EXECUTIVE SUMMARY

Due to the emerging COVID19, De Vera’s Trucking began to transition

the business from six (6) wheeler closed vans to number ten (10) wheeler
wing vans; the business started to penetrate Visayas and Mindanao.
The main products being transported by De Vera’s Trucking are various
vegetables from Benguet Province, and transporting these goods in the
several provinces of Visayas.
At present, De Vera’s Trucking has fifteen (15) units of 10-wheeler wing
vans earning approximately 1,050,000.00 monthly or 12,600,000.00 annual
revenue before taxes, and that includes cash and account receivable (AR).
The researcher used SWOT and TOWS analysis to identify the issues in
the business and formulated new strategies to recommend Mckinsey’s 7S
Models, where the researcher discussed the structure, systems, style, staff,
skills, and strategy of De Vera’s Trucking.
Also, De Vera’s recommended some strategies, such as adding a
finance department to administer its finances and make financial decisions
and implementing Standard Operating Procedures (SOP) to ensure that the
services provided by the business are at their highest level.
Major areas such as critical strategic management issues, objectives,
and strategies. Key strategic management issues, the recommended strategic
and financial objectives and strategies, and practical action plans were also
discussed. The strategies formulated were properly recording finances,
streamlining the process, standardization, and customer relation management.
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 I. INTRODUCTION
Businesses in the logistics industry provide connections between
producers or manufacturers down to end users and consumers. Businesses
and sometimes individuals book or contract with logistics companies to pick
up and transport various goods from one place to another. The variety of
transported goods is increasing as time passes, so the logistics industry must
keep up with the market demands. Not just is the range of goods expansion,
but also the improved process of how logistics is carried out. Most logistics
companies now offer competitive logistic services, from just transporting
goods to following a sophisticated process that involves professionals
ensuring the quality of the product is maintained from a certain point to
another point. Aside from guaranteeing that goods reach their destination,
logistics companies ensure that the temperature, time, and handling
procedures of goods employed during transportation are of the highest
standards to maintain quality. If one partners with a logistics business, ensure
the business aims to enable industries efficiently. The business must be known
to offer competitive and creative ways of supply chain services and offer
innovative solutions.
De Vera’s Trucking began in September 2017 with five (5) units of six
(6) wheeler closed vans. In the past first four years of operation, De Vera’s
Trucking catered to two significant clients, namely, Pepsi Cola Product
Philippines Incorporated North Luzon Operations (PCPPI-NLO) from 2018 to

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2020, and Convenience Distribution Incorporated (CDI), the official supplier
of 7-eleven stores in Northern Luzon which both located in Rosario La Union.
Pepsi Cola Product Philippines Incorporated North Luzon Operation is
the exclusive manufacturer and distributor of Pepsi products like Pepsi Cola,
Mt. Dew, Mirinda, and many more in Northern Luzon. De Vera’s Trucking is a
Third Party Logistics (TPL) contractor of PCCPI NLO. De Vera’s Trucking
delivers Pepsi products to different areas of Northern Luzon, such as La Union,
Pangasinan, Ilocos Sur, Benguet, and Baguio City. Moreover, Convenience
Distribution Incorporated is the exclusive supplier and distributor of 7 eleven
Stores in northern Luzon; De Vera’s Trucking’s role was to deliver various
products like beers, bread, soda, junk food, and many more where the
delivery is usually done at night. The contract for both partners lasted for two
years and ended in 2020.
In 2020, at the height of the pandemic, De Vera’s Trucking began to
transition the business from 6-wheeler closed vans to several 10-wheeler wing
vans; the business started to penetrate Visayas and Mindanao. The main
products being transported by De Vera’s Trucking are various vegetables
from Benguet Province, specifically in La Trinidad, and transporting these
goods in the provinces of Visayas, specifically Iloilo, Bacolod, Cebu, and
Dumaguete. The business also transports goods in Mindanao, like General
Santos City.
At present, De Vera’s Trucking has fifteen (15) units of 10-wheeler wing
vans earning a net profit of approximately ₱70,000.00 for each team, which
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makes a total of roughly 1,050,000 php every month and ₱12,600,000 on an
annual basis before taxes, and that includes cash and account receivable (AR).
De Vera’s Trucking has a total of thirty (30) logistics personnel in the
operations department which consists of one (1) driver and one (1) helper for
each unit and two (2) maintenance staff who are responsible for maintaining
and ensuring the running condition of all units. Overall, De Vera’s Trucking
has thirty-two (32) employees of De Vera’s Trucking.
De Vera’s Trucking is a sole proprietorship form of business. It has a
traditional business process where transactions are done traditionally,
including bookings, payment collection, and even payroll. Currently, the
management style of De Vera’s Trucking is centralized management, where
decisions are made by the owner alone.

Figure 1: Current Organizational Chart of De Vera’s Trucking

The chart shown above is the current organizational chart of De Vera’s
Trucking. The proprietor is managing the logistics business alone from the
booking, budgeting, monitoring, and collections, which seem to be a
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significant business problem. Thus, the proprietor lacks financial control and
will have difficulty tracking the business’ expenses, and the decision is only
limited to the proprietor since the business’ management style is centralized.
The logistics department is responsible for transporting goods from one place
to another.

II. RESEARCH DESIGN AND METHODOLOGY

This chapter explains different methodologies that were utilized in
gathering data and analysis which are relevant to the study. The
methodologies had included current financial positioning, current
management style of the business and its competitors’ profile of the business.
Research Design
This study employed a qualitative research design, which entails the
accumulation and analysis of nonnumerical data such as text, video, or audio
to comprehend concepts, opinions, or experiences. It can be used to gain
profound insights into a problem or generate new research ideas.
Data gathering
The business proprietor authorized the use of readily accessible
information for Management Research Report (MRR) purposes, including
company history, financial statements, clients, products, and services. Other
information, including competitors' information and company data, was
willingly provided and permitted for use in this study by competitors.

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 The information analyzed in this Management Research Report (MRR) is
presumed to be current and applicable for strategic management purposes.
The business has been studied from the owner's perspective to take a holistic
view, which includes the Operations and Maintenance departments.

RESEARCH METHODOLOGIES
Collection of Data
In this study, the researcher used interviews and analyzed necessary
documents like business permits and many more as a way of data collection.
Interview
The interview collects data through verbal and oral communication
between the respondent and the researcher. Both structured and unstructured
questions and discussions were used because they are flexible and adaptable
and enable researchers to gather more insight on the topic.
Document Analysis
Document analysis is a qualitative research technique used by
researchers. The process involves evaluating electronic and physical
documents to interpret them, understand their meaning, and develop upon
the information they provide, indeed, 2023.

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 Document Selected Analysis
Business Permit/DTI The business is legally operating
Company Profile De Vera’s trucking has been
operating for 6 years and have not
changed it’s vision, mission and
goals
OR/CR of the units De Vera’s trucking legally owns 16
units of wing van trucks
Table 1: Document Analysis
The table displayed above is the document analysis of De Vera's
Trucking, for which the researcher selected documents for analysis. The
documents business permit/DTI, company profile, and OR/CR were chosen
for analysis.

III. COMPANY VISION AND MISSION

Current Vision Statement
- De Vera’s trucking will be the leading goods transporter in Northern
Luzon with a positive impact on the clients it serve, the environment it
share, and to increase revenue to all employees it support
The current vision statement of De Vera’s Trucking only talks about
northern Luzon, which is their former coverage of the operation. Since De
Vera’s Trucking had already penetrated the Visayas region, the scope of their
vision should be changed from Northern Luzon to the Philippines.

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Current Mission Statement
- To provide superior customer service and to positively influence the
community and environment.
De Vera's Trucking's current mission statement is suitable for realizing its
vision; therefore, there is no need to alter the business's current mission
statement.
Throughout the business operation of De Vera’s Trucking the researcher
determined that the business has been consistently achieving its goals
mentioned above from transportation safety to having quality employees. The
difference of mission and vision is subtle however important. The vision
statement should define the organization’s strategic direction and purpose,
fixating on its goals and objectives.
Here are the proponents five recommendations on how to communicate
the vision and values more effectively to employees and other stakeholders
1. Keep it visible
Ensure that the vision is communicated to all staff, including the goals that will
have the organization's vision materialized. The vision should enable staff to
be more effective, so do not let it become a statement that sits on a memo in a
desk drawer. Instead, include it in all of the key messages and in both internal
and external documents.
2. Get everyone on board
Communicating the vision in a happy, positive, excited manner will ensure the
staff engage positively with what the business has set out for the organization
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to achieve. Take internal measures like having them memorize the vision,
mission and goals of the business to make sure everyone speaks with unity
about your mission, vision and goals.

3. Value employee engagement

Exert the effort to seek the opinions and ideas of all of the key stakeholders to
help move the vision forward. Present how the vision has a positive impact on
the organization and every individual’s work life.
4. Use a variety of channels
Communicate the vision, mission and goals through as many channels as
possible to keep in touch with all stakeholders. The stakeholders include the
current and prospective staff and local businesses. To ensure these are
reinforced and communicated consistently to them, your marketing
campaigns need to utilize all the channels available from your internal
newsletters, external magazines, prospectus, website, induction and
recruitment packs, press releases, social media and your front of house team.
5. Choose the stories wisely
Keep repeating success stories that demonstrate the business’ vision, mission
and goals. It is as important to do this on an internal basis as it is on an
external basis so that everyone in the organization is well-versed in the
stories that have the biggest and positive impact. Finally, it is worth
remembering that an organization's vision and goal should be reviewed on a

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regular basis and evaluated to make sure they are still relevant. Either big or
small changes can completely transform the direction a business is heading.

IV. EXTERNAL ANALYSIS

General Environment
Economic Development
The logistics industry in the Philippines is one of the most crucial
contributors to economic growth. It encompasses various services covering
different aspects such as transportation, warehousing, cargo distribution, etc.
Logistics is vital in the Philippines because it enables the movement of goods
and products. Without it, the economy would fall into ruin. Thus, it is essential
to shape logistics management in the Philippines for this sector to serve the
country (Transportify, 2020). They also stated that outsourcing logistics
management is gradually becoming common to businesses in the Philippines.
Businesses see more potential for growth by partnering with logistics
management companies. However, several businesses need to pay more
attention to proper logistics management, which is beneficial for a business
operation. Most companies focus on other aspects of the business rather than
effective strategies to be cost-efficient through good logistics management.
When a company discovers ways to improve its logistics management, it can
significantly improve its business operations performance. In today's business,
technology is a significant factor shaping the Philippine logistics industry.

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Most logistics businesses invest in software and algorithms that will make
efficient business operations.
Since the logistics industry covers a wide range of markets and most
businesses now need logistics management as part of channels of distribution
and indeed one of the most crucial contributors to the economic growth of the
Philippines.
According to Portcalls.com 2023 as outlined in its Regional
Development Plan (RDP) 2017–2022, Central Visayas (Region VII) aspires to
disperse economic growth across its municipalities by connecting important
metropolitan centers, important production sectors, and market hubs.
According to the Philippine Development Plan (PDP) 2017–2022, which
acts as a roadmap for national and local government agencies' programs,
finances, and strategies,
Through connectedness, Central Visayas is making progress in
maintaining its growth. Ernesto M. Pernia 2023, secretary of socioeconomic
planning, stated in a statement that this will improve chances for human
development throughout provinces, boost economic integration, and lessen
poverty.
The expansion of minor and main ports, the building and upgrading of
arterial highways, and the integration of transportation networks are all part of
the region's spatial development strategy, according to Pernia. The New Cebu
International Container Port, New Bohol Airport on Panglao Island,
Cebu-Bohol Link Bridge, Bohol-Leyte Link Bridge, Cebu-Negros Link Bridge,
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and the Bohol Northeast Basin Multipurpose Project are among the region's
infrastructure flagship projects that the NEDA Board has recognized. The RDP
designates Metro Cebu as the region's metropolitan hub and Metro Tagbilaran
(Bohol) as its projected network of urban centers.
Bogo-San Remigio (Cebu), Toledo City-Balamban (Cebu), Metro
Dumaguete (Negros Oriental), and Tubigon (Bohol) are examples of
sub-regional hubs.
Efren B. Carreon, regional director of NEDA, declared that Central
Visayas "will continue to be a major growth center in the country for the next
six years by making the most of our strategic location and diverse sources of
growth."
Additionally, according to Carreon, the region saw the strongest
economic momentum of any region throughout the 2011–2016 period covered
by the regional plan, with an average growth rate of the gross regional product
(GRDP) of 7.5%, which was greater than that of the National Capital Region.

Socio-cultural, demographic trends, lifestyle changes

Philippine logistics businesses continue to explore more efficient and
effective economic ways to integrate business logistics. Changes in the
logistics industry in the Philippines can also be seen in the progress in the
e-commerce sector that drives profitably for logistics businesses. Traditional
logistics service providers face a new challenge in their strategies in these
new developments. Clients now prefer on-demand services like same-day
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deliveries or 24/7 availability. On-demand logistics services help businesses
by charging them reasonable costs for shipping services. This is one reason
for the abrupt increase in shipping volume for services on demand.
On-demand logistics companies like Transportify interrupt almost the entire
logistics industry with the arrival of on-demand services in the Philippines.
People today prefer the convenience and ease in their daily activities rather
than being stressed in handling their distribution. Expectations of logistics
services have changed as more companies and businesses have displayed
interest in mobility solutions like on-demand services (Caro, 2020).

Technological Development
The global digital transformation is impacting the Philippine logistics
industry positively by enabling the industry to streamline its operations and
improve delivery. International companies are implementing modern software
solutions called Artificial Intelligence (AI) and Internet of Things (IoT)
technologies to modernize their operations, reduce cost reductions, increase
efficiency, and boost visibility into logistics. The Philippine logistics industry
is also undergoing a digital transformation. However, it is still an emerging
market with some structural limitations; there are several ways that
technology can improve the logistics industry in the Philippines (Maheshwari,
2022).
Many logistics service providers now offer end-to-end services instead
of the traditional part of the supply chain that businesses have traditionally
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handled. This allows the logistics provider to handle every aspect of business
logistics management from the time the order is placed until the products are
delivered. Logistics providers can provide value-added services such as
customs brokerage, electronic data interchange (EDI) systems, and inland
transport management.
It can offer and manage all these services with a central platform like
freight management software. Such multi-service offerings can result in
significant cost savings for companies. Shippers in the Philippines will
eventually look for a company that can offer a one-stop shop for all their
logistics needs. It can be a step ahead in the competition if it can ensure your
company is ready even before the demand arrives.
Another technological development is Automated tracking and tracing.
One of the essential impacts of technology on the logistics industry is the
ability to track real-time shipments and provide near real-time updates to
importers and exporters. The traditional process was manual, with the
paperwork involved, which was sometimes bound to be delayed. Businesses
can electronically complete the shipping process through electronic data
interchange (EDI) systems, standardized codes, and Internet-of-Things (IoT)
technologies.
In addition, logistics companies can also utilize tracing systems to find
out information about delayed shipments. Using this technology, logistics
companies can track the shipment's progress in the system to locate its current

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location. This can help companies identify possible delays and take necessary
action to minimize any negative impacts.
YCP Solidiance (2020) said that e-commerce companies in the
Philippines like Lazada, Zalora, and Shopee had been the pioneers of digital
transformation in the country, partnering with technology-driven logistics
companies such as Ninja Van and Lalamove in delivering goods that enable
customers to track their orders real-time.
To make digitalization possible in the logistics industry, it would be
ideal for logistics providers to invest and participate in digital platforms. By
transforming digitally, logistics companies can seize more opportunities
presented by the Philippines' growing commercial activity, specifically in
e-commerce.

Political, Legal, Governmental Aspects

Logistics sector is very timely as the pandemic restricted the flow of
goods in the domestic and global supply chains and worsened the issues in
the Philippine logistics industry, which was already struggling behind its
ASEAN neighbors even prior COVID-19 pandemic, said Acting
Socioeconomic Planning Secretary Karl Kendrick T. Chua 2021.
Despite the country’s ranking improvement in the World Bank Logistics
Performance Index from 71st place in 2016 to 60th place in 2018, more work is

15
needed to elevate the country's logistics system to approach that of its
neighbors, for instance, Hong Kong and Singapore.
As per the latest available data from the Department of Trade and
Industry and the World Bank, logistics costs in the Philippines accounted for
27.2% of sales of manufacturing firms in 2017.
Moreover, Foreign Direct Investment (FDI) data from the Bangko Sentral
ng Pilipinas(BSP) shows that the share of FDI in transport and storage
averaged only 0.6% of total FDI recorded for the period 2014-2019.
To properly address the issues in the logistics sector of the philippines,
the government constitute significant landmark measures like the “Ease of
Doing Business and Efficient Government Service Delivery Act of 2018”, and
the “National Competition Policy through a joint memorandum circular
issued” by NEDA and PCC that is pending the President’s signature.
According to K.Chua 2021, the National Logistics Master Plan 2017-2022
will also be up to date to further improve efficiency of the country’s logistics
system. The Master Plan highlights the regulations necessary to boost the
performance of logistics components such as, port operations, customs
procedures and transportation connectivity.
Ecological Aspect
The Philippines is a rapidly expanding emerging economy with
logistical services facilitating economic development. The logistics industry
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has a significant and increasing environmental footprint. Mitigation actions are
essential, and ecological and socio-economic sustainability needs to be
immersed in the Philippines' relevant strategies and plans.
The green freight and logistics concepts have arrived in the policy and
corporate agendas across Asian countries in recent years, driven by several
factors, including climate change mitigation and the need to improve logistics
performance. Technological advancements are demanded by logistics service
providers and the interest of businesses in opportunities to be more efficient
and cost reduction. Nevertheless, compared to other emerging economies,
the Philippines has seen discussions and initiatives on green freight and
logistics thus far.
To sum it up, the Green Freight Programme aims to assist governments
and businesses in promoting trade cost-efficiently, thus improving people's
quality of life while preserving the environment. It is an essential strategic
plan for a sustainable logistics system and to improve the logistics
performance of countries and their economies.

Market demand and opportunities

The country's economy continues to expand with the Philippines'
ever-growing population and increased domestic consumption. Moreover,
with the rise of the country's economy comes the height of the logistics and
transport industry. When the production and distribution of goods increase, it
needs to move these items more. However, the Philippines is an archipelago
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which means the geographic layout of the country is complex, with thousands
of islands connected through hundreds of bridges.
The country's on-demand logistics market is changing dramatically,
according to Ken Research 2023, driven by Filipinos' impulsive shopping
habits and the internet's rapid use among the population. On-demand logistics
services have become a vital part of the country's changing economic
landscape as the need for quick gratification and flawless delivery
experiences soars.
According to LinkedIn 2019, The economy must outpace the
Philippines' expanding requirement for logistics services given its rapid
growth. With 7,614 islands as of 2019, the demand for a reliable infrastructure
for the supply of products, services, and transportation is on the rise.
because of the rising demand for high-quality products and services.
Global market research company Transparency Market Research predicts that
the Philippines' freight and logistics market would grow to P3.26 trillion by
2023. True, as we can already see from the rising need for trucking services,
storage facilities, and warehouses across the nation.
The government and business sector must work together to find a
long-term solution to the expanding demands at our transportation terminals,
which result in delays and extra costs because of the poor system pace.
Although the government's "Build, Build, Build Program" aims to enhance
infrastructure and even contribute to job creation, not all of the issues will be

18
resolved by this initiative. Due to supply limits to and from the ports in 2014 as
a result of port congestion, there was increased traffic and delays.
The need for additional feeder links to Batangas and Subic won't
completely fix the issue, but they can help in the meantime. Currently, four
shipping lines service in Batangas and eight serve Subic. However, Batangas'
slow rate of growth, the acute lack of off-dock container yard space, and the
onset of a period of poor delivery productivity that leads to a shortage of
trucks and high transport costs make it appear as though Manila's capacity is
once again on the verge of collapse.
Expanding Subic and Batangas ports will provide prospects for shipping
businesses while also reducing traffic in Manila. The country may undoubtedly
become a significant center by 2023, or even before, with tangible steps taken
to develop the various sectors of our logistics business and satisfy their
specific demands. -Michael K. Raeuber's remarks in 2023.

Intensity of Competition
According to Competition Assessment Reviews 2020, The Philippines'
freight and logistics companies are facing tougher competition as a result of
the rising demand. It is anticipated that domestic and foreign logistics service
providers will coexist to promote trade activities in the nation.
The market for logistics transport services is estimated to be worth USD
11 billion; it accounts for 4% of Philippine GDP overall. 40% of freight
transportation earnings comes from the road, while 35% comes from the sea.
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In the Philippines, for instance, the cost of logistics to sales is still high at over
27% compared to ASEAN counterparts like Indonesia (21%), Vietnam (16%),
and Thailand (11%). According to the Department of Trade and Industry (DTI),
three of the
Customs processing delays, traffic congestion, and freight delivery
delays are the Philippines' major logistical performance problems. The
Philippines is ranked 60th globally in the Logistics Performance Index (LPI) by
the World Bank. Customs and punctuality appear to be the Philippines' two
most difficult areas, according to the LPI, and the nation also rates poorly for
infrastructure and logistics proficiency. The government's initiative to develop
a robust shipping industry supports the Philippines' strength in international
shipments. The Philippine Development Plan 2011-2016 acknowledged that
poor logistics and insufficient infrastructure are significant roadblocks to
investment and growth. The government's Build! the program has recently
funded numerous infrastructure projects. Build! Build! The quality of
infrastructure is projected to continue to improve because of (BBB) investment
programs.
Suppliers and Distributors
When moving various objects, a number of factors are important, such
as how much cargo we can move at once and its safety. Choosing the
appropriate vehicle is so crucial.
Fortunately, there are many truck dealers in the Philippines eager to
provide the best new or surplus truck trailers or car trailers, as well as the best
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used trucks for sale. For this reason, Subic Zambales is renowned as the truck
dealership capital of the Philippines. Among other alternatives, you might
easily find freightliner trucks for sale and international trucks for sale. In
addition, a lot of businesses provide huge or small truck rentals if you only
require them temporarily, such as while moving furnishings to a new home.
The top truck dealers in the Philippines can advise you on the best
commercial trucks to buy based on the commodities you need to carry, such
as whether they need to be refrigerated while being transported or if they are
dry goods or not. We at Infoisinfo wish to give you some advice on how to
purchase a pickup vehicle. Consider the engine's size and power because
they will affect how you operate the truck and the type of goods you are
moving.

Cost of doing the business

In the Philippines, the ability of a logistics company to deliver goods in
full and on time could be higher, specifically for construction materials,
chemical products, food and electronics. This reliability issue drives
manufacturers to depend on inventory and warehouses, further increasing the
logistics cost for the users, including the continuous oil price hike.
According to a recent poll, the Philippines had the largest percentage
of sales consumed by logistics costs among a group of Southeast Asian nations
last year, at roughly 27% for manufacturing companies. The International
Finance Corp., a member of the World Bank Group, stated as much in a policy
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brief.Around 159 busin esses in significant cities like Clark, Cebu, General
Santos, and Metro Manila were assessed. These are primarily small and
medium-sized businesses as stated by Roy Stephen C. Canivel in december
2018
For the first time ever, a preliminary baseline assessment of the local
logistics landscape was provided in the document, which was presented to the
Department of Trade and Industry (DTI). Due to the dearth of data, only three
Southeast Asian nations, Indonesia, Vietnam, and Thailand were used as
comparisons for the Philippines. Even so, the cost-to-sales ratio varies among
industries, with businesses producing "low value" goods suffering from high
logistical expenses.
Additionally, the cost-to-sales ratio differs across the country's major
islands, with Mindanao's logistics costs eating up a far higher percentage of its
sales than those of Luzon (17.48 percent) and Visayas (25.08 percent), which
are both substantially lower. The Philippines has the highest cost-to-sales ratio
among the three other countries, accounting for an average of 27.16 percent of
sales, the study states.
A. INDUSTRY AND COMPETITORS ANALYSIS
The Lobien Realty Group (2020) stated that the Philippine logistics
industry had been forecasted to grow from 8.2% to 8.8% between 2018 and
2024. It was projected to become a 1 trillion pesos market by 2023. The
Philippine government's efforts to simplify transactions and promote ease of

22
business were meant to improve the overall quality of the Philippines'
infrastructure. This was achieved through the "build-build-build" program,
which enabled Philippine logistics to advance significantly.
Although the COVID-19 pandemic slowed the overall rise of Philippine
logistics, there has been some steady growth. Logistics have been recognized
as an essential part of the economy, specifically during these times when the
movement of people is restricted.
1. Analyze the industry's situation and prospects
a. Market size and/or growth rate and stage in the growth cycle
According to Ken Research 2023, The Philippines Logistics Market is
growing, driven by increasing demand for food, beverages, and
manufacturing products. There are several players in the Philippines Logistics
market, some of which are Royal Cargo, W Express (DHL), 2Go Logistics,
Yusen Logistics, and AAI Logistics.
They also stated in their latest publication, "Philippines Logistics Market
Outlook to 2027F- Driven by the Rising Demand from Manufacturing, F&B,
Retail, and other industries along with Increasing Government Initiatives to
Strengthen the Logistics Infrastructure," observed that the Philippines
Logistics Market is in a growing phase. The government's increased budget
allocation for infrastructural development in the region and technological
development will contribute to the Philippines' Logistics market growth
throughout 2022P-2027F. The Philippines Logistics Market is expected to grow
at a CAGR of 8.2% for the above-forecasted period.
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 b. Number of players and their relative sizes
According to a new report from the Organization for Economic
Co-operation and Development (OECD) in 2021, they conducted a
competition review. They found that the cost of logistics to sales remains high
in the Philippines at 27% compared with other Southeast Asian countries,
specifically Indonesia (21%), Viet Nam (16%), and Thailand (11%).
The report is part of a series of competition assessment reviews by the
OECD for the Association of Southeast Nations (ASEAN) to identify rules and
regulations that may hinder the efficiency of the logistics market. Supported
by the UK Prosperity Fund, the project will publish country and regional
reports of its findings.
The Philippines' freight and logistics market competition is fragmented
because of the presence of various local and international logistics service
providers. Some existing significant players in the market include FedEx, UPS,
DHL, Kuehne + Nagel, PHLPost, Nippon Express, 2GO Express, etc.
The international players are making strategic investments to establish
a regional logistics network, such as opening new distribution centers,
intelligent warehouses, etc. The growth of e-commerce is an essential factor
spurring the development of courier services. Increasing consumption and
Internet penetration are boosting e-commerce activity in the Philippines.

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 c. Market aspects
According to Zhenhub 2023, the Philippines is an archipelago with
approximately 7,000 islands, and shipping is the main means of inter-island
travel. This means that because they move people and domestic goods across
several islands, the Philippine maritime industry and transportation sector are
essential to the country's prosperity. Transporting people and goods between
the three major areas of Luzon, Visayas, and Mindanao strongly relies on
barges in particular. A successful shipping industry that facilitates the
movement of people, goods, and other products is crucial to the development
of the nation in light of this purpose.
​ The surge in demand for eCommerce and the government's rising
infrastructure spending are the main causes of the Philippine shipping
industry's rapid growth. The epidemic accelerated internet shopping across
the country and fostered the expansion of online enterprises. The food and
beverage, manufacturing, electronics, automotive, and pharmaceutical
industries all contribute significantly to the Philippine logistics industry's
revenue.
The shipping industry accounts for a major portion of the Philippine
economy because more than 90% of the country's trade is transported by sea.
You may more successfully and efficiently supply your products to customers if
you are an eCommerce shop and are aware of the key features and
infrastructure of the sector. The Philippines has a vast network of ports spread
out across the country, including 23 major ports and more than 100 minor
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ports. It's an important facet of the nation's maritime industry. The
maintenance of the ports' efficient functioning and expansion is the
responsibility of the Philippine Ports Authority (PPA).
According to an OECD report from 2021, the Philippines has a $11
billion market for logistics transport services. 40% and 35%, respectively, of
the 4% GDP of the freight transportation industry are contributed by land and
sea transportation. Road transportation is used to convey goods to and from
ports for the majority of the nation's numerous islands.
d. Buyer/Customer description
E-commerce has been more popular in the Philippines in recent years
as more companies use online platforms to connect with their clients. As a
result, the need for e-commerce logistics services to assist online retail
enterprises in managing consumer orders and shipments is on the rise.
Consequently, a top e-commerce logistics provider in the Philippines is
required in order to offer firms affordable, effective, and trustworthy services.
A recent estimate by GlobalData projects that by 2025, e-commerce sales in
the Philippines would total USD10.3 billion. Since the pandemic, there has
been an increase in internet shoppers and sellers in the nation. There were
93,318 online retail merchants in January 2021, up from 1,700 in March 2020.
The Philippines' logistics sector is anticipated to expand at a compound
annual growth rate (CAGR) of 10.8% from 2019 to 2025, according to a report
by Ken Research. As storage and distribution facilities are the foundation of a
thriving e-commerce sector, the rise of the logistics business in the
26
Philippines is supplemented by the growth of this industry. By making sure
that online orders are delivered to customers on time, logistics companies in
the Philippines are significantly boosting the e-commerce sector. To fulfill the
supply and demand of e-commerce logistics, cities like Manila, Davao, Cebu,
and others emerged as key hubs.
The increased demand for same-day delivery is probably going to lead
to an increase in technological utilization. For the purpose of establishing
warehouses nearer to their target customers, several enterprises are
contacting 3PL firms. Additionally, since these technologies can help to
expedite procedures and increase accuracy, the use of artificial intelligence
(AI) and robotics is anticipated to increase in the logistics sector.
Businesses anticipate a bigger volume of orders as a result of the
growth in e-commerce sales and are collaborating with logistics providers to
meet client expectations. To meet the demands of businesses, logistics
providers in the Philippines are expanding their operations and putting
money into new technologies.
e. Aspects affecting corporate expenses
According to Transportify 2023, logistics expenses encompass all
supply chain operations. In this system, moving things around requires a
combination of planning, resource, employee, storage, and movement
strategies. However, the concept of logistics cost may differ from one business
to another because they depend on numerous factors. However, every
institution shares a few traits. Consider a few logistical cost categories.
27
 Inventory costs are a part of supply chain operations. How to manage
the ratio of units the business creates to demand has an impact on your bottom
line. If you have too many units, your available cash flow is being drained away
from other uses. You will miss out on sales if your inventory is too low.
Simply said, your logistics costs may experience bottlenecks if you are
unable to track massive amounts of data in real-time. Gaining a bird's-eye view
of your entire inventory might not be possible due to the large number of
moving parts, some of which may be located in different countries.
This may be caused by inadequate forecasting, unanticipated seasonal
variations in demand, product recalls, and other issues. Whatever the cause,
your company needs a system to manage and keep track of these changes as
they happen.
Transportation costs are an important component of logistical costs.
Additionally, mode-shifting and fulfillment are connected to it. with an
increase in the cost of online shopping for businesses. Additionally, anticipate
prompt delivery of these goods. Every global supply chain includes
mode-shifting. Making these operations visible across transportation and
distribution touchpoints is more difficult for businesses.
Poor inventory control puts undue strain on the transportation
component of the supply chain. The indirect expenses brought on by these
inefficiencies also get increasingly onerous. Finally, as supply chains widen
(as a result of higher gasoline prices), it has an impact on your bottom line.
One of the biggest sources of inefficiencies driving up distribution costs
28
is the movement of items through your distribution logistics networks. Your
logistics costs may be impacted by a number of variables. Throughput times,
scheduling, vehicle use, and vendor effectiveness are a few of them. Supply
chain optimization's cost unpredictability makes tracking across vendor
touchpoints a logical match.
Greater unpredictability makes it harder for the business to manage
data and keep track of it so you can make informed decisions. Additionally,
poor data tracking degrades the level of customer service you provide. For
instance, you won't be able to address the concerns of irate customers
regarding the status of their orders.
There's a good reason why the adage "the customer is always right" is
so well-known. In the business world, clients are what keep you afloat. Without
them, you wouldn't have a business because they are what keep it operating.
Because of this, you must take all possible measures to keep your clients
satisfied. This also entails offering them top-notch customer service.
f. Aspect of Production/Operation
Overtaking other economic sectors, logistics is one of the key drivers of
economic growth in the Philippines. It includes a broad range of services
related to numerous areas, including shipping, warehousing, and cargo
distribution. In the Philippines, logistics is crucial since it allows for the
transportation of goods and products. The economy would collapse without it.
Therefore, it is crucial to reshape logistics management in the Philippines for
this industry to benefit the nation.
29
 Businesses in the nation are increasingly turning to outsourcing for their
logistics management needs. By forming a partnership with a reputable
logistics management company, they see more opportunity for growth.
However, a lot of businesses fail to see how crucial efficient logistics are to a
company's success. Instead of effective tactics to reduce costs for the business
through good logistics management, the majority of them concentrate on
other business-related issues. However, a company's operational performance
can be markedly enhanced when it begins to look into ways to enhance its
logistics solutions.
Technology has a vital role in shaping the logistics sector in
contemporary business. The majority of logistics businesses spend money on
software and algorithms that will streamline their company processes.
The integration of corporate logistics is a topic that logistics
organizations are constantly researching for more economical and effective
solutions. For clients who want to make the most of their resources and
ultimately achieve operational efficiency, they hope to provide more logistics
options.
Progress in the e-commerce industry, which boosts the profitability of
logistics services, is another factor influencing changes in the Philippine
logistics scene. Following these recent advancements, traditional logistics
companies now have a new issue to address in their strategy. Customers now
choose on-demand services, such as same-day deliveries and 24/7
accessibility, as opposed to the traditional setup of arranging deliveries in a
30
predetermined time frame. By charging appropriate shipping rates and
releasing them from contractual obligations, on-demand logistics benefits
enterprises.This is the cause of the sudden rise in the volume of shipments for
on-demand services. With the introduction of on-demand services,
on-demand logistics startups like Transportify upset the entire logistics sector.
"These days, people would rather live comfortably and easily than have to
worry about managing their distribution. According to Kelvin Caro, the Senior
Operations Manager of Transportify Philippines in 2020, "As more enterprises
and businesses have demonstrated interest in mobility solutions like
on-demand services, expectations of logistics providers have shifted.
g. Technological Development
The logistics industry in the Philippines remains a significant and
growing segment of the country's economy due to developments in commerce
and infrastructure. In 2019, transportation and storage totalled 13 billion USD
and accounted for around 4% of the Philippines' Gross Domestic Product
(GDP) over the last five years. Developed alongside the Supply Chain
Management Association of the Philippines (SCMAP), the Philippines' latest
white paper, "Digitalization in the Philippine Logistic Industry," highlights that
digitalization is pivotal to bringing the logistics industry forward.
The e-commerce industry currently accounts for 2% of the country's
total retail market and is predicted to reach 7% of the total market share in the
future. As demands for effective and transparent logistics services keep
increasing, this condition can be developed should it go hand in hand with
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technology development in the industry.
E-commerce companies like Lazada, Zalora, and Shopee have been
leading the digital transformation, collaborating with technology-driven
logistics companies like Ninja Van and Lalamove in delivering goods so that
customers can track their orders in real-time.
Transforming digital will provide transparency regarding order status,
shorten lead times, and potentially cut down the customs clearance processes
by up to 80%, taking only 3 to 5 business days. Focusing on digitalization has
helped logistics companies like Lalamove to achieve roughly 2,000% growth
in the Philippines over the last four years.
h. Industry financial analysis
According to Mordor Intelligence 2023, the Philippines Freight and
Logistics Market is segmented by Function (Freight Transport, Freight
Forwarding, Warehousing, Value-added Services, and Other Services) and
End User (Manufacturing and Automotive, Oil and Gas, Mining, and
Quarrying, Agriculture, Fishing and Forestry, Construction, Distributive Trade,
Healthcare and Pharmaceutical, and Other End Users). The report offers
market size and forecasts for the Philippines Freight and Logistics Market in
value (USD billion) for all the above segments.
The Philippines freight and logistics market is USD 16.84 billion in the current
year and is anticipated to register a CAGR of over 6.16% during the forecast
period.
The warehouse industry is still in high demand, driven by the thriving
32
e-commerce business, and this bodes well for the industrial and logistics real
estate sector's growth in 2022. According to a survey by Colliers Philippines in
2021, manufacturing, logistics, and e-commerce will continue to grow in 2022.
According to Colliers, the industrial vacancy rate in the
Cavite-Laguna-Batangas (CALABA) corridor decreased to 5.6% in the first half
of 2021 from 5.7% in 2020.
Colliers attributed the reduction to the demand for warehouse and
storage space increase from fast-moving consumer goods (FMCG) companies
as the country's online retail market continues to expand. The e-commerce
sector is anticipated to contribute around PHP 1.2 trillion (USD 25 billion) by
2022, according to the DTI's e-commerce roadmap. According to Colliers
Philippines 2021, the increased need for cold storage facilities is anticipated
to support demand for industrial assets over the next 12 to 36 months. By 2023,
the Board of Investments (BOI) expects the country's cold chain sector to
generate PHP 20 billion (USD 417 million) in income.
i. Problems in the industry
The logistics industry in the Philippines faces several challenges
slowing down its growth and development. These challenges include poor
infrastructure, inadequate transportation systems and a need for efficient
supply chain management practices. Moreover, the industry is also facing
difficulties in terms of access to financing, which is essential for expansion and
expansion. These challenges create various barriers for companies operating
within the industry, making competing in the global marketplace difficult.
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Poor Infrastructure
One of the challenges faced by the Philippine logistics industry is poor
infrastructure. This includes more ports, road networks and airports essential
for efficient transportation and distribution of goods. This inferior
infrastructure increases transportation costs and longer delivery times,
making it harder for companies to meet customer demands and expectations.
Poor infrastructure like roads and ports could positively affect the
operation of De Vera's Trucking in a way that could delay the business process
and lead the inventory (if vegetables and fruits) into spoilage.
Supply Chain Management
Another challenge faced by the Philippine logistics industry is the need
for efficient supply chain management practices, including poor inventory
management, poor distribution networks and a lack of real-time information
on the movement of goods. These inefficiencies result in higher costs, longer
delivery times, and decreased customer satisfaction.
Access to Financing
Access to financing is also a significant challenge faced by the logistics
industry in the Philippines. Several logistics companies need help to get the
funding to invest in infrastructure, technology and other areas integral for
growth and expansion. This limits the industry's ability to compete in the
global marketplace and is slowing down its ability to provide customers with
high-quality services.

34
 j. Critical Success Factors in the Industry
Efficient management is the key to success, especially in supply chain
management. There are various factors involved in effective logistics
management. For example, automation and perfect coordination are always a
scope for improvising the process. When your business witnesses growth, you
must find ways to streamline logistics planning processes to improve output.
Here are some practices to manage logistics more effectively.
Proper Planning
Efficient and effective logistics is about planning. It involves acquiring
the goods, storage facilities and transportation of products to their final
destination. The purpose of planning is to achieve maximum work in the least
possible time and maximize profits. A good logistics business owner or
manager will ensure to plan well ahead of time to eliminate any supply chain
delays. However, one must always be prepared for unforeseen circumstances
like a truck's sudden malfunction as well as any internal issue in the
organization
Adopting Automation
Today, technology is an integral part of increasing the efficiency of an
organization. There are several ways that a company can automate the
logistics process, including tracking and monitoring each delivery in a
real-time manner.

35
Value Relations
People are an essential aspect of an organization responsible for the
business's growth. Regular training workshops will keep the employees
updated with the latest trends in the logistics industry. This helps increase the
clients' efficiency and satisfaction and get a more significant market size. A
logistics manager or owner with impeccable interpersonal skills is crucial for
the organization. There are times when things need to be revised according to
the plan. In this situation, instead of panicking, the company needs a reliable
person who can sort out the issues with utmost efficiency. Further, the owner
should have authoritative contacts in the industry. This can be beneficial in
tapping business opportunities.
Efficient Transportation System
Transportation is a critical factor in determining an organization's
overall logistics costs. Companies are constantly figuring out the most efficient
and cost-effective way to get their products from a certain point to another.
Some factors in a company's decision-making process on transportation
demand include determining the best logistic route, cost-effective packaging
that ensures low investment and safety of goods, and lead time to provide
different options, such as rail or barge, which could be much more
cost-effective. Other factors include the distance from customers to the
warehouse or the types of products and services that are critical logistics that
affect product delivery and quality.

36
Performance Measurement and Improvements
KPIs are more than the numbers and metrics that are reported weekly
or monthly; they enable the organization to understand the performance and
health of the business so that the organization can make critical adjustments in
the execution to achieve the organization's strategic goals. Determining and
measuring the right KPIs will help the organization achieve results faster. A
Key Performance Indicator is a measurable metric demonstrating an
organization's performance against its key business objectives. Logistics
network optimization incorporates performance measurement, analysis, and
feedback. When the organization deploys new strategies in the system, they
need to measure the output as it affects behavior that impacts supply chain
performance. Measurement tools and software should be integrated to quickly
determine and classify the required information.
Global logistics metrics and key performance indicators (KPIs) are being
developed and implemented to score-card Logistics Service Providers' (LSP)
performance and align payment terms to these metrics.
Helpful feedback helps improve the logistics system. The ideas and
suggestions of the employees should be recorded periodically. This ensures
that the organization generates various ideas and, at the same time, reveals
any flaws in the system.
2. PORTER'S 5 FORCES
Porter's Five Forces is a model that identifies and analyzes five
competitive forces that shape every industry and helps determine an
37
industry's weaknesses and strengths. Five Forces analysis is frequently used to
identify an industry's structure to determine corporate strategy.
1. Competition in the Industry
The local competition in the logistics industry in Northern Luzon,
specifically in BAPTC, is extremely fierce and intense. Since there are few
distinctions between companies in this industry, businesses such as De Vera's
Trucking are highly competitive in terms of service quality and pricing.
Customers typically opt for the simplest option. The intensity of competition in
the logistics industry makes it difficult for the majority of competitors to
increase their market share.
Due to the number of adversaries in the Logistics industry, competition
is fierce and intense. The lower the entry barriers, the greater the industry
competition. In the logistical industry, competition is primarily founded on
price and service quality. It is very simple for customers to transfer to a
competitor with more affordable prices, which forces businesses to reduce
their prices. A competitive rate structure is one of De Vera's Trucking's main
competitive advantages.
2. Potential of New Entrants into the Industry
De Vera's Trucking has very few potential new entrants into this
industry, with most new entrants subcontracting with De Vera's Trucking. In
the Logistics Industry, new business models have been supported by multiple
technological platforms. Due to these sharing business models, the company's
suppliers and customers become new entrants in the industry. These
38
asset-light new ventures are utilizing cutting-edge technology to benchmark
the rates of existing air or shipping companies and align their available
capacity with delivery requirements.
3. Power of Suppliers
The suppliers have very low bargaining power over the logistics
industry considering the constant price hike of petrol products due to inflation
and other necessities in running this business. The major provider of 10
wheeler units of De Vera’s trucking is in Subic Zambales. Since these suppliers
are found in abundance in the market, they are chosen based on their
differentiated prices which discounts and many more are hard to negotiate.
4. Power of Buyers
Minimum difference and low switching costs can give a lot of
bargaining power to the buyers. Today, the consumers or clients expect to
receive their shipments faster with more flexibility and transparency at a lower
price. Thus, De Vera’s need to have their competitive rate structure to win
these clients and become loyal clients. Good dealers (vegetables, fruits and
more) industry is becoming more customized which attracts the consumers or
clients but complicates things for the Logistics industry. Since clients/buyers
are the absolute and immediate customers of De Vera’s Trucking and they are
the end customers. Customers have the power to switch because of the
availability of a large number of providers and low costs. Since they are not
accumulated, the customer power can be reduced to medium.

39
 5. Threat of Substitute Products
Logistics industry in the Philippines is a fast growing one and offers
various services at several price ranges. Logistics range usually from
warehousing, supply chain down to transportation. The only substitutes are
being offered for transportation but actually have extra costs attached to it.
Hence the customers do not have many alternatives for the services provided
by the Logistics industry.
3. COMPETITORS’ ANALYSIS
1. Competitive Profile Matrix
The Competitive Profile Matrix (CPM) is a tool that compares the
business and its competitors and reveals their relative strengths and
weaknesses. In order to better understand the external environment and the
competition in the logistics industry, firms often use Competitive Profile Matrix
(CPM). The profile matrix determines a firm’s key competitors and compares
them using industry’s critical success factors. The analysis also reveals the
company's relative strengths and weaknesses against its competitors. As a
result, a company can easily identify the areas it should improve and the areas
it should protect.
Company A
Competitor A has been in the logistics industry for two years having two
units only of ten wheeler wing van trucks which operates approximately two to
three times monthly having a route of Benguet province to visayas regions. Just
like De Vera’s Trucking, competitor A is also a sole proprietorship form of
40
business with a traditional process and management style. Competitor A has a
higher rate structure compared to De Vera’s Trucking. Their financial
statement was not disclosed due to confidentiality.
Company B
Competitor B has been in the logistics industry for four years having
two units of ten wheeler wing van trucks and operates for approximately two
to three times monthly having the same route (Benguet to Visayas regions).
Also, Competitor B is the sole proprietorship form of business having a
traditional processes and management style. Competitor B has a higher rate
compared to De Vera’s Trucking. Their financial statement was also not
disclosed because of confidential information.
Company C
Competitor C has been in the logistics industry for five years having
four units of ten wheeler wing van trucks and operates for approximately two
to three times monthly having the same route (Benguet to Visayas regions).
Competitor C is also the sole proprietorship form of business having a
traditional processes and management style. Competitor B has a higher rate
compared to De Vera’s Trucking. Their financial statement was also not
disclosed because of confidential information.
The three competitors mentioned above are the identified major
competitors of De Vera’s Trucking. The researcher selected these three
logistics service providers because they are three of the most operational
truckers in Benguet Agri Pinoy Trading Center (BAPTC)
41
 Company A Company B Company C
Critical Success Weight Rating Score Rating Score Rating Score
Factor
- Proper Planning 0.25 1 0.25 1 0.25 2 0.5
-Adopting Automation 0.15 1 0.15 1 0.15 1 0.15
-Value Relations 0.10 2 0.2 2 0.2 3 0.3
-Efficient 0.20 3 0.6 3 0.6 3 0.6
Transportation System
-Performance 0.30 2 0.6 2 0.6 3 0.9
Measurement &
Improvement
Total 1.0 1.8 1.8 2.45
Table 2: Competitive Profile Matrix
The table shown above is the Competitive Profile Matrix (CPM) of De
Vera’s Trucking. It can be seen in the table above the critical success factors in
the logistics industry and were weighted, rated and scored based on how they
are responsive to these critical success factors. Companies A,B and C have a
total weighted score of 1.8, 1.8 and 2.45 respectively which an indication of
having weak to almost average response to the De Vera’s Trucking compared
against De Vera’s Trucking makes the company leading in the competition

Summary and Conclusion from External Analysis

1. Opportunities & Threats
Opportunities and threats are factors that are going on outside the
business like opportunities and threats. Business can take advantage of
opportunities and protect against threats.

42
Opportunities
1. Business Process Improvement
One major of De Vera’s Trucking is its business process because the
business process is a very traditional operation process down to the financial
aspect. De Vera’s trucking has no Standard Operating Procedures (SOP) that
are being followed. There is also no proper process of recording finances and
collections billing. Through business process improvement, De Vera’s
Trucking would be able to optimize its business process, it could improve the
operations management and the finances especially in accounting all the
business’ real expenses and real profits.
2. Digital Solutions
De Vera’s Trucking needs digital solutions to be able to make the
operation and financial process smooth and easy. Digitalization does
not only make back-office operations more efficient but it also creates
space for better utilization of human resources and enables flexible
reaction of disruption within the supply chain.
By using digital solutions, De Vera’s Trucking has real-time access to
tracking. Digital solutions help understand and mitigate possible delays
and disruptions in the logistics supply chain.

43
Threats
1. Constant fuel price hike
One of the highest costs contributing to the cutting transportation cost
concern is fuel prices. Higher fuel prices are likely to increase
transportation costs for De Vera’s Trucking and other truckers in the
industry. Rising Philippines diesel fuel prices are escalating surcharges
added to freight rates, which is directly affecting the financial position
of the business.
2. Government Regulations
De Vera’s Trucking transports goods from one place to another. The
usual route is from La Trinidad, Benguet down to Visayas regions like
Iloilo, Bacolod, Dumaguete, and Cebu which different government
policies differ from one province to another which is already
considered a threat.
3. Environmental Destructions
Environmental Destructions like earthquakes and typhoons have a
direct negative impact on the business operations of De Vera’s Trucking
mainly because it slows down the logistics operations.
4. Competitors
Competitors are one of the major threats of De Vera’s Trucking for they
can also occupy a share of the market in BAPTC and can lessen the
market share of De Vera’s Trucking and the possibility of copying the
business strategies of the company.
44
EXTERNAL FACTOR EVALUATION MATRIX
EFE Matrix determines whether the firm is able to effectively take advantage
of existing opportunities along with minimizing the external threats. Similarly,
it will help the organization to formulate new strategies and policies based on
the existing position of the company.
DVT
Critical Success Factor Weight Rating Score
OP Business Process Improvement 0.30 2 0.6 0.7
PO Digital Solutions 0.10 1 0.1
RT
UN
ITI
ES
TH Constant fuel price hike 0.20 4 0.8 2.4
RE Competitor 0.15 4 0.6
AT Government Regulations 0.05 4 0.2
S Environmental Destructions 0.20 4 0.8
TOTAL 1.0 3.1
Table 3: External Factor Evaluation Matrix
It can be gleaned from the matrix shown above that on the opportunities side
De Vera’s Trucking has a total weighted score of 0.7 which indicates that the
business has a weak response to its opportunity. On the other hand, De Vera’s
Trucking has a little to average response to its threats. Overall, De Vera’s
Trucking garnered a total weighted score of 3.1 which indicates that the
business’ strategy is well designed to meet the opportunities and defend
against threats.

45
Conclusion
External factors are things a business does not have control with and at the
same time are important because they can directly and indirectly affect the
business operations, personnel and revenue. The external environment of a
company constantly changes in ways beyond the company's control, but
owners, executives and managers can track these changes and minimize and
mitigate the consequences. Choosing to monitor the dynamic nature of
external environment factors allows businesses to protect themselves against
predictable events and mitigate the effects of unexpected changes.
The main purpose of an opportunity is to serve as the basis of businesses for
any action that results in profit and business growth. Opportunities like
business process improvements and digital solutions can positively impact De
Vera’s Trucking daily operations in a way that it allows the business to create,
implement ideas and innovations, improve their performance and optimize the
business’s process and to maximize profitability. On the other hand, threats
include anything that can negatively affect the business from the outside, such
as constant fuel price hike, economy, government regulations and
environmental destruction. These issues have been affecting badly the
business operations of De Vera’s Trucking because these issues are a major
determinant whether or not the logistics business should operate and these
issues change from time to time. It is important for De Vera’s Trucking to
anticipate threats and to take necessary action against them before the
business becomes a victim of these threats and slows down De Vera’s
46
Trucking’s growth or worse, it leads the business to bankruptcy if failed to
address these properly.
Globalization and reduction of trade barriers have really boosted up the
growth of the Logistics industry. In addition to that, the advancement of
technology in transaction, communication and product development has been
beneficial for the market. The use of e-commerce and GPS has helped the
companies to improve upon their outreach. (Leonet 2016). However, the
companies should be cautious of the regulations of the state in which the
operation is held. These policies are administered by the government to
protect the domestic businesses which might be an obstruction in the growth
of the international market. (Leonetti, 2016)
Strategic Issues
1. Constant fuel price hike
- Fuel is one of the major necessities to run a logistics business. If the
price of the petrol products especially diesel continues to increase, it
badly affects the profitability of De Vera’s Trucking because shipping
rate and salaries and other overhead costs don’t normally change in an
instant.
2. Economy
- When inflation strikes, it affects every business operations whether
logistics business or not,not only with business aspects but it also
affects the quality of life of the countrymen specially in their buying
power. If the buyer power or end customers decreased, dealers of
47
 goods (vegetables, fruits etc.) are expected to lessen their loadings. In
cases like this, De Vera’s Trucking is not able to maximize its operation,
there will be some units that can not be utilized for operation for the
meantime.
3. Government Regulations
- De Vera’s Trucking transport goods from one place to another
specifically from La Trinidad, Bengeut down to Visayas regions like
Iloilo, Bacolod, Dumaguete and Cebu and every province has different
regulations that De Vera’s Trucking should be aware of and be abided
with.
Government regulations are important for businesses like logistics
businesses to protect the business, employees, consumers, and the
public and ensure compliance with market rules. Although excessive
rules and changes in regulations may create some restrictions for
businesses, the government's intervention and supervision ensure
consumer safety, worker safety, and vital tax revenue. De Vera’s
Trucking must stay up to date on regulations of different provinces to
avoid penalties and operate successfully within the legal framework.
Overall, government regulations are an integral part in shaping the
business environment and promoting ethical and responsible practices.
4. Environmental Destructions
- Environmental destruction like typhoons and earthquakes hinder the
operations of De Vera’s trucking and these phenomena are inevitable.
48
 That is why De Vera’s Trucking should have contingency plans in order
for the business to still have lucrative activities even during these times.
V. INTERNAL/COMPANY ANALYSIS
A. De Vera’s Trucking’s Key Performance Indicator
- The success of a certain business whether or not a logistics business
most of the time would be based on the end result. In this case, one of
the major basis in determining the Key Performance Indicator (KPI) of a
business is through its financial position especially on its sales and
revenue. De Vera Trucking continuously improves its financial health,
the business is able to cover all its operational expenses and still get a
good number of net profit. Currently, De Vera’s Trucking has an overall
total units of trucks of fifteen (15) and each unit is earning a net profit of
70,000 to 100,000 net profit on average on monthly basis and all of these
units are being utilized for business operation and De Vera’s Trucking
has the biggest market share among its competitors in BAPTC La
Trinidad Benguet because they have most numbers of units as to
compare among its competitors in Benguet Agri Pinoy Trading Center
(BAPTC) which they occupy the one of the biggest number of units if not
the biggest. Currency, there are no applicable financial ratios to be
disclosed because of poor recording of the business finances especially
on its profitability and this is one of the important factors that De Vera’s
Trucking needs to work out. De Vera’s Trucking has the most

49
 competitive rate structure among the competition in BAPTC which led
them into having number of clients because clients usually goes with
the cheapest rate, also, De Vera’s Trucking has the biggest number of
units in BAPTC to ensure that there will always be a unit available
whenever clients need to transport their goods. Through these
strategies, De Vera’s Trucking were able to keep loyal clients and kept
on increasing them which had a positive impact on the profitability of
De Vera’s Trucking.
B. Organization Diagnosis
1. Galbraith’s Star Model
- The organization design framework portrayed in Figure 1 is called the
“Star Model.” In the Star Model™, design policies fall into five
categories. The first is strategy, which determines direction. The
second is structure, which determines the location of decision-making
power. The third is processes, which have to do with the flow of
information; they are the means of responding to information
technologies. The fourth is rewards and reward systems, which
influence the motivation of people to perform and address
organizational goals. The fifth category of the model is made up of
policies relating to people (human resource policies), which influence
and frequently define the employees’ mind-sets and skills.

50
 Figure 2: Galbraith’s Star Model
The figure shown above is called the Galbraith’s Star Model which is
composed of strategies, structures, processes, rewards and people. The
diagnosis will be as follows;
1. Strategy
The successful formula for De Vera's Trucking consists of Vision and
Comparative Advantages. De Vera's Trucking's vision is "De Vera's Trucking
will be known as one of the best and leading providers of logistics services in
the Philippines, with a positive impact on the clients it serves, the environment
it shares, and to increase revenue for all employees it supports." This vision
helps the organization adhere to their mission in order to realize this vision.

2. Structure

51
 The organizational structure determines the distribution of power and
authority within the organization. In this instance, De Vera's Trucking is a
centralized organization, as all decisions are made by the sole proprietor. The
organizational structure of De Vera's Trucking consists solely of proprietors
and employees, indicating that the organization's structure is weak.
3. Process
From booking to shipment of products, De Vera's Trucking follows a
very traditional procedure. In addition, there is no Standard Operating
Procedure (SOP) followed by the organization, and its financial records are
inadequate.
4. Rewards
The objective of the reward system is to align employee goals with
those of De Vera's Trucking. These rewards motivate and incentivize
individuals to accomplish the strategic direction. The reward system for De
Vera's Trucking defines policies governing salaries, bonuses, and the
doubling of wages during crucial days such as Christmas and New Year's.
5. People
This section administers the human resource policies governing the
employment procedure, including recruitment, selection, rotation, training,
and development. De Vera's Trucking does not adhere to a specific hiring
procedure; as long as the driver is able to drive and has a driver's license with
the required restrictions, they are already on board.

52
 De Vera's Trucking organizational structure has a lot of areas of
opportunities that need to be worked out and optimized, especially in
structure, process and people. The organization's structure needs more crucial
departments like the Finance Department to administer the organization's
finances. The organization's strategy has not built strong because it doesn't
follow any standardization in operations and finances. Lastly, the organization
is experiencing a high turnover because of an unsophisticated hiring process.
De Vera's Trucking should filter and qualify its people carefully and properly
to decrease the high turnover of its employees.

C. STRENGTHS AND WEAKNESSES

Your business strengths and weaknesses are the areas in which your
business excels and those where you fall behind the competition. They can
include anything from your product to your processes, supply chain or
company culture. They can also change over time as your business grows and
the market evolves.
Strengths
1. Competitive rate structure
De Vera’s Trucking has the lowest deals to offer as compared to its competitors
in BAPTC La Trinidad Benguet that attracts Baguio vegetable dealers which
are their primary client. De Vera’s Trucking usually shipping is 5-7 pesos per
kilo depending on the route of the delivery.

53
 2. Number of Units
- De Vera’s Trucking has one of the biggest market shares if not the
biggest in BAPTC which happens to be one of their competitive
advantages. Having a big market share enables De Vera’s Trucking to
meet the demand for logistics in the said area.
Weaknesses
1. Poor recording of finances
- De Vera’s Trucking does not have a proper recording of business
finances and revenues which leads the business to loss of tracks in its
finances.
2. Poor implementation of SOP
- De Vera’s Trucking does not follow a certain Standard Operating
Procedure (SOP) and has no strict implementation of such.
3. High turnover of employees
- There is a high frequency of resignation or turnover in the organization
basically not because of compensation issues but with the weight of
workload in the logistics department and the travel time.

54
INTERNAL FACTOR EVALUATION MATRIX
Internal Factor Evaluation (IFE) Matrix is a strategy tool used to evaluate a
firm's internal environment and to reveal its strengths as well as weaknesses.
DVT
Critical Success Factor Weight Rating Score
ST Competitive rate structure 0.30 4 1.2 1.8
RE Number of units 0.15 4 0.6
NG
TH
S
WE Poor recording of finances 0.20 1 0.2 0.8
AK Poor implementation of SOP 0.20 2 0.4
NE High turnover of employees 0.05 2 0.1
SS Traditional business 0.10 1 0.1
TOTAL 1.00 - 2.6
Table 4: Internal Factor Evaluation Matrix
Based on the matrix shown above, combining the strengths and
weaknesses scores of the business has a total of 2.6 which only signifies that
De Vera’s Trucking has an above-average score which indicates that De Vera’s
Trucking is strong against its competitors. The competitive rate structure has
weighted 0.30 because having a competitive pricing strategy helps the
business adapt to prices and ensures that the business is always on top of
trends. Hence, customers will know that the business will always offer the best
price for value. The competitive rate structure was rated 4 because this is one
of the major competitive advantages of De Vera’s Trucking. Another critical
success factor of the business is the number of units which weighted 0.15
because having a big number of units is good but not necessary as long as the
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business is meeting the client’s expectations; further, it was rated 4 because
De Vera’s trucking has the biggest number of units in BAPTC. Poor recording
of finances, Poor implementation of SOP, and High turnover of employees and
Traditional business were weighted 0.20, 0.20, 0.05 and 0.10, respectively.
Recording of finances, implementation of SOP and retaining employees are
the weakest points of De Vera’s and were rated 1,2 and 2 because the business
is not able to address these issues yet.

Summary and Conclusions of Internal Analysis

Through the years of operations, De Vera's Trucking has performed
very well in the industry, maintaining and increasing its market. De Vera's
Trucking's primary strength has a competitive rate structure. The said trucking
offers the lowest deals among the competition, which resulted in having new
and retaining clients. Although the business is performing well, it has some
opportunities that need to be appropriately addressed, like finances and
operations. De Vera's Trucking needs better financial management; it needs
financial accounting, such as recording expenses and revenues, because the
business needs a finance department.
Moreover, De Vera also needs a better management style, especially
since the business does not have a Standard Operating Procedures (SOP).
High turnover of employees is the result of poor hiring practices and
management. De Vera's Trucking must focus on optimizing its internal
process, like improving its organizational structure by adding some
56
departments like the finance department to administer the business' finances
and a quality assurance department to ensure the performance of De Vera's
Trucking as its highest grade.
Further, technology strategy and implementation and digital Solutions
would significantly impact De Vera's Trucking daily operations. De Vera's
Trucking needs help with monitoring the real-time location of a unit,
collections, and daily monitoring of operations expenses like fuel
consumption, food and many more. The business could address these issues
and optimize the business process through technology implementation.
DAVID'S FRAMEWORK
David's Framework guides strategists to evaluate firms' internal
strengths/weaknesses and external opportunities/threats to reach alternative
strategies using many different tools and models and choose the best strategy.

Figure 3: David’s Framework

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 The diagram shown in the previous page is known as David's
Framework, and it consists of two factors: external factors, which include
opportunities and threats, and internal factors, which include strengths and
limitations. This framework will aid in determining which strategies should be
employed to improve the business's performance and maximize its potential.
VI. STRATEGY FORMULATION
1. TOWS Analysis Matrix
TOWS matrix is a framework to create, compare, decide and access business
strategies. It stands for Threats, Opportunities, Weaknesses and Strengths. It
examines a business from an approach that references marketing and
administration, 4 minutes 2021.

STRENGTHS WEAKNESSES
OPPORTUNITIES 1. Proper recording 1. Add finance
of finances department
2. Customer 2. Add human
Relation resource
Management department
THREATS 1. Streamlining 1. Increase cash
process flow by adding
2. Operation more units of
Standardization truck
2. Contract drafting
Table 5: TOWS Matrix
The table shown above is the TOWS Matrix, in which the researcher
developed strategies by comparing internal factors (strengths and
weaknesses) and external factors (threats and opportunities). The researcher

58
identified the following strategies: proper recording of finances, customer
relationship management, addition of a finance and human resource
management department, and streamlining process. Standardization of
operations, expansion of cash flow through the addition of more vehicles, and
contract drafting.
3. McKinsey 7S Model
The figure below depicts the McKinsey 7S Model, a framework for
organizational effectiveness that proposes seven internal factors, namely
Structure, Systems, Style, Staff, Skills, and Strategy, must be aligned and
reinforced for an organization to be successful.

Figure 4: Mckinsey 7S Model

The preceding diagram depicts the McKinsey 7S models that will assist De
Vera's Trucking in formulating new strategies for enhanced performance.

59
 1. Structure
De Vera's Trucking should be a centralized management structure
where all business-related decisions should be done solely by the business
owner to maintain the integrity and have the whole operation monitored by
the owner. De Vera's Trucking has a very straightforward organizational
structure, consisting only of the owner and the logistics employees. As a
recommendation, De Vera’s Trucking should be adding more functions and
departments in the organization like finance department and human resources
department to optimize the organizational structure and to be able to
distribute the workload of the owner and become more efficient in managing
the business.
2. System
De Vera's Trucking should follow a process in their daily operations,
workflow, and decisions to comprise the organization's standard operations.
Booking. Loading/Distribution Fulfillment, Dispatching, and Shipping
constitute the organization's daily workflow.

Figure 5: Suggested Workflow Operations

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 De Vera’s Trucking should also implement a Standard Operating
Procedure (SOP). The rules, methods, and standards provided by standard
operating procedures are essential to the success of the business. They may
help a company by decreasing mistakes, boosting productivity and
profitability, fostering a safe workplace, and developing procedures for
dealing with problems and overcoming barriers. One of the SOP’s should be
implemented is that collections should not be safe kept by the logistics team
rather, the collection or payment should be sent directly to the owner through
bank transfers to properly account the payment and to avoid mishandling and
loss of the collection. Moreover, all decisions should only come from the
owner to monitor the movement of the logistic team.
3. Style
De Vera's Trucking ought to embrace a transformational leadership
style, in which the goal is to alter both societal structures and individual
behavior. In its optimal state, it makes significant and beneficial changes to
the organizational internal structure with the aim of transforming people into
leaders. When practiced in its purest form, transformational leadership
improves followers' motivation, morale, and output via a number of processes.
Included in this are tying an employee's sense of self and identity to the
organization's mission and overall identity; setting an example for followers
that motivates them; encouraging them to take more responsibility for their
work; and knowing the strengths and weaknesses of their team members so
the leader can assign workers to tasks that maximize their performance.
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 De Vera's Trucking's management style should also be a combination of
Autocratic and Rewarding styles of management. Autocratic leadership is a
style of management in which the owner of De Vera's Trucking makes all
decisions with minimal input from his employees and other group members.
In contrast, De Vera's Trucking should double the salaries of its employees
who work on critical business days such as Christmas and New Year's Day and
offer Scholarship Programs to the children of their employees once they have
attained a certain requirement.
4. Staff
De Vera's Trucking should carefully recruit and select staff through
establishing a certain number of requirements before employing an individual
in the business organization. Human Resource should shortlist qualified
applicants who undergoing several formal interviews from the human
resources department up to the top management and after surpassing the the
interview process applicant must complete the requirements being asked by
the human resources department such as legal document e.g Birth Certificate,
NBI Certificates, Certificate of Trainings, Certificate of Employment, Drivers
License with a restriction of 123 (for drivers) and other relevant documents.
To be able to keep up with the growth of the business, De Vera’s
Trucking should increase its manpower by hiring more employees to work in
the business, also, the business should add more functions or departments in
the organization like finance department and human resources department.
Finance department will be administering all the financial activities of the
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business such as allocation of budgets, taxes, collection of payment and more
while the human resources department will be administering the human
capital of the business such as compensation, recruitment, rewarding and
sanctions to the employees.
5. Skills
Workforce engagement, which is the interest and zeal of employees in
their job and workplace, should be implemented by De Vera's Trucking.
Employee opinions on the critical components of the workplace culture may
be measured and managed by the business with the aid of workforce
engagement. The employer can determine whether the staff members are
putting in time or are actively involved in their work. The owner can determine
if team-building exercises and HR procedures have a good impact on
company outcomes or whether there is space for improvement. Additionally,
the owner may learn how to strengthen the bond between your staff and your
business with the correct strategy.
The owner's principal task should be to involve the workforce. Owners
or human resources departments are in charge of making sure that workers
are aware of the tasks at hand, providing them with assistance and advocacy if
needed, and outlining how their efforts contribute to the success of the
company. The owner or HR must be prepared to engage in regular coaching
sessions with employees in order to successfully fulfill that role.
Further, De Vere's Trucking should require the logistics team to have
exceptional operating abilities where drivers and helpers should be
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knowledgeable in route planning and capacity planning. Another skill that
should be imparted to the logistics team is having basic accounting skills for
they safe keep the collections from the clients. Another skill that should be
possessed by the logistics team is having good communication skills for they
are the frontline of the business and they are the first touch to the clients, they
should know how to properly communicate and build rapport with the clients.
Lastly, the logistics teams should have repair skills, they should know how to
troubleshoot if there are some issues with the truck. De Vera values
employability skills because they are indicators of a candidate's compatibility
with other teams and clients, as well as their ability to manage the job and
perform effectively.
6. Strategy
Strategy enables business owners or executives to establish
organizational objectives and provides a competitive advantage. Various
business factors, including pricing strategy, are determined by strategy. One
of the strategies that De Vera’s Trucking should be focusing on is the working
and improving the competitive rate structure of the business for this is one of
their competitive advantages and to be able to keep up in the competition.
Moreover, to be able to meet the demand in the logistics industry and to
increase its yearly revenue, De Vera's Trucking should be adding more units of
trucks on its operations with at least one 0r two units every year to be able to
maximize its profitability.

64
VII. OBJECTIVES, STRATEGY RECOMMENDATIONS AND ACTIONS
PLANS
STRATEGIC AND FINANCIAL OBJECTIVES
A. Strategic and Financial Objectives
Financial strategic objectives allow a business to focus on the financial
needs of its organization with specified steps to increase or decrease costs,
re-evaluate spending, analyze revenue trends and plan for financial growth.
FINANCIAL STRATEGIC TIME FRAME
OBJECTIVES OBJECTIVES
Improve Cost Structure ● Streamlining ● Within five years
Process
Increase Revenue Growth ● Increase cash flow ● Within five years
by 10% by adding more
unit and service
extension
Table 6: Strategic Financial Objectives
The table below shows the financial objectives of the researcher which
are to improve the De Vera’s Trucking’s cost structure and increase revenue
growth of 5%. Strategic Objectives are streamlining processes and increasing
the business’s cash flow through adding more units and service extension
respectively. Both strategic objectives should be attained in one to three years
time.
B. Recommended Business Strategies
1. Proper Recording of finances
Keeping accurate and up-to-date records is integral to the business's
success. Good records help the business minimize losses, manage cash, meet

65
legal, regulatory and tax authority requirements and improve financial
analytics. This is the importance of having a Finance Department in every
business to administer the business's finances and help the organization in
financial decision-making.
2. Customer Relationship Management
Achieving a high level of customer satisfaction and experience is one of the
primary objectives of any business, as customer or client satisfaction has a
direct impact on sales results, as is evident in the transportation and logistics
industry. To provide an exceptional customer experience, we must equip our
business with a robust CRM solution.
3. Streamlining Process
Make the process of De Vera’s Trucking by removing unnecessary parts
to cut down expenses. Streamlining processes refers to identifying and
eliminating repetitive and excessive steps or activities in a procedure to make
it more efficient and effective. Streamlining processes aims to reduce waste,
improve efficiency, and increase productivity.
4. Operation Standardization/SOP
Standard operating procedures (SOP) involve documenting the precise
steps required to fulfill the responsibilities of a particular function or role. To
complete any type of automation, procedures must be standardized with
clearly defined steps and actions that employees and other stakeholders must
follow.SOP sounds wonderful, but small businesses, including De Vera's
Trucking, always seem to place it at the bottom of their priority list. Therefore,
66
it may make sense for business leaders to prioritize standardization as an
organization-wide objective and to implement standardization across all
business functions.
5. Add finance department
Accounts receivable, accounts payable, payroll, cash receipts, cash
management, and investments are the department's main responsibilities.
Additionally, the department is in charge of purchasing, preparing the budget,
and issuing loans for capital projects, in short, the finance department will be
managing all the finances of De Vera’s Trucking
6. Add human resource department
Human resources (HR) of a business is in charge of selecting, hiring,
and training personnel as well as putting employee procedures into place. In
essence, HR departments are in charge of overseeing all aspects of a
company's employee experience, from the time someone applies for a job to
the time they start working there to the time they leave.
Benefits related to compensation are also handled by the human
resources department. HR departments exist to bring value to a business by
giving employees unbiased advice on topics relating to people. This task is
accomplished by combining project work, ongoing staff assistance, and
long-term strategic planning. The correct individuals are hired for the
position, and a well-run HR department takes the necessary steps to keep
them happy and productive.

67
 7. Increase cash flow by adding more units of truck
De Vera’s trucking should be adding more units of truck to be able to
increase and maximize its profit. In the global economy, truck transportation is
essential since it forms the basis of supply chain management and logistics.
The trucking business's profitability is influenced by a number of variables,
including consumer demand, operational effectiveness, industry rules, and
the company's capacity for accommodating shifting market trends. Although it
might be a lucrative endeavor, it is crucial to comprehend the industry's
complexity and difficulties.
8. Contract Drafting
De Vera's Trucking should draft a contract in order to reduce the high
rate of employee turnover. In this way, the company will have greater control
over its employees, particularly in terms of turnover. The contract should
stipulate a minimum number of days of service provision until the company
finds a replacement. If the employee fails to comply, they must take corrective
action or face the consequences of their actions.
Recommended Organizational Strategy
Organizational strategy is a tool that helps businesses structure their
resources to support their business objectives and activities. It can enhance
the decision-making process and guide the organization toward a common
objective if utilized effectively.

68
 Figure 6: Recommended Organizational Chart
The chart seen above is the organizational chart for De Vera that the
researcher recommends. The purpose of this organizational chart strategy is
to divide the owner's duties for the efficient and effective daily administration
of the business into two categories: finance and logistics. The Finance
Manager will be responsible for the financial aspects of the business, while
the Operations Manager will be in charge of booking, dispatching, route
planning, as well as monitoring and tracking all units' real-time location and
maintenance. Lastly, the Human Resource Manager will be in charge of
employee payrolls. The three business divisions will coordinate and
communicate with the owner for final decision making.
VIII. STRATEGY IMPLEMENTATION
Strategy implementation is turning plans into action to reach a desired
outcome. Essentially, it’s the art of getting stuff done. The success of every
organization rests on its capacity to implement decisions and execute critical
processes efficiently, effectively, and consistently. But how do you ensure that
69
 implementing a strategy will be successful?
A. The Strategy Map
Vision Statement
- De Vera’s trucking will be the leading goods transporter in Northern
Luzon with a positive impact on the clients we serve, the environment
we share, and to increase revenue to all employees we support
Mission Statement
- To provide superior customer service and exercise a positive impact on
the community and environment.
Business Objective & Strategy MEASURES TARGETS INITIATIVES
Map
FINANCIAL ● Revenue ● Increase revenue by ● Finance
● Increase Revenue ● Gross Margin 10% annually management
● Improve Cost Structure ● Net Income ● Streamlining and
● Increase Profitability improving the
financial
system
● Add units
CUSTOMER ● Customer ● Increase customer ● Deliver goods
● Improve service Satisfaction rate satisfaction by 5% intact and
attributes efficiently
● Improve Customer
Satisfaction
● Improve Brand Image

INTERNAL PROCESS ● Achieving high ● Implementation of ● The

● Standardization/SOP Key SOP proprietor
● Proper recordings Performance ● Provide financial should
● Add finance Indicators statements consider
department having
finance
department
and SOP
GROWTH PERSPECTIVE ● Employee ● Increase Employee ● Employee
● Effective Teamwork and Development Development Plan by Development
Leadership Plans 10% & Training
● Technology Strategy & ● Logistics ● Increase Logistics Program
Implementation Strategy Strategy Efficacy by ● Technology
Efficacy 100% Implementati
on
Table 7: Strategy Map
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 The previous page is the visualization of the Strategy Map of De Vera’s
Trucking depicts that the vision of De Vera’s Trucking is “De Vera’s Trucking
will be the leading goods transporter in Northern Luzon with a positive impact
on the clients we serve, the environment we share, and to increase revenue to
all employees we support.” The mission of De Vera’s Trucking is “To provide
superior customer service and exercise a positive impact on the community
and environment.” The next step in the Strategy Map is creating the four
perspectives and determining the strategic priorities for achieving business
goals. The strategic importance of De Vera’s Trucking includes having its
business process automated and having digital solutions. The business goals
of De Vera’s Trucking further show that the key aim of the business in the
current times is to achieve business process automation to maximize its profit
by ensuring better operations management and improving the organization's
overall financial performance.
B. Departmental Action Plan
Developing an action plan to direct the department's work in the
desired direction of the organization. The strategic priorities for change, the
context in which that change will occur, the actions that the department will
take, and the individuals who will execute these actions must all be explicitly
stated. The action plan also includes criteria for determining when the
department's objectives have been attained.

71
 Department: Finance
Goal: Improve the Financial Positioning of De Vera’s Trucking
Objective (Outcome Based)
Objective Key Expected Data Person Target
s Action Outcome Evaluation Responsi Date
Steps /Measurem ble
ent
Increase Focus on Revenue Income Finance Within a
Revenue repeat increases Statement Manager year or
customers by 5% and Balance two
& Sheet
expanding
market
base
Improve Reduce Reduce Income Finance Within a
Cost Overhead unnecessa Statement Manager year or
Structure costs & ry two
Effective expenses
allocation by 10%
of budget
Table 8: Finance Departmental Plan
The figure shown in the previous page is the recommended Finance
Department Plan which consists of and discusses the department’s objectives,
key action steps, expected outcome, data valuation and measurement, person
or area responsible and target date. The finance department should be
accountable for the business’s financial activities, like a proper recording of

72
the business’ finances like cash flow, income statement and other financial
statements. They should also be responsible for financial decision-making.
Department: Operations
Goal: Improve the efficiency of the operation
Objective (Outcome Based)
Objectives Keys Action Expected Data Person Target
Steps Outcome Evaluation Responsible Date
/Measurement
Reliable & Execute Delivery of Real time of Logistics Staff One year
Consistent proper goods on or delivery
Delivery planning on ahead of time
transportation
modes and
inventory
available
Minimum Proper Proper Inventories are Logistic Manager One year
Product monitoring of handling of intact until
Damage all product good and successful
movements proper delivery
Inventory
Management
Reduce Streamlining Reduce Income Logistics and One year
Transportation unnecessary Statement Finance
Cost expenses by
10%
Quick Solving the Resolve the Clients Logistics One year
Response customer client’s issues feedbacks
query and efficiently
issues in the
shortest time
frame
Follow SOP Provide a Performance KPI Logistics and One year
process SOP improvement Finance
Table 9: Operations Departmental Plan
The figure shown above is the recommended Operations Department
Plan which also consists of and discusses the department’s objectives, key
action steps, expected outcome, data valuation and measurement, person or
area responsible and target date. The operations department should maintain

73
 all the units in running condition, inventories, client relations, and excellent
delivery process.
C. Financial Projections and Overall Evaluation of the Strategies
C.a. Financial Projections
A financial projection shows a business's expected revenues, expenses,
and cash flows over a forecast period. This forecast may be used internally as
the basis for a more detailed budget, or it may be presented to outsiders.
DE VERA’S TRUCKING
FINANCIAL PROJECTION FOR 5 YEARS
FOR THE YEAR ENDED DECEMBER 2022-2027
Notes 2022 2023 2024 2025 2026 2027
Revenue 12,600,000.00 13,860,000.00 15,246,000.00 16,770,600.00 18,447,660.00 20,292,426.00
Less: Expenses
Overhead 2 1,392,000.00 1,461,600.00 1,534,680.00 1,611,414.00 1,691,984.70 1,776,583.94
Salaries Expense 5 7,056,000.00 7,408,800.00 7,779,240.00 8,168,202.00 8,576,612.10 9,005,442.71
Depreciation 3 240,000.00 252,000.00 264,600.00 277,830.00 291,721.50 306,307.58
Utilities 4 38,736.00 40,672.80 42,706.44 44,841.76 47,083.85 49,438.04
Office Supplies 1 3,608.00 3,788.40 3,977.82 4,176.71 4,385.55 4,604.82
Total Expenses 8,730,344.00 9,166,861.20 9,625,204.26 10,106,464.47 10,611,787.70 11,142,377.08
Total Net Income
Before Tax 3,869,656.00 4,693,138.80 5,620,795.74 6,664,135.53 7,835,872.30 9,150,048.92
Table 10: De Vera’s Trucking Financial Projections
The table shown above is the financial projection of De Vera’s Trucking
for five years. It can be seen in the table total revenue, total expenses and the
net income before tax in year 2022 which are 12,600,000.00, 8,730,344.00 and
3,869,656.00 respectively. It can also be seen in the table the projected
revenue which is expected to increase by 10% every succeeding year and all

74
expenses had increased by 5% until year 2027.

Assumptions
De Vera’s Trucking will be increasing its revenue for 10% every year
through increasing the number of its units at least 1 or two units a year to and
to cut off unnecessary expenses to achieve a profit of 5,129,656.00,
6,515,656.00, 8,040,256.00, 9,717,316.00 and 11,562,082.00 in year 2023 to
2027 respectively.
On the other hand, expenses like overhead, salaries, depreciation,
utilities and office supplies will remain constant for the next five years of
operation of De Vera’s Trucking

Figure 7: Graph Chart of De Vera’s Trucking

The figure shown above is a graphical representation of Operation

75
 Expenses, Freight Rates, Revenue and Gross Profits of De Vera’s Trucking in
their previous years of operations until year 2023.

C.b. Overall Evaluation of Strategies

Evaluation of a strategy is the process of analyzing a strategy to
determine how well it will be implemented and executed. A strategy
evaluation is an internal analysis instrument that should be used as part of a
broader strategic analysis of the organization when making business strategy
decisions.
Strategy Internal Consistency Appropriateness Degree of Appropriate Workability
Consistency with the with the available risk time horizon
Environment resources
Proper consistent consistent available low Every Highly workable
recording of operations
finances
Streamlining consistent consistent available low Every Highly workable
process operations
Operation consistent consistent available low Every Highly workable
Standardizatio operations
n
Customer consistent consistent available low Every Highly workable
Relationship operations
Management
Recommended consistent consistent available low Whenever De Highly workable
Organizational Vera’s
Strategy Trucking is
ready
Table 11: Overall evaluation of strategies
The table on the previous page is the overall evaluation of the
researcher's recommended strategies, which includes and discusses the
internal consistency, environmental consistency, appropriateness with the

76
available resources, degree of risk, appropriate time horizon, and workability.
It is evident from Internal Consistency and Consistency with Environment that
De Vera's Trucking can be internally and externally consistent if it has the
appropriate resources. All recommended strategies have a minimal degree of
risk, as evidenced by the fact that De Vere's Trucking can easily implement
them, as shown in the table. Except for the recommended organization
strategy, all strategies can be implemented in every operation. Adding
functions to the business will incur costs, and one of De Vera's Trucking's
objectives is to minimize costs. However, adding functions will help the
business maximize profits and optimize processes. In addition, the table
demonstrates that all prescribed strategies are highly implementable because
they do not require complex execution.

VIII. STRATEGY EVALUATION, MONITORING AND CONTROL

Balanced Scorecard
The balanced scorecard is a management system designed to translate
an organization's strategic goals into a set of organizational performance
objectives, which are then measured, monitored, and modified to ensure the
strategic goals are met.

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 Business Objective & Strategy MEASURES TARGETS INITIATIVES
Map
FINANCIAL ● Revenue ● Increase ● Finance
● Increase Revenue ● Gross revenue by management
● Improve Cost Structure Margin 10% and improving
● Increase Profitability ● Net Income annually the financial
● Streamlinin system
g ● Add units
CUSTOMER ● Customer ● Increase ● Deliver goods
● Improve Customer Satisfaction customer intact and
Satisfaction rate satisfaction efficiently
by 5%
INTERNAL PROCESS ● Achieving ● Implement ● The proprietor
● Standardization/SOP high Key ation of should
● Proper recordings Performanc SOP consider
● Add finance department e Indicators ● Provide having finance
financial department
statements and SOP
GROWTH PERSPECTIVE ● Employee ● Increase ● Employee
● Effective Teamwork and Developme Employee Development
Leadership nt Plans Developme & Training
● Technology Strategy & ● Logistics nt Plan by Program
Implementation Strategy 10% ● Technology
Efficacy ● Increase Implementatio
Logistics n
Strategy
Efficacy by
100%
Table 12: Balance Scorecard
The figure shown in the previous page is the Balanced Scorecard of De Vera's
Trucking, a strategy map recommended by the researcher to the business. It
can be seen from the table above that the business objectives under finance,
such as increasing revenue, improving cost structure and growing profitability,
are attainable. De Vera's Trucking will be releasing its 16th unit in May 2023; it
only means that the business's revenue is expected to increase by 5% in the
said year. On the other hand, Streamlining was also achieved. De Vera's
Trucking's most unnecessary expense is renting land for a truck garage, which
is usually idle because all units are frequently used for business operations.
78
This excessive business expense was cut down, and they decided to purchase
land in Rosario La Union, specifically in Cataguintingan. In this way, De Vera's
Trucking can save a lot in the long run, which adds to the company's assets.
Business objectives under customers, like improving customer
satisfaction, have always been achieved since De Vera's started its business
operation. De Vera's Trucking has been transporting goods intact and
efficiently. Thus, the said business has built strong relationships with its
customers, which has become one of the success factors of De Vera's
Trucking.
One of the issues De Vera's Trucking identified is its internal processes,
such as needing more standardization, organizational structure, and record of
finances. The researcher discussed these issues with the owner of De Vera's
Trucking, who agreed to consider recommendations to improve the business'
internal process, like having an SOP, properly recording finances, and adding
a finance department to the organizational structure. One of the SOPs agreed
to work out is the collection of Accounts Receivables (AR), where the
collection would go directly to the owner instead of being safely kept by the
employees. This is to account for the group properly and avoid anomalous
acts. By implementing the new SOP, the business can avoid adverse
circumstances like discrepancies in the collection and being robbed. Also,
employees in the operations department should submit consolidated records
of expenses and groups throughout the operations in exchange for a salary.
Lastly, the owner considered hiring a finance associate to administer the
79
business's finances, keep track of records, file taxes, budget and decision
making in the company's financial aspect.
The last objective of the business is the growth perspective; effective
teamwork and leadership were achieved through a combination of autocratic
leadership style and reward systems. The autocratic leadership style was
helpful in the business management because it established discipline in the
organization, and employees tended to become compliant simultaneously. De
Vera's Trucking also exercises a reward system that motivates and drives
employees to work and achieve necessary goals. On the negative side,
technology strategy & implementation was not considered by De Vera's
Trucking due to expenses that will incur upon its performance, and the
business needs to allocate a budget for digitization and technology
implementation.

80
BIBLIOGRAPHY
A. Electronic References
Transportify 2020, Shaping Logistics Management in the Philippines
https://www.transportify.com.ph/shaping-logistics-management-in-the-philip
pines/
Port Calls 2022, How is Technology Changing the Philippine Freight
Forwarding Industry?
https://www.portcalls.com/how-is-technology-changing-the-philippine-freigh
t-forwarding-industry/
YCP Solidiance 2020, Digitalization in the Philippine Logistics Industry
https://ycpsolidiance.com/white-paper/digitalization-in-the-philippine-logisti
cs-industry
NEDA 2021, LOGISTICS REFORMS, PRO-COMPETITION REGULATIONS
CRUCIAL FOR ECONOMIC RECOVERY
https://neda.gov.ph/logistics-reforms-pro-competition-regulations-crucial-for
-economic-recovery-neda/
Clean Air Asia , Association of Southeast Asian Nations (ASEAN) ,
Philippines
2018, Green Freight and Logistics Policy Development in the
Philippines: Assessing Freight Transportation in Support of a National
Green Freight Programme
https://www.ccacoalition.org/en/resources/green-freight-and-logistics-policy
-development-philippines-assessing-freight
81
Ken Research 2023, The Philippines Logistics Market is Expected to
grow at a CAGR of 8.2%, 2022P- 2027F owing to the Rapid Improvement in
the Logistics Infrastructure by the government
https://www.prnewswire.com/news-releases/the-philippines-logistics-market
-is-expected-to-grow-at-a-cagr-of-8-2-2022p--2027f-owing-to-the-rapid-impro
vement-in-the-logistics-infrastructure-by-the-government-ken-research-30173
9128.html

82
APPENDICES
Appendix A
Interview guide questions for the owner and competitors?
a. What form of business ownership?
b. Years in the logistics industry?
c. What are the products you are transporting?
d. Destination?
e. How frequently is your operation?
f. How much is your rate?
g. How many units currently does the business have?
h. How much is your operation expenses every operation?
i. What is your average revenue per operation?
j. What are your current business strategies?
k. Who are your current suppliers?

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Appendix B
Notes on Financial Statement of De Vera’s Trucking
1. Office Supplies

Office Supplies
Unit
Description Quantity Total
Cost
Record Books 1 65 65.00
Ballpen 15 5 75.00
Receipt 2 36 72.00
Calculator 2 58 116.00
TOTAL 328.00

2. Overhead Cost
Variable Overhead Costs
Description Cost Monthly Annual
Fuel 20,000.00 80,000.00 960,000.00
Sea Fare 3,000.00 12,000.00 144,000.00
Parking Fee 1,000.00 4,000.00 48,000.00
Repair and Maintenance 5,000.00 20,000.00 240,000.00
Total 29,000.00 116,000.00 1,392,000.00

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 3. Depreciation Expense
Depreciation Expense
Descript Cost per Salvage Usefu Depreciat
ion Quant Total Total
ion Unit Value l Life Expense ity Cost Salvage
Value
TOTAL

Truck 1,700,000 500,000 5 240,000 15 25,500,0 00 7,500,000 3600000

TOTAL 15.00 3,600,000.0
0
Depreciation
Expense for
succeeding year
Description 2023 2024 2025 2026 2027
Truck 21,900,000 18,300,000 14,700,000 11,100,000 7,500,000
4. Utilities Expense
UTILITIES EXPENSE
MONTHL ANNUAL
ITEM Y TOTAL
Water 970 11640
Electricity 958 11496
Wi-Fi
PLDT 1300 15600
TOTAL 2270 38,736.00

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 5. Salaries Expense
Salaries Expense
Per
Employees QTY Employee Weekly Monthly Annually
Owner 1 20,000.00 20,000.00 80,000.00 960,000.00
Driver 15 5,000.00 75,000.00 300,000.00 3,600,000.00
Helper 15 3,000.00 45,000.00 180,000.00 2,160,000.00
Maintenance 2 3,500.00 7,000.00 28,000.00 336,000.00
Total 31,500.00 147,000.00 588,000.00 7,056,000.00

86
6. Income Statement

87
Appendix C
Legal Documents of De Vera’s Trucking
1. Business Permit

88
2. DTI Permit

89