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EXECUTIVE SUMMARY

Central Azucarera de Tarlac (CAT) is a sugar mill and refinery located in Barrio San Miguel, Tarlac City. Its segments include sugar and its by-products (molasses, alcohol and carbon dioxide) and real estate. Sugar (raw and refined) and carbon dioxide are normally sold to industrial users while alcohol are sold to wine distillers and alcoholic beverage manufacturers.

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Under the external environment analysis, the opportunities and threats identified relate to the increase in market demand, the company’s variation in product mix, the intensity of competition in the industry, the availability of suppliers and distributors, and the climate change. The increase in market demand is expected to benefit the sugar industry because of the growth of food processing industry and the population. CAT can attract more customers and generate higher profit with the different products and services offered. Another opportunity identified is the intensity of competition which can cause continuous development for the company as it strives to be at the top of the sugar industry in the Philippines. Having its raw materials produced in their own farms, suppliers and distributors are not a problem for the company. CAT also maximizes its crops by using scraps in other processes. Lastly, climate change most is a threat to its production since it will affect the growth of the sugar cane and in effect will increase the production costs. The quality of the sugar produced is dependent on the raw materials that are placed as inputs, mainly the crops harvested.

The strengths and weaknesses were obtained under the internal environment analysis using the Resource-Based View and the Porter’s Value Chain Model Analysis. Its physical, organizational, human resources and resource innovation are efficient in promoting sustainable competitive advantage. Research and development (R&D) is considered as its weakness. Upon further analysis, the company does not focus on this support activity as evidenced by its financing. The expenses related to R&D activities only reflect a small portion of the company’s budget.

The company is relatively stable with a few risks that need to be assessed and managed, which are the crop shortage, supply shortage, obsolete technology and employee strike. In order to mitigate these risks, strategic objectives are recommended to be implemented. These objectives are acquisition of raw materials from other suppliers, allotment of product safety stock, investment in research and development services, and boosting of employee morale.

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