Arabia, Duchess Saudia T.

Case Study 1: Malabon Marketing, Inc.

I. Point of View
Luis Tiongson, 24-year-old production manager of Malabon Marketing, Inc. He felt that each of
his two brothers had compelling arguments on his side.

II. Statement of the Problem (or Objective)

How can the Tiongson brothers come up to a decision for the future direction of the Company
that would increase its profit and maintain its financial stability?

III. Areas of Consideration

In May 1981, the surviving heirs of the founder of Malabon Marketing, Inc. should make a decision
for the company’s future and their individual fortunes. Arturo Tiongson, 38, the eldest of the three and
company president, was arguing for expansion of the candle-making business, via development of
decorative candles, which were premium-priced, high-profit items. Rodolfo Tiongson, 35, vice president
and treasurer, was in favor of expanding their selling and distribution of food product lines and wanted
to keep its candle-making business to its current level. The youngest brother, Luis, 24, production manager
was uncertain because he felt that each of his two brothers had compelling arguments on his side.
Malabon Marketing, Inc. was founded fifteen years ago by Mr. Lee S. Tiongson, a salesman working for a
Chinese-Filipino manufacturer of soy sauce. Mr. Tiongson bought a second-hand pitch shot display board
and made arrangements to be appointed as a separate soy sauce dealer in his locality. Upon his
retirement, he formed Malabon Marketing, Inc. and continued selling soy sauce. Gradually, the company
added other product lines and expanded its territory. Over a span of seven years, it added patis and
bagoong, laundry soap, sugar, detergents, canned meat, sardine s, biscuits, candies, coffee, and cocoa to
its line of products by applying as electrical distributor/wholesaler for various manufacturers. Soon it had
twelve delivery panels and a corresponding team of salesmen and merchandisers; it was covering part of
Metro Manila, Bulacan, Pampanga and Tarlac, as well as Laguna and Batangas in Central and southern
Luzon. In its seventh year, Mr. Tiongson started experimenting with the manufacture of candles. By 1978,
the candle business was outselling the grocery product line.

IV. Alternative Courses of Action

 Pursue the expansion of the candle-making business
Strengths Weaknesses Opportunities Threats
-The company has -The company has -The oil crisis will not -Other companies
been manufacturing limited funds subside and is likely to that have mastered
candles since 1973 -In conflict with the worsen in the future the art of decorative
-Gradual increase in decision of Rodolfo -A Taiwanese candle-
candle-making and
sales profit -The company doesn’t maker will lend his
-The candles are basic know how to make production supervisor have been selling
commodity and in line and sell the for two years for the them for years
with other product decorative candles company to make -Seasonal products
lines of the company
 quality decorative -Increase liability
candles
-The venture can be
easily financed
because the branch
manager of the
equitable bank,
Arturo’s compadre,
can finance the
company up to P2
million
-The candle-making
business would
increase the
company’s profit
margin by 30-40
percent

 Undertake the expansion of grocery products distribution business and maintain the candle-
making business to its current level
Strengths Weaknesses Opportunities Threats
-The company has -The company has -The company could -Other companies
been in grocery limited funds gain more profit in the that offer more
distribution business -In conflict with the expansion of grocery product lines
for decision of Arturo product lines
-Malabon Marketing
Inc. is a well-known
independent soy
sauce dealer in the
business industry
-Products were
bought from other
manufacturers at a
discount for resale
-Continuous increase
in sales profit

 The top management should analyze the situation carefully of what product line should undertake
expansion
Strengths Weaknesses Opportunities Threats
-The top management -Conflict in decision- -If the company - Other companies
have knowledge of making expands the right that offer more
the whole situation product line, they product lines
and would carefully could gain more profit
analyze it since it is
 their own corporation
and their decision
would affect the
company and their
individual fortunes

 Hire a consultant to give an expert opinion

Strengths Weaknesses Opportunities Threats
-expertise in -additional cost -if the company - Other companies
marketplace and in expands the right that offer more
marketing space product line using the product lines
-Save time opinion of the
consultant, they could
gain more profit

V. Recommendation
After considering all the alternatives, I recommend the decision of hiring a consultant to provide
an expert opinion. Since the top management cannot decide on whose proposal would be used, Arturo
Tiongson was arguing for expansion of the candle-making business while Rodolfo Tiongson was in favor
of expanding their selling and distribution of food product lines and keeping the candle-making business
to its current level, it is reasonable to hire a consultant. Hiring a consultant would help the company
because a consultant views the situation from a fresh perspective. An outside pair of eyes is helpful
because it is common for internal teams to miss certain problems in the company because of bias or too
close to problems and miss to catch them, especially because the company is a family-owned business.
Even though the brothers have different positions, all their opinions matter because they are siblings who
own the business. Decorative candle-making business is new to the company. They have no idea on how
to make and sell those candles.
In addition to expertise, a consultant has a track record of past accomplishments. One of the
qualifications of a consultant is possession of extensive experience and expertise in the marketplace
where the organization operates. Consultants have worked with many companies in the same industry
and know the ins and outs of market trends. They know what other competing companies are doing, and
so their recommendations will help this company outsmart competitors easily. Although hiring a
consultant would make the company add its cost, it is worth it because the company is in the point
wherein the brothers need to make an important decision. Time is essential in making a decision.
Dedicating quality time to address certain aspects is a path most companies don’t like to take, as it ends
up being costly. The consultant has all the time in the world to dedicate their efforts towards data
collection, formulating and implementing necessary policies to solve the company’s problems. The
brothers can dedicate this saved time to do other aspects of the business that contribute to higher
profitability. Therefore, hiring a consultant is beneficial for making tough decisions. The brothers cannot
make a decision, thus a consultant not related to the company, would provide a fair and objective expert
opinion. Since a consultant has all the knowledge needed to give an opinion, his recommendation is very
much helpful for the firm.