A proposed strategic plan for A. Luna Press

A. Luna is a medium scale, single proprietorship company that belongs to the printing industry. This is involved in the reproduction of images on paper and other related materials normally done through contact impression that causes a transfer of ink. In addition to this, it can be classified as a fragmented industry. There are three major classifications of printers, namely: media and publishing, specialty, and commercial and job printing. A. Luna Press belongs the third category which makes up fifty (50) percent of all printing establishments in the Philippines An analysis using Porter Five Competitive Forces model revealed the following: 1. There is a high threat from potential entrants to the industry both foreign and local 2. The supplier group has a high bargaining power over the industry through immediate price changes and causing artificial shortages 3. The buyer group has a high bargaining power also when dealing with the printing industry due to low switching costs and the unimportant of the printed products to the quality of their products 4. There is a low moderate threat from substitutes which come in the form of alternative reproduction processes like photo copiers and laser printers 5. There is a high threat from rivals in the industry particularly in commercial printing due to numerous or equally balanced competitors, and high fixed and storage costs that lead to price cutting. Biddings is a normal way for printers to solicit orders, and the lowest priced quotation is usually an advantage. After the company operations the following notable strengths were revealed: 1. The company has a pool of regular customers composed of fifty (50) companies 2. It has an integrated system of operations that means no process is contracted outside of the firm. 3. It employs competent managers and personnel and are provided with opportunities for growth and improvement 4. It has a good relationship with suppliers and banks 5. It has the image of a dependable, quality printer with reasonable prices. The weaknesses found are the following: 1. The owner is very conservative in managing the firm’s monetary resources 2. The company experiences difficulty in scheduling during peak season and utilizing plant capacity during low months 3. There were substantial operating costs incurred in the past three (3) years 4. The company does not have specific rules and regulations to guide operations. Due to these factors mentioned, it is suggested that the company adopt a focused generic strategy leading towards cost leadership. Since sixty (60) percent of all jobs accepted by the firm is solicited through biddings, it would be wise to have a cost advantage. The specific strategies recommended are the following: 1. Increase value Added by providing prompt and personalized service as well as complete technical assistance at reasonable prices 2. Specialization by product type or segment by focusing on the printing needs of commercial establishments like brochures, office forms and receipts 3. Specialization by customer type and type of order by focusing only on private companies printing requirements 4. Backward integration by building a more efficient fully integrated system of production 5. Focused geographic area by concentrating on areas that are accessible to its Paranaque plant. Aside from companies located in Paranaque, the areas covered by the firm are Makati, Manila, Pasig, Las Pinas and Muntinlupa. These strategies are recommended to further enhance the competitive advantage of the company in terms of: 1. Developing a cost advantage 2. Implementing measures to increase value-added and differentiation 3. Maximizing use of strong ties with suppliers and financial institutions 4.Specializing on the needs of specific market segments served and products produced The growth of sales has been relatively stable from 1994 to 1996. But the net income has been pegged at below PHP 2,000,000.00 for the past five (5) years. This means that effective cost control both in the office and plant must be implemented. The main idea is that the firm capitalize on its strong points to compensate its weak areas. All these recommendation were made to better prepare the company in meeting the challenges it may in future, serve its public more effectively and ensure the attainment of its goals