AMBROSIA CORPORATION – SAN AUGUST

SUMMARY

INTRODUCTION

I) AMBROSIA’S PRESENTATION

II) COMPETITIVE MARKET

III)SOLUTION

CONCLUSION

INTRODUCTION

• 1925: San August Corporation.

• Trade became easier. Consumer demand increased.

• Ambrosia: leader in the ice cream industry (77.3%)

• Ice cream market was expected to double.

• Arrival of new competitors.

I. PRESENTATION OF AMBROSIA

• Leadership in the Filipino ice cream market.

• High Price

TOTAL REVENUE : P2.830 BILLION

FDS55%

NCB 38%

FPS6% Others

1%

Total Revenue : P2.830 Billion

FDSNCB FPSOthers

PRESENTATION OF AMBROSIA

• The Frozen Dessserts and Snacks is the most important category.

• 3 main line offering products:

• Bulk ice cream

• Single-serves

• Soft-serve

ANSOFF ANALYSIS

PRODUCT DEVELOPMENT

ANSOFF ANALYSIS

• Best strategy: Product development.

• Develop new products catering to the same market: 1992: 5 new flavors, 16 new products, a fruit bar in 4 flavors.

• It permit us to:

• Maintain the company’s reputation as a product innovator

• Protect overall market share

• Counter competitive entry

• Use of excess production capacity

DISTRIBUTION

6 manufacturing plants

Current capacity expcted to double by 1993

35 sales offices

86% buy on impulse.

Carrito vendors

Split the distribution into :

60% retail store

30% outlets and others.

II. COMPETITIVE MARKET

4 MAJOR COMPETITORS:

SELECTA:

7.3% to 15% (1992)

Medium priced products

Increase its production capacity -> New equipments

PRESTO:

Low-pricing serve products

Strategy of product development

PUREFOOD:

Attraction of Ambrosia’s carrito vendors

Improve technology

Offered rebates

MARKET SHARES

Ambrosia77%

Presto10%

Selecta7%

Coney Isand2%

Sorbetero3%

AmbrosiaPrestoSelectaConey IsandSorbetero

S

77% share of market

Product line

Local Brand

Knowledge of market

Distribution

Technology

Domestic

Company

80% of capacity

Share in the expansion (100 over 7 years)

Relationship with foreign compagnies

International and domestic

rivals

Political and natural

disasters

W O T

III. SOLUTION

OUR OPINION

Why should the company make a strategic alliance ?

• Technology

- Fill the void created by the lack of technology

- New infrastructures

- Problem of new flavor research solved

- New products and packages

- Better, faster and broader production to increase profits

• International opportunities

- Firm located in a foreign country OR firm with agencies dispatched internationally

- New points of activity allowing the firm to have broader scope around the world

- Additional profits

- Nestlé and Häagen-Dazs; reinforced reputation

• The 20% capacity left aside finally used

- 20% of the Ambrosia Corporation is left out of the business, yet it could be fully used

- Maximization of benefits

• Strengthen power and flexibility

- International and domestic rivals

- Politic and natural disasters

Does it really need to make an alliance ?

HOW BEST TO MAINTAIN ITS COMPETITIVE DOMINANCE ?

• No Joint Venture

• No License

• A contract is better and more flexible

CONCLUSION

• Potential to grow and increase its power on the international scale

• Ought to give itself an aid from foreign companies

• The better type of alliance is a contract, where both parts can agree on the terms.