Case Analysis

DYNAMIC PACKAGING CORPORATION

Gloria V. Talavera, 2001

Group 4

Goc-ong, Heraldine Yvonne

Senoc, Moanna Janica

Toledo, Christine

Yap, Lorenz Jasper

MBA 2018 Business Management

First Trimester, 2018

October 20, 2018

I. CASE PERSPECTIVE

Dynamic Packaging Company is engaged in the repacking of food-based products such as

powdered products like coffee, sugar, crème and liquid items like ketchup and other food sauces. It
operates into three major service lines namely packaged products, contract packaging services and toll
packing/manufacturing services.In their annual meeting, Mr. Gabi Santos, being a hands-on
president/general manager, decided to have a strategic planning session to get ideas from his managers.
Based on the contribution margin analysis of their various products and services, Mr. Santos concluded
that the liquid line provided the best income opportunities. Toll packing/manufacturing was also another
venue for growth.

In 2001, Dynamic Packaging Company was the third largest in food repacking industry. The
company’s objective is to become the number one firm in the said industry. Despite their grand plan, the
crucial question was whether the company had the capability to exploit such opportunities and indeed
become strategically number one. Thus, an evaluation of different strategies to achieve this goal is being
made. According to the author Hakan Butuner, in his book, “Case Studies in Strategic Planning,” a
strategic plan has to be devised to outline the path between the current status of business and its desired
status. It involves a long-term and prospective perspective.

II. STATEMENT OF FACTS

1. Dynamic Packaging Company is a company engaged in the repacking of food-based
products. It operates into three major service lines namely packaged products, contract
packaging services and toll packing/manufacturing services.
2. Packaged products are offered to various customers and DPC supplies the raw materials and
other factors of production.
3. DPC supplies the printed packaging materials and packaging services. The packaged products
contain the customer’s desired package design and their preferred contents and usually do not
show the DPC name as the repacker.
4. DPC also provides packing services to large companies and only provides manpower and
facilities necessary for the operations. It has four major product types: liquid portion packs,
powder portion packs, hot cups and special projects.
5. Marketing Systems, Inc. is a firm that handles the toll service lines of DPC. There were about
four MSI plants.
6. Mr. Gabby Santos was a hands-on type of manager/president who prefers a decision-setting
style. He was directly involved in the overall operations of the company.
7. The vision and mission statement of the company was created at the time where DPC had
forty-nine regular employees and five members of the top management team.
8. DPC did not yet have formally written policies and systems on operations, marketing,
finance, and quality control.
9. Based on the contribution margin analysis of their various products and services, Mr. Santos
concluded that the liquid line repacking services provided the best income opportunities due
to higher margins, limited players in the industry and huge growth potential.
10. Toll packing/manufacturing was also another venue for growth since it did not entail large
working capital requirements other than accounts receivable financing.

III. STATEMENT OF THE PROBLEM

 Despite having a grand plan during the DPC’s strategic planning process, the company is unsure
what strategic direction to take in order to achieve its aim of becoming the number one firm in the
repacking business.

IV. STATEMENT OF OBJECTIVES

General objective:

To be able to determine the different strategies Dynamic Packaging Corporation should execute to
increase its market share and be the number one in their industry

Specific objectives:

1. To be able to produce written and/or captured documentationfor the processes on the operations,
marketing, finance and quality control
2. To be able to identify areas of DPCs strategic plan that needs improvement and/or replacement
3. To be able to find business activities that would allow to accomplish its goal of becoming the
number one in their industry

V. ANALYSIS OF RELEVANT FACTS

Strengths:

1. Operates in three service lines

2. 3rd Place in terms of market share in the industry
3. The president is hands-on in the operations
4. Provides packing services to several big companies such as RFM, LTS, Phils., Wrigleys, Kraft

Weaknesses:

1. Did not have formal written company policies on procedures of different functions
2. Packaging or repacking function did not bear DPC’s name
3. Centralized organizational structure

Opportunities:

1. Limited industry players, huge growth potential

2. Diversification to repacking even non-food items (e.g. shampoo, toothpaste, gel, etc)
3. Venture into retailing or repacking items carrying their own brand name

Threats:

1. Greatest competitor holds 50% of marker share

2. Possibility of major clients repacking their own products
VI. ALTERNATIVE COURSES OF ACTION

1. Maintain and improve liquid line services.

Liquid Line Services has low manufacturing/fixed cost. On the other hand, DPC may lose focus
and neglect their other product lines

2. Retail the repacked items under the company’s own brand name.
Retailing the repacked items under the company’s own brand name provides them with more
control on the products being packaged. Moreover, DPC will be able to create their own name
both in the packaging and commodity provider industry. The downside is the additional expenses
the company will incur. This will be very costly because they may need an R&D team to
formulate new products. Also, they’ll have increased liability in the items that they’d release in
the market

3. Create new and related product lines.

This strategy will help DPC increase their number of product lines to be able to really meet the
customers’ other needs. However, it requires research about the market they want to tap. It can be
risky since it is going beyond what they are used to.

VII. RECOMMENDATION

Maintain and improve liquid line services.

The Liquid Line Services of DPC posed the greatest opportunity for growth. This service line bested in
the contribution margin analysis because of higher returns, limited players in the industry, and the huge
potential for growth. In order to maximize this strength, DPC should invest to improve its Liquid Line
Services.
REFERENCES:

Butuner, H. (2016).Case Studies in Strategic Planning. Boca Raton, Florida: Auerbach Publications.