TITLE OF THE CASE: Halina Mountain Resort (A) TIME CONTEXT: 1977 SUMMARY: Victor Herrera, chairman of the board of Blue Heights Realty & Development Corporation, desired to launch his company’s first big project, a mineral hot spring resort at Bucal, Calamba, Laguna named Halina Mountain Resort (A). He wanted to make it as “something he could leave for his family”. Blue Heights Realty & Development Corporation was organized in October 1976 attached in owning, improving and managing real estate; it is considered a stable company with authorized capital stock of P1 M and paid-up capital of P900T.
The proposed resort was planned to establish to their 2. 2 hectare land in Bucal, calamba, Laguna. The land was composed of 1. 5 hectare Victor inherited from his father in 1974 and the other 700T hectare which he purchased from his commission from commodities trading. Upon the proposal of the project, Victor asked his son Victor Jr. to make a survey and gathered enough data and information about the vicinity and its rival resort. Also, he made an application with the Ministry of Tourism requesting the approval for the establishment of the resort stating his reasons for going into the resort trade.
And lastly, he made a loan application for a P1. 3 M with Far East bank and Trust Company however, there is no assurance if it would recognize the merit of his proposal, with a complete paper requirement, Herrera strongly believed that his project is viable & attractive and their reports are unbiased. The only problem would be the approval of his loan application with the Far East Bank and Trust Company. I. Statement of the Problem To acquire enough financial resources to continue his resort project II. Central Problem
How would Victor Herrera and his Company can acquire enough financial resources to continue his resort project? III. Areas of consideration (SWOT analysis) STRENGTH 1. Facility innovation Skills 2. Better service quality relative to rivals. 3. Widely recognized market leader & attractive customer base. 4. Good geographic location 5. Health factor 6. Profit factor WEAKNESS 1. Short on financial resources to fund promising strategic initiatives. 2. Missing some key skills or competencies 3. Lack of management department OPPORTUNITIES 1.
Serving additional customer group 2. Ability to grow rapidly because of strong increases In market demand 3. Expanding the company’s service line to meet a broader range of customer needs 4. Opening to take market share away from rival firms THREATS 1. Existing potential competitors 2. Growing bargaining power of customer or suppliers 3. Susceptibility to industry driving force 4. Vulnerability to recession and business cycle IV. Alternative Courses of action with corresponding Advantages/Disadvantages 1. The application of loan worth P1. M to Far East Bank & Trust Company is a good primary option to gain financial support. ADVANTAGE: •Immediate Capital DISADVANTAGE: •No assurance that it would be approve •Additional expenses for the company because of interest. 2. They can look for an existing resort there, with a good financial standing and reputation. ADVANTAGE: •Good foundation when it comes to company reputation •A good financial source •Sure market and patrons DISADVANTAGE: •No full management control •Different objectives •Unable to meet terms and conditions 3.
They can sell some of their properties to gain enough capital. ADVANTAGE: •Can provide less capital DISADVANTAGE: •No assurance of obtaining the exact money needed. V. Strategy Formulation/Recommendation I there for conclude that the best solution to the problem is alternative course no. 2, merging or joint venture with an existing Resort because, it can solve his major problem which is obtaining financial resources and at the same time obtaining other advantages such as good market and sure patrons thus giving a higher rate profit profitability. VI. Plan of Action 1.
Make sure to have a good agreement with the company’s management terms and conditions regarding to division of control. 2. Pursue its original plan especially the additional services such as restaurant and other facilities. 3. Look and search for a potential company resort to be merge with. VI. Potential Problem 1. If there’s no potential company to merge with. 2. If Far East Bank and Trust Company can’t approve the application loan. 3. If there’s no willing to buy the property VII. Contingency Plan 1. Sell some of their properties 2. Look for another bank for a loan application 3. Find new investors