airfreight 2100, inc

1MICRO HENRY J. AREGLADO

AIRFREIGHT 2100, INC.

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MIDYEAR SWOT ANALYSISFROM SALES & MARKETING

Company BackgroundINTRODUCTION

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Company Background

•1979: Mr. Alberto D. Lina , Mrs. Sylvia P. Lina, Mr. Glorioso R. Martinez, and Mr. Jose D. Lina came up with a plan of establishing a Customs Brokerage company.•1979: 21st of June Airfreight 2100, Inc. was established. •The company’s first accounts were Intel Philippines, Wilson Electronics and EPZA Bataan registered enterprise. •1985: Contract was awarded to be the authorized agent of Federal Express in the Philippines.

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Company Background

•Air21 is under the flagship of Airfreight 2100, Inc. •Exclusive licensee of Federal Express Corp. in the Philippines.•First Global Service Provider (GSP) in Asia Pacific to receive ISO 9002 certification from Lloyds Registrar’s Quality Assurance in London. •Awarded Most Outstanding Cargo Forwarder by the Consumers Union of the Philippines

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Company Background

•Company is engaged in the Express Delivery Service.•1,600 employees•Delivers an average of 510,000 packages monthly. •Currently has three gateways, fourteen stations and forty nine affiliated agents around the Philippines.•Posted Php2.1 billion in revenue for 2008, 66% increase from its 2007 revenue of Php1.4 billion.

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Domestic Presence

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Airfreight 2100, Inc.’s Subsidiaries

Serves as an additional drop off center for FedEx and Air21 packages.

I.T.

Customer Service

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•Threat of New Entrants: Medium•Capital requirement•Cost of switching

•Bargaining Power of Buyers: High•Buyers are companies which compete by driving down prices and bargain for higher quality and more services.

•Threat of Substitutes: Low•Courier service has no substitute service in other industries.

•Bargaining Power of Suppliers: Medium •Alliances with air & shipping companies.

•Rivalry among Competitors: High•Small number of competing firms

Porter’s Five Forces

MIDYEAR SWOT ANALYSIS

FROM SALES & MARKETING 9

Competitive Profile Matrix (CPM)

AIRFREIGHT 2100, INC. - COMPETITIVE PROFILE MATRIX

Critical Success Factors Air21 LBC Aboitiz 2Go

Weight Rating Score Rating Score Rating Score

Freight Charge 0.20 4 0.80 3 0.60 2 0.40

Transit Time 0.15 4 0.60 3 0.45 3 0.45

Network (Area Coverage) 0.10 3 0.30 3 0.30 3 0.30

Service Quality 0.20 4 0.80 3 0.60 3 0.60

Customer Loyalty 0.10 2 0.20 3 0.30 3 0.30

Financial Position 0.05 4 0.20 3 0.15 4 0.20

Global Presence 0.10 1 0.10 4 0.40 3 0.30

Market Share 0.10 4 0.40 3 0.30 2 0.20

TOTAL 1.00 3.40 3.10 2.75



External Factor Evaluation Matrix (EFE)

AIRFREIGHT 2100, INC. - EFE MATRIX

OPPORTUNITIES WEIGHT RATING WEIGHTED SCORE

1. Increase in demand for logistics 0.15 4.00 0.602. Rise in online consumer services 0.05 4.00 0.203. Stability in world prices of crude oil 0.05 3.00 0.154. Increasing number of SME's 0.10 3.00 0.305. Continued growth of the service related sectors 0.15 4.00 0.606. Increasing number of OFW's 0.05 1.00 0.05

THREATS 1. World Financial Meltdown 0.05 4.00 0.202. Rising unemployment rate 0.15 2.00 0.303. Cheaper freight charge of freight forwarders 0.05 3.00 0.154. Existing international network of competitor 0.10 1.00 0.105. Partnership between Negros Navigation & 2GO 0.10 2.00 0.20TOTAL 1.00 2.85



Internal Factor Evaluation Matrix (IFE)AIRFREIGHT 2100, INC. - IFE MATRIX

STRENGTHS WEIGHT

RATING

WEIGHTED SCORE

1. Brand Equity 0.10 4.00 0.402. Licensee of FedEx 0.10 4.00 0.403. Equipped with state of the art technology 0.15 4.00 0.604. Wide transportation network 0.10 3.00 0.305. Alliances with affiliates 0.05 4.00 0.206. Employee's expertise in supply chain management services enhanced by adequate technical trainings. 0.05 3.00 0.15

WEAKNESSES 1. High sales team turnover 0.10 1.00 0.102. Poor Marketing in Vis-Min Area 0.05 2.00 0.103. No cold chain support 0.05 2.00 0.104. Lack of systems and control procedures in finance 0.10 1.00 0.105. Inconsistent service quality for agents outside NCR 0.05 2.00 0.106. Costly technology innovations 2.00 0.20TOTALS 1.00 2.75



Strengths-Weaknesses-Opportunities-Threats Matrix (SWOT) Strengths Weaknesses

1. Brand Equity 1. High sales team turnover

2. Licensee of FedEx 2. Poor marketing in Vis-Min Area 3. Equipped with state of the art technology 3. No cold chain support

4. Wide transportation network 4. Lack of systems and control procedures in finance

5. Alliances with affiliates 5. Inconsistent service quality for agents outside NCR

6. Employee's expertise in supply chain management services enhanced by adequate technical trainings. 6. Costly technology innovations

Opportunities SO Strategies WO Strategies

1. Demand for logistics 1. Provide service specific to a company's need. (S3,S4,01,02,04,05) PD

1. Pentrate Vis-Min thru marketing and modern technology. (W3, W4, 01,02,04,05) MP

2. Rise in online consumer services 2. Make use of vast networks and resources to support remittances from OFW's. (S1,S3,S4,S5,01,06) MD

2. Form a strategic partnership with IT companies that will lessen cost in innovating exisiting system. (W5, W6, W7, 01,02,04,05,06) BI

3. Stability in world proces of crude oil 3. Focus on the rise of online consumers with the use of the company's exisitng technology. (S1,S2,04,05) MP

3. Strict compliance in the continuity of service quality through agents. (W2,W5,W6,01,02,04,05) BI

4. Increasing number of SME's 4. Use employees expertise to saturate growing service industries. (S1,S2,S3,S4,S5,S6,03,04,05) MP

4. Revisit sales support; make use of the opportunities in emerging markets to retain sales professionals. (W1,W2,W5,O1,02,04,05) MP

5. Continued growth of the service related sectors

5. Enhance business model through niche marketing on SME's. (S1,S4,S5,S6,01,02,04,05,06) MP

5. Acquisition of cold chain support that will validate the company as total logistics provider. (W4,01,02,O4,05) RD

6. Increasing number of OFW's

Threats ST Strategies WT Strategies

1. World Financial Meltdown1. Provide supply chain management expertise to companies and provide adequate recommendations to lessen logistics cost. (S6, T1, T2, T3) PD

1. Revisit paying options for companies greatly affected by the economic recession. (W2,W5,T1,T2) PD

2. Rising unemployment rate2. Continue to build brand and maintain strong partnership with FedEx clients to achieve loyalty on both brands. (S1,S2,S5,T4,T5) MP

2. Lessen risk on top accounts with large AR by having an external support group to monitor development. (W2,W5,T1,T2) BI

3. Cheaper freight charge of freight forwarders

4. Exisitng international network of competitior

5. Partnership between Negros Navigation & 2GO

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Strengths-Weaknesses-Opportunities-Threats Matrix (SWOT)

Market Penetration•Penetrate Vis-Min through marketing and modern technology. Focus on the rise of online consumers with the use of the company's existing technology. •Use employee’s expertise to saturate growing service industries. •Enhance business model through niche marketing on SME's. •Revisit sales support; review compensation package and ensure that all areas are covered by a sales professional. •Continue to build brand and maintain strong partnership with FedEx clients to achieve loyalty on both brands.

Product Development•Provide service specific to a company's need.•Revisit paying options for companies greatly affected by the economic recession.

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Strengths-Weaknesses-Opportunities-Threats Matrix (SWOT)

Backward Integration•Form a strategic partnership with IT companies that will lessen cost in innovating existing system. •Lessen risk on top accounts with large A/R by having an external support group to monitor development.

Market Development•Make use of vast networks and resources to support remittances from OFW's.

Forward Integration•Train and maintain strict compliance in the continuity of service quality of agents.

Related Diversification•Acquisition of cold chain support that will validate the company as total logistics provider.

DOMINANT STRATEGY: MARKET PENETRATION

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Strategy Formulation


FROM SALES & MARKETING

Financial Strength rating is 1 (worst) to 6 (best) Ratings1. Costly technology innovations 32. Lack of systems and control procedures in finance 5Industry Stength rating is 1 (worst) to 6 (best) 42. Continued growth of the service related sectors 63. Increasing number of SME's 54. Wide transportation network 55. Alliances with affiliates 6Environmental Stability rating is 1 (best) to 6 (worst) 4.41. High sales team turnover -12. Stability in world prices of crude oil -33. Rising unemployment rate -54. Cheaper freight charge of freight forwarders -35. Increase in demand for logistics -16. Rise in online consumer services -17. World Financial Meltdown -1Competitive Advantage rating is 1 (best) to 6 (worst) -2.141. Brand Equity -12. Licensee of FedEx -13. Equipped with state of the art technology -14. Exisitng international network of competitior -65. Employee's expertise in supply chain management services enhanced by adequate technical trainings. -26. Poor Marketing in Vis-Min Area -47. No cold chain support -48. Inconsistent service quality for agents outside NCR -49. Increasing number of OFW's -610. Partnership between Negros Navigation & 2GO -4

-3.3

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Strategic Position and Evaluation Matrix (SPACE)Financial Strength rating is 1 (worst) to 6 (best) Ratings

1. Costly technology innovations 32. Lack of systems and control procedures in finance 5Industry Strength rating is 1 (worst) to 6 (best) 4

2. Continued growth of the service related sectors 63. Increasing number of SME's 54. Wide transportation network 55. Alliances with affiliates 6Environmental Stability rating is 1 (best) to 6 (worst) 4.4

1. High sales team turnover -12. Stability in world prices of crude oil -33. Rising unemployment rate -54. Cheaper freight charge of freight forwarders -35. Increase in demand for logistics -16. Rise in online consumer services -17. World Financial Meltdown -1Competitive Advantage rating is 1 (best) to 6 (worst) -2.14

1. Brand Equity -12. Licensee of FedEx -13. Equipped with state of the art technology -14. Existing international network of competitor -65. Employee's expertise in supply chain management services enhanced by adequate technical trainings. -26. Poor Marketing in Vis-Min Area -47. No cold chain support -48. Inconsistent service quality for agents outside NCR -49. Increasing number of OFW's -610. Partnership between Negros Navigation & 2GO -4 -3.3



Strategic Position and Evaluation Matrix (SPACE)

ES average -2.14

CA average -3.30

IS average 4.40

FS average 4.00

X Coordinate 1.10

Y Coordinate 1.86

Strategy >> Aggressive

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Internal-External Matrix (I-E)

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Grand Matrix



Matrix SummaryAIR21 - MATRIX SUMMARY

Alternative Strategies SWOT SPACE IE GRAND TOTALForward Integration x x x 3Backward Integration x x x 3Horizontal Integration x x 2Market Penetration x x x x 4Market Development x x x 3Product Development x x x x 4Related Diversification x x x 3Unrelated Diversification x 1Conglomerate Diversification x 1Horizontal Diversification x 1Joint Venture 0Retrenchment 0Divestiture 0Liquidation 0



Quantitative Strategic Planning Matrix (QSPM)

Market

PenetrationProduct

DevelopmentForward

Integration Key Internal Factors Weight AS TAS AS TAS AS TAS

Strengths 1. Brand Equity 0.10 4 0.40 3 0.30 4 0.402. Licensee of FedEx 0.10 4 0.40 3 0.30 4 0.403. Equipped with state of the art technology 0.15 4 0.60 4 0.60 3 0.454. Wide transportation network 0.10 4 0.40 3 0.30 3 0.305. Alliances with affiliates 0.05 4 0.20 4 0.20 4 0.206. Employee's expertise in supply chain management services enhanced by adequate technical trainings. 0.05 3 0.15 4 0.20 4 0.20Weaknesses 1. High sales team turnover 0.10 3 0.30 4 0.40 2 0.202. Poor Marketing in Vis-Min Area 0.05 3 0.15 2 0.10 4 0.203. No cold chain support 0.05 3 0.15 3 0.15 2 0.104. Lack of systems and control procedures in finance 0.10 3 0.30 4 0.40 2 0.205. Inconsistent service quality for agents outside NCR 0.05 4 0.20 4 0.20 4 0.206. Costly technology innovations 0.10 3 0.30 3 0.30 3 0.30SUBTOTAL 1.00 3.55 3.45 3.15



Quantitative Strategic Planning Matrix (QSPM)

Market Penetration

Product Developme

ntForward

Integration

Key External FactorsWeight AS TAS AS TAS AS TAS

Opportunities 1. Increase in demand for logistics 0.15 3 0.45 3 0.45 4 0.602. Rise in online consumer services 0.05 3 0.15 2 0.10 4 0.203. Stability in world prices of crude oil 0.05 1 0.05 1 0.05 1 0.054. Increasing number of SME's 0.10 4 0.40 3 0.30 4 0.405. Continued growth of the service related sectors 0.15 4 0.60 3 0.45 4 0.606. Increasing number of OFW's 0.05 4 0.20 4 0.20 1 0.05Threats 1. World Financial Meltdown 0.05 3 0.15 3 0.15 3 0.152. Rising unemployment rate 0.15 4 0.60 3 0.45 3 0.453. Cheaper freight charge of freight forwarders 0.05 3 0.15 4 0.20 4 0.204. Existing international network of competitor 0.10 1 0.10 1 0.10 1 0.105. Partnership between Negros Navigation & 2GO 0.10 3 0.30 3 0.30 4 0.40SUBTOTAL 1.00 3.15 2.75 3.20SUM TOTAL ATTRACTIVENESS SCORE 2.00 6.70 6.20 6.35

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Recommendations

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Recommended Vision Statement

“To become the undisputed market leader in the

international and domestic express transportation and

logistics industry by the end of 2020.”

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Recommended Mission Statement

“To provide superior customer driven quality service to its customers by maintaining the most efficient equipment in the

industry that will provide time-definite, totally reliable, innovative pick-up, delivery and logistics services to customers

that value time in doing business.

Thus, by giving our employees mutual trust and respect all of our long term strategies and short term actions will be molded by a set of core values that will deliver profits and growth to

our shareholders.

Lastly, we will exceed these expectations by conserving resources and observing the highest ethical standards in our pursuit to lead the markets in which we choose to compete.”

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Strategic Objective

1. Total revenues from express service is projected to increase from Php942 million in 2009 to Php1.1 billion in2011, representing an annual growth of 10%.

2. Net income of for the parent company Airfreight 2100, Inc. is targeted to grow from Php67 million in 2009 to Php94 million in 2011.

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Recommended Strategies

Forward Integration: We can look to increase control over distributors by integrating systems and processes to our agents.

Market Penetration: Increase market share in the Visayas and Mindanao Area.

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Departmental ActivitiesRECOMMENDATION

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Departmental Goals

Sales•Reduce turnover rate by offering new incentive scheme and personal growth through training and education.

Marketing•Improve visibility and awareness in the Visayas and Mindanao area.

Finance•Implement regulatory changes in workloads, standardization, people and procedure will be prioritized.

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Departmental Goals

Operations•Assure that agents adhere to the service quality and performance indices in terms of operations.

Human Resources•Train all agents with company procedures, processes and system involved in daily operations.

I.T.Enhance I.T. infrastructure in the Visayas and Mindanao area.

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Balance ScorecardEVALUATION AND SUCCESS INDICATORS



Financial PerspectiveArea of Objectives Measure or Target Time Expectation Primary

Responsibility

Revenue Growth

10% ave. per annum 2009 –

Php214,171,076.502010 –

Php235,588,184.152011 –

Php259,147,002.57

2009-2011 Sales, Marketing and Operations

Improved A/R Collection 40 days ave. collection

days2009-2011 Finance

Achievement of Sales Quota

100% sales performance

2009 – Php942,352,736.60

2010 – Php1,036,588,010.2

2011 – Php1,140,246,811.2

2009-2011 Sales & Marketing

Utilization of Assets 98% utilization rate Annual Operations



Customer Perspective

Area of Objectives Measure or Target Time Expectation Primary Responsibility

Market Share >57% Market Share 2009-2011 Sales, Finance and Marketing

Customer Satisfaction

>98% Monthly Sales, Marketing and Operations

Customer Retention >90% Annual Marketing, Sales, Operations & Finance

Transit Time 1-2 days Monthly Operations

Price Industry Leader Annual Marketing



Internal Business Perspective


Improve Operational Efficiency

100% turnaround time

Monthly IT and Operations

Hiring of Competent SP

Internal hiring HR and Sales

Ensure Agent Presence

Zero agent vacancy in a territory

Annual HR and operations




Sales Coaching 100% of SP coached Quarter Sales

High Skills Level 95% skill set ratio Annual HR

Innovation of current technology

100% on time and accurate information

Annual IT

Employee Satisfaction

100% satisfaction rating

Quarter HR

Training Best Practice

100% employees trained

Annual HR

Innovation and Learning Perspective

airfreight 2100, inc

Documents

sales professional

niche marketing

substitute service

lowcourier service

express delivery service

growing service industries

company background1979

company backgroundcompany