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Lamoiyan Corporation

Brief Background

Owner:

Cecilio Kwok Perdo

The company positioned itself as a corporation that produces low-priced and quality products and expanded to producing some water-based toiletries and cleansing products.

It started as a factory that supplied aluminum toothpaste tubes for companies like Colgate-Palmolive, Procter & Gamble and Unilever.

In the long run, the factory closed because the toothpaste companies decided to switch from aluminum to plastic tubes. Unfortunately, a lot of workers were affected because they became unemployed.

Pedro turned this misfortune into opportunity

and thought that if nobody wanted his tubes,

then he might as well fill them up with his own

toothpaste. Pedro created the Lamoiyan

Corporation and built his own brand of

toothpaste. He introduced Hapee Toothpaste

to the Filipino consumers.

After a few years in the market,

the company moved away from

using aluminum tubes and turned

to the plastic ones too.

Today, Lamoiyan Corp. has

their tubes, closures, and

cartons made by other

packaging companies.

Success wasn’t easy for Lamoiyan to achieve.

They’d been through a lot of challenges and

one of these are their competitors.

Major competitors are Colgate,

P&G and Unilever. There are

three significant perceptual

barriers to the company’s success.

Important

Details

Analysis of

Macro Environment

Products offered

by Lamoiyan Corporation

Analysis of Task

Environment

Porter’s Five

Forces

Threat of New Entrant

It will be hard for a new company to enter the toothpaste industry because it is already dominated by Colgate-Palmolive’s “Colgate” and Unilever’s “Close-Up”, even the “Hapee” toothpaste of Lamoiyan find it hard to enter the industry. Also, the barriers to entry is high like for the capital requirement, new companies need to invest large financial resources in order to compete, they will need technologies and machineries to produce toothpaste. It will also be hard for them to differentiate their product since almost all of the toothpaste is same. Colgate-Palmolive, Unilever and Lamoiyan have already found their niche, they are already known in what they do and what they offer. They already have large customer base.

Opportunities

and Threats

Possibilities of going public, achieving

deeper channel penetration with

existing products, launching new

products, and expanding

internationally are the opportunities

that Lamoiyan must have.

Competitors have a lot of stores

that offering their products unlike

Hapee toothpaste they only have

selected stores that offered

Hapee toothpaste.

ACAS (Strategies)

1. We will introduce our new product which is HAPEE SHAMPOO for smooth and silky hair.

“HAPEE to

have you”

1. By introducing our new product

line which is HAPEE shampoo we

can expand our customer based so

that we can easily increase our sales.

2. Product Awareness

1. It is costly on the

part of the company.

2. We will introduce

new product of

toothpaste which

is HAPEE White for

whitening the teeth

of their customers.

1. It will help solve the

problem of the consumers

with regards to Hapee that

it does not clean teeth well.

3. Increase promotion strategies

such as making memorable slogan,

jingle, commercials, etc.

Bargaining Power

of Buyers

Bargaining Power of Buyers is low because

even though the price of Colgate is high

compared to other toothpaste products,

it still has the large share in the market.

Even though Lamoiyan’s “Hapee” toothpaste

offered its product much lower, its market

share is still behind of Colgate and Close-up.

(cc) photo by jimmyharris on Flickr

Threat of Substitution

This is affected by the ability of your customers to find a different way of doing what you do or what you provide. Threat of Substitution in the Toothpaste industry is low since people need the benefits offered by the toothpaste product of Colgate-Palmolive, Uniliver and Lamoiyan. Even though there are other substitute for the toothpaste like salt and baking powder, it does not affect largely to the market share of the three competing companies.

Intensity of Rivalry

Bargaining Power

of Suppliers

The intensity of Rivalry is very high in

the industry. Lamoiyan has several

strong competitors in the market like

Colgate-Palmolive, Unilever, Procter

and Gamble and Zest-O Corporation.

Another important element affecting

the intensity of rivalry is that the

switching cost in this industry is quite

low as it does not cost anything for a

consumer to buy one brand instead

of another.

Hapee was able to capture a market share of multinational companies resulting to increased bargaining power of suppliers. It's ranked as, number three when it comes to market share in the toothpaste industry. As for the suppliers, they wish to maintain stability in delivering their raw material to the firm without fluctuating the prices. Hapee sure knows how to bargain with suppliers to be able to reduce cost and increase their profit.

First is that the consumers fear that locally

produced goods were inferior, consumers’

preference for Colgate’s taste and the lack

of awareness of Happee Toothpaste. To

overcome these barriers, Lamoiyan made

a tie-up with a Japanese firm to enhance

the perception of the people that Happee

toothpaste’s quality is good. They also

made a flavor that was comparable to

Colgate’s and they even sponsored the

Philippine Olympic Team.

Advantages:

Tagline:

Disadvantage:

Political-Legal

Environment

Demographic

- Political contained an executive, legislative and judicial branch and functioned as a democratic state under President Gloria Macapagal-Arroyo.

- Ms. Macapagal-Arroyo took office in January 2001 after Former President Joseph Estrada was impeached on charges of nepotism and corruption.

- Macapagal-Arroyo, who desired to strengthen competition and liberalize trade, unleashed considerable political uncertainty and recession threat in late 200 but in 2002, the instability, had mostly subsided.

- The Philippine population exceeded 80 million in 2002, and was expected to grow at 2% annually through 2007.

- The island divided into three geographic areas: The southern island of Mindanao, the central island of the Visayas and the northern and largest island of Luzon, which contained the country’s capital Manila.

- Almost half the population lived in urban areas, and over 10 million resided in Metro Manila, which covered only 245 square miles.

- The national language was Tagalog, with over 80 distinct dialects; English was widely spoken and was the medium of communication in business and higher education.

- Philippines boasted one of the highest literacy rates in the world and in Southeast Asia including Hong kong and Taiwan.

Advantage:

1. Increase brand awareness

and memorability.

Disadvantage:

1. It is costly on the part of the company.

Advantage:

Disadvantage:

Economic

Environment

1. Low customer belief

- The 2002 real GDP reached US$77.1 billion, reflecting 8% increase from 2001, and export revenues in 2000 totaled US$35 billion, more than four times the amount in 1990.

- In 2002, Philippines fell 13 places to 61st out of 80 countries in World Economic Forums Global Competitiveness Report, and index based on countries expected five year per capita GDP growth.

- In 2000, GDP was distributed as follows 45% services, 35% industrial, and 20% agricultural. Over 90% of businesses in the Philippines employed fewer than ten people each; in 2002 approximately 11% of the labor force was unemployed.

Socio-cultural

Environment

Opportunities

- Philippine consumers purchased toothpaste three times per month on average, with 72% buying only one package of toothpaste per purchase occasion, 18 % buying two packages and 10% buying three or more.

- The most important purchase considerations for Philippine toothpaste consumers were product cleaning and freshening benefits on teeth, gums, mouth, and breath.

- 80% of survey respondents were product availability, price, taste, user imagery and brand image.

Objectives

Increase market share

from 2002 (10%) to

2003 (14.1%).

Problem

Threaths

Low distribution because

of the company’s limited

product line.

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