henry sy & john gokongwei case analysis

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    CASE ANALYSIS

    (Henry Sy and John Gokongwei)

    Presented To:

    Prof. Michael Sanchez

    Prepared By:

    Gellie GonzalesEmilyn MandoAilyn Linatoc

    Nadine April VillaRommel Quijano

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    I. INTRODUCTION

    II. KEY PERSONS INVOLVED HENRY SY

    - Retailing tycoon, owner of successful SM Shoemart chain ofdepartment stores.

    Henry Sy Jr. eldest son of Henry, based in Hong Kong andhandles his fathers foreign investments. He likewise functions as

    management consultant of hotel projects in China which are being

    set up together with Novotel, a French hotel chain.

    Teresita Sy eldest daughter of Henry, handles finance and Bancode Oro operations.

    Hans Sy in charge of operations and engineering of Shoemart. Herbert Sy takes care of SM ACA and the supermarket. Harley Sy oversees merchandising of all department stores. Elizabeth Sy takes care of the pastries and food divisions.

    JOHN ROBINSON GOKONGWEI- Banker-industrialist, owner of Robinson Commercial, Inc. outlets. Robina Gokongwei eldest daughter of John. Lance Gokongwei son of John, who has degrees in finance and

    science (summa cum laude), who was been assigned to the

    Philippine Commercial International Bank as assistant treasurer and

    at Robinsons Galleria, a two-billion-peso complex hotel,department store, flats, shops, cinemas, restaurants and offices.

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    III. ANALYSIS Strengths:

    To the entrepreneurial Chinese, every peril, every threat is as good asan opportunity. Filipino Chinese look beyond the political risks that

    surround the country.

    Far from ignoring the dangers, they look into them. Their positivevision is long-range vision coupled with an enduring faith in the

    creativity and resilience of the entire Filipino national community.

    The key to business success lies in Henry Sys interest in peoplephilosophy, especially in retailing where consumers are a varied and

    finicky lot. What keeps Henry Sy going on, doing one megaproject

    after another besides the undeniable prospect of huge returns? He

    said community service overwhelms the competitive instincts.

    The compelling reason for commercial centers is much like a publicservice offering of convenience for shoppers. For the love and need of

    people, indeed, cannot compensate for the wealth one acquires.

    Similarly, Henry Sys shopping cities provide employment to many.

    One thing John Gokongwei is though: He is competitive. Thats why hetakes his relaxation diligently. No competitive sport for fun or fame; no

    barkada to kill time with, when little enough of it is left for family

    and solitude; no hobby other than reading to distract his attention

    from the pure enjoyment of whiling away the moments alone and not

    having to do anything other than do nothing.

    Henry Sy leads a very limited social life. It is perhaps because of thisthat he is a non-smoker and just occasionally has a sip of brandy or

    simply because he values his health like John Gokongwei.

    Henry Sys no off-season philosophy must have been routed in theearly retail days when he realized that when everybody else is off

    from work that is the time they go shopping.

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    Weaknesses: The challenge of going public is particularly tough for John Gokongwei,

    whose estimated 4 billion asset business include retail holdings, sugar

    mills, hotels, grocery stores, and textile mills, and whose 22-year-old

    son, Lance, is just out of university.

    Opportunities: Henry Sy had always been proud that his Shoemart outlets which dot

    the Metropolis and other key cities in the Philippines had been

    gradually upgraded into ever larger commercial complexes through

    retail cash flow and from the deposits of concessionaries eager to

    piggyback on his reputation for sound business dealings and good

    services.

    John Gokongwei had also claimed to have avoided major borrowingsfor his projects. Instead, he has relied on huge sums of cash

    generated by his two main holding companies, Universal Robina

    Corporation and Commonwealth Food Corporation, the support of

    relatives and associates who have been silent partners from the start,

    and on profits from stockmarket dealings.

    Henry Sy purchased a closed-end investment company from the AyalaGroup and renamed it the SM Fund, Inc. While hard work and a sharp

    eye for the bottom line had serve Henry Sy well, so apparently had his

    development partnership with the Zobel family, primary owners of the

    property-based Ayala Corporation.

    Similarly, in August, 1988, Gokongwei filed an application with theSecurities and Exchange Commission to offer publicly 40% of Robinson

    Land Corporation, his groups primary real estate development arm.

    Shares are expected to be placed overseas, largely among institutional

    investors.

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    John Gokongwei learned everything on the effects of his two-weekvacation in a health center at the Pritikin Longevity Centre in Los

    Angeles. He listened to three hours of lectures everyday by experts

    who talked about food and how it is ingested by the body. He is also

    learning that he can take off from work for as long as a month. Hes

    learning that travelling for business and pleasure is both possible and

    enjoyable.

    Perhaps Henry Sy considers his many travels to the United States andEurope in the 1950s to 1970s as his vacation. It was, for him, an

    absorption time that sharpened his entrepreneurial skills.

    IV. PROBLEM IDENTIFICATION

    Both tycoons are building multi-storey commercial centers that causethem a competition for the land in Manila.

    The race between Henry Sy and John Gokongwei to cash in on thePhilippines consumer boom was coined as Manilas store wars, ringing

    the metropolis with vast concrete shopping malls.

    Both of them are taking the concept of shopping center as communitycenter to the extreme with their new plans.

    Both developments will include hotels, apartments, shops and cinemas. Both groups have also tried to boost access to financing trough buying

    local banks.

    V.

    LIST OF ALTERNATIVE SOLUTIONS:

    They should combine their business into a partnership Advantages:

    1. They will avoid competition on their business.2. They will gain more profit.

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    Disadvantages:1. Profit of both companies will be divided among them.2. Decision-making will be difficult for both owners.

    Spreading shopping plazas, and copying the idea throughout thearchipelago

    Advantages:1. Customers can easily choose where to buy things according to

    their needs.

    Disadvantages:1. It will provoke further changes in how and where Filipinos does

    their shopping.

    2. Customers will be divided into two groups so the profits of thesetwo companies will be separated.

    VI. CONCLUSION/RECOMMENDATION: