The Tiongson brothers who own Malabon Marketing, Inc. are faced with deciding whether to expand their candle-making business or grocery product distribution. Arturo favors expanding candles while Rodolfo wants to focus on grocery. Hiring a consultant is recommended to provide an expert opinion on the best path forward. A consultant can offer an outside perspective, industry expertise, and help make an important decision in a timely manner. Their recommendation will help the company outsmart competitors and increase profits, outweighing the additional cost of hiring a consultant.
The Tiongson brothers who own Malabon Marketing, Inc. are faced with deciding whether to expand their candle-making business or grocery product distribution. Arturo favors expanding candles while Rodolfo wants to focus on grocery. Hiring a consultant is recommended to provide an expert opinion on the best path forward. A consultant can offer an outside perspective, industry expertise, and help make an important decision in a timely manner. Their recommendation will help the company outsmart competitors and increase profits, outweighing the additional cost of hiring a consultant.
The Tiongson brothers who own Malabon Marketing, Inc. are faced with deciding whether to expand their candle-making business or grocery product distribution. Arturo favors expanding candles while Rodolfo wants to focus on grocery. Hiring a consultant is recommended to provide an expert opinion on the best path forward. A consultant can offer an outside perspective, industry expertise, and help make an important decision in a timely manner. Their recommendation will help the company outsmart competitors and increase profits, outweighing the additional cost of hiring a consultant.
The Tiongson brothers who own Malabon Marketing, Inc. are faced with deciding whether to expand their candle-making business or grocery product distribution. Arturo favors expanding candles while Rodolfo wants to focus on grocery. Hiring a consultant is recommended to provide an expert opinion on the best path forward. A consultant can offer an outside perspective, industry expertise, and help make an important decision in a timely manner. Their recommendation will help the company outsmart competitors and increase profits, outweighing the additional cost of hiring a consultant.
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Arabia, Duchess Saudia T.
Case Study 1: Malabon Marketing, Inc.
I. Point of View Luis Tiongson, 24-year-old production manager of Malabon Marketing, Inc. He felt that each of his two brothers had compelling arguments on his side.
II. Statement of the Problem (or Objective)
How can the Tiongson brothers come up to a decision for the future direction of the Company that would increase its profit and maintain its financial stability?
III. Areas of Consideration
In May 1981, the surviving heirs of the founder of Malabon Marketing, Inc. should make a decision for the company’s future and their individual fortunes. Arturo Tiongson, 38, the eldest of the three and company president, was arguing for expansion of the candle-making business, via development of decorative candles, which were premium-priced, high-profit items. Rodolfo Tiongson, 35, vice president and treasurer, was in favor of expanding their selling and distribution of food product lines and wanted to keep its candle-making business to its current level. The youngest brother, Luis, 24, production manager was uncertain because he felt that each of his two brothers had compelling arguments on his side. Malabon Marketing, Inc. was founded fifteen years ago by Mr. Lee S. Tiongson, a salesman working for a Chinese-Filipino manufacturer of soy sauce. Mr. Tiongson bought a second-hand pitch shot display board and made arrangements to be appointed as a separate soy sauce dealer in his locality. Upon his retirement, he formed Malabon Marketing, Inc. and continued selling soy sauce. Gradually, the company added other product lines and expanded its territory. Over a span of seven years, it added patis and bagoong, laundry soap, sugar, detergents, canned meat, sardine s, biscuits, candies, coffee, and cocoa to its line of products by applying as electrical distributor/wholesaler for various manufacturers. Soon it had twelve delivery panels and a corresponding team of salesmen and merchandisers; it was covering part of Metro Manila, Bulacan, Pampanga and Tarlac, as well as Laguna and Batangas in Central and southern Luzon. In its seventh year, Mr. Tiongson started experimenting with the manufacture of candles. By 1978, the candle business was outselling the grocery product line.
IV. Alternative Courses of Action
Pursue the expansion of the candle-making business Strengths Weaknesses Opportunities Threats -The company has -The company has -The oil crisis will not -Other companies been manufacturing limited funds subside and is likely to that have mastered candles since 1973 -In conflict with the worsen in the future the art of decorative -Gradual increase in decision of Rodolfo -A Taiwanese candle- candle-making and sales profit -The company doesn’t maker will lend his -The candles are basic know how to make production supervisor have been selling commodity and in line and sell the for two years for the them for years with other product decorative candles company to make -Seasonal products lines of the company quality decorative -Increase liability candles -The venture can be easily financed because the branch manager of the equitable bank, Arturo’s compadre, can finance the company up to P2 million -The candle-making business would increase the company’s profit margin by 30-40 percent
Undertake the expansion of grocery products distribution business and maintain the candle- making business to its current level Strengths Weaknesses Opportunities Threats -The company has -The company has -The company could -Other companies been in grocery limited funds gain more profit in the that offer more distribution business -In conflict with the expansion of grocery product lines for decision of Arturo product lines -Malabon Marketing Inc. is a well-known independent soy sauce dealer in the business industry -Products were bought from other manufacturers at a discount for resale -Continuous increase in sales profit
The top management should analyze the situation carefully of what product line should undertake expansion Strengths Weaknesses Opportunities Threats -The top management -Conflict in decision- -If the company - Other companies have knowledge of making expands the right that offer more the whole situation product line, they product lines and would carefully could gain more profit analyze it since it is their own corporation and their decision would affect the company and their individual fortunes
Hire a consultant to give an expert opinion
Strengths Weaknesses Opportunities Threats -expertise in -additional cost -if the company - Other companies marketplace and in expands the right that offer more marketing space product line using the product lines -Save time opinion of the consultant, they could gain more profit
V. Recommendation After considering all the alternatives, I recommend the decision of hiring a consultant to provide an expert opinion. Since the top management cannot decide on whose proposal would be used, Arturo Tiongson was arguing for expansion of the candle-making business while Rodolfo Tiongson was in favor of expanding their selling and distribution of food product lines and keeping the candle-making business to its current level, it is reasonable to hire a consultant. Hiring a consultant would help the company because a consultant views the situation from a fresh perspective. An outside pair of eyes is helpful because it is common for internal teams to miss certain problems in the company because of bias or too close to problems and miss to catch them, especially because the company is a family-owned business. Even though the brothers have different positions, all their opinions matter because they are siblings who own the business. Decorative candle-making business is new to the company. They have no idea on how to make and sell those candles. In addition to expertise, a consultant has a track record of past accomplishments. One of the qualifications of a consultant is possession of extensive experience and expertise in the marketplace where the organization operates. Consultants have worked with many companies in the same industry and know the ins and outs of market trends. They know what other competing companies are doing, and so their recommendations will help this company outsmart competitors easily. Although hiring a consultant would make the company add its cost, it is worth it because the company is in the point wherein the brothers need to make an important decision. Time is essential in making a decision. Dedicating quality time to address certain aspects is a path most companies don’t like to take, as it ends up being costly. The consultant has all the time in the world to dedicate their efforts towards data collection, formulating and implementing necessary policies to solve the company’s problems. The brothers can dedicate this saved time to do other aspects of the business that contribute to higher profitability. Therefore, hiring a consultant is beneficial for making tough decisions. The brothers cannot make a decision, thus a consultant not related to the company, would provide a fair and objective expert opinion. Since a consultant has all the knowledge needed to give an opinion, his recommendation is very much helpful for the firm.
