VII.

Objectives, Strategy Recommendations and Action Plans

Strategic Objectives
ThestrategicobjectiveofDMCIhomesistobetheclearsecondinthemiddle
marketresidentialindustry.
Fromthemarketanalysis,thereisawideleadofthebigthreerealestatecompanies
versusthelowerrealestatecompanies.Thebigthreecompanieshavecompetenciesindifferent
segmentsofthemarket.AyalaLandthroughAyalaLandPremierandAlveoLandisdominantin
theluxuryrealestatemarketalthoughitalsohasinterestinthemiddleincomesegment(Avida)
and is entering the low cost segment. Megaworld is the market leader in the middle income
segment. Vista Land prevails in the low costsegment through its subsidiary Camella Homes
althoughitalsohasinterestinthehighendandmiddleincomesegment.
TheotherobjectivesofDMCIHomesarestatedanddefinedintherevisedvisionand
missionstatementofthecompany.DMCIHomesalsowantstoaimachievementintheirbestlevel
ofsatisfyingtheircustomersinimprovingitsprojects,programs andthelike.DMCIHomes
financialobjectiveistotargetmonetarysystemsinmeasurabletermsliketheprofits,percentagein
increaseinsalesthroughcertainperiodoftimeandthelike.
Year
SalesRevenue
62,217
2015
68,438
2016
75,281
2017
82,809
2018
91,089
2019
*Increaserevenueby10%annually
*RecommendedBusinessandOrganizationalStrategies

NetIncome
11,852
13,037
14,340
15,774
17,351

BUSINESSSTRATEGIES
Take advantage of the foreign

Sincethecountryisbeingpromotedasaretirementhavenfor

retireesthatareseekingforunits

foreigners, DMCI Homes could use this opportunity to

that will provide them

expandtheirtargetmarketandcatertothosewhoarenoteven

convenience of a tranquil

Filipinos. This particular market, if tapped, could generate

residentialenvironment.

revenuesforthecompany.
To penetrate this particular market, DMCI Homes should
establish a presence within foreign countries where a huge
number of foreigners show interest in retiring in the
Philippines, This would again end up in establishing
internationalsalesofficestowidenthedistributionnetworkof
thecompany.
Also,thePhilippineRetirementAuthorityhasmadealistof
foreignerswhohaveplansofstayinginthePhilippinesright
aftertheyretire.DMCIHomescouldusethisinformationto
gaininsightastowhatparticularnationalitiesshowintention

Make

use

of

developing

ofhavingthelastyearsoftheirlivesinthePhilippines.
It has been the edge of DMCI Homes to construct resort

units

themed condominiums at a lower price compared to their

that would target the rapidly

competitorswithoutcompromisingitsquality.Thegeneration

residential

condominium

growing population of financially

empowered young professionals.

of young professionals that has emerged in recent years is

constantlygrowingandcontinuouslyaddinguptothedemand
for residentialtype of buildings which are near their
workplace.
DMCIHomesshouldpenetratethekeybusinessdistrictsin
Manila because it is where the large population of young
professionals are concentrated. These young professionals

havethemindsetofbuyinglifetimeinvestmentsthatare
close to their workplace and to other commercial
establishments.This generationoftheyoutharethosewho
wanttoliveinadynamicsettingwhereeverythingtheywant
Pursue an integrated marketing

isascloseandaseasytograspbythehand.
AdvertisingthroughlocalandOFWchannelswillbeusedto

communications

to

buildupalongtermimageoftheDMCIHomesbrandasa

strengthen brand awareness

provider of high quality homes at a good value. Public

amongOFWs.

relationssuchassponsorshipofarticlesandblogswillbeused

plan

toreenforcetheDMCIbrandfurtherasaqualityproperty
developer. Events such as real estate conferences and
participationinoverseastradefairswillbeusedtopromote
specific projects. Lastly, personal selling done by external
brokerswillbeusedtobuildupbuyerpreference,conviction
Enhance website to include e

anddeliveractualsales.
Thecompanyhasanexistingwebsite,dmciinternational.com,

commercecapabilityandpromote

butthisactsonlyasacatalogueoftheprojectswithonlya

it as an alternative distribution

briefdescriptionofadevelopmentandcontactinformation.

channel.

Thewebsitecanbeimprovedtoallowforaninteractiveopen
house that will allow users to explore in 3D a selected
property. The website will also build its ecommerce
capabilitybyallowingforonlinereservationsthatwillallow
for real time inventory monitoring and online payment of
reservations.
Byenhancingitswebsite,DMCIcanstrengthenitslimited
distributionnetworkbuyersbothlocallyandabroad.

Launch incentive program for

Use of word of mouth advertising would be an effective

satisfied home owners to refer

strategytopenetratethemarketfurther.Existinghomebuyers

family and friends to DMCI

willgeteitheracashincentiveoradiscountintheselling

Homes.

priceiftheyrefertheirfamilymembersandfriends.Thiswill
be especially effective given tightly knit family ties of
Filipinosasbuyersmaywanttoliveclosetotheirextended
familymembers.
Tobeabletoeffectivelypromotethereferralprogram,DMCI
willneedtointensifyitsCustomerRelationshipManagement.
DMCI should continue to promote the DMCI brand and
products to its existing customers. A relationship manager
fromcustomercaregroupshouldbeassignedtomaintainand
strengthen its relationships with existing home buyers and
will introduce the referral program to them. An intensive
databasewillalsobekepttodetermineifexistingbuyershave

Encourage the market with the

relativesorfriendstoreferto.
Homesareconsideredtobelifetimeinvestments.Theydonot

capacity to buy condominium

depreciatebutratherappreciateinvalue.Thismindsethas

units as a form of longterm

beenprevalentamongFilipinos.Andthedisparity,intermsof

investment.

value,ofowningaunitinacondominiumisnonethanthatof
owningaresidentialhouse.
ThismentalityamongFilipinobuyersshouldbereiteratedin
adcampaignsofDMCIHomes.Thecompanyshouldusean
intensive integrated marketing approach to its potential
buyers. This will affect the brand awareness of Filipino
buyersrelativetoDMCIHomes.

In pursuing an intensive integrated marketing approach,

DMCI Homes should also strengthen its public relations.
Events outside of the country like international real estate
conferencesshouldbeutilizedbythecompanytointroduce
innovations in their developments and introduce DMCI
Homestotheglobalmarket.
With increased capitalization in marketing and promotions
andeffectiveadvertising,thereisapossibilitythatitwould
deliversalesglobally.Andwiththefundsgathered,DMCI
HomescouldlookintothepossibilityofdoinganIPOtobe
independentofthatofDMCIHoldings.
Also, DMCI Homes could look into the opportunity of
borrowingmoneyfrombanksforcapitalization.Withtheir
stablefinancialcondition,DMCIHomescouldnowborrowa
hugeamountofmoneytofinancealltheirexpenditures in
Maximize the presence of the

everynewproject.
The construction arm of DMCI Holdings which is a sister

company in cities where there is

company of DMCI Homes has been winning bids in

limited space and make use of the

constructing highways and other related private and

shift in trends toward smaller unit

government initiated infrastructure construction projects.

sizes.

Someoftheseprojectsarelocatedoutsideofthemetroand
aremainlyinprovinces.DMCIHomescouldtakeadvantage
ofthisandbidforuntappedsurroundingareasforresidential
development.
To utilize the synergy among the businesses under DMCI
Holdings, DMCI Homes could be the first to construct a

community of highrise residential buildings in provincial

areastogivepotentialbuyersanurbanfeel.Thiswillinturn
contributetoconsideringprovincialareasasemerginggrowth
centersthatwouldhelpboosttheeconomyofthecountry.
To add up, tapping the provincial areas for development
wouldhaveDMCIHomesgarnerahugemarketshareinthe
industry because there are only a few developers in those
PartnerwithBPOsforDMCIto

areas,mostofwhicharenotknowninthemetro.
OneoftheconcernsoftheBPOindustryisitshighturnover

providehousingsolutionstoBPO

rate.DMCIcanofferasolutionbypartneringwithBPOsand

workers.

bankstoprovidehousingtoBPOworkers.DMCIcanoffer
discountstoemployeesofcorporateaccounts.BPOworkers
can enjoy lower rates provided a bond with the BPO
company.1bedroomand2bedroomunitscanbemarketed
directly to these employees. Additionally, DMCI can
approachBPOcompaniestobuyseveralunitsthatwhichthe
companiescanallowtheiremployeestoliveinaspartoftheir
benefits.
A corporate account manager under the sales division will
studythissegmentindetailandproposethebestsolutionto

Strengtheninternationalpresence

thehousingrequirementsoftheBPOsector.
DMCI should increase the number of external brokers its

especially in untapped countries

partneringwithoutsidethecountrytowidenitsdistribution

by partnering with external

networktothegrowingOFWmarket.Currently,DMCIonly

broker.

covers12countriesbutthiscanbeincreasedbypartnering
with external brokers in countries like the Saudi Arabia,

GermanyandNorway.SaudiArabiaisthethirdmostpopular
destinationforOFWs withyearonyearincreasingby5%.
Along with its Dubai office, this will strengthen DMCIs
presenceintheMiddleEastwhichcurrentlyonlyconstitutes
22%ofDMCIstotalinternationalsales.TheMiddleEastis
theareawhereMegaworld,theleaderinthemiddlemarket
segment,sourcesmostofitsinternationalsalesfromGermany
and Norway are also potential countries where DMCI can
ventureintothroughapartnershipwithalocalbroker.
This strategy will be supplemented by an Integrated
MarketingCommunicationsstrategy(describedlater)thatwill
buildbrandequitytobothlocalandinternationalmarkets.For
theinternationalmarket,DMCIwilljoinrealestatetradefairs
andhostspropertyconferencestobuildbrandawarenessfor
Target the families of OFWs and

bothpotentialbuyersandbrokerpartners.
Theportionofthepopulationwhohastherisingpurchasing

encourage them to purchase a

powerarethosewhoareclassifiedunderthemiddleincome

unit for their family member

segmentofbuyers.Thissegmentisprimarilycomprisedof

abroad as a form of lifetime

OFWswhoremittheirincomefromabroadtotheirfamilies

investment.

inthePhilippines.
To strongly penetrate the market of OFWs, DMCI Homes
shouldcapitalizeinestablishingsalesofficesabroad.DMCI
Homes is behind its competitor in terms of its scope of
distributionnetwork.ButsinceDMCIHomescannotcompete
in establishing a global distribution network against its
competitors,theresearchersadvisetomodernizetheexisting

website, dmciinternational.com, which acts only as a

catalogue of its projects with only a brief description of a
developmentandcontactinformation.

ORGANIZATIONALSTRATEGIES
Additional positions for Launchincentiveprogramforsatisfiedhomeownerstorefer
relationshipmanagers.

familyandfriendstoDMCIHomes.
For the incentive program strategy to be implemented,
existing clients should be satisfied. A relationship manager
willbeusedtomarkettheincentiveprogramtotheDMCI
Homeowners.Animportantdutywillalsotostrengthenthe
companys CRM. Relationship managers would determine

Additional

personnel

to

institutionalsales.

potentialhomeownersthatwouldhavepossiblereferrals.
Acorporatesalesunitwillbeaddedtoformpartnershipswith
BPOcompaniesinlinewiththemarketdevelopmentstrategy
totargetBPOworkers:
PartnerwithBPOsforDMCItoprovidehousingsolutionsto
BPOworkers.
The new unit will forge partnerships with corporate

Concentrate DMCIs real estate

institutionstoprovidehousingsolutionstotheiremployees.
Toreduceoperatingcostandincreasebusinessfocus,DMCI

businesstoDMCIHomes.

Holdingsshouldconcentrateallofitspropertybusinessesto
DMCI Homes. Currently, there is a small portion of its
housing business belonging to its construction arm. These
projectsshouldbetransferredtoDMCIHomestofullyutilize
the infrastructure and property development experience of
DMCIHomes.

Additional personnel to support

This is in line with market penetration strategy to extend

internationalsalesdivisions.

furtheritspresencetotheOFWmarket.
Increaseinternationalpresencebyaddinginhousesalesand
partneringwithexternalbrokersabroad.
Additionalpersonnelwillbeusedtomanageandsupportthe
operationsofthedifferentinternationaloffices.Personnelwill
beusedtodeveloppartnershipswithbrokersabroadandto
helpDMCIcomplywithforeignregulationsinestablishing
salesoffices.

*FinancialProjections
The following table shows the comparison of values inthe income statement of
DMCIHomestakenfromthenotessectionoftheconsolidatedincomestatementofDMCI
Holdingsfrom2015to2019.DMCIHomesisaimingtohaveatleast10%increasesin
revenuesannually.

SalesRevenue
CostofGoodsSold
GrossProfit
Selling,GeneralandAdministrative

2015
62,217
42,708
19, 508
6,917

Expenses
476
InterestandOtherIncome(Expenses)
14,162
IncomeBeforeTax
1,196
Taxes
11,852
NetIncome
7,003
Dividends
40,795
RetainedEarnings
*Computedusingthe2014FinancialStatement

2016
68,438
46,978
21,458
7,608

2017
75,281
51,675
23,603
8,368

2018
82,809
56,842
25,963
9,204

2019
91,089
62,526
28,559
10,124

523
15,578
1,315
13,037
7,703
44,874

575
17,135
1,446
14,340
8,473
49,361

632
18,848
1,590
15,774
9,320
54,297

695
20,732
1,749
17,351
10, 252
59,726

*GrowthRatio
2015
VOLUME
NumberofUnits
5,732
TotalResidentialUnits
3,439
VolumeGrowth
62%
REVENUE
SalesandReservation
9,800
RecognizedRevenues
3,905
RevenueGrowth
103%
TOTALMARKETSHARE
MarketSize
418,396
MarketShare
0.8%
MarketShareGrowth
0.3%
MIDDLEINCOMEMARKETSHARE
MarketSize
211,031
MarketShare
1.7%
MarketShareGrowth
1.7%
INCOME
NetIncome
11,852
IncomeGrowth
233%

2016

2017

2018

2019

5,095
3,057
11%

7,265
4,359
43%

8,254
4,952
14%

9,333
5,600
13%

8,711
3,711
6%

12,642
6,953
87%

14,362
7,899
14%

16,240
8,932
13%

426,764
0.9%
0.0%

435,299
1.6%
0.7%

444,005
1.8%
0.2%

452,885
2.0%
0.2%

215,251
1.7%
0.1%

219,556
3.2%
1.4%

223,948
3.5%
0.4%

228,427
3.9%
0.4%

13,037
74%

14,340
14%

15,774
21%

17,351
19%

* Departmental Programs
MARKETING DEPARTMENT
a.
Integrated
Marketing Marketing will lead in the planning and execution of the integrated

Communications

marketing communications plan of the company to raise brand

awareness.
The IMC plans target audience will be middle income OFWs
looking to settle in the Philippines or provide homes to their
families. The communication objective is to build brand awareness
or the ability to identify the DMCI brand among OFWs in the
housing category.
Overall advertising message will be that DMCI Homes delivers
their dreams for their families to have a quality house they can call
home. The marketing department will contract an advertising
company to propose and execute the ad campaign based on this ad
message.
Given the Integrated Marketing approach, DMCI will utilize several
communications mode to deliver a coherent and effective message
and promote brand awareness. TV advertisements will focus on the
DMCI brand (as opposed to a specific project) as a property
developer that offers optimal quality and value for money to their
families in the Philippines. Events will also be organized to inform
both external brokers and buyers of the features and Unique Selling
Propositions of specific developments. DMCI will participate in real
estate fairs and organize buyer conventions.
Publicity will be used by sponsoring magazine articles and property

b. Referral Program

blogs to write about specific projects.

Marketing will support customer care in the referral program.
Marketing will provide the needed printed materials to properly
communicate the message of the referral program. The material

should not only emphasize the possible monetary rewards of

referring a family member to DMCI developments but the chance to
be close to your extended family and friends.
SALES DEPARTMENT
a. Online Sales Strategy

The sales division will lead in the execution of the e-commerce

strategy. The Sales team will develop the infrastructure to be able to
handle the logistics of an e-commerce capable website. Sales will
link their inventory management system to the enhanced website so
both buyers and brokers are made aware of specific units that are
still available in real time. Sales will also assign sales personnel to
handle the reservations coming online and ensure that adequate
follow-ups are made to convert the reservations into actual sales.
The sales team will coordinate with the other departments for the
other components of the website. Marketing will provide the sales
team the ad content of the website. The content will be in line with
the integrated marketing communications plan of marketing.
Construction will provide pictures and updates of current projects to
be able to update buyers of the status of their investment and to
emphasize a key strength of DMCI which is its fast delivery time.
Design will provide the look of a particular development. This will
be uploaded in the website as a part of the 3D Open House feature

of the website.
b. Development of the OFW Another market development strategy is to tap the OFW segment.
Market

The sales department will lead this initiative by forging partnerships

with various external brokers in countries DMCI has no presence in.
An external broker will be employed to market DMCI in Saudi
Arabia, whose OFW deployment is growing at 5%. Germany and

Norway are also among the top destinations of OFWS but DMCI
does not have presence. The sales team will also partner with
external brokers in these European countries. Aside from widening
DMCIs presence in popular OFW destinations, DMCI will also
strengthen its hold over Canada and Japan which also has an
increasing number of OFW deployments.
c. Development of the BPO BPO workers will be targeted as a possible new market to tap, to be
Market

able to innovate a housing solution to BPO workers, the key

accounts unit under sales will lead this initiative. Together with
marketing, finance and construction, they will formulate a corporate
housing package specifically geared toward BPO workers.

CUSTOMER DEPARTMENT
a. Customer Care
Customer care will lead in the market penetration strategy to tap the
more than 10,000 existing home owners of DMCI. For the referral
program to work, existing home owners should continue to remain
satisfied. The relationship manager within the customer care
department will be in charge of this. A more important duty of the
customer care group is to update the CRM of DMCI not just for
prospective clients but for existing home owners. In satisfying the
current needs of the home owners, customer care will also data mine
for possible referrals that can be obtained from existing home
owners. The relationship manager will then concentrate his/her
efforts in these identified customers and introduce the existing
products of DMCI as well as the financial incentive of referring
someone to the program.
BUSINESS DEVELOPMENT
a. Expansion of Property
The Business Development division will lead in the companys
expansionary strategy in the BGC area. The business development

will approach the BGC administration and other realtors to acquire

new tracts of land such as the newly opened Northern BGC area.
Expansionary activities will occur within three years after the
planned IPO. Investment in properties will grow from the current
price. Additional properties will be utilized for additional mid and
high rise developments.
FINANCIAL DEPARTMENT
a. IPO Strategies
Finance will own the IPO strategy. If the IPO is well received, the
remaining capital requirement can be sourced thru a re-launch of
the stocks. If not, the remaining capital raising can be either
deferred until market conditions improve or it can be funded via
debt.
Finance will use the proceeds of the IPO not only to fund
expansionary strategies (such as strategic land banking strategy) but
also to pay off its short term debt. Bulk of the companys debt are
short term debt. Given that interest rates are expected to rise further.
Paying off the short term debt of DMCI will save on finance cost
and improve the companys profitability.
CONSTRUCTION DEPARTMENT
a. Sales and Operations Operations will chair monthly meetings with sales to determine
Planning

forecasted demand for units. Sales will provide indication as to the

type of units that are on demand (studio type, 1 bedroom, 2
bedrooms). Construction will design its developments based on the
projection provided by sales. Through Sales and Operations
planning, inventory levels will be monitored by the construction
department.
Operational synergy with DMCI group will also be strengthened to

reduce cost and manage quality better. All of the construction and
steel fabrication requirements of DMCI Homes will be coursed
through DM Consunji (construction) and AG&P (Steel fabrication).
Additionally, DMCI Homes purchases will be priced lower since it
is an internal counterparty of these DMCI subsidiaries.
DMCI Homes raw material requirements will be integrated to
DMCI Groups requirements. This will give DMCI additional
bargaining power to lower the acquisition price of its raw materials
and reduce DMCI Homes build cost.
HUMAN RESOURCE DEPARTMENT
a. Additional Personnels
Human resources will need to hire and train 50 additional personnel
to man the different strategies of DMCI such as the improvement of
its distribution channel. As a motivational tool for its employees,
DMCI will send high performing sales personnel to international
sales offices. HR will also launch training to prepare new hires for
the real estate licensure exam which is a requirement by the
government.
HR will also review the performance appraisal system to include
customer service to both new and existing customers as a key
performance indicator to sales and customer care personnel. Sales
quotas indicated in the performance appraisal system will be
revised to focus more on sales coming from OFWs and BPOs to
align it with the market development strategies.