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This Research Paper is focused on discussing the possible strategies that would assist and
improve DMCI Homes to improve its present standing in the market, as well as to enhance its
financial standing in the future. The strategies that are recommended by the researcher are derived
from the matrixes that would essentially suggest the best strategy for the business.
This paper includes a methodical process of acquiring every piece of data. It contains a
research and design methodology, a complete analysis of both external and internal forces, a
formulation of the strategy, the different actions necessary to finalize the proposed strategy, and
The results of this paper show that DMCI Homes can either formulate its strategized based
Product Development. Where these strategies can improve the current position of DMCI Homes.
David M. Consunji acquired the knowledge of construction when he was a young, concrete
inspector. He was armed with in-depth facts and the precise system of construction through his
Civil Engineering degree that he earned from the University of the Philippines. After some time,
December 24, 1954, in a quaint room in Pandacan, Manila. He had a vision of "Building a
generation of Filipinos."
DMCI started building chicken houses for the Bureau of Animal Industry. This earned him
a reputation for timeliness of service delivery and punctuality and quality output. After that, the
Tacloban Coca-Cola Plant and Bacnotan Cement Plant projects were awarded to the company.
Through DMCI’s unwavering quest for progression, its development and research aspect
paved the way for the pioneering of several advanced construction application technologies in the
Philippines. Now, DMCI enjoys the patronage of both its new and repeat institutional clients.
In the year 1999, DMCI expanded with its housing division, which was called DMCI
Homes. Its aim was to build progressive condominiums and house and lots. It all began with Lake
View Manors (1999) followed by more innovations like Hampstead Gardens (2001). By the
beginning of the year 2003, DMCI Homes became stronger, more aggressive and even more
DMCI Homes – Strategic Management Paper Page 2
competitive. They constructed the East Ortigas Mansions and added more amenities and facilities
for its residents. Villa Alegre Homes and Mayfield Park were then erected in 2004 with more
As the company kept expanding its business operations, DMCI Homes grew as a household
name in the real estate industry. It began to carve itself a niche in the real estate business.
All in a span of seven years, DMCI Homes has built the most comfortable, resort-like
residential spaces for urban dwellers. The rapid growth rate of DMCI Homes can be attributed to
its thrust to continuously delight its customers. DMCI Homes will perpetually continue to create
The company's head office is in Bangkal, Makati, though it has several sales and property
management offices in Metro Manila. Isidro Consunji presides as the president of DMCI Homes.
He is also the president and Chief Executive Officer (CEO) of DMCI Holdings.
application technologies in the Philippines. Taking this into account, DMCI enjoys the patronage
of both new and repeat institutional clients whose businesses have benefited from DMCI’s on-or-
by DMCI symbolize the expertise and professionalism of the Filipino engineer. Some of the
• Solaire Resort & Casino (Entertainment City, Bay City, Paranaque City)
• Philippine International Convention Center (CCP Complex, Roxas Boulevard, Pasay City)
• The Westin Philippine Plaza/Sofitel (CCP Complex, Roxas Boulevard, Pasay City)
Real estate refers to producing, buying and selling real estate. The real estate industry is a
critical driver of economic growth. Real estate industry in the Philippines has been booming these
past few years and it is without a doubt that every Filipino aims to find a place of their own. As a
result, it aims to help the consumers which developer should they choose.
The construction and real estate sectors make up around 20% of the Philippine economy,
slightly ahead of manufacturing. Over the past few years, construction in the Philippines has been
flourishing amid a climate of political stability and upbeat business sentiment, spurred by growth
in overseas foreign worker remittances, inbound investments into business process outsourcing,
rising numbers of tourist arrivals, and government spending on large and small-scale
infrastructure. Positive trading conditions for the residential, office, retail and hospitality segments
The reasons for choosing DMCI Homes for this research are the following: First, is that
DMCI targets the middle-class and not the high-end. Second, DMCI Homes is under an umbrella
company of DMCI Holdings Incorporated which they engage in mining, construction, utilities
(Maynilad Water), real estate development (DMCI Homes) and energy (DMCI Power
Corporation). DMCI have diversified investments that continue to grow through the years. Third,
DMCI earned the rating of the very first Triple-A builder/developer in the country.
process of data collection that enables them to describe the situation more completely than was
possible without employing this method. It is appropriate for this study since this strategic
The Historical research method was also used because it is important to examine the
historical data of the company to formulate strategies. This study involves a comparative analysis
of the company's performance during its past three years, therefore, historical research method was
used.
Pertinent information was gathered from different sources to be able to discuss all the
required discussion in this study. Sources such as news and articles (business world), industry
updates through websites, government publications regarding the real estate industry were used.
The research includes data collection of Financial Statements of DMCI Homes. DMCI Homes is
a wholly owned marketing subsidiary of DMCI Project Developer. For this paper, DMCI Project
Developers Inc and DMCI Homes will be synonymously referred to as DMCI Homes.
With the intention to comply and complete this paper, the researcher utilized the available
resources to measure and interpret the financial performance of the parties involved – that is
limited to the company's annual reports from the year 2014 to 2016, including ample information
The scope of this paper is limited to DMCI Homes' real estate ventures in the Philippines
and two of its other major competitors from the real estate industry namely: Filinvest Land Inc.
and Ayala Land. This paper is conducted to analyze and determine the market size and market
share of the players based on their revenue by comparing their performance to the industry
standards.
EXTERNAL ANALYSIS
This Tax Reform is primarily focused on the support of infrastructure development and on
free education in state colleges and universities, universal health care, and free irrigation because
according to the 2018 General Appropriations Act, the size of the government budget will be 12%
higher than the 2017 National Budget. The 2018 National Budget for the Department of Public
Works and Highways (DPWH) amounting to Php 637.86 Billion. This plan of the government will
have a great impact to the real estate industry, wherein the time spent on the road may be reduced
because of public transportation and public roads which will later improve and will cause
Gross Domestic Product (GDP) grew by 6.9 percent in the third quarter of 2017.
Manufacturing, Trade, and Real Estate Renting and Business Activities were the main drivers of
growth for the quarter. The Service Sector is the largest sector in the Philippine Economy which
accounts for 57% of the total GDP, inside the service sector are its important segments which are:
trade , repair of motor vehicles and household goods (17 percent of total GDP); real estate, renting
and business activities (11 percent); transport, storage and communication (8 percent); financial
DMCI Homes – Strategic Management Paper Page 9
services (7 percent) and public administration, defense and social security (4 percent) Industry
accounts for 31 percent of GDP. Within the industry, manufacturing (22 percent of total GDP) and
SLOWS DOWN
RERBA posted a 7.7 percent growth in the third quarter of 2017, slower than the 8.9
percent growth recorded in the third quarter of the previous year. The growth was driven by
Renting and Other Business Activities which grew by 11.0 percent as compared with the 13.1
percent growth in the same period of the previous year. Meanwhile, Real Estate expanded by 7.7
percent, slower compared with the 9.7 percent growth recorded in 2016.
The growing number of tourists in the Philippines boosted the interest of OFWs to invest
Local tourism alone is growing especially with budget fares now offered by various airline
companies. Meetings, family vacations, company incentives and conventions also contribute to
the strong demand for accommodation needs. Whenever there are tourists, there is also a great
With the emerging industry, the real estate industry could benefit from these since most
BPOs are situated in the Metro, BPO workers would choose to rent or to buy units near the area.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 10
Also, the area of the market will probably become popular with investors who can purchase
That is the reason why property developers are really focusing on building low-end
apartments in the metropolitan, those with average monthly rents of P8,000 ($167.1) where mid-
The employment rate in January 2018 was estimated at 94.7%. In January 2017, the
employment rate was 93.4%. The labor force participation rate (LFPR) in January 2018 was
estimated at 62.2% given the population 15 years old and over of 70.9 million. The LFPR in
January 2017 was 60.7%. The labor force population consists of the employed and the unemployed
Workers were grouped into three broad sectors, namely, agriculture, industry, and services
sector. Workers in the services sector comprised the largest proportion of the population who are
employed. These workers made up 55.9% of the total employed in January 2018. Among them,
those engaged in the wholesale and retail trade; repair of motor vehicles and motorcycles
accounted for the largest percentage of workers in the services sector. In January 2017, workers
in the services sector accounted for 57.1% of the total employed, with those engaged in the
wholesale and retail trade; repair of motor vehicles and motorcycles making up the largest
proportion of workers. The January 2018 LFS results also showed that in the industry sector,
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 11
workers in the construction and manufacturing subsectors made up the largest groups, accounting
Employed persons fall into any of these categories: (1) wage and salary workers, (2) self-
employed workers without any paid employee, (3) employers in own family-operated farm or
business, and (4) unpaid family workers. In January 2018, the wage and salary workers made up
61.7% of the total employed, with those working in private establishments continuing to account
for the largest share. They made up 48.7% of the total employed in January 2018 and 49.1% in
January 2017. The second largest class of workers were the self-employed making up 27.7% of
the total employed in January 2018 while it was 27.2% in January 2017. Unpaid family workers
accounted for 6.9% of the total employed in January 2018 and 6.3% of the total employed in
January 2017.
The unemployment rate in January 2018 was estimated at 5.3%. The unemployment rate
in January 2017 was 6.6%. Among the regions, NCR (7.8%), Ilocos Region (6.7%), and
CALABARZON (6.7%) were the regions with the highest unemployment rates.
Among the unemployed persons in January 2018, 65.5% were males. Of the total
unemployed, the age group 15 to 24 years comprised 43.2% while the age group 25 to 34, 31.1%.
By educational attainment, 21.9% of the unemployed were college graduates, 13.7% were college
undergraduates, and 29.4% have completed junior high school. Graduates of junior high school
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 12
3.1.3.2 LIFESTYLE
Despite stubbornly high levels of income inequality, the middle class is expanding, driving
increased demand for a wide range of modern products and services. Both average disposable
income and consumer expenditure have increased, particularly among younger, educated urban
households. Younger consumers have also helped drive the considerable growth of internet and
mobile internet retailing. The increasing number of single-person and smaller households is
The country’s 7,641 islands offer plenty of lifestyle choices for expats who want to live
there. Rural farmhouses, condominiums, and rooms in shared apartments are all available. As is
the case almost everywhere in the world, housing is not as widely available in urban centers. The
The rents are highest in Metro Manila. The best and safest way to find a place to stay during
your expat life in the Philippines is through recommendations from friends and colleagues. Internet
listings like Philippines Properties and classified ads in local newspapers are also great ways to
start. The typical lease for upper-end apartments in the Philippines lasts twelve months, and you
are usually expected to pay rent for the entire year in advance with postdated checks. Shorter
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 13
3.1.3.3 MORE YOUNG PROFESSIONALS TEND TO HAVE PROPERTY PURCHASING
ABILITY
A more visible effect is seen in the residential property division. Mid-end condominium
market grew as more young professionals tend to have property purchasing ability. Higher income
in the BPO workforce has become the target of property developers. BPO employees are usually
single and residential units such as studio-type ones are more preferred. This workforce (in BPO)
is potentially seen to be ‘the upgraders' soon by the time they get into marriage. Residential unit
renting also make up a great part of the property industry and is a great support in the demand of
Metro Manila is one of the world’s most densely populated urban conurbations. In fact, at
43,079 inhabitants per square kilometer, Manila proper alone is the world’s most densely
populated city, according to Forbes. Notorious for traffic jams, Manila was also ranked by Forbes
Since people prefer to live in the area, more infrastructures are being built for the demand
which results in lesser green areas since it is being replaced by condominiums, subdivisions, and
the likes.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 14
3.1.4.3 METRO MANILA IS VERY VULNERABLE TO NATURAL CALAMITIES
The Philippine capital sits on an active fault line, putting us at risk for earthquakes and
tsunamis, and the country lies on the firing line of typhoons forming in the northwest Pacific Basin.
There can be no guarantee that the occurrence of such natural calamities will not substantially
interrupt the Corporation’s operations. These factors, which are not within the Corporation’s
control, could potentially have substantial effects on the Corporation’s housing and land
development projects, many of which are large, complex estates with infrastructure, such as
None of DMCI Homes' developments were severely affected during the typhoon
"Yolanda". DMCI had the foresight to choose less flood prone areas and invest in a good drainage
system for all its development, as “Metro Manila can never be flood-free”, as the former MMDA
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 15
3.1.5 LEGAL FORCES
Republic Act No. 6552, also known as the "Realty Installment Buyer Protection Act" and
more commonly known as the "Maceda Law" is an act to protect real estate buyers with regards
to installment payments. Since installment payments and real estate transactions need to have a
clear set up between the buyer and developer, the law clearly states the time frame when the
installment payments should be made. The law also states that the seller can cancel the contract if
the buyer is not able to settle the installment payments once the grace period expires after the buyer
The Subdivision and Condominium Buyers' Protective Decree", Presidential Decree No.
957 (P.D. 957) aims to help buyers know their real estate rights, especially if the sellers and
developers seem to be engaged in fraudulent activities. This is primarily important since most
sellers will do any scheme just to sell their condominiums and land properties such as false
advertisements telling that there is "no down payment". Developers should only present real facts
in their promotional materials when selling their units. "No down payment" simply means that no
lump sum money is required to pay for the unit since the down payment price is distributed among
the allowable term set by the developers for their condo project.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 16
If developer or seller reverses their registration certificate and their license to sell, the buyer
can file a complaint, provided it is under the grounds of having a bad business reputation, being
involved in fraudulent transactions, and does not conduct their business practices according to the
law.
A common problem for most buyers is the delayed turnover of their condominiums. P.D.
957 states that buyers can halt their payment after giving due notice to the developers and acquiring
clearance from the Board, and they can also ask for the reimbursement of their total payment
The Condominium Act”, also known as the Republic Act No. 4726 (RA 4726) is an act “to
define condominium, establish requirements for its creation, and govern its incidents”. Enacted on
June 18, 1966, this act allows people the right to co-own lands, aside from their absolute ownership
of their unit. This act further explains the extent of their influence when it comes to the unit that
they purchased. The rights of the buyers are well-explained to ensure that developers or sellers do
Included in the provisions are common areas regulations, and the exclusive rights of a
condo owner, such as refinishing or decorating his own unit, and to sell or dispose his unit unless
there is a master deed which indicates that the property must be offered to other unit owners before
it is offered to other interested buyers. The act also allows foreign nationals to acquire units if they
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 17
3.1.6 TECHNOLOGICAL FORCES
KEY PASSES
Since some competitors are already making use of electronic key passes, DMCI should
employ the use of electronic key passes to improve the security of their property vicinity since it
is easy for unauthorized persons to enter the building instead of continuing the use of manual
logbook where people can easily fake their identity names and it will also be difficult for security
personnel to identify whether these persons entering are really tenants or owners in the building.
They should also make use of electronic key passes in their parking areas so that there is no
Since majority of the Filipinos are using smartphones, they should create a mobile app
where prospective buyers can see details of certain properties such as the places where
condominiums are located, prices of the units, and a list of agents that they can contact or through
the app in which they can talk to a representative for their inquiries.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 18
3.1.6.3 DEVELOPERS AND AGENTS HAVE FOUND VALUE IN INCREASING THEIR
MEDIA
From the evolving social media, it will be easier for developers and agents to have a greater
opportunity to advertise the properties. For instance, agents can simply make a blog and post
details about the properties, they can post at buy-and-sell sites, or simply post it on social
networking sites which are usually free unless you pay for the advertisement for more exposure.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 19
3.2 INDUSTRY AND COMPETITOR ANALYSIS
FORCES
Rivalry among competing firms Strong force
Potential entry of new competitors Weak force
Bargaining power of consumers Weak force
Potential development of substitute Strong force
products
Bargaining power of suppliers Moderate force
from the real estate industry namely: Filinvest Land Inc. and Ayala Land.
With over a century of envisioning, building, and developing master planned, mixed-use,
and sustainable communities, Ayala Land's rich history, and illustrious reputation remain
unparalleled in the country. It leads the industry in raising the standard of commitment to
innovation and value appreciation. It stands for trailblazing quality. Considered as one of the
largest residential areas here in the Philippines which is known with their high standards when it
comes to quality of life and now over 27 communities were established as the company
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 20
FLI is a pioneer in the development of very large master-planned township developments
FLI currently has over 150 projects located in 48 cities and municipalities nationwide. The
Company has an extensive network of sales offices, in-house sales agents and independent brokers
located throughout the Philippines, as well as accredited brokers in countries and regions with
large Overseas Filipino Workers (OFW) and expatriate Filipino populations (such as Japan, Italy,
the United Kingdom and the Middle East). Approximately half of FLI’s real estate sales are
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 21
3.2.1.2 POTENTIAL ENTRY OF NEW COMPETITORS – WEAK
The industry is capital intensive which requires continuous land acquisitions and
construction of buildings. A new entrant should have to have a minimum capital expenditure
budget of 32.5 billion pesos to level its corporation to the existing real estate developers like
DMCI Homes allocated around P27.5 billion will be used for the total development cost of
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 22
3.2.1.3 BARGAINING POWER OF CONSUMERS – WEAK
Real estate is measured as one of the high-cost inventories, together with automobiles, thus,
the ability to acquire in large amount prevents the developers to profit in an instant to think that
there is a need to surmount the expense incurred. Plus, the fact that our culture of being a family-
oriented where even extended families are accommodated in one place can make some of the
buyers whose capable of purchasing become cautious in deciding whether to buy or not.
products with flexible terms that potential buyers may avail rent to own spaces depending on their
choice are more convincing to avail while considering the locations are mostly within the
commercial areas targeting those employees to somehow lessen their travel time and cost for their
allowances.
As compared if the house and lot is to acquire, it is not burdensome at some point when it
comes to the cash flow of the buyer; only the deposit for three months, one month advance as the
tenant enters into a contract then the monthly rate afterwards, as a standard requirement, unlike
down payment that roughly ranges 10 to 30% of its current price and its installment payment with
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 23
3.2.1.5 BARGAINING POWER OF SUPPLIERS – MODERATE
Construction services and raw materials such as cement and metals are the main
compositions of the company's cost aside from parcels of land. The prices are dictated by the world
market, only monitored, and will not vary as to the location of the construction site but rather the
competition in the raw materials and construction services due to numerous providers and
contractors.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 24
OPPORTUNITIES
With the emerging industry, the real estate industry could benefit from these since most
BPOs are situated in Metro Manila, BPO workers would opt to rent or to buy units near the area.
Also, the area of the market will probably become popular with investors who can purchase these
That is the reason why property developers are really focusing on building low-end apartments in
the metropolitan, those with average monthly rents of P8,000 ($167.1) where mid-scale BPO
purchasing ability. Higher income in the BPO workforce has become the target of property
developers. BPO employees are usually single and residential units such as studio-type ones are
more preferred. Residential unit renting also make up a great part of the property industry and is a
employment rate was 93.4%. The labor force participation rate (LFPR) in January 2018 was
estimated at 62.2% given the population 15 years old and over of 70.9 million. The LFPR in
January 2017 was 60.7%. The labor force population consists of the employed and the unemployed
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 25
The unemployment rate in January 2018 was estimated at 5.3%. The unemployment rate
in January 2017 was 6.6%. Among the regions, NCR (7.8%), Ilocos Region (6.7%), and
CALABARZON (6.7%) were the regions with the highest unemployment rates.
Among the unemployed persons in January 2018, 65.5% were males. Of the total
unemployed, the age group 15 to 24 years comprised 43.2% while the age group 25 to 34, 31.1%.
By educational attainment, 21.9 %of the unemployed were college graduates, 13.7% were college
undergraduates, and 29.4% have completed junior high school. Graduates of junior high school
4.TOURISM-DRIVEN DEMAND
The growing number of tourists in the Philippines boosted the interest of OFWs to invest
Local tourism alone is growing especially with budget fares now offered by various airline
companies. Meetings, family vacations, company incentives and conventions also contribute to
the strong demand for accommodation needs. Whenever there are tourists, there is also a great
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 26
5. INCREASE IN GDP BY 6.9%
Gross Domestic Product (GDP) grew by 6.9 percent in the third quarter of 2017.
Manufacturing, Trade, and Real Estate Renting and Business Activities were the main drivers of
growth for the quarter. The Service Sector is the largest sector in the Philippine Economy which
accounts for 57% of the total GDP, inside the service sector are its important segments which are:
trade , repair of motor vehicles and household goods (17 percent of total GDP); real estate, renting
and business activities (11 percent); transport, storage and communication (8 percent); financial
services (7 percent) and public administration, defense and social security (4 percent) Industry
accounts for 31 percent of GDP. Within the industry, manufacturing (22 percent of total GDP) and
opportunity to advertise the properties. For instance, agents can simply make a blog and post
details about the properties, they can post at buy-and-sell sites, or simply post it on social
networking sites which are usually free unless you pay for the advertisement for more exposure.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 27
THREATS
1. CLIMATE CHANGE
There can be no guarantee that the occurrence of such natural calamities will not
substantially interrupt the Corporation’s operations. These factors, which are not within the
Corporation’s control, could potentially have substantial effects on the Corporation’s housing and
land development projects, many of which are large, complex estates with infrastructure, such as
Metro Manila is one of the world’s most densely populated urban conurbations. In fact, at
43,079 inhabitants per square kilometer, Manila proper alone is the world’s most densely
populated city, according to Forbes. Notorious for traffic jams, Manila was also ranked by Forbes
None of DMCI Homes' developments were severely affected during the typhoon
"Yolanda". DMCI had the foresight to choose less flood prone areas and invest in a good drainage
system for all its development, as “Metro Manila can never be flood-free”, as the former MMDA
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 28
4. TAX REFORM EFFECTED IN 2018
This Tax Reform is primarily focused on the support of infrastructure development and on
free education in state colleges and universities, universal health care, and free irrigation because
according to the 2018 General Appropriations Act, the size of the government budget will be 12%
higher than the 2017 National Budget. The 2018 National Budget for the Department of Public
Works and Highways (DPWH) amounting to Php 637.86 Billion. This plan of the government will
have a great impact to the real estate industry, wherein the time spent on the road may be reduced
because of public transportation and public roads which will later improve and will cause
RERBA posted a 7.7 percent growth in the third quarter of 2017, slower than the 8.9
percent growth recorded in the third quarter of the previous year. The growth was driven by
Renting and Other Business Activities which grew by 11.0 percent as compared with the 13.1
percent growth in the same period of the previous year. Meanwhile, Real Estate expanded by 7.7
percent, slower compared with the 9.7 percent growth recorded in 2016.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 29
3.3.2 COMPETITIVE PROFILE MATRIX
From the identified critical success factors in the industry, DMCI Homes and its key
competitors were assigned the following ratings (from 1-4, 4 being the strongest). The table above
shows the Competitive Profile Matrix of DMCI Homes and its competitors based on the
researcher’s ratings.
Based from the CPM ratings, Ayala Land is labeled as the overall to player. It has a
competitive advantage over DMCI and its other competitors. Ayala Land’s strength over the rest
of the competitors is in the areas of Capitalization, Location, Advertisements, and Consumer
Loyalty. DMCI Homes’ overall CPM rating was lower due to its weak capitalization,
advertisements, and consumer loyalty.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 30
CHAPTER 4
COMPANY ANALYSIS
to providing the utmost quality of service that promotes a convenient lifestyle and wholesome
DMCI Homes is the country’s first Triple A builder/developer of premium quality, urban-
friendly, fully serviced communities for the underserved young families of modest income that
aspire to live comfortably near their place of work, of study and of leisure.
We shall be the best provider of residential communities designed to create quality lifestyle
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 31
to promote the growth of our people
INTEGRITY EXCELLENCE
All our actions are guided by what is ethical, We reject mediocrity and strive for
fair, and right. Believing in profit with excellence in even the smallest of details.
honor, we are committed to good
governance and the highest moral standards.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 32
shared aspirations and transcend boundaries and in the enhancement of productivity and
along functional and organizational lines. quality.
4.2 REVIEW OF THE EXISTING VISION AND MISSION
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 33
TECHNOLOGY: Is the firm Y It uses current technologies for its operations.
technologically current?
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 34
4.3 MANAGEMENT
4.3.1 PLANNING
As a company of innovative builders and engineering experts that develop modern day
living solutions for urban families, DMCI Homes adopts and implement a business plan. Strategies
of DMCI Homes are aligned to that of DMCI Holdings so that synergy between DMCI Homes
4.3.2 ORGANIZING
About the company’s decision structure, top-bottom structure is adopted. This structure
allows the upper management to make major decisions through the recommendations and
information provided by lower-level managers. Accordingly, lower level managers get involved
in the decision-making process through business planning sessions were done twice a year
involving all levels of management. Action points and departmental goals from the meeting are
delegated to specific departments and managers, which are held accountable for their performance
evaluations.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 35
Name Position
4.3.3 MOTIVATING
To motivate employees, DMCI Homes makes sure that the high potential employees stand
recognized publicly through service excellence awards. To retain talent, the company provides a
total compensation package. The working environment is also managed through several activities
such as company sponsored events to encourage teamwork and to promote work-life balance.
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4.3.4 STAFFING
Measurable company objectives and goals are communicated as early as training stages or
upon hiring of new employees through manuals and an employee orientation program. The
company also uses an internal website (Intranet) thus; vision, mission, core values and other
4.3.5 CONTROLLING
The company ensures that job descriptions are well defined, showing the knowledge and
skills needed, as well as the specific duties of a position. Annual performance evaluations are also
done for managers to be able to measure the productivity or achievements of each employee, to
have the opportunity to direct the behavior of each employee towards the execution of the
compensation and managing company culture is also significant to the company. Employee
development includes classroom training and, on the job mentoring and coaching.
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MANAGEMENT AUDIT CHECKLIST
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4.4 MARKETING
middle-class Filipino families with residential communities that create a quality lifestyle. DMCI
Homes residences provide high-definition photos which highlight the unique amenities that their
condominiums offer. They may not have enough television advertisements but when you visit their
website, you will be surprised with great photos of their residential units. The company believes
that great photos not only attract potential tenants, they are also more likely to be shared on social
media.
DMCI Homes’ residential communities are strategically situated near malls, schools,
hospitals, and government offices, DMCI Homes’ residential communities make living hassle-free
4.4.3 DISTRIBUTION
DMCI Homes distribute their products via internal and external brokers. For buyers’
convenience, there is an available website provided for them to easily find DMCI Homes that are
for rent or for sale. The website has categorized property features to make it easier to compare.
DMCI Homes only contract sales professionals who have undergone the Foundation
Training. Only those who successfully pass the Accreditation Exam and the Oral Revalidation
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 39
DMCI Homes is proud of its top-caliber sellers. The Elite Club is an exclusive list of top
4.4.4 PRICING
Price and payment terms for DMCI Homes differ due to some factors like location and
size. Usually, 30% minimum down payment and a 20% minimum down payment payable over the
construction period is required for a High – rise condominium unit and Mid-rise condominium
unit, respectively, with a reservation fee of Php 20,000 for the unit and a Php 10,000 for the parking
(optional unless parking is required). The balance may be settled through cash, in-house financing,
with a maximum term of 10 years or External financing through accredited partner banks or PAG
– IBIG financing.
Projects of DMCI Homes have flexible payment schemes offered with partner-banks
(Banco de Oro, United Coconut Planters Bank, Philippine National Bank, BPI Family Savings
Bank) and PAG – IBIG financing which is applicable only for RFO (ready for occupancy) projects.
affordability is the key. Since DMCI Homes is both builder and developer, it has full control of
the project quality and schedules, thereby giving clients a product of high quality and timely
turnover with prices that are competitive and within reach of the middle-income market.
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4.4.5 MARKETING RESEARCH
DMCI has been awarded as the contractor-developer of AFP Off-Base housing that
includes master planning, design, construction, and marketing. DMCI Homes employ a Marketing
Research Analyst who is held responsible for conducting feasibility and competing market
scenario, conduct studies, monitor industry and competition news and manage customer database
processing with analysts results, the company will be able to monitor market trends.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 41
• Does the firm conduct Yes DMCI Homes continues to
market research? research possible land bank
that may acquire
• Are the product Yes DMCI Homes offer high-
quality & customer quality products and provide
service good? excellent customer service
• Are the firm’s Yes The prices of DMCI Homes
products and services is quite lower than their
priced appropriately? competitors.
• Does the firm have an Yes DMCI Homes focus on
effective promotion, Billboards, social media and
advertising, and through online
publicity strategies? advertisements.
• Are the marketing, Yes DMCI Homes successfully
planning, and implements their planning
budgeting effective? and budgeting.
• Do the firm’s Yes DMCI Homes managers are
marketing managers well educated and well
have adequate attached to the suppliers as
experience and well as to the government.
training?
• Is the firm’s Internet Yes DMCI Homes presence is
presence excellent as active on the internet using
compared to rivals? their website
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4.5 FINANCE/ ACCOUNTING
Balance sheet
2014 2015 2016
ASSETS
Current Assets:
Noncurrent Assets:
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TOTAL NON-CURRENT 4,733,730,195 5,192,016,021 4,180,536,439
ASSETS
Current Liabilities:
Noncurrent Liabilities:
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EQUITY
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 45
INCOME 2014 2015 2016
Real estate sales 12,232,699,569 13,461,859,381 10,039,174,952
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NET INCOME 3,289,471,108 3,587,280,760 2,221,274,868
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4.5.2 RATIO ANALYSIS
Liquidity Ratios are the ratios that measure the ability of a company to meet its short-
term debt obligations. These ratios measure the ability of a company to pay off its short-term
liabilities when they fall due. These ratios come off the balance sheet and hence measure the
4.5.2.1.1CURRENT RATIO
This ratio is obtained by dividing the "Total Current Assets" of DMCI Homes by its "Total
Current Liabilities". A refinement of quick ratio and indicates the extent to which readily available
funds can pay off current liabilities. It expresses the working capital relationship of the current
Current
Current Assets
3.60 2.66 3.86
Ratio = Current
Liabilities
This means that in 2014, DMCI Homes had a strong financial position in the market and
that it has sufficient liquid assets to maintain its operations. A higher current ratio is always more
favorable than a lower current ratio because it shows the company can more easily make current
debt payments. However, this strong financial condition decreased by 0.94 in 2015 and eventually
This ratio is obtained by dividing the "Total Quick Assets" of DMCI Homes by its "Total
Current Liabilities". The ratio tells creditors how much of the company's short-term debt can be
met by selling all the company's liquid assets at very short notice.
Quick Assets
Quick Ratio
Current 1.06 0.71 0.85
=
Liabilities
This means that DMCI Homes' quick ratio did not improve considerably in 2015 and 2016
because based on the result, the ratio says that DMCI Homes doesn't have the capacity to pay its
current liabilities if these were due immediately. But in 2014 DMCI Homes was able to meet its
short-term obligation using most of its liquid assets because a quick ratio of 0.90 or 1.00 is the
acceptable quick ratio in most industries because companies could pay off its current liabilities
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4.5.2.1.3 SOLVENCY RATIO
This ratio identifies a going concern issue and a firm's ability to pay its bills in the short
term and long term. Solvency ratios focus more on the long-term sustainability of a company
Net Income
+
Solvency
Depreciation 0.13 0.12 0.08
Ratio =
Total
Liabilities
This means that in the year 2016, DMCI Homes’ solvency ratio resulted in a favorable ratio
although it only decreased from 2015 going to 2016, showing that DMCI Homes can meet long-
term liabilities from the past few years. For the year 2016 shows the lowest solvency ratio it usually
implies a more stable business with the potential of longevity because a company with a lower
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4.5.2.2 LEVERAGE RATIOS
This ratio is obtained by dividing the "Total Liabilities" of DMCI Homes by its "Total
Equity". The ratio measures how the company is leveraging its debt against the capital employed
by its owners.
Debt to Total
Equity Liabilities 2.25 2.21 2.12
Ratio= Total Equity
This means that DMCI Homes has been aggressive in financing its growth with debt. In
the year 2014, DMCI Homes with a higher debt to equity ratio of 2.25 compared to 2015 and 2016
are considered riskier to creditors and investors than with a lower ratio. In the years 2015 and 2016
also shows a high debt to equity ratio. This implies that for every peso of DMCI Homes owned by
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4.5.2.3 EFFICIENCY RATIOS
Efficiency ratios are ratios that come off the balance sheet and the Income Statement. The
efficiency ratio is typically used to analyze how well a company uses its assets and liabilities
internally. An efficiency ratio can calculate the turnover of receivables, the repayment of liabilities,
the quantity and usage of equity, and the general use of inventory and machinery.
The ratio is obtained by dividing the "Net Sales" of DMCI Homes by its "Total Inventory".
The ratio is regarded as a test of Efficiency and indicates the rapidity with which DMCI Homes
DMCI’s inventory turnover ratio decreased by 3.07 in 2015. This means that the company
has a low inventory turnover ratio. It is simply an unfavorable scenario, a low turnover means that
the corporation is not able to sell its products efficiently, we can see in the horizontal analysis that
DMCI Homes are buying too much inventory for demand which increased in 2015 or we can
assume that they are throwing out expired or deteriorated products. These conditions often cause
the corporation to sell products at discounts to clear these out. A lower inventory turnover ratio
can result from inventory buildup intended to meet pending spikes in demand. The company
should predict pending sales growth for the ratio to improve in the next period.
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4.5.2.3.2 ACCOUNTS PAYABLE TO SALES RATIO
This ratio is obtained by dividing the "Accounts Payables" of DMCI Homes by its "Net
Sales". This ratio indicates how much of the suppliers’ money the company uses to fund its sales.
The higher the ratio means that the company is using its suppliers as a source of cheap financing.
Accounts
A/P to Sales X100
Payable 10.30% 10.53% 12.41%
Ratio = %
Net Sales
This means that DMCI Homes turned out to have improved from the previous year of
accounts payable against its sales, thus the company has been efficient in converting its sales into
cash and promptly able to pay its suppliers. Short-term creditors, financial managers & lenders to
DMCI Homes might use these accounts payable ratios as indicators of the company’s financial
strength to make punctual payments on its accounts payable & liabilities outstanding. Payment
requirements will usually vary from supplier to supplier, depending on its size and financial
capabilities. DMCI Homes resulted on increasing by 1.88% from 2015 to 2016 means “A high
ratio means there is a relatively short time between the purchase of goods and services and payment
for them. Conversely, a lower accounts payable turnover ratio usually signifies that a company is
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But a high accounts payable turnover ratio is not always in the best interest of a company.
Numerous companies extend the period of credit turnover (i.e. lower accounts payable turnover
assets. These ratios basically show how well companies can achieve profits from their operations.
The return on sales of DMCI Homes determines its ability to withstand competition and
adverse conditions like rising costs, falling prices or declining sales in the future. The profit margin
ratio shows what percentage of sales are left over after all expenses are paid by the business.
This means that DMCI Homes has quite a high rate of return on sales the increase in the
rate in 2014 and 2015 is significant and identifies the company as more successful than in 2016.
This tells us that DMCI Homes was able to generate income from the 26.9% of its invested capital
in 2014 and 26.23% in 2015 and it measures how much profits are produced at a certain level of
sales. Thus, DMCI Homes was able to convert what it has invested into net income for the
company.
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4.5.2.4.2 RETURN ON ASSETS
The return on assets of DMCI Homes determines its ability to utilize the assets it employed
efficiently and effectively to earn a good return. This ratio measures how efficiently a company
Net Income
X100
Profit Margin = Total 8.43% 7.76% 4.67%
%
Assets
This means that DMCI Homes had less ability to convert what it has invested into net
income for the company from the 7.76% of its invested capital in 2015 to 4.67% in 2016. It only
makes sense that a higher ratio is more favorable to investors because it shows that the company
is more effectively managing its assets to produce greater amounts of net income.
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4.5.2.4.3 RETURN ON EQUITY
The return on equity of DMCI Homes measures the ability of the management of the
company to generate adequate returns for the capital invested by the company owners. This
measures the ability of a firm to generate profits from its shareholders' investments in the company.
DMCI Homes has a high return on equity ratios although there was a decrease in 2015 and
2016 by 2.5% and 10.3%, respectively. This means that the management has been inefficient in
utilizing its equity base in generating better returns for its investors. The investors want to see a
high return on equity ratio because this indicates that the company is using its investors' funds
effectively.
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4.6 PRODUCTION/ OPERATIONS
DMCI Homes boast greater control over product quality through its synergy with DM
Consunji Inc., which is a triple-A rated construction company with more than 63 years of
construction experience. Using the latest construction technology, DMCI ensures the durability of
developments. In terms of passing such rights to buyers, DMCI developments are turned over at a
faster rate of 3 years compared to the industry at 5 years. In terms of construction design, individual
units of DMCI have larger cuts than Filinvest Land Inc. and Ayala Land. DMCI's developments
4.6.1 PROCESS
The Company's main activities include the development, management, and selling of
various real estate such as condominium units, subdivision lots, buildings, resorts, and others. The
communities near places of work, study, and leisure. DMCI Homes endeavors to achieve
objectives that advance the proposition of "profit with honor", namely, to ensure business partners,
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4.6.2 CAPACITY
conglomerate in the Philippines with interests in construction, real estate, power, and mining.
DMCI – HI is listed at the PSE with a market capitalization of Php 179.06 billion as of December
31, 2016. One of the Company's affiliates is D.M. Consunji Inc. ("DMC" I), a DMCI – HI wholly
– owned subsidiary and one of the Philippines' leading Triple-A rated general construction
companies.
4.6.3 INVENTORY
In line with its goal of providing well – located residential options, DMCI Homes purchase
properties within the Metro Manila area. The Company's land development begins one to two years
from property acquisition to avoid carrying costs, resulting in more competitive sales pricing.
Potential land acquisitions are assessed based on strategic locations, acquisition price relative to
prevailing market prices, presence of competition in the area, shape of the lot, potential legal and
Based on the Company's development standards, the minimum land area required for the
Company's five-story and mid-rise developments is one hectare, with a zonal classification of R –
2. Ten-story and mid-rise developments have a minimum land area requirement of 5,000 square
meters, with a zonal classification of R – 3. High – rise developments require a minimum land area
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 58
Figure 4.6.3.1 The Company’s current land inventory available for development
developments in key urban centers in the Northern Luzon and Western Mindanao regions. Future
land acquisitions will be funded by debt finance and internally generated funds.
In addition to its land inventory, the Company owns its corporate headquarters, located at
1321 Apolinario St. Bangkal, Makati City, Philippines, 1228. The property has a total land area of
approximately one hectare, upon which stands a six-story building with annex, with a total floor
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 59
4.6.3.2 ENCUMBRANCES
Certain parcels of land of the Company which are minor in size considering the total
landholdings of the Company are subjected to proceedings arising out of claims of certain
individuals. While the results of litigation cannot be predicted with certainty, the Company
believes that the outcome of these proceedings will not have a material adverse effect on the
Properties of the Company in which projects which have been created are subjects to
restrictions arising from the nature of the projects created over them. For instance, properties over
which a condominium building has been constructed would have restrictions annotated on the title
of such property arising from the master deed restrictions on the use of the property for
condominium use.
The Company has entered leases of spaces in commercial areas in Metro Manila in which
model units for its projects are set – up. The leases may be renewed based on the marketing needs
of the Company. Due to the small space involved, the lease rental payments are not substantial.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 60
Figure 5.4.3 Leased properties for the purpose building model units
4.6.4 WORKFORCE
The Company has 1,097 employees as of December 31, 2016. Employees of the Company
can be classified based on their positions. The total number of employees consists of 870 Rank
and File Employees, 138 Junior-Senior Supervisor employees, 70 Assistant Manager to the
Manager employees, 14 Senior Manager to the Vice Presidents, and 5 Senior Vice President to the
President. The employees of the Company are non – unionized and are not covered by collective
bargaining agreements. They receive supplemental benefits such as health care benefit plan, dental
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4.6.5 SUPPLIERS
The Company’s sources and availability of raw materials and the names of principal suppliers are
Figure 5.4.5 List of Names of the Raw Material Suppliers of DMCI Homes
4.6.6 CUSTOMERS
The country's middle-income socio-economic group is emerging as the most promising real
estate market., and this has intensified competition in the property development business for that
market segment. The Company's significant sales growth in recent years has made it one of the
dominant players in the middle – income residential market category, and its pioneering
construction and development methods, specifically in mid-rise developments have been used as
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To leverage against real estate groups positioned in the same market category, DMCI
Homes maximizes its investments by drawing on the Company's strengths and resources as both
developer and builder, enabling it to offer attractive, even lower prices than the direct competition,
and produce value for home buyers without adversely affecting its profitability. Aside from
offering competitively – priced, high-quality units, DMCI Homes ensures good property location
on or ahead of schedule. Furthermore, it enjoys the patronage of both new and repeats institutional
clients.
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4.7 SUMMARY AND CONCLUSION
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STRENGTHS
Raw materials and construction services are being sourced within DMCI Homes' parent
company which is the DMCI Holdings group. Thus, the company has an advantage of having been
DMCI Homes can build up its inventory at a faster pace and can be more responsive to a
changing market environment because it can deliver a project in three years compared to the
FACILITIES
DMCI Homes has pioneered genuine resort- inspired daily living with its pioneering
midrise developments. The company is renowned among condo dwellers in the local property
DMCI Homes has a strong financial condition because of its proven strong sales record. It
has been able to utilize its capital investments and convert these into income. It is very liquid and
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5. COST ADVANTAGES OVER KEY RIVALS
Since DMCI Homes work with DM Consunji, as stated in the first listed strength, it has
also allowed the company to control the cost of all its developments. This has given the company
the ability to price its developments lower compared to its competitors namely- Ayala Land and
Filinvest Land.
WEAKNESSES
DMCI Homes has a weak distribution channel. They are behind their competitors in
advertising their projects. The Commercials of DMCI Homes on televisions, print ads are
exceptionally rare. Based on observations, the company is not utilizing the opportunity in
promoting their products in social medias like uploading videos on Facebook or YouTube. Being
inactive in advertising allows the company’s competitor to have an edge over the company.
Furthermore, because of the lack in distribution channels, DMCI Homes is not the leader in the
Compared to its competitors, DMCI Homes has a relative small capitalization allotted for
real estate development. And because of this small capitalization, it is not considered to be the
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3. DEVELOPMENTS ARE NOT LOCATED IN CENTRAL BUSINESS AREAS
Unlike its key competitors, DMCI Homes’ projects are not centrally located. This is a
strategic choice of the company. However, the downside of this is that the accessibility of the
location is a key decision factor of a buyer. Ayala Land for instance locates its developments within
business areas.
Unlike its key competitors, DMCI is limited in developing only the residential market. It
has no experience in developing commercial and office real estate. Ayala Land has been
developing commercial real estate through Ayala Malls. Robinson ‘s and MegaWorld also has
offices and commercial developments. Their projects combine office and commercial spaces or
what MegaWorld termed as township developments such as Eastwood City. Regarding this, DMCI
DMCI Homes has a smaller distribution channel compared to its key competitors.
Its key competitors have more sales offices and partnerships with external brokers both within and
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CHAPTER 5
STRATEGY FORMULATION
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Opportunities SO Strategies WO Strategies
O1.Rising number of BPOs in 1. Continue offering cheap 1. Offer promotions for
Metro Manila condominium units to attract locals products that are already
O2.Young investors capacity to and foreigners. ( S5, O1, O4) MP developed outside the
spend 2. Penetrate the market of young coverage of Metro Manila.
O3.Increase in labor force investors through dynamic, fast- (W5, O2, O6) MP, MD
participation paced, and quality condominium 2. Present the company’s
O4.Tourism-driven demand units located within the center of products as the best and the
O5.Increase in GDP by 6.9% Metro Manila at an affordable most affordable among all
O6.Brand Visibility through price. (S3, S5, O2) MP other substitute products
social media 3. Construct inexpensive yet quality for people who are finding
high-rise residential buildings, a home in Metro Manila
condominium units specifically (W4, O1, O2) MP, MD
catered to foreigners according to
their taste and lifestyle (S3, S5,
O4) MP, PD
Threats ST Strategies WT Strategies
T1. Climate Change 1. Develop residential properties 1. Develop more projects
T2. Congestion and Traffic in intended for low and middle- outside Metro Manila (W4,
Mega Manila income earners in Metro Manila. W5, T1, T3) PD, MP, MD
T3. Risk of flooding in Metro (S1, S3, S5,) PD 2. Upload videos on social
Manila 2. Take advantage of the company’s media sites (i.e. Facebook,
T4. Tax Reform effected in 2018 Triple A builder reputation and Twitter, YouTube) showing all
T5. RERBA slows down by adapt new technological amenities of their products.
7.7% advancements to withstand (W1, T5) MP, MD
flooding and other calamities. (S1,
S3, S5, T1, T3) PD
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A TALLY OF STRATEGIES IN SWOT
The SWOT Matrix assesses both internal and external aspects of the business. The SO
strategies are laid out to use the company’s strengths in maximizing its opportunities. To improve
the company’s weaknesses, the WO strategies are presented. While the ST strategies use strengths
to minimize the given threats, the WT strategies demand the company to do something to improve
Based on the presented strategies, it basically falls on two strategies- market penetration
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5.2 STRATEGIC POSITION AND ACTION EVALUATION (SPACE) MATRIX
X = -.57
Y = 2.5
DMCI Homes belongs to the conservative quadrant. This means that the conservative
posture arises when DMCI Homes is financially strong but is unlikely to make significant returns
to the business. The strategy is to look for related diversification, market penetration, market
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SPACE MATRIX
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CONCLUSION
DMCI Homes should be more conservative in approach in undertaking strategies for them
to maintain or surpass their current position in the market. Since the directional vector of DMCI
Homes is in the conservative quadrant (upper left quadrant) of the SPACE Matrix, this means that
DMCI Homes should employ the strategies that would be found in the Quadrant 2 of the Grand
Strategy Matrix.
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5.3 BOSTON CONSULTING GROUP (BCG MATRIX)
Relative Market Share
High Medium Low
1.0 0.50 0.0
High Question Mark
+15 STAR
Industry
Sales
Growth Rate
Medium
0 Cash Cows Dogs
Low
-15
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ANALYSIS OF BCG MATRIX
After computing the necessary pieces of information to construct the matrix and evaluating
these data, DMCI Homes has fallen into the first Quadrant (Question Mark) which indicates that
parts of a business have high growth prospects but has a low market share given that the market
share is 13% and the growth rate is 10%. The result is a rage net cash consumption. The company
is consuming a lot of cash but is bringing little in return. However, since these business units are
rapidly growing, they do have the potential to turn themselves into Stars. Companies are
recommended to invest in question marks if the product has the potential for growth, or to sell if
it is in the contrary. DMCI Homes must be analyzed carefully to determine whether they are worth
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5.4 INTERNAL- EXTERNAL (IE) MATRIX
ANALYSIS OF IE MATRIX
Based on the IE Matrix, DMCI Homes falls into the first cell: Grow and Build are the
strategies which are recommended for companies which fall in that particular cell. This requires
intensive and aggressive tactical strategies. The strategies should focus on market penetration,
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5.5 GRAND STRATEGY MATRIX
a. COMPETITIVE POSITION
DMCI Homes has weak competitive position brought about by its lack of adequate
capitalization for expansionary activities, its limited distribution network and its global presence.
Although their market share is progressively increasing, it still lags behind key competitors in
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 77
terms of capitalization and diversified product lines within the same industry such as the
Furthermore, DMCI Homes lacks presence in key business districts. They often construct
projects outside recognized business districts in Metro Manila like Bonifacio Global City and
Makati Central Business Districts. Because of this, they cannot easily penetrate the market of
b. MARKET GROWTH
The immense traffic in Metro Manila, causes working individuals to acquire condominium
units for their convenience which adds to market growth. There also those OFW’s who would
acquire real properties as their investment and for their personal use which also helps in increasing
individuals prefer condominiums instead which adds to the improvement of the market growth.
Another is that people prefer modern living which could also be the reason of choosing
condominiums. Furthermore, they prefer instant or readily available units with lots of amenities.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 78
5.6 SUMMARY OF MATRICES AND ANALYSES
Forward Integration ✓ 1
Backward Integration ✓ 1
Horizontal Integration ✓ ✓ 2
Market Penetration ✓ ✓ ✓ ✓ ✓ 5
Market Development ✓ ✓ ✓ ✓ ✓ 5
Product Development ✓ ✓ ✓ ✓ ✓ 5
DIVERSIFICATION STRATEGIES
Related Diversification ✓ 1
Unrelated Diversification 0
Retrenchment 0
Divestiture ✓ ✓ 2
Liquidation ✓ 1
Of amongst the strategy decisions, market penetration, product development, and market
development are constantly suggested by the SPACE, IE, and GRAND matrices. The mentioned
strategies may be used by the company since it has garnered the highest total score equivalent to
three. Moreover, the unrelated diversification and retrenchment strategies are assessed to be not
suitable to the company since it never appeared in the results of any of the matrices presented.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 79
5.7 QUANTITATIVE STRATEGIC PLANNING MATRIX
STRATEGIC
ALTERNATIVES
(Market (Product (Market
Penetration) Development) Development)
Present Develop more Upload videos on
products as projects social media sites
the best and outside Metro (i.e. Facebook,
the most Manila Twitter, YouTube)
affordable for showing all
people who amenities of their
are finding a products
home in
Metro Manila
Key Factors Weight AS TAS AS TAS AS TAS
Opportunities
Rising number of BPOs in Metro .11 4 .44 3 0.33 4 0.44
Manila
Young investors capacity to spend .10 3 0.30 3 0.30 3 0.30
Increase in labor force participation .08 3 0.24 2 0.16 2 0.16
Tourism-driven demand .11 3 0.33 4 0.44 4 0.44
Increase in GDP by 6.9% .05 2 0.10 2 0.10 2 0.10
Brand Visibility through social media .10 4 0.40 4 0.40 4 0.40
Threats
Climate Change .09 3 0.27 4 0.36 3 0.27
Congestion and Traffic in Mega .08 4 0.32 3 0.24 3 0.24
Manila
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 80
Tax Reform effected in 2018 .09 2 0.18 4 0.36 2 0.18
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 81
ANALYSIS OF THE QUANTITATIVE STRATEGIC PLANNING MATRIX
Based on the table above, it can be concluded that the most suggested for DMCI Homes
from the results of the matrices used would be Market Penetration, because it garnered the highest
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 82
CHAPTER 6
To be the leading real estate holding company and elevating the lifestyle of the common
Filipino into a more comfortable and convenient lifestyle.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 83
6.1.2 REVISED MISSION STATEMENT
As the country’s first Triple A developer, DMCI Homes creates premium quality, urban –
friendly, fully served communities for the moderate income earning families that seeks to live
comfortably near their place of work, of study and of leisure.
After analyzing the current standing of the company by using different matrices, the
researcher was able to determine strategic objectives that will be strategic to the growth and
• To increase the Sales of DMCI Homes, by offering its products as the best and most
• To increase the Market Share of DMCI Homes by uploading videos on social media sites
• To widen the geographical coverage of DMCI Homes by developing projects outside of Metro
Manila.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 84
6.2.2 FINANCIAL OBJECTIVES
Based on the results of the QSPM, it is clearly evident that the market penetration got the
highest attractiveness score. Market Penetration can be defined as the action of increasing an
existing products market share or introducing new products to acquire market share. Thus, DMCI
Homes should focus on this strategy on the part of strategy implementation. The company should
exert its efforts in getting the attention of potential buyers through providing advertisements that
would appeal to buyers most especially to the common Filipino, while having an estimated budget
of Php 5 million for the succeeding year of operations. To penetrate such wide market, the
company should establish its presence within foreign countries where huge numbers of foreigners
would like to invest in real estate in the Philippines. Moreover, the company should also be active
in participating in international shows to encourage people of different origins; since most of all
the potential buyers are accessing the World Wide Web, the company may also penetrate different
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 85
social media sites (i.e. Facebook, Twitter, YouTube and etc.). Through the said approaches, DMCI
Homes will increase primarily in customer brand awareness and secondarily will increase in sales
Another strategy that DMCI Homes would adapt is product development. Such strategy
refers to the process of either improving the previous available product or creating a new product
and or service that would satisfy a firm’s customers. Regarding the current situation of DMCI
Homes, it may choose to construct a community of high – rise residential buildings that incurs a
gradual speed of deprecation and displays architectural designs in provinces while having a budget
of Php 10 billion in the succeeding year of operations. The company should make use of the
company’s reputation as a Triple A developer that offers its products at a relatively cheaper price
rather than those of key competitors and offer units with innovative architectural design concepts
to attract more potential buyers especially those local and foreign investors who have the capacity
to spend more.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 86
6.4 RECOMMENDED ORGANIZATIONAL STRATEGIES
This section presents the weaknesses addressed by the proposed strategy along with the
The company should present their products to different nations around the world which
would enable the company to garner a large market share in the global real estate industry. DMCI
Homes would have an edge over its key competitors since only a handful of companies are only
DMCI Homes should request for additional capitalization to finance all project
Advertisements of DMCI Homes should utilize every available option of advertising its
exceptional property developer that offers the best quality and offers the best value for money.
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 87
6.5 FINANCIAL PROJECTIONS
DMCI Homes
Financial Projections
December 31, 2017, to 2020
(in CURRENT (EST.) (EST.) (EST.) (EST.) (EST.)
thousand 2016 2017 2018 2019 2020 2021
pesos)
Net Sales 11,766,435,807 12671274721 13645695747 14695049749 15825099075 17042049194
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 88
2016 2017 2018 2019 2020
Current Assets
Cash and cash
equivalents 3868999775 4166525858 4486931696 4831976744 5203555755
Financial assets
at fair value
through profit or
loss
Receivables - net 5686986231 6124315472 6595275332 7102452005 7648630564
Real Estate
Inventories 31622758783 34054548933 36673343746 39493523880 42530575867
Other current
assets 2187162918 2355355746 2536482603 2731538115 2941593397
TOTAL
CURRENT
ASSETS 43365907707 46700746010 50292033378 54159490745 58324355583
Noncurrent
Assets:
Noncurrent
receivables 2300542230 2477453927 2667970135 2873137038 3094081276
Net Pension
Asset
Investments in
associates, joint
ventures and
others 341194947 367432838.4 395688423.7 426116863.5 458885250.3
Investment
properties 155125788 167054961.1 179901487.6 193735912 208634203.6
Property, plant
and equipment 1053940342 1134988354 1222268959 1316261442 1417481947
Software Cost 77491126 83450193.59 89867513.48 96778325.26 104220578.5
Deferred tax
assets – net
Other
noncurrent
assets 252242006 271639416.3 292528487.4 315023928.1 339249268.1
TOTAL NON-
CURRENT
ASSETS 4180536439 4502019691 4848225005 5221053508 5622552523
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 89
TOTAL
ASSETS 47546444146 51202765701 55140258383 59380544253 63946908106
LIABILITIES
AND EQUITY
Current
Liabilities:
Accounts and
other payables 1245917952 1341729043 1444908006 1556021432 1675679480
Customers’
advances and
deposits 9178277946 9884087520 10644173850 11462710819 12344193281
Payable to
related parties 232799388 250701660.9 269980618.7 290742128.2 313100197.9
Dividends
Payable 100000000 107690000 115971361 124889558.7 134493565.7
Current portion
of long-term
debt 861234841 927463800.3 998785766.5 1075592392 1158305447
Current Portion
of Liabilities for
purchase land 623150513 671070787.4 722676131 778249925.5 838097344.7
TOTAL
CURRENT
LIABILITIES 11241380640 12105842811 13036782123 14039310669 15118933659
Noncurrent
Liabilities:
Long-term debt -
net of current
portion 17479587785 18823768086 20271315851 21830180040 23508920886
Liabilities for
purchased land -
net of current
portion 906622242 976341492.4 1051422153 1132276517 1219348581
Pension
liabilities - net 53079093 57160875.25 61556546.56 66290244.99 71387964.83
Deferred tax
liability 2647010891 2850566029 3069774556 3305840219 3560059332
TOTAL NON-
CURRENT
LIABILITIES 21086300011 22707836482 24454069107 26334587022 28359716764
TOTAL
LIABILITIES 32327680651 34813679293 37490851231 40373897690 43478650423
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 90
EQUITY
Equity
attributable to
equity holders of
the Parent
Company:
Capital Stock 3487727328 3755933560 4044764850 4355807267 4690768846
Paid-in capital 15260667 16434212.29 17698003.22 19058979.67 20524615.2
Appropriated
Retained
earnings 7000000000 7538300000 8117995270 8742269106 9414549601
Unappropriated
Retained
Earnings 4445357676 4787205681 5155341798 5551787582 5978720048
Remeasurements
gains on defined
benefit plans 183084079 197163244.7 212325098.2 228652898.2 246236306.1
Stockholders'
Equity – Parent 15131429750 16295036698 17548125020 18897575834 20350799415
Non-controlling
interests 87333745 94049709.99 101282132.7 109070728.7 117458267.7
TOTAL
EQUITY 15218763495 16389086408 17649407153 19006646563 20468257683
TOTAL
LIABILITIES
AND EQUITY 47564444146 51222149901 55161133228 59403024373 63971116948
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 91
6.6 DEPARTMENTAL PROGRAMS
marketing communications
plan
sales promotions
Team
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 92
displays unique architectural Research and Development
design concepts, facilities and
Department;
other add-ups for leisure
Sales and Marketing Department
IT Department
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 93
CHAPTER 7
FINANCIAL PERSPECTIVE
Objective Performance Target Initiatives
Measure
• Marketing,
Sales and
Operation
Teams
7.69% growth in net Boost sales efforts to Positive amounts in
income annually increase profitability the income statements • General
Management
• Finance
Department
CUSTOMER PERSPECTIVE
Objective Performance Target Initiatives
Measure
• Customer Care
Unit
• General
Management
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 94
INTERNAL BUSINESSES PERSPECTIVE
Objective Performance Target Initiatives
Measure
• Purchasing
Department
Develop a system and
To stabilize training program that
Less time lag in • Customer Care
convenience in would increase the
constructing a unit Unit
operations knowledge of the
employees
• General
Management
• Human Resource
Empower all the and General
To explore new
Annual Net Income employees and give Management
avenues for growth of
growth recognition to
the employees
excellent ones • Finance
Department
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 95
IX. APPENDICES
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 96
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 97
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 98
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 99
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 100
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 101
D M C I H o m e s – S t r a t e g i c M a n a g e m e n t P a p e r P a g e 102
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