer Power High

E. Workshop Output: Health & Wellness - Retirement Threats to Profits Force Current Future E. Workshop Output: Health & Wellness - Retirement Threats to Profits Force Current Future Internal Rivalry Medium High Entry Low Medium Substitutes and complements Low Medium Supplier Power Medium High Buyer Power Medium High

E. Workshop Output: Observations and Findings • • • Lack of appreciation by the E. Workshop Output: Observations and Findings • • • Lack of appreciation by the participants as manifested by the incomplete and few submission of the Porter’s Five Forces Analysis. Reasons given were: 1) Exercise is time consuming; 2) Cannot find information on the internet; 3) Not familiar with Porter’s Five Forces Model; Participants were constrained by lack of available information on the internet. Some participants are knowledgeable about the exercise but were constrained to do the tedious part of the analysis (completing the Porter’s Five Forces) or doing the information search. Hesitancy of participants from the private sector to share information e. g. pricing and cost structure Existing apparel database in DTI (WGSN. com) is under-utilized because proprietary constraints.

F. Synthesis of Implementation Strategy Papers 1. Continuous capability building of government and industry F. Synthesis of Implementation Strategy Papers 1. Continuous capability building of government and industry practitioners on competitor analysis and business intelligence o o 2. Similar workshop be conducted for all critical sectors with a longer timeframe but staggered schedule (i. e. one a week for six month starting this year) to both government personnel and industry practitioners Export Development Council and DTI should take the lead in pushing for massive training tapping institutions such as AIM, UP, UA &P, DLSU, Society of Competitive Intelligence of the Philippines, etc. Outsourcing of formulation of industry analysis including business intelligence plans o 3. Export Development Council and DTI should take the lead in outsourcing the formulation of industry analysis and business intelligence Increasing access to global and local researches and industry databases o o 4. The Department of Science and Technology (DOST) and the Department of Health (DOH) should provide assistance For Food Industry, public (DA/DTI/DFA/ PCARRD - Mango Information Network (MIN) ) and private agencies (e. g. Phil. Export, Philfoodex, ) Setting up f intelligence gathering activities o Kapihan is recommended for all critical sectors. Industry Associations, DTI and EDC should take the lead in organizing the said forum within this year.

G. Synthesis of Policy Reform Papers 1. Patenting Filipino products (e. g. hilot, apparel G. Synthesis of Policy Reform Papers 1. Patenting Filipino products (e. g. hilot, apparel and furniture designs, mango (brand) o 2. Export Development Council should negotiate with the WTO in patenting the Pinoy Hilot and other Pinoy products to signify PHillippne brand. Taking advantage of ASEAN agreements and other bilateral agreements to collect business intelligence on key industries o 3. DTI through EDC should take the lead Industry Integrations (Supply Chain approach) o 4. public and private partnership to facilitate better competitive-cooperative relationship, network protocols, and standardization (i. e. DTI –EDC and Industry players) Educational Reforms and Technological Innovation o o o The NCC should direct CHED and TESDA to work closely DOST and DA should be at the forefront in developing appropriate or alternative technologies DTI and EDC should take the lead National Competitive Council (NCC) should direct the PIDS, DOST and all State Colleges and Universities (SUCs) and perhaps even High School Sciences to focus researches that can help improve the competitiveness of Philippine industries Design center of the Philippines

Mabuhay Competitive Philippines! copies available at http: //www. policy. aim. edu/ Mabuhay Competitive Philippines! copies available at http: //www. policy. aim. edu/