Diversification is one strategy in portfolio management to s

Diversification is one strategy in portfolio management to spread the normal market risks associated within the enterprise. Applying this to property management, can you cite examples of local or multi-national companies operating in the country (Philippines) that are employing horizontal integration and vertical diversification strategies?

Solution

In the Philippines, the contracts that have been used for pork production are based upon the farmers possessing labour and the production facilities such as housing for the animals. These facilities are often built with finance provided by the firms involved in meat processors. High financing costs for the development of production facilities and for the purchase of stock are said to be behind the high cost structure of that part of the Philippine broiler industry in the hands of the small independent growers (Dobashi et al. 1999).

In the Philippines, where there are a small number of feed mills[12], poultry farms have integrated with the feed mills, lending credence to the argument made by Moss and Schmitz (2000). They argue that as the number of firms increases, the need for vertical integration decreases, and instead firms will enter into contracts with one another.

In the Philippines, the livestock producer, Monterey Farms Corporation, established retail outlets in the mid-1990s to sell meat products produced by Monterey. This was seen as a way of dealing with concerns that Philippine consumers might have about the quality of the product being sold to them.

Company (vertical integration)

Source of information

Head office

Business Activities

San Miguel Corporation

www.sanmiguel.com
de Dios (1994)

Philippines

Brewing
Basic meat products
Non-alcoholic malt beverages
Wines and spirits
Juice and juice drinks
Bottling of water
Value-added meat products
Processed meat
Butter, cheese and margarine
Coconut and other products
Glass, Metal
Plastics
Paper composite
Real estate,

RFM Corporation (Republic Flour Mills)

http://www.rfm.com.ph
de Dios (1994)

Philippines

Ice cream, milk and juice production
Cans and bottles for soft drinks and water
Bottling of water
Broiler production
Feed production for ducks and fish
Processing of meat, canned goods, customized meat products, canned tuna
Flour production, noodles, spaghetti, macaroni, cake mixes
Butter margarine
Bank and Insurance brokers
Real estate
Semiconductor packages

Purefoods Corporation

www.com.ph
de Dios (1994)

Philippines

Meat production
· pork
· beef
· chicken
Feed production
Flour milling
Noodles manufacturing

Vitatich Corporation

http://profiles.wisi.com/profiles/scripts/corpinfo.asp?cusip=C60881370

Philippines

Live and dressed chicken production covering
· day old chicken
· day old pullets
Processed meat products
Animal and aqua feeds