(1) Name and Background of the Company
Ayala Corporation. It is considered as the oldest and most successful conglomerate. It is a holding
company founded by Domingo Roxas and Antonio de Ayala since 1934 during the Spanish times. Now, the
corporation is served by third-generation family corporation of Ayala Family. Ayala Corporation is engaged
in providing Real Estate, Telecommunications, Utilities, Logistics, Financial and Insurance Services. Lastly,
Ayala Corporation is said to be head quartered in Makati, Philippines.
(2) Analyze the competitive situation of the company using the Porter’s 5 analysis
Ayala Corporation may be one of the most successful conglomerates but nowadays we can’t deny
that there are also factors and competitive intensity that affects the growth of the company. Very reason
why Porter’s five forces must be enforced because it helps identify where the power lies in a business
situation.
a) Threat of Suppliers >> As we all know that suppliers are the heart of every company, it helps the
company live according to longevity. It fuels the need of the company before, during and after the
production of a company’s product. If there are only few of them but a large number of customers continue
to arise, this will then result to cost of switching of suppliers. Therefore, Ayala Corporation by operation of
Real Estate considered the Threat of Suppliers as moderate.
b) Threat of Buyers/Customers: >> With regards of Real Estate Industry in the Philippines, the threat
of bargaining power of buyers is considered to be weak. Maybe this is due to a reason that,
customers/buyers are more sensitive with the price. Thus, since homes are still considered as an essential
possession of every family, the cost for a consumer to change or switch homes is normally prohibitive.
c) Threat of rival firms/competitors: >> Real Estate continues to expand in different areas of the
country.
Very reason why, real estate competition plays a tough role in the market. As what I have researched, large
amount of initial capital is needed in order to build a single unit. This leaves the industry to large real estate
development companies having adequate capital and are willing to risk the required amount of money.
Thus, the major real estate developers cannot just let go of what they have invested in their ongoing
projects.
d) Threat of Substitutes/Compliments : >> In Philippines, there are only two substitutes that buyers
can
choose from instead of purchasing a condominium or house. First, is to rent a property which serves as an
option. Lastly, an individual can own a residential house that is constructed from the ground by the owner
himself which has been an intimidating choice. Therefore, this results to the threat of substitutes or
complements strong in the real estate industry.
e) Threat of New Entry: >> Profitable Markets attract new entrants, which erodes profitability. But this
is far way different in terms of Real Estate Industry like Ayala Corporation. New entrants in the real estate
industry are relatively weak in terms of competing against the major industry giants. Therefore, Ayala
Corporation has a weak approach towards the threat of new entrants. This is due to a reason that
incumbents have a weak and less durable barriers to entry due to high cost of entering the market of real
estate industry.
(3) Analyze the Company’s Performance using SWOT analysis
Ayala Corporation. It is considered as the oldest and most successful conglomerate. It is a holding
company founded by Domingo Roxas and Antonio de Ayala since 1934 during the Spanish times. Now, the
corporation is served by third-generation family corporation of Ayala Family. Ayala Corporation is engaged
in providing Real Estate, Telecommunications, Utilities, Logistics, Financial and Insurance Services. Lastly,
Ayala Corporation is said to be head quartered in Makati, Philippines.
(2) Analyze the competitive situation of the company using the Porter’s 5 analysis
Ayala Corporation may be one of the most successful conglomerates but nowadays we can’t deny
that there are also factors and competitive intensity that affects the growth of the company. Very reason
why Porter’s five forces must be enforced because it helps identify where the power lies in a business
situation.
a) Threat of Suppliers >> As we all know that suppliers are the heart of every company, it helps the
company live according to longevity. It fuels the need of the company before, during and after the
production of a company’s product. If there are only few of them but a large number of customers continue
to arise, this will then result to cost of switching of suppliers. Therefore, Ayala Corporation by operation of
Real Estate considered the Threat of Suppliers as moderate.
b) Threat of Buyers/Customers: >> With regards of Real Estate Industry in the Philippines, the threat
of bargaining power of buyers is considered to be weak. Maybe this is due to a reason that,
customers/buyers are more sensitive with the price. Thus, since homes are still considered as an essential
possession of every family, the cost for a consumer to change or switch homes is normally prohibitive.
c) Threat of rival firms/competitors: >> Real Estate continues to expand in different areas of the
country.
Very reason why, real estate competition plays a tough role in the market. As what I have researched, large
amount of initial capital is needed in order to build a single unit. This leaves the industry to large real estate
development companies having adequate capital and are willing to risk the required amount of money.
Thus, the major real estate developers cannot just let go of what they have invested in their ongoing
projects.
d) Threat of Substitutes/Compliments : >> In Philippines, there are only two substitutes that buyers
can
choose from instead of purchasing a condominium or house. First, is to rent a property which serves as an
option. Lastly, an individual can own a residential house that is constructed from the ground by the owner
himself which has been an intimidating choice. Therefore, this results to the threat of substitutes or
complements strong in the real estate industry.
e) Threat of New Entry: >> Profitable Markets attract new entrants, which erodes profitability. But this
is far way different in terms of Real Estate Industry like Ayala Corporation. New entrants in the real estate
industry are relatively weak in terms of competing against the major industry giants. Therefore, Ayala
Corporation has a weak approach towards the threat of new entrants. This is due to a reason that
incumbents have a weak and less durable barriers to entry due to high cost of entering the market of real
estate industry.
(3) Analyze the Company’s Performance using SWOT analysis
