John Paul Sindol MBA G21
CASE 2: FORT BONIFACIO GLOBAL CITY

I. Point of View

The ING Barings hired as the consultant of Metro Pacific Corporaion for overcoming the immense encounter of the company. The firms is on detailed study based on the concept of intellectual services, managerial consultants or even strategic consultancy is highly appreciated.

II. Objective a. To be able to identify factors (TOWS-driven) in which the company can exploit to stimulate maintainable improvement; b. To be able to know the effective utilization of these factors (TOWS-driven) through the help of strategic planning; c. And, to be able to help solve the company’s problem through the utilization of the concepts of Strategic Planning.

III. Problem
How will the MPC pay its short term debts without letting go the “crown jewel”-The fort Bonifacio of the company? IV. Ares of Consideration A. Company Back Ground
MPC was a diverse corporation that, one time or another held stakes in telecommunications (Smart Communications, Inc/ PLDT), real estate (Landco Pacific Corporation/Pacific Plaza Towers, Inc.), transportation ( Negros Navigation Co., Inc), consumer products ( such as Metro Bottled Water), and others (1st eBank). MPC created their subsidiary project facilitator, the Bonifacio Land Corporation (BLC). The company won the highest bidding of Fort Bonifacio as the country’s choicest portion of prime real estate. They acquire the property for Php 39.2 billion pesos or at about Php33,000 per square meter over their tough competitor, the Ayala land who bid for the property for Php9,000. The latter has been known in the industry as the developer of the Makati business configurations. After winning the bidder, BLC was granted a 55 percent share of the Fort Bonifacio Development Corporation, the body tasked to develop the former military base. The other 45 percent remained as government property.

B. Persons involved in the Case
The persons involved in this instance are the High Rank Officers (CEO,BODs, Stockholders) of Metro Pacific Corporation. C. TOWS (Threats/Opportunities/Weaknesses/Strength) 1. Threats a. Instability on Security. -unstable, threats such as terrorism and other security related incidents are of suspicious probability. b. Geographic Competition.-internal competition brought up the property’s weakness. In this case, geographic competition trigger the property’s development. c. Environmental Issues.-property’s internal consideration, external weakness or the threat in simpliest form is also attributable to the business’ environmental issues which is covered by the property’s administration.

2. Opportunities d. Projected Cash Inflow – Future cash generating investments. e. Global Exposure -competitive advantage in the marketplace, when the MPC embrace globalization and the property will be expose to the big market. f. Expansion. -internal growth and expansion. When a certain property performs well, growth is at reach to efficiently deliver the services.

3. Weaknesses g. Big Cost. This only means that the property accompanies high cost since it is strategically located. The venturing business will be affected in any way and is reflective to the services they offer and/or to the facilitative support they have. h. Reorganization. Ruling approach towards management system can also trigger the property’s weakness. It illustrates individualism in terms of managerial efforts for growth. This equates also to the concept of decentralization. i. Diversity.-internal competition the property can offer. The competition arising from two or more businesses covering the same industry. This is a threat since this is an internal consideration that the property needs so much attention for repositioning the business structure and configuration.

4. Strength j. Tactical Location. It is known as the city within a city through its strategic location. k. Accessibility. Since the property is bounded by different major urbanized cities, transportation by air, land and sea is not anymore a quandary. This dictates future investments thereby increasing revenues. l. Attractiveness. Wrapping up all these, since businesses operate in busy lifestyle, the property is very attractive because it paves way to businesses in their market penetrating activities considering that the property is highly volatile to market exposure.

V. Alternative Course of Action 1. Disposal of its other property (idle or generating)
The company will sell some of their assets in order to write off their debts in the short-term. The concept will be beneficial especially if the company is protecting core businesses while disposing the inactive. This will also relates to the proper inventory management concepts where a certain company can use to exercise effectiveness and efficiency. When the company will sell some of their assets, it is just like reforming the existing asset into useful and income-generating asset.

2. Backing out scenario
The company has the option to back out from the project and sell its share to other party like the Ayala Land Incorporated for a competitive price. This step is a risk for the company declaring itself to the public that it is suffering from a financial crisis. And with this option the company can pay its short term debts and will not dissolved the company. 3. Maintain the “Crown Jewel” & organize a bidding to finance the construction.
The concept of this alternative is to find a construction company or banking industry. This also pertains to a long-term agreement or a partnership. The tendency for this alternative towards failure is minimal since help in this regard does not only limit to single entity but bundle of entities who happen to have bundle interest with the property and the businesses inside it.

VI. Conclusion
The best alternative is the third one which “ Maintain the “crown jewel” and organize a bidding to finance the construction”. First, when you will be selling something, it does not necessarily reflects that it will guarantee the solution because the sold item, property or whatsoever (idle or generating) has liberally economic uses. Secondly, the cost of the planning state alone, if you happen to transfer the ownership of the property to an interested party will not just waste a lot of money but most of all, time. The MPC with project facilitator the BLC is an established company which can be possibly get the desired amount to sustain the development of the Fort Bonifacio. A successful operation on the project can be a cash generating investment for the MPC and at the same to recover from a financial crisis they are going to. VII. Recommendation

Fort Bonifacio is a joint venture between a Metro Pacific-led private consortium called Bonifacio Land Corp., or BLC, and the Philippine government to build a new business district in Manila. As for MPC, continue the development of Fort Bonifacio and take risk for in the future it will be their cash generator. Moreover, the rate of the land is five times as the offer price per square meter in the future. It projected that this development can get international investors to build an empire for businesses that can give more job to Filipinos and for future economic success.