i

TABLE OF CONTENTS

Executive Summary…………………………………………………..………………….1

Chapter I: Introduction

Nature of Business....................................................................................... 4

Company History......................................................……………………… 4

Organizational Structure...........……………………………………………..5

Number of Employees…..............................................................................6

Major Market Served…………………………………………………...…...7

Other Relevant Information......................................................................…8

Chapter II: Research Design and Methodology

Data Requirements and Data Sources...........................................................9

Research Design and Methodology..............................................................9

Scope and Limitations of the Study.............................................................10

Chapter III: External Analysis

Key External Forces.....................................................................................11

Concern Factors Affecting Threats and Opportunities……………………..13

Chapter IV: Industry and Competitors Analysis

Market Size and Growth Rate…………………………………..................15

Customer Composition and Characteristics………………………………..15

Technology Developments………………………………………………....16

Numbers of Players and Their Size………………………………………...16

Competitive Rivalry………………………………………………………..17

Industry Pricing………………………………………………………….....17

Critical Success Factors In the Industry…………………………………....19

Porter’s Five-Forces Model………………………………………………...19

Competitive Profile Matrix………………………………………………...22

External Factor Evaluation Matrix…………………………………………25

Conclusion on Industry Attractiveness........................................................27

Key External Strategic Issues......................................................................27

Chapter V: Company Analysis

Vision Analysis............................................................................................28

Mission Analysis..........................................................................................28

Ways to Communicate Vision and Mission Statement................................29

Comparative Financial Statements...............................................................30

Market Share................................................................................................39

Financial Ratios…………………………………………………………….40

Internal Analysis......................................................................................... 47

Internal Factor Evaluation Matrix………………………………………….52

Key Internal Strategic Issues.......................................................................53

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Chapter VI: Strategy Formulations

Strengths, Weaknesses, Opportunities and Threats Matrix……….............54

Strategic Planning Action Evaluation (SPACE) Matrix…………………...58

Grand Strategy Matrix………………………………………………...........61

Quantitative Strategic Planning Matrix (QSPM)………………………......63

Chapter VII: Recommendations

Recommended Revised Vision Statement....................................................67

Recommended Revised Mission Statement..................................................67

Recommended Strategic Objectives..............................................................67

Recommended Strategies..............................................................................68

Chapter VIII: Strategy Implementation

Programs........................................................................................................69

Action Plan....................................................................................................69

Chapter IX: Strategy Evaluation and Control

Evaluation......................................................................................................80

Control...........................................................................................................81

Contingency Plan..........................................................................................82

References.......................................................................................................................84

Appendix.........................................................................................................................85

TABLES:

Table 1. Company Profile Matrix..................................................................22

Table 2. EFE Matrix......................................................................................25

Table 3. IFE Matrix.......................................................................................52

Table 4. SWOT Matrix..................................................................................54

Table 5. QSPM..............................................................................................63

FIGURES:

Figure 1. Market Share..................................................................................29

Figure 2. Comparative Financial Performance..............................................45

Figure 3. Comparative Financial Position.....................................................46

Figure 4. SPACE Matrix...............................................................................60

Figure 5. Grand Strategy Matrix...................................................................61

Figure 6. Annual Objectives..........................................................................70

Figure 7. Proposed Organizational Structure................................................72

1

EXECUTIVE SUMMARY

Three Little Star Learning Center, Inc. (TLSLC, Inc.) is an educational

institution located at 398 A. Bonifacio Street, Pinagpanaan, Talavera, Nueva Ecija.

Currently, they offered pre-elementary and elementary school courses.

Based on the external and internal analysis, the total weighted score of EFE

Matrix is 2.31 which below the average of 2.5. This indicates that the business is not

doing well, not taking advantage of external opportunities, and not neutralizing the

impact of external threats. The total weighted score is 2.90 of the internal factor

evaluation matrix which is above the average of 2.5. This indicates that the business is

doing well in taking advantage of internal strengths and reducing internal weaknesses.

The key issues that the company should consider are: customer trust and loyalty, rising

number of competitors in the industry, potential transferees from public schools,

availability of qualified teachers, employee turnover, marketing efforts, employee

benefits and incentives and teacher-to-student ratio.

The result of SWOT Matrix shows that the company should implement strategy

such as increase in employee benefits and rewards to attract qualified teachers, offer

High school curriculum, avail of cash discount on books to maximize the use of funds,

recognized accomplishment of their students or alumni through print advertisements,

provide additional incentives to employees to increase employee retention, continue

providing quality education and stability assurance on management matters to increase

customer loyalty, increase employee satisfaction and competitiveness by continuous

trainings and seminars to enhance employee skills, adapting to technological changes

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through the use of generated funds, and additional advertising cost to invite more

enrollees and improve Facilities for recreation.

The SPACE Matrix shows a result that the company, being in the conservative

quadrant (upper-left quadrant) of the SPACE Matrix, should pursue conservative

strategies which often include market penetration, market development, product

development, and concentric diversification. It also implies that the firm should stay to

their basic competencies and not taking excessive risks.

Based on Grand Strategy Matrix, the industry has an annual growth of 5.56%

which could be considered to have rapid market growth. The assessment on TLSLC, Inc.

indicates that its external environment is weak. The suggested strategy to be pursued by

TLSLC, Inc. must come from quadrant II which is market penetration and product

development in particular.

From the QSPM matrix, two strategic alternatives — product development and

market penetration — are being considered by the group. Product development strategy

includes, but not limited to, providing tutorials for students. On the other hand, strategies

on market penetration can be carried out through intense marketing efforts. The sum

total attractiveness score of 4.69 indicates that market penetration is more attractive

strategy when compared to product development strategy.

Strategies should be designed to support and to accord with organizational

structure, vision and mission; to properly communicate it with key employees; to

efficiently allocate and utilize the organization’s limited resources; to attract and retain

skilled teachers and other personnel; to redirect marketing efforts; to improve and

maintain competitive position and financial stability; and to delegate authority and

3

responsibility of every staff so that they can work efficiently and develop harmonious

relationship within the organization.

Summarizing all the matrixes prepared and examined, market penetration is the

best strategy that should be implemented by the company. It implies that the company

must seek to increase market share for present services in present market.

The researcher examined the company’s management, marketing, production and

operation, finance and accounting, and management information system issues that are

central to effective strategy implementation.

Management issues central to strategy implementation include establishing

annual objectives, devising policies, allocating resources, matching structure to strategy

and linking performance and pay to strategies.

Since the TLSLC, Inc. is a service industry, the operation process comprises

inputs such as facilities, teaching materials, competitive teachers, to gain an output of

quality education.

When implementing strategies, the company must consider the capacity and

behavior of its human resource. Problems that may arise in implementing strategies can

usually be traced to one of three causes: (1) Disruption of social and political structure,

(2) Failure to match individuals’ aptitudes with implementation tasks, and (3)

Inadequate top management support for implementation activities.

. The company can implement many ways to market and advertise its operation

and name. The company can distribute leaflets to houses in order that the community

will have information on the services, rates of tuition, its quality and benefits like

proving better discounts against competitors provided by the company.

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CHAPTER I

INTRODUCTION

NATURE OF BUSINESS

The Three Little Star Learning Center, Inc. (TLSLC, Inc.) is a privately owned

institution primarily organized as an entity providing education service. It is a closed

corporation where the incorporators are composed mainly of the family members.

Currently, they offered pre-elementary and elementary school courses. The registered

office address of the educational institution is 398 A. Bonifacio Street, Pinagpanaan,

Talavera, Nueva Ecija.

COMPANY HISTORY

On June 1999 Mr. and Mrs. Maranan decided to put up a learning center in their

locality in Brgy. Pinagpanaan, Talavera, Nueva Ecija in a newly build garage with an

area of 48 sq. m. They believe that this center will develop children of 21st century to

become adults and will sustain their creativity during the formative years through its

curriculum. These were the heart and soul of program’s philosophy, goals and objectives

that are intertwined firmly so that their product will be quality children who are well-

rounded individuals physically, cognitively, emotionally, and socially who’s values are

not only learned but caught and internalize as they move along through the years. Three

Little Stars Learning Center was started with only twenty five pupils in the kindergarten

and nursery classes handled by the directress, Mrs. Remedios G. Maranan and an

assistant teacher. On February 14 2000, the school was granted the government

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recognition/accreditations #E0112 in the pre-elementary level. To carry on the goals and

mission of the school, there is a need to continue the level of educating elementary

pupils by giving them the basic education from grade I until they finally reach grade VI.

It is only then that evaluation can be made if the learners have been equipped with all

the skills cognitively, physically, socially, emotionally, morally upright and totally

develop citizen. The company would be a partner of our government in developing the

Filipino youth to become honest and competent leaders of our beloved Philippines, so

that “this nation will be great again”. So on august 19 2005, TLSLC, Inc. was accredited

by the DepEd #E-105, S. 2005 for grade I to grade VI of the elementary course.

Organizational Structure

Three Little Star Learning Center, Inc. Administration and Staff

Mr. Alejandro D. Maranan Jr.

President

Mrs. Remedios G. Maranan Vice President/Directress

Mrs. Christine G. Maranan Novales

Secretary

Mrs. Chona G. Maranan Osis Treasurer

Mrs. Charina Grace G. Maranan Borge Auditor

Mrs. Digna T. Maulino

Asst. to the Principal

Mrs. Marian E. Tongol Teacher in-charge – Pre-Elementary

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The above organizational structure given by the directress of the school is the

one which has been filed to Securities and Exchange Commission (SEC) for compliance

purposes only. Also, the structure provides positions which identify the duties and

responsibilities of the officers. However, the above mentioned structure does not take

effect for the present company operation.

Number of Employees

Currently, the company has nine employees composed of eight contractual

teachers and one utility personnel. Each contractual teacher undergoes certain

qualifications and trainings. The teacher must be a graduate of Bachelor of Science in

Elementary Education, had an early childhood teaching course and must passed the

written examination, interview, and teaching demonstration to be evaluated by the

directors of the school. After passing the said qualifications, the teacher must undergo

into two weeks teaching training.

Meanwhile, the utility personnel serve as the janitor and the security of the

campus. The utility personnel must be trustworthy, industrious and committed in doing

his job.

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Major Markets Served

The major market served by TLSLC is the parents/guardians with children of age

4-12 years old male and female, Filipino or non-Filipino, sectarian and non-sectarian.

The students of the school are wholly within Talavera, Nueva Ecija.

Other Relevant Information

Company Philosophy

The administration and staff of TLSLC, Inc. believed that every individual is

unique, worthy, dignified, so he or she should be respected, nurtured, with cognitive,

emotional, social, and physical growth and provided with rich and age-appropriate

learning experiences through self-discipline, good study habits, value integration in the

curriculum coupled with scholarly and caring mentors.

The school commits itself to create a good learning environment that is anchored

with current educational trends and strategies, applies positive approaches and empathic

understandings, accentuates and recognizes each child’s God given talents and capacities.

The school further emphasizes knowledge and discovery of the truth can be

attained by virtue and values formation.

With this, children are holistically transform to become productive, divergent

thinkers, value oriented, thus: physically, mentally, socially, emotionally prepared to

cope with complex issues and needs of the ever changing time; challenges of

competitive world and adjust the advancement in science and technology.

8

Company Vision

TLSLC, Inc. envisions a community of active leaders of our country and citizens

that will make this nation great again and be proud of ourselves as Filipinos.

Company Mission

TLSLC, Inc. provides well balanced educational programs in our curriculum for

formation of individuals who are God loving, self reliance, creative, responsible,

equipped with functional intelligence and moral virtues.

Company Goals

TLSLC, Inc. aims to be one of the best school in our place with up-to-date and

age- appropriate practices and an electric curriculum which incorporates the traditional

but useful and the new but fruitful knowledge.

Company Objectives

1. TLSC, Inc. shall aim to develop the spiritual, moral, and physical capabilities,

of the child pattern from the Revised Elementary Program in 1970.

2. Provide the child with experiences in democratic way of life.

3. Inculcate ideas and attitudes of patriotism and nationalism.

4. Teach the duties of a leader and a follower.

5. Encourage critical and logical thinking.

6. Broadens scientific, technological and creative thinking.

7. Promote the country’s cultural heritage.

9

CHAPTER II

RESEARCH DESIGN AND METHODOLOGY

DATA REQUIREMENTS AND DATA SOURCES

This research requires the following data: company’s financial statements,

mission and vision statement, goals and objectives, philosophy, background or history,

general policies and other relevant information that is needed in this study.

The researchers’ source of data was the interview conducted with Mrs. Remedios

G. Maranan, the current Vice President and Directress of the said company. The

researchers also obtain data from their student handbooks and accounting records.

Information needed in performing External and Internal Audit was acquired

through observation in the company’s environment and operations. In determining their

market share the researcher get the total number of pre-elementary and elementary

students in Brgy. Pinagpanaan, Talavera. This information was gathered from the

Municipal Planning and Development Office of the Municipality of Talavera..

RESEARCH DESIGN AND METHODOLOGY

Interview was the method used in collecting data in this study. It is chosen

because of its flexibility in terms of data gathering. It gathers data interactively and

attains important data beyond the expectations. The interview method could yield a high

proportion of information. This was possible because the interviewee’s answer could be

easily validated and probed by the interviewer in real time. This was used in gathering

data from the company’s director and other key personnel about the company’s rules

10

and regulations governing their services, how the company complies with them and how

they provide services. The interview method was also used in assessing how the

management responds to the customer demands. The information that were gathered will

undergo further analysis to answer the questions cited in this study and ultimately

evaluate the performance of the company in responding to the varying preferences of

customer in conformity with the services laid down by their competitors. The

researchers personally visit the school for an interview.

The descriptive method of research was used in this study. The information

concerned the current status of the phenomena to describe “what exists” with respect to

the given conditions in a situation. Descriptive method involves the description,

recording, analysis and interpretation of the present nature, composition or processes of

phenomena.

SCOPE AND LIMITATIONS OF THE STUDY

This study focuses on the background of the TLSLC, Inc. such as its history ,

nature of business and the other relevant information, analysis of its external

opportunities and threats; factors affecting its industry and competitors; evaluation of

company’s mission, vision and philosophy and objectives; and lastly using the gathered

information to generate the best strategy.

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CHAPTER III

EXTERNAL ANALYSIS

The following are the areas of concerns that are significant in analyzing the

external environment of TLSLC, Inc.:

ECONOMIC FORCES

The economic environment comprises the different economic conditions of the

TLSLC, Inc. Some of the areas concerns are availability of qualified teachers and supply

of capital needed for expansion. With regards to availability of qualified teachers, the

company have a lot of applicants to hire because they can be hired even though they are

not board passers. The company wants to expand their operations (from grade school to

building high school courses) if they have some capital investment to use.

SOCIAL, DEMOGRAPHIC AND ENVIRONMENTAL FORCES

Social – The school participates in outside activities with other private schools.

They participate socially in some activities like quiz bee on spelling, math, and science

category which they compete with other private schools within the district, sponsored by

Nueva Ecija Private Elementary Education Association (NEPEEA). They also practice

social awareness within their four corner of the school. They celebrate significant events

with quality and entertaining program that develops and showcases the students’ talents.

Parents are enjoined to support their children in celebration of different momentous

12

occasions such as the school’s Foundation Day, Buwan ng Wika, Christmas and

Graduation Program.

Demographic – The school is located at 398 A. Bonifacio St., Pinagpanaan,

Talavera which is quite away from the main road. The location is also good because it is

away from too many people so there is almost no disturbance or noise created. The

surrounding is composed of family houses living there and is nature-oriented. It is also

near to the Barangay Hall which is advantageous for security purposes.

Environment - The surrounding of the school is very nature-oriented – full of

trees and fresh air roams freely. They also observe cleanliness inside and outside of the

school. Near the school, there is a coconut plantation that enhances the natural beauty of

the location.

TECHNOLOGICAL FORCES

If the company wants to survive in the long-run, it must adopt to changes such as

technological development. School nowadays have adopted technological development

such as using computers. In order for TLSLC, Inc. not to be left behind by its

competitors, they are offering computer subjects on their grade school courses and use it

as learning materials in providing quality education.

GOVERNMENT AND LEGAL FORCES

As compliance to government standards specifically Department of Education

(DepEd) standards, the TLSLC, Inc make an effort to process their government

recognition/accreditation such as #E 012 in the pre- elementary level during February 14,

13

2000 and on August 19, 2005, they were granted accreditation by DepEd to operate

Grade I to Grade VI of elementary courses. They are accredited by the Securities and

Exchange Commission being a corporation in nature.

COMPETITIVE FORCES

TLSLC, Inc. entered into a private educational institution industry that provides

quality education to the student it serves. The external environment has contributed to its

potential growth. The private schools within the town of Talavera increases in numbers

and they were the main competitor of the TLSLC, Inc.

CONCERN FACTORS AFFECTING THREATS AND OPPORTUNITIES

Market Demand and Opportunities

The school is surrounded by agricultural lands. There is opportunity of increase

in number of residential houses around the school due to the conversion of agricultural

lands. As a result of growth in population, there could be an opportunity of growth in

market size. But examining the possible threats, there could be decrease in customer

trust and loyalty due to false notion that the school will end its operations.

Competition in the Industry

Looking the social forces of the school, it participates in some outside activities

with other private schools. They compete in quiz bee and specialized subjects and gather

competitiveness through winning in the competitions. But looking its competitive forces,

14

the number of private schools is relatively high which contributes to the intensity of

competition in the industry.

Suppliers and Labors

The economic forces indicate that the availability of needed labor is stable. Thus,

there are enough supplies of qualified teachers which provide quality education.

Suppliers of books and learning materials allow the schools to maximize its capital

investments by giving discounts and promos. On the other hand, present teachers treat

the school as a stepping stone to enter in the public school. Thus, it creates loss of

competitive teachers that often contributes to the competitiveness of the school.

Technological Advancement

The technological forces allow the firm to see the importance of adapting to

changes. The trend today is that schools are capitalizing in technological advancement in

order to provide quality education. It could also used to improve its marketing efforts

which could enhance its market share in the industry. But this also means, failure

adapting to change will lead to loss of competitive advantage.

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CHAPTER IV

INDUSTRY AND COMPETITORS ANALYSIS

Market Size and Growth Rate

The market size has been determined by the researchers through the number of

individuals of Barangay Pinagpanaan falling within ages 4 to 12 years old. This range of

age is believed to be the range of potential market, Pre-elementary and elementary level.

The total market size is 837 individuals. The growth rate projected is 5.56% every year.

Customer Composition and Characteristics

The majority target customers of the industry are the parents with enough

capabilities to send their children into a private school. The prospective students are

young male and female under the age bracket of 4 to 12 years old which derives their

necessities to their parents. The parents must have stable jobs or capable of supporting

their children to private school because the tuition fee is significantly expensive.

In less-developed countries like the Philippines, people are very meticulous in

choosing services and products. They are considered as price sensitive because the price

is very significant to them. Thus, price sensitive customers may prefer public school

than private schools because e the tuition fee in private school is expensive compared to

public school.

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Technology Developments

The trend in companies engage in education is now focusing on e-learning

education. This system comprises the use of computer and internet which is more

interactive, faster and conducive for learning. Companies focusing on this kind of

learning system invest large amount of money on more advanced teaching tools such as

computers and projectors. The organization should employ teachers that are capable of

implementing this kind of system.

The company will benefit from this investment not only in terms of higher

customer satisfaction but also in terms of payroll, accounting functions, flexibility of

education, and grading system.

Competitive Rivalry

The major competitors of TLSLC, Inc. in their industry are Holy Angels

Academy, New Horizon, Renato E. Herera Montessori College (REHMC), Talavera

Central School, and Mary’s Little Angels Montessori School. But their most significant

rivals based on demographic location of TLSLC, Inc. are Kobayashi and Christian Faith

Academy.

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Numbers of Players and Their Size

Players within the industry of providing education has enormously increasing

today, there are 15 private schools operating within Talavera. 80% of these are situated

in the town proper where large number of potential market is available. The remaining

20% is operating outside the town proper and serving a small number of potential

markets. TLSLC, Inc. belongs to the 20% of the private schools operating outside the

town proper of municipality of Talavera.

Industry Pricing

Enrollment Fee of Three Little Stars Learning Center Incorporated

Three Little Stars Learning Center Inc.

Enrollment Fee

2011-2012

Annual

Tuition Fee

Miscellaneous

Books

Computer

Total

Pre-Elem

9,000.00

2,400.00

2,400.00

-

13,300.00

Grade I-III

9,000.00

2,400.00

3,500.00

1,500.00

16,400.00

Grade IV-VI

9,000.00

2,400.00

3,700.00

1,500.00

16,600.00

Optional Down Payment of P5,000.00

Monthly

Quarterly

Semi-Annual

Pre-Elem

979.00

2,935.00

4,400.00

Grade I-III

1,270.00

3,800.00

5,700.00

Grade IV-VI

1,290.00

3,870.00

5,800.00

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Optional Down Payment of P4,000.00

Monthly

Quarterly

Semi-Annual

Pre-Elem

1,090.00

3,270.00

4,900.00

Grade I-III

1,380.00

4,135.00

6,200.00

Grade IV-VI

1,400.00

4,200.00

6,300.00

Note:

Monthly Payment Due: 1st week of July to March

Quarterly Payment Due: July 1, October1 & January 1

Semi-Annual Payment Due: July 1 & November1

Discounts:

1. A 10% discount on tuition fee is given for those who pay in full upon registration or

before the beginning of the regular school year.

2. Two brothers and/or sisters, youngest gets a 14% discount on tuition fee.

3. Three brothers and/or sisters, youngest gets 50% discount on tuition fee.

4. Four brothers and/or sisters and above, youngest gets 100% discount on tuition fee.

The tuition fee pricing of the key competitors in the industry is relatively higher by

approximately 2% compare to the pricing of TLSLC, Inc.

19

Critical Success Factors in the Industry

The critical success factors are composed mainly of internal and external issues.

This could contribute to the formulation of effective strategy which could result to

competitive advantage. The internal issues includes pricing, quality of services,

employee skill and turnover, availability of capital, management and administration

which define by organizational structure, and marketing concerns which includes

advertising. The critical success factors on external issues include the market share in

the industry, location of the firms, availability of technology advancement, and

government compliance. These critical success factors would be used in analyzing the

industry.

PORTER’S FIVE-FORCES MODEL

Rivalry among Competing Firms

The intensity of rivalry among competing firms tends to increase as the number

of competitors increases. Capability of competitors becomes equal and any increase in

the industry growth will bring each competitor’s equal chance to gain that growth.

The Three Little Star Learning Center, Inc. experiences decline in enrollees this

past year due to wrong notion that the school will ends its operation. The demand of

consumers for quality education also intensifies the competition. The strategy of the firm

is effective and successful if it provides competitive advantage over the strategies

pursued by rival firms.

20

Potential Entry of New Competitors

Whenever there is new firms’ entering in the industry, the intensity of

competition also increases. New players in the market cannot easily enter due to

government regulatory policies concerning the accreditation granted by them. The

requirements needed should be filed to the Department of Education for the enough

capital, faculties, facilities, and good curriculum in order for the government to grant

accreditation.

Lack of experience and undesirable location covered also create barriers to entry

in the market. Customer trust and loyalty can be achieved through significant experience

of the firm. Another barrier is the location which must be competitive enough for the

new firm to gain market share. Whenever the new firm entering the market, is

significantly strong, the firm must be capable of securing its competitive position and

take necessary actions to counter the new entrants.

Potential Development of Substitute’s Product/Services

The potential development of substitute services/products contributes to

increasing competition in the industry. Customers today demand quality education for

their children. Customers can hire independent tutors for their children to maintain the

quality of education they demand. This would entail a decreased on the enrollees of the

school and increased in the intensity of competition.

21

Bargaining Power of Supplier

The bargaining power of suppliers affects the intensity of competition. The

TLSLC, Inc. allows the potential entry of new suppliers of books. The suppliers of

books and educational tools offer discounts and promos to school they go. It must be the

interest of both suppliers and producers to assist each other with reasonable prices and

improved quality of learning materials. There is also enhancing availability of

competitive teachers which provide quality education due to high supplies of fresh

graduates whose major is education.

Bargaining Power of Consumers

Nowadays, the demand for quality education is increasing because of the

conviction that it would alleviate poverty. The customer of TLSLC, Inc. has a

substantial influence on the competitiveness of the firm. In order for the school to gain

customer trust and loyalty, it offers discounts on tuition fee to customers. The firm is

also struggling in the face of falling consumer demand due to rumors that the school will

gain to ends its operations. Thus, it also contributes to increase the bargaining power of

consumers. A well-informed consumer about the school’s service, prices and cost also

contributes to the bargaining power of the customers. The increase of knowledge

customers about prices makes them to think for substitutes or transferring to other

school (e.g. public schools) if the price is significant to them.

22

Competitive Profile Matrix

Kobayashi Christian Faith

Academy

Critical Success Factors Weight Rating Weighted

Score Rating

Weighted

Score

Pricing 0.02 2 0.04 2 0.04

Service Quality 0.17 3 0.51 4 0.68

Market Share 0.17 1 0.17 3 0.51

Finances 0.13 2 0.26 3 0.39

Location 0.09 1 0.09 4 0.36

Employees Skill 0.08 3 0.24 3 0.24

Teaching Aid 0.06 2 0.12 2 0.12

Management 0.07 3 0.21 3 0.21

Administration 0.03 3 0.09 3 0.09

Technological

Advancement 0.04 2 0.08 3 0.12

Government Compliance 0.03 3 0.09 3 0.09

Employee Turnover 0.04 3 0.12 4 0.16

Extra Curricular Activities 0.03 2 0.06 4 0.12

Advertising 0.03 1 0.03 4 0.12

Organizational Structure 0.01 2 0.02 3 0.03

Total 1 2.13 3.28

Table 1. Company Profile Matrix

The two most important factors to being successful in the industry are “service

quality” and “market share” with a weight of 0.17. Kobayashi is weaker on market share

with the rating of 1.0 or weighted score of 0.17 and Christian Faith Academy is stronger

with the rating of 3.0 or weighted score of 0.51. Christian Faith Academy is relatively

stronger in service quality with the rating of 3.0 or weighted score of 0.51 compare to

Kobayashi with the rating of 4.0 or weighted score of 0.68.

23

SUMMARY AND CONCLUSION

External Opportunities

� Increase availability of qualified teacher because of abundant supply of fresh

graduates of Bachelor of Science in Elementary Education (e.g. graduates from the

newly branch of NEUST in Talavera).

� The school is located relatively far from the road which ensures the student’s

safety.

� With the aid of technology, the company could increase accessibility through

establishing net working site on which they promote their services.

� The fluctuation of tax rate imposed by government agencies does not influence

them.

� Availability of book suppliers that allow the school to choose the best of quality

books at a reasonable price.

� Increase in market size due to conversion of agricultural areas into residential

areas.

� Increase in popularity because of excelling in different competitions in higher

level such as national level quiz bee.

� Increase in students by adding high school department if there is available capital

investment.

� High student transferees from public school because of unsatisfactory facilities.

24

External Threats

� Possible loss of competitive teachers in the school because a lot of newly hired

teachers treat the institution as a stepping stone for them to enter in the public school.

� Increasing number of competitors due to rising number of private school in the

locality.

� New government regulations/policies that may affect the company. It may result

to higher cost of compliance and if not complied, may result to decreased

customers/students.

� Decrease in customer loyalty due to false notion that there will be changed in

administration.

� The area around the school is included in the flood prone area.

� Increases degree of government intervention due to accreditations achieved.

� Decrease in competitive advantage due to failure to adapt to technological

changes.

25

External Factor Evaluation Matrix

Key External Factors Weight Rating Weighted

Score

Opportunities

Increase availability of qualified teacher because of abundant

supply of fresh graduates of Bachelor of Science in Elementary

Education (e.g. graduates from the newly branch of NEUST in

Talavera).

0.11 4 0.44

The school is located relatively far from the road which ensures

the student’s safety. 0.08 2 0.16

With the aid of technology, the company could increase

accessibility through establishing net working site on which they

promote their services.

0.03 1 0.03

The fluctuation of tax rate imposed by government agencies does

not influence them. 0.03 1 0.03

Availability of book suppliers that allow the school to choose the

best of quality books at a reasonable price. 0.07 3 0.21

Increase in market size due to conversion of agricultural areas

into residential areas. 0.10 1 0.10

Increase in popularity because of excelling in different

competitions in higher level such as national level quiz bee. 0.06 3 0.18

Increase in students by adding high school department if there is

available capital investment. 0.04 2 0.08

High student transferees from public school because of

unsatisfactory facilities. 0.05 4 0.20

Threats

Possible loss of competitive teachers in the school because a lot

of newly hired teachers treat the institution as a stepping stone

for them to enter in the public school.

0.05 4 0.20

Increasing number of competitors due to rising number of

private school in the locality. 0.11 1 0.11

New government regulations/policies that may affect the

company. It may result to higher cost of compliance and if not

complied, may result to decreased customers/students.

0.03 1 0.03

Decrease in customer loyalty due to false notion that there will

be changed in administration 0.12 3 0.36

The area around the school is included in the flood prone area. 0.06 1 0.06

Increases degree of government intervention due to

accreditations achieved. 0.01 2 0.02

Decrease in competitive advantage due to failure to adapt to

technological changes. 0.05 2 0.10

Total 1 2.31

Table 2. EFE Matrix

26

The most important factor to be considered to become successful in this industry

is to neutralize the threat such as “decrease in customer loyalty due to false notion that

there will be changed in administration” with 0.12 weight, because it will result in

sudden decrease in total numbers of enrolees. Also take into consideration the two

factors, “Increase availability of qualified teacher because of abundant supply of fresh

graduates of Bachelor of Science in Elementary Education” and “Increasing number of

competitors due to rising number of private school in the locality” with 0.11 weight. The

industry has superior response (rating = 4.0) with regards to the following factors:

“Possible loss of competitive teachers in the school because a lot of newly hired teachers

treat the institution as a stepping stone for them to enter in the public school” and

“Increase availability of qualified teacher because of abundant supply of fresh graduates

of Bachelor of Science in Elementary Education” by taking necessary action such as

giving essential benefits and incentives to their employees. The industry also has

superior response on “High student transferees from public school because of

unsatisfactory facilities” by continue improving their facilities to accommodate

transferees or new students.

Finally, the total weighted score of EFE Matrix is 2.31 which below the average

of 2.5. This indicates that the business is not doing well, not taking advantage of external

opportunities and not neutralizing the impact of external threats.

27

CONCLUSION ON INDUSTRY ATTRACTIVENESS

Filipinos nowadays give more importance in education because of the premise of

better future. Thus, parents try to send their children to school that provide quality

education. That’s why industries providing educational service doesn’t easily vanished

because of that demand for quality education. However, there are some external factors

that may affect the trends such as economic condition, government policies and

technological advancements. There could be potential growth in this industry if players

in industry could uplift the desired output of its market.

KEY EXTERNAL STRATEGIC ISSUES

• Customer trust and loyalty

• Rising number of competitors in the industry

• Potential transferees from public schools

• Availability of qualified teachers

28

CHAPTER V

COMPANY ANALYSIS

VISION ANALYSIS

A good vision statement of a company must briefly answer the basic question “what

do we want to become?” It should also describe outcomes that are five to ten years away,

and it should provide the foundation for developing a comprehensive mission statement.

The researchers observed that the vision of the TLSLC, Inc. does not depict directly

what the company wants to be in the long-run. It does not promote change for their

desired direction, but they had only described their specific output they want to be

achieved. It is also broad in scope.

MISSION ANALYSIS

A good mission statement must rely accordingly with its vision statement. The

researchers had made observation on the TLSLC Inc.’s mission statement. Findings

includes that it vaguely state what really the company’s purpose is on making output in

connection to what their company’s vision is.

The school’s mission statement fails to comply with some of the characteristics of a

good mission statement. It does not reveal that the firm is socially and environmentally

responsible. The customers were not clearly identified and the technology that they used

or offered was not stated. Furthermore, their commitment to growth and financial

soundness of the firm was not identified; the company does not indicate its distinctive

29

competency or major competitive advantage; and, it does not also specify how it valued

its employees.

As a result of the evaluation by the researchers, the mission statement of the

company must be restated with more clear and sound message of their purpose of its

existence.

WAYS TO COMMUNICATE VISION AND MISSION STATEMENT

The vision and mission statement, philosophy, goals and objectives must be

communicated well throughout the organization. This will make a harmonious flow of

tasks and perform efficiently within the operation.

The following are the recommendations provided by the researchers in order that

TLSLC will have their vision, mission statement, philosophy, goals and objectives be

well communicated among their employees and students.

• Include the company statement as basis of agendas when conducting

meetings to their employees.

• Require each and every employee to memorize and to put in action the

company statements.

• Create school pledge through empowerment that will bring their students

aim and feel noble in studying.

• Always remind the employees and students of their mission and vision

statement, philosophy, pledge, goals and objectives, through providing

copies in each room and within the school premise.

30

COMPARATIVE FINANCIAL STATEMENTS (2008-2010)

THREE LITTLE STARS LEARNING CENTER, INC.

Statement of Comprehensive Income

For the year ended December 31, 2008

Revenue:

Tuition Fees(Cash and On Account) (Note 1)

1,247,929.69

Miscellaneous 45,000.00

Gross Revenue

1,292,929.69

Expenses:

Salaries and Wages

539,000.00

Employee Benefits

46,500.00

Repair and Maintenance

25,000.00

Supplies Expense

28,260.00

Light and Water Expense

57,495.50

Rent Expense

70,000.00

Permits and Licenses

43,451.06

Communication Expense

32,600.00

Insurance Expense

6,605.75

Charitable Contribution

8,500.00

Gasoline and Oil

24,000.00

Depreciation Expense (Note 2)

25,100.00

Total Expenses

906,512.31

NET PROFIT

386,417.38

Note 1: Tuition Fees

Note 2: Depreciation Expense

Cash 930,750.00

Classroom Chairs & Tables 10,000.00

On Account 317,179.69

Computer Accessories 10,500.00

Total Tuition Fees 1,247,929.69

Audio/Video System 4,600.00

Total Depreciation 25,100.00

31


Statement of Financial Position

As of December 31, 2008

ASSETS Current Assets

Cash and Cash Equivalent

6,000.00

Accounts Receivable 317,179.69

323,179.69

Non-Current Assets Library 75,400.00

Classroom Chairs and Tables

83,500.00

Jitney (XLT)

270,000.00

Service car

150,000.00

Toys and Furniture

44,370.00

Computer Accessories

160,000.00

Copying Machine

26,000.00

Audio/Video System

107,100.00

Air-conditioning Units

84,000.00

1,000,370.00

TOTAL ASSETS

1,323,549.69

LIABILITIES AND EQUITY Current Liabilities

Accounts Payable – books

50,000.00

Equity Member's Donated Capital 50,000.00

Donated Capital 1,130,242.00

Advances from Officers 120,000.00

Add: Excess of Receipts over Disbursements -26,692.31

1,273,549.69

TOTAL LIABILITIES AND EQUITY

1,323,549.69

32


Statement of Cash Flows

For the Year Ended December 31, 2008

Cash Balance – Beginning

70,500.00

Add: Cash Inflows: Advances from Officers

120,000.00

Donated Capital

118,372.00

Tuition Fees

930,750.00

Increase In payables

50,000.00

Miscellaneous

45,000.00

Total Cash Available

1,334,622.00

Less: Cash Outflows: Operating Expenses

1,002,442.31

Increase in non-current Assets

9,000.00

Increase in Receivables

317,179.69

Total Cash Outflows

1,328,622.00

Cash balance, end

6,000.00

33




Revenue:

Tuition Fees(Cash and On Account) (Note 1) 967,970.31


Gross Revenue

1,190,970.31

Expenses:

Salaries and Wages 405,904.00

Employee Benefits 10,716.00

Repair and Maintenance 6,540.00

Supplies Expense 63,765.00

Light and Water Expense 36,375.00

Permits and Licenses 32,075.00

Communication Expense 1,900.00

Insurance Expense 109,850.00

Charitable Contribution 2,000.00

Gasoline and Oil 18,771.00

Depreciation Expense (Note 2) 25,100.00

Total Expenses

712,996.00

NET PROFIT

477,974.31



Cash 943,500.00

Classroom Chairs & Tables 10,000.00

On Account 24,470.31


Total Tuition Fees 967,970.31

Audio/Video System

4,600.00


34






43,986.69

Accounts Receivable 341,650.00

385,636.69

Non-Current Assets Library 75,400.00


93,500.00

Jitney (XLT)

270,000.00

Service car

450,000.00

Toys and Furniture

49,970.00


149,500.00

Copying Machine

39,000.00

Audio/Video System

102,500.00


95,000.00

1,324,870.00

TOTAL ASSETS

1,710,506.69



43,980.00


Donated Capital 1,103,549.69


Add: Excess of Receipts over Disbursements 426,977.00

1,666,526.69


1,710,506.69

35




Cash Balance – Beginning 6,000.00

Add: Cash Inflows:

Tuition Fees 943,500.00


Total Cash Available 1,172,600.00

Less: Cash Outflows:

Operating Expenses 804,302.00

Increase in non-current Assets 259,821.00

Payment of advances from Officers 34,000.00

Decrease in Payables 6,020.00

Increase in Receivables 24,470.31

Total Cash Outflows 1,128,613.31

Cash balance, end 43,986.69

36




Revenue:

Tuition Fees(Cash and On Account) (Note 1)

768,230.40


Gross Revenue

945,214.53

Expenses:

Salaries and Wages

405,904.00

Employee Benefits

10,716.00


5,190.48

Supplies Expense

50,607.14


28,869.05


32,075.00


1,507.94

Insurance Expense

87,182.54


1,587.30

Gasoline and Oil

14,897.62

Depreciation Expense (Note 2)

25,100.00

Total Expenses

663,637.06

NET PROFIT

281,577.47



Cash 530,304.40

Classroom Chairs and Tables 10,000.00

On Account

237,926.00


Total Tuition Fees 768,230.40

Audio/Video System 4,600.00


37






68,134.86

Accounts Receivable

237,926.00

306,060.86

Non-Current Assets

Library

59,841.27


74,206.35

Jitney (XLT)

214,285.72

Service car

357,142.86

Toys and Furniture

39,658.73


118,650.79

Copying Machine

30,952.38

Audio/Video System

81,349.21


75,396.83

1,051,484.14

TOTAL ASSETS

1,357,544.99



34,904.76


Donated Capital 875,833.09


Add: Excess of Receipts over

Disbursements 338,870.63

1,322,640.23


1,357,544.99

38




Cash Balance – Beginning

37,986.69

Add: Cash Inflows: Tuition Fees

748,809.52

Miscellaneous

177,063.49

Total Cash Available

963,859.71

Less: Cash Outflows: Operating Expenses

638,334.92

Increase in non-current Assets

206,207.14

Payment of advances from Officers

26,984.13

Decrease in Payables

4,777.78

Increase in Receivables

19,420.88

Total Cash Outflows

895,724.85

Cash balance, end

68,134.86

39

MARKET SHARE

Market share is computed by getting the total number of enrolees of TLSLC Inc.

divided by the total population of individuals ranging from 4 years old to 12 years old of

Brgy. Pinagpanaan, Talavera, Nueva Ecija. The total population is 837 individuals with

the growth rate of 5.56% every year.

Market Share =

Total Number of

Enrollees =

70

students = 8.36%

Total Population

837

students

Figure 1. Market Share

8.36% 3.23%

3.58%

84.83%

Market Share

Three Little Star Learning Center

Christian Faith Academy

Kobayashi

Schools Outside Locality and

Public Schools

40

FINANCIAL RATIOS (2008)

Liquidity Ratios

Current Ratio = Current Assets

= ₱323,179.69

= 6.46 Current Liabilities ₱50,000

Quick Ratio = Quick Assets

= ₱323,179.69


Working Capital = Current Assets -

Current Liabilities =

₱323,179.69 -

₱50,000 = ₱273,179.69

Cash Ratio = Cash

= ₱6,000


Leverage Ratios

Debt-to-Total-Assets

Ratio =

Total Debt =

₱50,000 = 3.78%

Total Assets ₱1,323,549.69

Debt-to-Equity Ratio = Total Debt

= ₱50,000

= 3.93% Total Capital ₱1,273,549.69

Equity Ratio = Total Capital

= ₱1,273,549.69

= 96.22% Total Assets ₱1,323,549.69

Fixed Charge Coverage = Income Before Fixed

Expenses = ₱291,811.63 = 3.8 times

Fixed Charges ₱76,605.75

Activity Ratios

Accounts Receivable

Turnover =

Revenue (On

Account) = ₱317,179.69 = 12.96 times

Average A/R ₱24,470.31

Average Collection

Period =

360 days =

360 days = 28 days

A/R Turnover 12.96 times

41

Fixed Asset Turnover = Revenue

= ₱1,292,929.69

= 1.29 times Fixed Assets ₱1,000,370.00

Total Asset Turnover = Revenue

= ₱1,292,929.69

= .98 times Total Assets ₱1,323,549.69

Profitability Ratios

Net Profit Margin = Net Income

= ₱386,417.38

= 29.89% Revenue ₱1,292,929.69

Return on Total Assets = Net Income

= ₱386,417.38

= 29.19% Total Assets ₱1,323,549.69

Return on Total Assets = Net Income

= ₱386,417.38

= 30.34% Total Capital ₱1,273,549.69

42


Liquidity Ratios


= ₱385,636.69


Quick Ratio =

Quick Assets =

₱385,636.69 = 8.77

Current Liabilities ₱43,980



₱385,636.69 -

₱43,980 = ₱341,656.69

Cash Ratio =

Cash =

₱43,986.69 = 1.00

Current Liabilities ₱43,980

Leverage Ratios


Ratio =

Total Debt =

₱43,980 = 2.57%


Debt-to-Equity Ratio =

Total Debt =

₱43,980 = 2.64%

Total Capital ₱1,666,526.69

Equity Ratio =

Total Capital =

₱1,666,526.69 = 97.43%


Activity Ratios

Accounts Receivable

Turnover =

Revenue (On Account) =

₱24,470.31 = 12.96 times


Average Collection

Period =

360 days =

360 days = 28 days


Fixed Asset Turnover =

Revenue =

₱1,190,970.31 = 0.90 times

Fixed Assets ₱1,324,870.00

Total Asset Turnover =

Revenue =

₱1,190,970.31 = .70 times


43


Net Profit Margin =

Net Income =

₱477,974.31 = 40.13%

Revenue ₱1,190,970.31

Return on Total Assets =

Net Income =

₱477,974.31 = 27.94%



Net Income =

₱477,974.31 = 28.68%


Growth Ratio

Growth in Sales = Current Yr. Revenue -

Previous Yr. Revenue =

₱1,190,970.31

-

₱1,292,929.69 = -7.89%

Previous Yr. Sales ₱1,292,929.69

Growth in Net Income = Current Yr. NI -

Previous Yr. NI = ₱477,974.31 -

₱386,417.38 = 23.69%

Previous Yr. NI ₱386,417.38

44


Liquidity Ratios


= ₱306,060.86

= 8.77 Current Liabilities ₱34,904.76

Quick Ratio =

Quick Assets =

₱306,060.86 = 8.77

Current Liabilities ₱34,904.76



₱306,060.86 -

₱34,904.76 = ₱271,156.10

Cash Ratio =

Cash =

₱68,134.86 = 1.95

Current Liabilities ₱34,904.76

Leverage Ratios


Ratio =

Total Debt =

₱34,904.76 = 2.57%


Debt-to-Equity Ratio =

Total Debt =

₱34,904.76 = 2.64%


Equity Ratio =

Total Capital =

₱1,322,640.23 = 97.43%


Activity Ratios

Accounts Receivable

Turnover =

Revenue (On Account) =

₱24,470.31 = 12.96 times


Average Collection

Period =

360 days =

360 days = 28 days


Fixed Asset Turnover =

Revenue =

₱945,214.53 = 0.90 times

Fixed Assets ₱1,051,484.13

Total Asset Turnover =

Revenue =

₱945,214.53 = .70 times


45


Net Profit Margin =

Net Income =

₱281,577.47 = 29.36%

Revenue ₱959,208.26


Net Income =

₱281,577.47 = 20.74%


Return on Equity =

Net Income =

₱281,577.47 = 21.29%


Growth Ratio

Growth in Net Income = Current Yr. NI -

Previous Yr. NI = ₱281,577.47 -

₱477,974.31 = -41.09%

Previous Yr. NI ₱477,974.31

Growth in Revenue = Current Yr. Revenue -

Previous Yr. Revenue = ₱945,214.53 -

₱1,190,970.31 = -20.63%

Previous Yr. Revenue ₱1,190,970.31

Figure 2. Comparative Financial Performance

-

200,000.00

400,000.00

600,000.00

800,000.00

1,000,000.00

1,200,000.00

1,400,000.00

2008 2009 2010

Revenue

Operating Expenses

Net Income

46

Figure 2 illustrates the trend of revenue, operating expense and net income of

Three Little Stars Learning Center Inc. for 2008, 2009 and 2010. The revenue as well as

operating expenses are continuously decreasing from 2008-2010, this is because of the

decreasing number of enrolees of the school for that period. However, the net income

increased from the year 2008-2009 but decreased from the year 2009-2010.

Figure 3. Comparative Financial Position

Figure 3 illustrates the changes in current assets, non-current assets, current

liabilities and owners’ equity. It shows that all of them increased from the year 2008-

2009 and decreased in year 2009-2010 the reason for that is the decreasing number of

enrolees.

-

200,000.00

400,000.00

600,000.00

800,000.00

1,000,000.00

1,200,000.00

1,400,000.00

1,600,000.00

1,800,000.00

2008 2009 2010

Current Assets

Non-current Assets

Current Liabilities

Owners' Equity

47

INTERNAL ANALYSIS

Management

TLSLC, Inc. are not using strategic management concept in its management

function. The company merely manages the company operation in usual way. The

company administration did not have any written strategic plan to consider as a basis for

the company’s management operation instead short-term objectives were set by the

company. Company objectives and goals are measurable and well communicated.

Currently, the decisions made for the company were centralized from the president and

directress.

Based on the interview made by the researchers, the directress gave a statement

containing relevant information regarding the actual duties and responsibilities of the

officers. According to the directress, the president and vice-president of the company

has the direct involvement with the company operation. The directress added that

officers having the position of secretary, treasurer and auditor are not directly

performing their duties and responsibilities.

The directress also performs the duties of secretary and collection officer. The

president of the company also serves as the one responsible for the preparation of the

financial statements subject to external audit and certification by a Certified Public

Accountant (CPA).

The company assigned the subject taught based on the teachers’ specialization.

But, since the company hires few teachers, the teachers must taught specified subject for

48

the whole elementary course, e.g. a teacher with high skill level in teaching mathematics

shall taught math subject from grade 1 to 6.

The employee morale is high with regard to the directress due to her teaching

experience. Nevertheless, with regard to the teachers, the employee morale is also high

even though they have not yet passed the Licensure Examination for Teachers (LET)

and do not have enough experience. The employee absenteeism is low because the

dedication for teaching is high. And employee turnover is high because TLSLC, Inc. has

provided as a training ground for the teachers applying to it. After passing the LET, the

teachers who passed it make decision of moving to public schools.

TLSLC, Inc. provides a reasonable compensation to their employees. Also, the

management gives recognition for quality work contributed by the employees.

Christmas gifts were also properly given to the company employees.

The management control mechanism is effective. The directress makes frequent

surveillance to the teachers’ performance to maintain a good quality education. Teachers

are compelled to do their lesson plans in order for them to meet the required standards

for teaching.

Marketing

Markets served by TLSLC, Inc. are properly segmented into Nursery,

Kindergarten, Pre-elementary and Elementary. Although the organization is not

positioned well in the market, TLSLC Inc has the ability to compete to its competitors

based on quality of education offered. The market share of the organization is increasing

because from time to time, TLSLC Inc, are becoming more popular for its quality

49

education. This is evidenced by many students who won in different academic

competitions. However, compared to its rivals, the promotion, advertising and publicity

strategy of TLSLC is not enough. This is due to inadequacy of knowledge of manager

about marketing.

Financial and Accounting

TLSLC, Inc is financially strong as indicated by financial ratio analyses. The

organization can meet its short-term obligations as indicated by liquidity ratios. The

institution can raise needed short-term and long-term capital through donations and

advances from officers and investment by the owner. TLSLC, Inc has sufficient working

capital for its daily operations. The only liability of TLSLC, Inc is short-term; this is

coming from the acquisition of books.

The historical trends of liquidity ratios are increasing. As time goes by, the

organization is becoming more liquid. Leverage ratios with regard to debt-to-total assets

and debt-to-equity ratio is decreasing while the equity ratio is increasing. This signifies

that TLSLC, Inc is not financed by debt but rather by investments. The trends in activity

ratios are decreasing. The effectiveness in using the resources of the organization is

lesser compared to the previous year. This outcome may lead, to managers, to become

more focus on using its resources effectively. Profitability ratios are also decreasing.

This is due to the declining number of enrollees every year. TLSLC’s ability to maintain

its economic position in the growth of the economy and industry is becoming weak

because of its decreasing trend in growth ratios.

50

Productions and Operations

The company has reasonable and reliable suppliers with regard to the purchases

of books use in teaching. Books are properly assessed by the administration and teachers

before it would be purchased. Facilities, equipment, machinery and office are all in good

condition. The room facilities are assessed to be in good condition and conducive in

learning. Machineries and equipment, such as computers, are good in physical

appearance and programs are updated.

The facilities and resources are strategically located. The reason is that it is

conveniently accessed for efficiency purposes.

Lastly, the company has a low technological competency. Although, they have

internet services teaching process was still at its traditional style.

Management Information System

The TLSLC, Inc uses traditional information system or the so called manual-

based system of storing information. The information stored by the organization

includes payroll system, grading system, teachers’ assessment, receipt and disbursement,

and students’ information.

The principal’s secretary uses the information system to retrieve information

such as when a student requests a certificate of good moral character, grades and other

relevant information. Employees can get information from the payroll system.

Furthermore, teachers can be evaluated based on previous assessment that was recorded.

Data are always updated through continues addition of inputs coming from employees

51

and other sources. The Information system is said to be user friendly however, it is less

efficient compared to those firms using advance technologies.

SUMMARY AND CONCLUSION

Internal Strengths

� High teacher-to-student ratio that results to more effective teaching.

� High customer satisfaction because of quality teaching methods.

� Well established relationship with book suppliers.

� High employee morale.

� The school premise and location is conducive for learning.

� The company can meet short-term obligation.

� Most of the company’s assets are financed by the owners.

� The management is effective in generating profit.

� Efficient utilization of company’s resources.

Internal Weaknesses

� High employee turnover.

� Irregular delegation of authority and responsibility.

� Lack of marketing efforts.

� Limited sources of capital investment because the company is a close

corporation.

� Lack of sports facilities and sports related programs/activities.

� The company incurs negative growth in revenue and in net income.

52

Internal Factor Evaluation Matrix

Table 3. IFE Matrix

The most important factors to be considered to become successful in this

business are: “High teacher-to-student ratio” (0.12 weight) because teachers will

regularly monitor performance of each students and “High employee turnover” (0.10

Key Internal Factors Weight Rating Weighted

Score

Strength

High teacher-to-student ratio that results to more

effective teaching. 1:15 0.12 4 0.48

High customer satisfaction because of quality

teaching methods. 0.09 3 0.27

Well-established relationship with book suppliers. 0.05 4 0.20

High employee morale. 0.04 3 0.12

The school premise and location is conducive for

learning. 0.03 3 0.09

The company can meet short-term obligation.

Current Ratio: 877% 0.08 4 0.32

Most of the company’s assets are financed by the

owners. Equity Ratio: 97.43% 0.07 4 0.28

The management is effective in generating profit.

Net Profit Margin: 29.36% 0.10 4 0.40

Efficient utilization of company’s resources.

Accounts Receivable Turnover: 12.96% 0.07 4 0.28

Weaknesses

High employee turnover of 100% w/in 5 years. 0.10 1 0.10

Irregular delegation of authority and responsibility. 0.04 2 0.08

Lack of marketing efforts. Market Share: 8.36% 0.06 1 0.06

Limited sources of capital investment because the

company is a close corporation. 0.05 2 0.10

Lack of sports facilities and sports related

programs/activities. 0.02 2 0.04

The company incurs negative growth in revenue

and in net income. Growth in Revenue: -41.09%,

Growth in Income: -20.63%

0.08 1 0.08

Total 1 2.90

53

weight) because teachers seek for greater opportunity. Also take into consideration the

major strengths (4.0 rating) which are: “High teacher-to-student ratio”, “Well-

established relationship with book suppliers” and “Financial Stability”. The school is

having major problem (1.0 rating) on “High employee turnover”, “marketing efforts”

and “negative growth in revenue and in net income”.

Overall, the total weighted score is 2.90 which is above the average of 2.5. This

indicates that the business is doing well in taking advantage of internal strengths and

reducing internal weaknesses.

KEY INTERNAL STRATEGIC ISSUES

• Employee turnover

• Marketing efforts

• Employee benefits and incentives

• Teacher-to-student ratio

54

CHAPTER VI

STRATEGY FORMULATIONS

STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS MATRIX

STRENGTHS--S

� High teacher-to-

student ratio that

results to more

effective teaching.

� High customer

satisfaction because

of quality teaching

methods.

� Well established

relationship with

book suppliers.

� High employee

morale

� The school premise

and location is

conducive for

learning.

� The company can

meet short-term

obligation.

� Most of the

company’s assets

are financed by the

owners.

� The management is

effective in

generating profit

� Efficient utilization

of company’s

resources

WEAKNESSES—W

� High employee

turnover.

� Irregular delegation

of authority and

responsibility

� Lack of marketing

efforts

� Limited sources of

capital investment

because the

company is a close

corporation.

� Lack of sports

facilities and sports

related

programs/activities

� The company incurs

negative growth in

revenue and in net

income.

55

OPPORTUNITIES—O

1. Increase availability

of qualified teacher

because of abundant

supply of fresh

graduates of

Bachelor of Science

in Elementary

Education (e.g.

graduates from the

newly branch of

NEUST in

Talavera).

2. The school is

located relatively far

from the road which

ensures the student’s

safety.

3. With the aid of

technology, the

company could

increase

accessibility through

establishing net

working site on

which they promote

their services.

4. The fluctuation of

tax rate imposed by

government

agencies does not

influence them.

5. Availability of book

suppliers that allow

the school to choose

the best of quality

books at a

reasonable price.

6. Increase in market

size due to

conversion of

agricultural areas

into residential

areas.

SO STRATEGIES

1. Increase employee

benefits and reward

to attract qualified

teachers.(S4, S8,O1)

2. Offer High school

curriculum. (S5, S9,

O6, O8)

3. Avail of cash

discount on books to

maximize the use of

funds. ( S3, S6, S9,

O5)

WO STRATEGIES

1. Recognized

accomplishment of

their students or

alumni through print

advertisements.

( W3, W6, O7)

2. Provide additional

incentives to

employees to

increase employee

retention and to

attract qualified

teachers.(W1, O1)

56

7. Increase in

popularity because

of excelling in

different

competitions in

higher level such as

national level quiz

bee.

8. Increase in students

by adding high

school department if

there is available

capital investment.

9. High student

transferees from

public school

because of

unsatisfactory

facilities.

THREATS—T

1. Possible loss of

competitive teachers

in the school

because a lot of

newly hired teachers

treat the institution

as a stepping stone

for them to enter in

the public school.

2. Increasing number

of competitors due

to rising number of

private school in the

locality.

3. New government

regulations/policies

that may affect the

company. It may

result to higher cost

of compliance and if

not complied, may

result to decreased

customers/students.

ST STRATEGIES

1. Continue providing

quality education

and stability

assurance on

management matters

to increase customer

loyalty. ( S1, S2, S5,

T2, T4)

2. Increase employee

satisfaction and

competitiveness by

continuous training

and seminars to

increase employee

retention. ( S1, S4,

T1, T2)

3. Adapting to

technological

changes through the

use of generated

funds. ( S8, T7)

WT STARTEGIES

1. Additional

advertisement cost

to invite more

enrollees. ( W3, W6,

T2, T4)

2. Improve Facilities

for recreation. ( W5,

T2)

57

4. Decrease in

customer loyalty due

to false notion that

there will be

changed in

administration.

5. The area around the

school is included in

the flood prone area.

6. Increases degree of

government

intervention due to

accreditations

achieved.

7. Decrease in

competitive

advantage due to

failure to adapt to

technological

changes.

Table 4. SWOT Matrix

58

Strategic Planning Action Evaluation (SPACE) MATRIX

Financial Strength

Ratings

� Return on investment of 21.29% for 2010 2.0

� Total Equity to Total asset ratio of 97.43% 4.0

� Current ratio of 877% which is significantly higher than standard of 100%. 6.0

� Working capital of P271,156.10 3.0

� Decrease in operating expenses of P49,358.94 2.0

� Shorter collection period of 28 days 4.0

21.0

Industry Strengths

Ratings

� Educational institutions are tax exempted 1.0

� New players in the market cannot easily enter due to

government requirements needed. 3.0

� There is less politics and government intervention in private

school industry. 4.0

8.0

59

Environmental stability

Ratings

� High student transferees from public schools to private schools

because of unsatisfactory facilities. -2.0

� Filipinos consider education as the best way to alleviate poverty -3.0

� Potential growth in demand because of population

growth every year of 5.56%. -4.0

9.0

Competitive Advantage

Ratings

� High customer satisfaction because of quality teaching methods. -2

� School premise and location is conducive for learning. -3

� High resource utilization : fixed asset turnover of 0.90 times

and total asset turnover of 0.70 times. -5

-10

Conclusion

ES Average is -9.0÷3= -3.0 FS Average is +21.0÷6= 3.5

CA Average is -10.0÷3=-3.33 IS Average is +8.0÷3= 2.66

Directional Vector Coordinates: X-axis: -3.33 + (+2.66) = -0.67

Y-axis: -3.0 + (+3.5) = +0.5

The school should pursue Conservative Strategies.

60

(-0.67, 0.5)

THE STRATEGIC POSITION AND ACTION EVALUATION MATRIX

Figure 4. SPACE Matrix

The company, being in the conservative quadrant (upper-left quadrant) of the

SPACE Matrix, should pursue conservative strategies which often include market

penetration, market development, product development, and concentric diversification.

It also implies that the firm should stay to their basic competencies and not taking

excessive risks.

FS

IS

ES

CA

61

GRAND STRATEGY MATRIX

Figure 5. Grand Strategy Matrix

RAPID

MARKET

GROWTH

STRONG

COMPETITIVE

POSITION

SLOW

MARKET

GROWTH

WEAK

COMPETITIVE

POSITION

QUADRANT II

Market Penetration

Product development

62

The industry has an annual growth of 5.56% which could be considered to have

rapid market growth. The assessment on external environment of TLSLC, Inc. indicates

that it is weak. As a result of the evaluation, the suggested strategy to be pursued by

TLSLC, Inc. must come from quadrant II which is characterized by rapid market growth

and weak competitive position. Although the industry is growing, the firm is unable to

compete effectively. This would result for the firm to determine why the current

approach is ineffective and how the company can best improve its competitiveness. The

strategies that can be pursued by the firm are the intensive strategies (market penetration

and product development in particular).

63

QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM)

STRATEGIC MANAGEMENT

Key factors Weight Product Development Market Penetration

AS TAS AS TAS

Opportunities

1. Increase availability of qualified

teacher because of abundant supply of

fresh graduates of Bachelor of Science

in Elementary Education (e.g. graduates

from the newly branch of NEUST in

Talavera).

2. The school is located relatively far from

the road which ensures the student’s

safety.

3. With the aid of technology, the

company could increase accessibility

through establishing net working site

on which they promote their services.

4. The fluctuation of tax rate imposed by

government agencies does not influence

them.

5. Availability of book suppliers that

allow the school to choose the best of

quality books at a reasonable price.

6. Increase in market size due to

conversion of agricultural areas into

residential areas.

7. Increase in popularity because of

excelling in different competitions in

higher level such as national level quiz

bee.

8. Increase in students by adding high

school department if there is available

capital investment.

9. High student transferees from public

schools to private schools because of

unsatisfactory facilities.

0.11

0.08

0.03

0.03

0.07

0.10

0.06

0.04

0.05

1

1

3

—

3

1

1

4

1

0.11

0.08

0.09

—

0.21

0.10

0.06

0.16

0.05

4

3

4

—

2

2

4

1

4

0.44

0.24

0.12

—

0.14

0.20

0.24

0.04

0.20

64

Threats

1. Possible loss of competitive teachers in

the school because a lot of newly hired

teachers treat the institution as a

stepping stone for them to enter in the

public school.

2. Increasing number of competitors due

to rising number of private school in

the locality.

3. New government regulations/policies

that may affect the company. It may

result to higher cost of compliance and

if not complied, may result to decreased

customers/students.

4. Decrease in customer loyalty due to

false notion that there will be changed

in administration

5. The area around the school is included

in the flood prone area.

6. Increases degree of government

intervention due to accreditations

achieved.

7. Decrease in competitive advantage due

to failure to adapt to technological

changes.

Strengths

1. High teacher-to-student ratio that

results to more effective teaching. 1:15

2. High customer satisfaction because of

quality teaching methods.

3. Well-established relationship with book

suppliers.

4. High employee morale.

5. The school premise and location is

conducive for learning.

6. The company can meet short-term

obligation. Current Ratio: 877%

7. Most of the company’s assets are

0.05

0.11

0.03

0.12

0.06

0.01

0.05

1.00

0.12

0.09

0.05

0.04

0.03

0.08

—

2

4

1

2

3

2

2

3

4

3

2

3

—

0.22

0.12

0.12

0.12

0.03

0.10

0.24

0.27

0.20

0.12

0.06

0.24

—

4

1

4

3

2

3

3

4

3

1

3

1

—

0.44

0.03

0.48

0.18

0.02

0.15

0.36

0.36

0.15

0.04

0.09

0.08

65

financed by the owners. Equity Ratio:

97.43%

8. The management is effective in

generating profit. Net Profit Margin:

29.36%

9. Efficient utilization of company’s

resources. Accounts Receivable

Turnover: 12.96%

Weakness

1. High employee turnover of 100% w/in

5 years.

2. Irregular delegation of authority and

responsibility.

3. Lack of marketing efforts. Market

Share: 8.36%

4. Limited sources of capital investment

because the company is a close

corporation.

5. Lack of sports facilities and sports

related programs/activities.

6. The company incurs negative growth in

revenue and in net income. Growth in

Revenue: -41.09%, Growth in Income:

-20.63%

Sum Total Attractiveness Score

0.07

0.10

0.07

0.10

0.04

0.06

0.05

0.02

0.08

1.00

2

3

—

—

2

2

3

3

3

0.14

0.30

—

—

0.08

0.12

0.15

0.06

0.24

3.79

1

2

—

—

1

4

2

2

2

0.07

0.20

—

—

0.04

0.24

0.10

0.04

0.16

4.69

AS = Attractiveness Score; TAS = Total Attractiveness Score Attractiveness Score: 1=not attractive; 2= somewhat attractive; 3=reasonably attractive; 4=highly attractive.

Table 5. QSPM

In the above QSPM, two strategic alternatives — product development and

market penetration — are being considered by the group. Product development strategy

includes, but not limited to, providing tutorials for students. On the other hand, strategies

on market penetration can be carried out through intense marketing efforts.

66

Several factors have no effect on the choice being made, so dashes are recorded

in roles. Other factors such as decrease in customer loyalty due to false notion that there

will be changed in administration greatly affect the choice being made, so a high

attractiveness score was recorded. The sum total attractiveness score of 4.69 indicates

that market penetration is more attractive strategy when compared to product

development strategy.

67

CHAPTER VII

RECOMMENDATIONS

RECOMMENDED REVISED VISION STATEMENT

“TLSLC as one of the country’s best provider of quality education and perpetuator

of children’s moral values.”

RECOMMENDED REVISED MISSION STATEMENT

“TLSLC Inc. provides well balanced pre-elementary and elementary educational

programs in our curriculum that will develop individuals to become God-loving, self

reliant, creative, environmentally and socially responsible, and equipped with functional

intelligence and moral values. We will emphasize training for our teachers; adapt to

technological changes; furnish best-in-class service and support; and to grant both

employees and customers with opportunities for growth and enrichment.”

RECOMMENDED STRATEGIC OBJECTIVES

Strategies should be designed:

• To support and to accord with organizational structure, vision and mission;

• To properly communicate with key employees;

• To efficiently allocate and utilize the organization’s limited resources;

68

• To attract and retain skilled teachers and other personnel;

• To redirect marketing efforts;

• To improve and maintain competitive position and financial stability; and

• To delegate authority and responsibility of every staff so that they can work

efficiently and develop harmonious relationship within the organization.

RECOMMENDED STRATEGIES

Based on the matrixes prepared and examined, market penetration is the best

strategy that should be implemented by the company. It implies that the company must

seek to increase market share for present services in present market. It includes the

following:

• Increase marketing effort by allocating funds for advertising.

• Creating a good corporate image by recognizing school and student

achievements.

• Taking advantage to new technologies that will enhance their

marketability.

69

CHAPTER VIII

STRATEGY IMPLEMENTATION

PROGRAMS

After the interview and observation conducted by the researchers on the Three

Little Star Learning Center Incorporated, the gathered information was assessed and

evaluated critically. Based on the results of strategy evaluation, the researchers identifies

some of its internal strengths and weaknesses aligned with its external opportunities and

threats, then it was matched using different strategy formulation tools (SWOT, SPACE,

GRAND matrixes). The results were product development and market penetration and

these two strategies is further assessed and evaluated using a decision tool (QSPM) that

results to the best strategies of using market penetration. Therefore, the company’s

market penetration aims to gain more competitive advantages on its quality education on

their present market with its present services offered through intensive marketing and

advertising efforts.

ACTION PLAN

The researcher examined the company’s management, marketing, production and

operation, finance and accounting, and management information system issues that are

critical to effective strategy implementation.

70

MANAGEMENT PERSPECTIVES

Management issues central to strategy implementation include establishing

annual objectives, devising policies, allocating resources, matching structure to strategy

and linking performance and pay to strategies. Managers and employees are motivated

more by perceived self-interest than by organizational interests. Thus, it is important that

key persons must be involved in formulation of strategies.

ANNUAL OBJECTIVES

Figure 6. Annual Objectives

LONG TERM COMPANY

OBJECTIVES

Increase the market share to 13% and

company gross revenues increase by

60% in two years through intensive

market penetration. (Current revenues

are 940,000)

Employee Annual

Objectives

Decrease

employee

turnover by 30%

this year.

Marketing Annual

Objectives

Establish

advertising

expense by 5% of

previous gross

revenue this year.

Finance Annual

Objectives

Reduce average

collection period

to 20 days this

year.

Operation Annual

Objectives

Provide at least

one transport

service vehicle

this year for

students.

71

POLICIES

Company Strategy

Increase the market share to 13% and company’s gross revenue increase by 60% in two

years through intensive market penetration.

Supporting Policies

1. “The school must show its student achievement through print

advertisements.”(This policy could increase the competitive image of the

TLSLC, Inc thereby enhancing its market share.)

2. “The school must support company advertising of 5% of revenues of gross

revenue.”(This policy could allow the company to established good

reputation.)

3. “The school must adhere to the standards set by government authorities.

(This policy could help assure customers that the company is consistent with

its service standards.)

4. “The school must increase its employee benefits and rewards.”(This policy

could able the school to retain competitive teachers.)

5. Establish a strict credit policy that is shorter than the current average

collection period.

6. The service vehicle must be used only for school related activities so that the

cost of gasoline, maintenance and other related expenses can be directly

attributed to the school.

72

ORGANIZATIONAL STRUCTURE

Figure 7. Proposed Organizational Structure

OPERATION PERSPECTIVES

Production/operations processes comprise more than 70% of firm’s total assets.

This theory is also applicable to the company, because based on its financial position it

is obvious that its noncurrent assets in 1,000,000 over a 300,000 current assets, whereas

all of its non-current asset are used in the company’s operation.

Since the TLSLC, Inc. is a service industry, the operation process comprises

inputs such as facilities, teaching materials, competitive teachers, to gain an output of

quality education.

PRESIDENT

VICE PRESIDENT

TEACHER-IN-

CHARGE PRE-

ELEMENTARY

T2 TEACHER-IN-

CHARGE

KINDERGARTEN

UTILITY

PERSONNEL

T1 T3 T5 T4 T6

73

The adjustment of this aspect of organization to strategy implementation is to

add on its current operation a service vehicle that will transport student from their

houses to school or vice versa every school day. This step will add confidence to the

parents on their children’s safety from traveling. This will increase revenue to the school

and will also build strong customer loyalty thereby increasing its competency. This

would also build the company’s image that will help crucially on their pursuit of its

market penetration strategy.

HUMAN RESOURCE CONCERNS

TLSLC, Inc. when implementing strategies must consider the capacity and

behavior of its human resource. Problems that may arise in implementing strategies can

usually be traced to one of three causes: (1) Disruption of social and political structure,

(2) Failure to match individuals’ aptitudes with implementation tasks, and (3)

Inadequate top management support for implementation activities.

Disruption of social and political structures that accompany strategy execution

must be anticipated and considered during strategy formulation and managed during

strategy implementation. Also, TLSLC, Inc. management should considered

compensation of their workforce.

TLSLC, Inc. may use methods that match employees with strategies to be

implemented. This method includes developing leadership, offering career development

activities, promotions, job enlargement, and job enrichment.

74

During meeting and assembly, the presiding officer should do a lot of chatting

and informal questioning to stay abreast of how things can build support for strategy

implementation efforts by giving a few orders, to probe and clarify until a consensus

emerges.

Perhaps the best method for preventing and overcoming human resources

problems is to actively involve as many or all employees as possible in the process.

Although time-consuming, this approach builds understanding, trust, commitment,

ownership and reduces resentment and hostility. The good strategy formulation and

implementation resides in people.

MARKETING PERSPECTIVES

The company currently has no fixed marketing and advertisement on its present

operation. But as the circumstances provided, the company must allocate fund on its

marketing and advertising to implement its market penetration strategy in order to

achieve its aims to increases is gross revenue and its market share in the said area. The

market penetration strategy is an intensive strategy that requires marketing and

advertising effort. The management allocates its 5% of its gross revenue of the previous

year in order to have funds for implementing the strategy.

The company can implement many ways to market and advertise its operation

and name. The company can distribute leaflets to houses in order that the community

will have information on the services, rates of tuition, its quality and benefits like

75

proving better discounts against competitors provided by the company. This will give

the company’s the advantage of being known to many that can gain the interest of

communities on the said school. The company can also recognize the achievement of its

student on some prestigious contest that the school is a participant by making

banner/tarpaulin and placing it on some crowded places that people can see. This

advertising strategy has an effect of saying to people how the school prioritizes on its

quality education that results to achievement.

76

FINANCE/ACCOUNTING PERSPECTIVE


(Pro-forma)Statement of Financial Position

Year 1



88,575.31

Accounts Receivable

309,303.80

397,879.11

Non-Current Assets

Library

77,793.65


96,468.25

Jitney (XLT)

278,571.44

Service car

464,285.71

Toys and Furniture

51,556.35


154,246.03

Copying Machine

40,238.10

Audio/Video System

105,753.97

Air conditioning Units

98,015.87

1,366,929.38

TOTAL ASSETS

1,764,808.49


Accounts Payable - books

45,376.19

Equity

Member's Donated Capital

51,587.30

Donated Capital

1,138,583.01

Advances from Officers

88,730.16

Add: Excess of Receipts over Disbursements

440,531.83

1,719,432.30


1,764,808.49

77


(Pro-forma) Statement of Comprehensive Income

Year 1

Revenue:

Tuition Fees(Cash and On Account)

998,699.53


Gross Revenue

1,228,778.89

Expenses:

Salaries and Wages

527,675.20

Employee Benefits

13,930.80


6,000.00

Supplies Expense

65,789.29


37,529.76


32,075.00


1,960.32

Insurance Expense

87,182.54


2,063.49

Gasoline and Oil

19,366.90

Advertising Expense

47,260.73

Depreciation Expense

25,100.00

Total Expenses

865,934.03

NET PROFIT

362,844.86

78


(Pro-forma)Statement of Financial Position

Year 2



109,015.77

Accounts Receivable

380,681.60

489,697.37

Non-Current Assets

Library

95,746.03


118,730.16

Jitney (XLT)

342,857.16

Service car

571,428.57

Toys and Furniture

63,453.97


189,841.27

Copying Machine

49,523.81

Audio/Video System

130,158.73


120,634.92

1,682,374.62

TOTAL ASSETS

2,172,071.99


Accounts Payable - books

55,847.62

Equity

Member's Donated Capital

63,492.06

Donated Capital

1,401,332.94

Advances from Officers

109,206.35

Add: Excess of Receipts over

Disbursements

542,193.02

2,116,224.37


2,172,071.99

79


(Pro-forma) Statement of Comprehensive Income

Year 2

Revenue:

Tuition Fees(Cash and On Account)

1,229,168.65


Gross Revenue

1,512,343.25

Expenses:

Salaries and Wages

649,446.40

Employee Benefits

17,145.60


6,000.00

Supplies Expense

65,789.29


46,190.48


32,075.00


2,412.70

Insurance Expense

87,182.54


2,539.68

Gasoline and Oil

23,836.19

Advertising Expense

61,438.94

Depreciation Expense

25,100.00

Total Expenses

1,019,156.82

NET PROFIT

493,186.43

80

CHAPTER IX

STRATEGY EVALUATION AND CONTROL

EVALUATION

The evaluation of company’s strategy encompasses factors that are considered

necessary for mission achievement and long-run success. Strategy evaluation is based

on both quantitative and qualitative criteria. The measurement is based on the services

they provide that equals or exceeds a customer’s quality, price, and other expectations.

Since the company is small, the manager often communicates daily with other

personnel and does not need extensive evaluative reporting system.

Evaluation may be performed by comparing actual results with budgeted results.

The company is doing fine as a quality provider of education – the management

priorities quality services than gaining profit. The company is satisfied with their

financial performance. The company’s net revenue is expected to be P362,844.86 next year

and P493,186.43 for the 2nd

year.

In terms of employee performances, the company must set standards as the basis

of comparison. Teachers can be evaluated based on number of hours actually worked

and based on feedback or comments of the students and co-teachers. The evaluator can

also attend the actual class for personal observations.

The relative market share must be evaluated also. It can be done by comparing

the market that the company holds with the market or industry it belongs. As shown

from the above information, the company is not doing well – it occupies only small

portion (only 8.36%) of the market. By implementing the strategy formulated, the

81

company’s relative market share is expected to increase by 30% per year for the next

two years.

Other important factor in strategy evaluation is the customer satisfaction in terms

of service quality. The effectiveness of strategy could be reflected by the feedback from

customers and even from the employees. These feedbacks could be either positive or

negative which includes customer complaint, increase/decrease in enrolees, and others.

Control

Strategy control should be designed to encourage behaviors that will result in

outcomes that generate organizational success. An effective control requires accurate

forecasting. The company should assess progress toward mission – establish operational

targets of total customer satisfaction and environmental and social responsibility.

The company’s management must set high performance standards and

communicate them to others (from top to bottom). The employees and other people

involved must be aware of and understand the policies or standards in order to promote

harmonious operations. People who have participated in setting targets generally attempt

to achieve the results to affirm that the plans were well founded so participant of all the

employees is encouraged.

The control measures must be fair, and personnel must obtain the appropriate

skills for their jobs. They must be properly equipped with tools, resources, information,

and authority to be able to perform their part effectively.

82

The company should also provide, on a continuing basis, the feedback (both

positive and negative) to the appropriate personnel. It must be prompt and helpful to

allow the said personnel an opportunity for early adjustment.

CONTINGENCY PLAN

TLSLC, Inc. should have the resources or money that will serve as a contingency

fund. It can be done by appropriating a 10% of its net income every year. This fund will

serve as a support for the contingency plan that will be implemented if the current

strategy will not give favorable results.

If the increase in net profit did not cover the amount spent in advertisement, the

company should modify its approach in choosing effective advertisement scheme.

Instead of using digitally printed banners/tarpaulins, the company may use manually

painted tarpaulin or give only high degree of advertising efforts on the area in which

their market share is relatively lower than its competitors to avoid excessive spending in

advertising.

If the actual number of enrolees exceeds what is being expected, the company

should use its contingency fund and excess capacity to improve their facilities and hire

additional teachers or personnel, if necessary, to properly accommodate all the students.

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If market penetration strategy is not effective or produces unexpected results that

caused more expenses, the company must consider the alternative strategy which is the

product development; they may offer tutorials that may increase revenue thereby

increasing net income. But they must ensure that the increase in net income can cover

the additional salaries that will be given to the teachers.

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References

Strategic Management Concepts and Cases by Fred R. David, 12th Edition, copyright 2009

Strategic Management Concepts and Cases by Fred R. David, 13th Edition, copyright 2010

Cost Accounting by Michael R. Kinney and Cecily A. Raiborn, copyright 2011

Foundation of Financial Management by Block/Hirt/Danislsen, 13th Edition, copyright 2010

www.wikipedia.com

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APPENDIX

Pictures

three little star learning center(strategic management)

Documents