Module I.

Introduction

The residential real estate industry in the Philippines stands as a dynamic sector, deeply

intertwined with the nation's economic landscape and societal dynamics. Over the years, this

industry has witnessed remarkable growth spurred by factors such as urbanization, population

expansion, and evolving consumer preferences. With a burgeoning middle class and increasing

urbanization rates, the demand for residential properties continues to soar, presenting both

opportunities and challenges for key players within the sector. From high-rise condominiums in

metropolitan centers to suburban housing developments, the Filipino real estate market

showcases a diverse range of offerings catering to varying lifestyle needs and preferences.

Within this vibrant industry, Ayala Land emerges as a pivotal figure, renowned for its

extensive portfolio of residential developments and its significant impact on shaping urban

landscapes across the Philippines. As one of the country's leading real estate developers, Ayala

Land has built a reputation for excellence, innovation, and sustainable urban planning. With a

rich history spanning decades, Ayala Land's commitment to quality, community development,

and environmental stewardship has positioned it as a cornerstone of the Philippine real estate

sector, influencing industry standards and setting benchmarks for others to follow.

This paper aims to delve into a comprehensive review and analysis of Ayala Land,

examining its strategic position within the residential real estate market in the Philippines.

Through a systematic evaluation of its external and internal environments, this study seeks to

uncover the key drivers and challenges influencing Ayala Land's strategic decisions and

performance. Furthermore, it will explore the company's strategic plan, functional area strategies,
and the execution of its overarching strategy. Additionally, financial projections will be

scrutinized to provide insights into Ayala Land's future trajectory within the dynamic landscape

of the Philippine real estate industry.

This paper will be divided into seven parts, namely: (a) External Environment Analysis;

(b) Analysis of Internal Environment; (c) Strategic Plan; (d) Functional Area Strategies; (e)

Strategy Execution; and (f) Financial Projections.

Module II. External Environment Analysis

1. Definition of the Industry

The residential real estate industry in the Philippines stands as a vital pillar of the nation's

economy, characterized by robust growth and significant contributions to GDP. Rapid

urbanization, coupled with a burgeoning population, has fueled relentless demand for housing

across various segments, ranging from affordable to luxury residences. Metropolitan centers like

Metro Manila, Cebu, and Davao have witnessed substantial investments in high-rise

condominiums, townships, and mixed-use developments, catering to the diverse needs and

preferences of urban dwellers. Moreover, the government's initiatives to promote housing

affordability and accessibility through programs like socialized housing and housing loan

subsidies have further stimulated demand and investment in the residential sector. Despite

occasional challenges such as regulatory constraints, infrastructure limitations, and market

volatility, the Philippine residential real estate market continues to exhibit resilience, attracting

both local and foreign investors seeking long-term growth prospects.

Furthermore, the evolving landscape of the Philippine residential real estate industry is

characterized by shifting consumer preferences and emerging trends, necessitating adaptation

and innovation among industry players. Increasingly, sustainability and eco-friendly designs are

gaining prominence, driven by growing environmental awareness and regulatory pressures.

Developers are incorporating green technologies, energy-efficient features, and sustainable

materials into their projects to appeal to environmentally conscious consumers and align with

global sustainability agendas. Moreover, digitalization and technological advancements are

revolutionizing the way properties are marketed, sold, and managed, with the adoption of virtual
tours, online platforms, and smart home technologies becoming commonplace. As the industry

continues to evolve amidst rapid urbanization and changing demographics, strategic agility,

innovation, and a customer-centric approach remain paramount for sustained growth and

competitiveness in the Philippine residential real estate market.

Major Groups and Players

The residential real estate industry in the Philippines is characterized by a diverse array of

major groups and players, each contributing significantly to the sector's growth and

development. Among the prominent players in the market, Ayala Land, Inc. stands out as a

leading real estate developer, renowned for its extensive portfolio of residential projects

spanning across various segments. With a strong focus on sustainable urban planning and

community development, Ayala Land has played a pivotal role in shaping the country's urban

landscapes through its iconic developments such as Ayala Alabang, Ayala Center Makati, and

Nuvali.

Another key player in the Philippine residential real estate sector is SM Development

Corporation (SMDC), a subsidiary of SM Prime Holdings, Inc. Leveraging its vast retail and

mall network under the SM Group, SMDC has established a formidable presence in the

residential market, catering to middle-income and affordable housing segments. Its portfolio

includes high-rise condominiums, integrated developments, and residential communities

strategically located in key urban centers nationwide.

 In addition, diving into the landscape of the Philippine residential real estate sector,

DMCI Holdings, Inc. also emerges as a pivotal player, particularly through its subsidiary DMCI

Homes. Leveraging its expertise in construction and engineering, DMCI Homes has established

itself as a significant presence in the residential market, offering a diverse range of housing

options from mid-rise condominiums to exclusive residential subdivisions. With a commitment

to quality craftsmanship and sustainable development, DMCI Homes has earned recognition for

its innovative designs and efficient project delivery, contributing to the enhancement of urban

living experiences across the Philippines.

Beyond these major players, the Philippine residential real estate industry also features a

multitude of local and international developers, each bringing unique expertise, innovations, and

offerings to the market. From boutique developers specializing in niche segments to global

players capitalizing on the country's growth potential, the industry's diverse ecosystem fosters

healthy competition and innovation, ultimately driving the sector forward and meeting the

evolving needs of Filipino homebuyers.

2. Analysis of Present Task Environment

● Threat of New Entrants (Low): Ayala Land benefits from economies of scale, strong

brand recognition, and significant barriers to entry such as high capital requirements,

regulatory approvals, and established relationships with suppliers and contractors. These

factors collectively pose a moderate to low threat of new entrants into the market.

However, the threat could increase slightly if there is a significant change in regulatory

policies favoring new entrants or if disruptive technologies emerge that lower barriers to

entry.

● Bargaining Power of Buyers (Moderate): The bargaining power of buyers varies across

different segments of Ayala Land's offerings. In the luxury segment, where Ayala Land

enjoys a strong brand image and limited competition, buyers' bargaining power may be

moderate. However, in the mid-range and affordable segments, where buyers have more

options, their bargaining power tends to be higher. Factors such as economic conditions,

interest rates, and consumer preferences can also influence buyers' bargaining power,

making it a moderate force overall.

● Bargaining Power of Suppliers (Moderate): Ayala Land's scale of operations and

established relationships with suppliers provide it with some bargaining power. However,

the availability of alternative suppliers and the dependence on certain critical inputs like

construction materials and skilled labor can moderate this power. Overall, the bargaining

power of suppliers for Ayala Land is moderate, with fluctuations in input costs and

availability influencing the degree of bargaining power.

 ● Threat of Substitutes (Low): The threat of substitutes for Ayala Land's residential real

estate offerings is relatively low. Real estate properties are tangible assets with unique

characteristics and intrinsic value, making them less susceptible to direct substitution.

While indirect substitutes like rental properties or alternative investment options exist,

they do not pose a significant threat to Ayala Land's market position and profitability.

● Intensity of Competitive Rivalry (High): The competitive rivalry in the Philippine

residential real estate market is intense, with several established players competing for

market share and consumer attention. Ayala Land faces competition from major

developers such as SM Development Corporation, DMCI Holdings, and Robinsons Land

Corporation. Price competition, product differentiation, and marketing strategies are key

battlegrounds where Ayala Land must continually innovate to maintain its competitive

edge. The cyclical nature of the industry and economic factors further intensify

competitive pressures, making this force high.

3. Analysis of Potential Changes in the Macro-environment

Ayala Land, a prominent real estate development company, operates in a dynamic and

multifaceted business environment. To navigate this complex landscape effectively, it is crucial

to conduct a comprehensive analysis of the external factors that can impact its operations and

strategic decisions. This PESTEL analysis delves into the political, economic, social,

technological, environmental, and legal factors that shape Ayala Land's business landscape,

providing valuable insights into the opportunities and challenges the company faces in its quest

for sustainable growth and success.

Political
 1. Government Policies & Regulations: Analyzing the impact of government regulations on

zoning laws, building codes, and permits affecting residential real estate development.

2. Government Infrastructure Projects: Assessing the influence of government-funded

infrastructure projects such as transportation, utilities, and public amenities on residential

property demand and values.

3. Political Stability: Examining the stability of the political environment and its effect on

investor confidence and property market dynamics.

Economic

1. Economic Growth: Evaluating the correlation between economic growth rates and

demand for residential properties in various market segments.

2. Interest Rates: Analyzing the effects of fluctuating interest rates on mortgage

affordability and housing demand.

3. Consumer Spending Power: Assessing trends in household income levels and their

impact on purchasing power for residential properties.

Social-cultural

1. Changing Demographic Trends: Understanding shifts in population demographics, such

as aging populations or millennial preferences, and their implications for housing demand

and design.

2. Housing Needs and Preferences: Examining evolving consumer preferences for housing

types, amenities, and location preferences.

3. Change in Lifestyles: Analyzing changes in lifestyle trends, such as remote work or eco-

friendly living, and their influence on residential real estate demand.

Technological

1. Construction Technologies: Assessing the adoption of innovative construction methods

and materials to improve efficiency, sustainability, and cost-effectiveness in residential

development.

2. Digitalization: Examining the integration of digital technologies in property management,

marketing, and sales processes.

3. Technology in Home Construction: Analyzing the incorporation of smart home

technologies and energy-efficient systems in residential properties to meet evolving

consumer demands.

Environmental

1. Environmental Regulations: Evaluating compliance with environmental laws and

regulations governing land use, conservation, and sustainability initiatives.

2. Sustainable Development Practices: Analyzing the adoption of sustainable building

practices, green certifications, and eco-friendly design features in residential

developments.

3. Risk of Climate Change: Assessing the potential impact of climate change-related risks,

such as sea-level rise or extreme weather events, on residential property values and

insurance costs.

Legal

1. Land Ownership Laws: Understanding legal frameworks governing land ownership rights

and their impact on property development and transactions.

 2. Property Taxation: Analyzing property tax rates and regulations and their implications for

property investors and homeowners.

3. Regulatory Compliance: Assessing compliance requirements related to land use,

environmental regulations, and building codes affecting residential real estate projects.

4. Threats and Opportunities

Ayala Land is poised to capitalize on several opportunities to bolster its growth and

market presence. Firstly, market diversification presents a promising avenue for Ayala Land to

expand its portfolio and mitigate risks associated with concentration in specific sectors or

regions. By diversifying into complementary markets such as hospitality, healthcare, and

education, the company can tap into new revenue streams and enhance its resilience against

market fluctuations. Additionally, embracing digitalization and integrating advanced

technologies into its operations can streamline processes, improve efficiency, and enhance

customer experiences. This could include leveraging data analytics for market insights, adopting

smart building technologies for sustainable development, and implementing digital platforms for

property management and customer engagement.

Furthermore, Ayala Land's commitment to sustainable development initiatives aligns

with evolving consumer preferences and regulatory mandates, presenting an opportunity to

differentiate itself in the market. By prioritizing environmentally responsible practices, such as

green building certifications and renewable energy integration, the company can appeal to eco-

conscious investors and tenants while contributing to long-term environmental sustainability.

Lastly, expanding into emerging markets offers Ayala Land access to untapped growth
opportunities, particularly in rapidly urbanizing regions with rising demand for real estate

development and infrastructure. By strategically entering new markets with high growth

potential, the company can diversify its revenue streams and strengthen its competitive position

on a global scale.

Despite these opportunities, Ayala Land faces several threats that could impact its

performance and growth trajectory. Market saturation in key sectors or regions could limit the

company's ability to achieve significant market share gains and may intensify competition for

prime real estate assets. Moreover, regulatory and legal risks, including changes in zoning

regulations, land use policies, and taxation laws, could pose challenges to project development

timelines and profitability. Economic uncertainties and market volatility, exacerbated by factors

such as inflationary pressures, interest rate fluctuations, and geopolitical tensions, may impact

consumer confidence and investment sentiment, potentially dampening demand for real estate

properties and affecting the company's financial performance. Additionally, intense competition

from domestic and international players in the real estate industry could erode Ayala Land's

market share and exert downward pressure on pricing and margins. To mitigate these threats,

Ayala Land must adopt a proactive approach to risk management, maintain financial resilience,

and continuously innovate to stay ahead of competitors in an increasingly dynamic market

environment.
5. Industry Competitive Analysis

Strategic Map

High

Low

Market Share

Within the strategic framework, Ayala Land emerges as situated in the high-growth,

high-share quadrant, suggesting a dominant position in segments with robust market growth rates

and a strong relative market share. This indicates Ayala Land's capability to capitalize on
thriving markets and maintain its competitive edge. In contrast, DMCI finds itself in the middle

quadrant, indicating a stable position with moderate market growth rates and relative market

share. While not experiencing the same level of growth as Ayala Land, DMCI maintains a solid

market presence. Conversely, SMDC occupies the lowest quadrant, facing challenges with low

market growth rates and weaker market share. This positioning signals a need for SMDC to

strategize and potentially explore avenues for revitalization to improve its competitive standing.

Market Definition

The market definition of residential real estate in the Philippines encompasses a broad

spectrum of properties catering to various segments of the population. From luxury

condominiums in bustling urban centers to affordable housing developments in suburban areas,

the residential real estate market in the Philippines offers a diverse range of options to meet the

diverse needs and preferences of homebuyers. This market is characterized by dynamic trends

influenced by factors such as demographic shifts, economic conditions, government policies, and

socio-cultural dynamics. For instance, the rapid urbanization and rising middle-class population

have fueled demand for condominium units with convenient access to amenities and employment

hubs, particularly in metropolitan areas like Metro Manila, Cebu, and Davao. Conversely, the

government's initiatives to promote housing affordability and accessibility through programs

such as socialized housing have stimulated investments in low to mid-income housing

developments across the country.

Moreover, the Philippine residential real estate market is also shaped by factors such as

changing consumer preferences, lifestyle trends, and technological advancements. With an

increasing emphasis on sustainability, wellness, and smart living, developers are incorporating

eco-friendly designs, wellness amenities, and smart technologies into their projects to attract

discerning homebuyers. Additionally, digitalization has revolutionized the way properties are

marketed, sold, and managed, with online platforms, virtual tours, and digital payment systems

becoming integral components of the real estate industry. As the market continues to evolve

amidst urbanization, demographic shifts, and technological disruptions, a nuanced understanding

of the diverse segments, trends, and drivers within the residential real estate market is essential

for developers, investors, and policymakers to navigate effectively and capitalize on emerging

opportunities.

Market Size

In the landscape of the residential real estate industry in the Philippines, Ayala Land,

SMDC, and DMCI Holdings, Inc. (DMCI Homes) stand as prominent players, each commanding

a substantial market segment share. Ayala Land typically holds a market share ranging from 15%

to 20%, focusing on high-end and upscale developments in prime locations to cater to affluent

homebuyers and investors seeking premium properties with luxurious amenities and lifestyle

offerings.

SMDC, a subsidiary of SM Prime Holdings, Inc., captures a significant portion of the

market, with an estimated share of around 20% to 25%. Targeting the mid-range and affordable

housing segments, SMDC's extensive portfolio of condominium projects and integrated

developments strategically located across key urban centers in the Philippines appeals to a broad

range of homebuyers.
 Similarly, DMCI Homes, a subsidiary of DMCI Holdings, Inc., boasts a market share of

approximately 10% to 15%. Specializing in mid-rise condominiums, resort-inspired

communities, and exclusive residential subdivisions, DMCI Homes focuses on delivering value-

for-money residential offerings with a strong emphasis on affordability and quality

craftsmanship. Together, Ayala Land, SMDC, and DMCI Homes collectively dominate a

significant portion of the residential real estate market in the Philippines, reflecting their

influence and contribution to the industry's overall market size and growth.

6. Broader Societal Expectations

In today's interconnected world, broader societal expectations extend beyond traditional

economic metrics to encompass a wide array of social, environmental, and ethical

considerations. As stakeholders increasingly scrutinize corporate behavior and demand greater

accountability, companies operating in diverse industries, including real estate, face mounting

pressure to address these expectations. In the Philippines, where rapid urbanization,

environmental concerns, and social inequalities pose significant challenges, there is a growing

emphasis on legal compliance, social responsibility, environmental stewardship, and

sustainability reporting within the real estate sector.

Legal
 Legally, real estate developers in the Philippines are subject to a range of regulations

governing land use, property development, and construction. Compliance with zoning laws,

building codes, and environmental regulations is imperative to ensure the safety, integrity, and

sustainability of real estate projects. Additionally, adherence to labor laws and fair employment

practices is essential to uphold workers' rights and promote social justice within the industry.

Broader societal expectations entail not only meeting these legal requirements but also

demonstrating a commitment to ethical business conduct and corporate governance principles.

Social

From a social perspective, real estate developers are expected to contribute positively to

the communities in which they operate, fostering inclusive growth and addressing societal needs.

This may involve engaging with local stakeholders, supporting community development

initiatives, and providing affordable housing options for marginalized groups. Moreover,

promoting diversity, equity, and inclusion within the workforce and ensuring safe and livable

environments for residents are paramount. Transparency and engagement with stakeholders are

key in building trust and fostering mutually beneficial relationships with local communities.

Environmental

Given the environmental challenges facing the Philippines, such as climate change,

deforestation, and pollution, real estate developers are under increasing pressure to adopt

sustainable practices and mitigate environmental impacts. This includes incorporating green

building designs, utilizing energy-efficient technologies, and implementing waste management

strategies to minimize carbon footprints and conserve natural resources. Furthermore, developers
are expected to conduct environmental assessments and incorporate resilience measures to

mitigate risks associated with natural hazards and climate-related events.

Sustainability Reporting

Sustainability reporting has emerged as a critical tool for real estate companies to

transparently communicate their environmental, social, and governance (ESG) performance to

stakeholders. By disclosing key sustainability metrics, initiatives, and goals, developers can

demonstrate their commitment to sustainable development and accountability. Moreover,

sustainability reporting enables investors, consumers, and communities to make informed

decisions and hold companies accountable for their impact on society and the environment. As

such, real estate developers in the Philippines are increasingly expected to embrace sustainability

reporting as a means to drive positive change and build resilience in the face of evolving societal

expectations.
Module III: Analysis of Internal Environment

1. Overview of the Company

Figure _. Conglomerate Map of Ayala Corporation

Ayala Land, Inc. is one of the largest and most prominent real estate developers in the

Philippines. Established in 1988 as a subsidiary of Ayala Corporation, one of the oldest and

largest conglomerates in the country, Ayala Land has played a pivotal role in shaping the urban

landscape of the Philippines. Its corporate history is deeply intertwined with the nation's growth

and development, marked by a commitment to sustainability, innovation, and community

development. From its inception, Ayala Land has focused on creating vibrant, master-planned

communities, mixed-use developments, residential neighborhoods, and commercial centers that

cater to the diverse needs of Filipino families, businesses, and investors.

 Ayala Land's corporate structure reflects its diverse portfolio and strategic vision. The

company operates through several subsidiaries and business units, each specializing in different

aspects of real estate development, property management, and investment. These include Ayala

Land Premier, catering to the high-end residential market; Alveo Land, focusing on innovative

residential projects; Avida Land, targeting the middle-income segment; and Ayala Land Offices

and Ayala Malls, which develop and manage commercial properties. Additionally, Ayala Land

has ventured into hotels and resorts through Ayala Hotels and Resorts Corporation,

demonstrating its versatility and adaptability in meeting evolving market demands.

Furthermore, Ayala Land's corporate ethos is characterized by a strong commitment to

sustainable development and corporate social responsibility (CSR). The company integrates

sustainable practices into its operations, from eco-friendly design and construction to community

engagement programs that promote education, livelihood, and environmental stewardship. Ayala

Land's CSR initiatives extend beyond philanthropy to encompass long-term partnerships with

local communities, government agencies, and non-profit organizations, fostering inclusive

growth and nation-building. Through its corporate history, corporate structure, and commitment

to sustainability, Ayala Land continues to be a driving force in shaping the future of Philippine

real estate while contributing to the overall socio-economic progress of the nation.

2. Financial Analysis

Ayala Land's financial performance, as indicated by its total revenue, demonstrates

steady growth over the three-year period from 2021 to 2023. In 2021, the company recorded total
revenue of Php96.27 billion. Over the following years, Ayala Land experienced consistent

expansion, with total revenue increasing to Php106.14 billion in 2022 and further to Php126.56

billion in 2023.

This upward trend in total revenue reflects Ayala Land's effective business strategies,

including its robust real estate development projects, property management services, and

diversified investment portfolio. The increasing revenue figures suggest that Ayala Land has

been successful in capitalizing on market opportunities, expanding its customer base, and

optimizing its operations to drive revenue growth. Additionally, the sustained growth in total

revenue indicates the company's resilience and adaptability, even amidst challenging economic

conditions. Ayala Land's ability to consistently generate higher revenue over the years

underscores its strong market position and potential for continued success in the real estate

industry.

TOTAL REVENUE

2021 2022 2023

Php96,273,000,000.00 Php106,143,000,000.00 Php126,556,000,000.00

FINANCIAL RATIOS

Ratios 2021 2022 2023

Current 1.62 1.58 1.78

Debt-to-Equity 0.81 0.82 0.80

Return on Equity 4.0% 5.4% 7.0%

 Return on Assets 1.5% 2.1% 2.9%

Moreover, Ayala Land's financial performance, as evidenced by its financial ratios over

the period from 2021 to 2023, reflects a trajectory of stability and improvement. The company's

liquidity, as indicated by the current ratio, exhibited a slight fluctuation initially but ultimately

trended upwards, reaching 1.78 in 2023. This suggests that Ayala Land strengthened its ability to

cover short-term obligations over time. Similarly, the debt-to-equity ratio remained relatively

stable throughout the period, indicating a balanced capital structure and prudent management of

debt levels. Meanwhile, Ayala Land's return on equity (ROE) and return on assets (ROA) both

demonstrated significant improvement, with ROE rising from 4.0% in 2021 to 7.0% in 2023 and

ROA increasing from 1.5% to 2.9% over the same period. These positive trends underscore

Ayala Land's enhanced profitability and efficiency in utilizing shareholder equity and total assets

to generate earnings. Overall, Ayala Land's financial ratios portray a picture of resilience,

strategic management, and improving performance, positioning the company for continued

growth and success in the real estate industry.

3. Value Chain Analysis

 Figure _. Value Chain Model

Value chain analysis is a strategic management tool used to dissect the activities and

processes within a company to identify areas of competitive advantage and cost efficiency. It

involves breaking down the sequence of activities involved in producing and delivering a

product or service, from raw material sourcing to the final customer delivery. By analyzing each

step in the value chain, businesses can identify opportunities for optimization, cost reduction,

differentiation, and innovation. Value chain analysis helps companies understand their

competitive position relative to rivals and enables them to make informed decisions about

resource allocation, outsourcing, vertical integration, and strategic partnerships. Ultimately, it

empowers organizations to create value for customers while maximizing profitability and

sustaining long-term growth in the market.

Primary Activities

Primary Activities Description

Inbound Logistics ● Ayala Land efficiently manages its inbound logistics by

strategically procuring raw materials, such as construction
materials and land parcels, from various suppliers. With a
 robust supply chain network, Ayala Land ensures timely
delivery of materials to its construction sites, optimizing
costs and minimizing delays in project timelines.

Operations ● Ayala Land's operations are characterized by meticulous

project management, precise construction processes, and
adherence to quality standards. From land development to
building construction, the company focuses on efficiency
and excellence, employing modern techniques and
technologies to enhance productivity and ensure the
successful execution of its real estate projects.

Distribution ● In distributing its developed properties, Ayala Land

carefully assesses market demand and strategically
allocates its resources across different geographic
locations. Through a comprehensive understanding of
consumer preferences and market dynamics, the company
maximizes the value of its real estate portfolio, effectively
meeting the diverse needs of homebuyers, investors, and
tenants.

Marketing and Sales ● Ayala Land's marketing and sales activities are
characterized by a strong brand presence, targeted
marketing campaigns, and personalized customer
engagement. Leveraging its reputation and expertise in the
real estate industry, the company employs innovative
marketing strategies to showcase its properties and attract
potential buyers, while its sales teams provide expert
guidance and support throughout the purchasing process.

Service ● Ayala Land prioritizes post-sales service to ensure

customer satisfaction and retention. From property
handover to ongoing maintenance and support, the
company offers comprehensive services to address the
needs of homeowners, tenants, and investors. By providing
timely assistance, resolving issues promptly, and
maintaining open communication channels, Ayala Land
builds lasting relationships with its customers, fostering
loyalty and driving repeat business.

Support Activities

Support Activities Description

Procurement ● Efficient inbound procurement involves sourcing and

 acquiring raw materials and resources essential for real
estate projects. Building strong supplier relationships,
negotiating favorable terms, and ensuring timely delivery
are key. Optimizing procurement processes minimizes
costs, mitigates risks, and maintains a reliable supply
chain, supporting operational activities.

Human Resources ● Human resources are pivotal in driving innovation,

efficiency, and growth. Investing in recruitment, training,
and fostering a culture of excellence ensures a skilled and
motivated workforce. Effective human resource
management equips employees with the necessary skills
and knowledge to deliver high-quality services and
solutions.

Research and ● Commitment to research and development drives

Development innovation, sustainability, and market differentiation.
Investment in R&D explores new technologies, design
trends, and sustainable practices, enhancing the value of
real estate offerings. Staying ahead of industry trends and
consumer preferences positions the organization as a
market leader, delivering innovative solutions.

Infrastructure ● A robust IT infrastructure streamlines operations,

marketing, sales, and service activities. Leveraging
technology improves efficiency, communication, and
collaboration. With advanced systems and platforms,
seamless data management and analytics empower teams
to deliver superior products and services, maintaining a
competitive edge.

4. Strengths and Weaknesses

From Financial Analysis From Value Chain Analysis

Strengths ● Ayala Land benefits from ● Strategic procurement

diversified revenue streams and supply chain
derived from its various real management enable
estate projects, ensuring Ayala Land to optimize
stability even during economic costs and minimize
fluctuations. delays, enhancing
● Efficient cost management operational efficiency
coupled with high-quality and project timelines.
offerings allows Ayala Land to ● Ayala Land's robust
maintain healthy profit marketing and sales
 margins, enhancing financial activities, characterized
performance and shareholder by a strong brand
value. presence and innovative
● Being part of the Ayala strategies, attract
Corporation conglomerate potential buyers and
provides Ayala Land with drive sales, contributing
access to ample financial to overall value creation.
resources and funding, ● Prioritizing post-sales
facilitating large-scale service ensures customer
developments and strategic satisfaction and
investments. retention, fostering long-
term relationships and
repeat business, thereby
adding value throughout
the customer lifecycle.

Weaknesses ● Ayala Land's financial ● Reliance on specific

performance may be impacted suppliers for raw
by fluctuations in real estate materials may pose risks,
market conditions, interest such as disruptions in
rates, or regulatory changes, the supply chain or
exposing it to market risks vulnerability to supplier
beyond its control. price fluctuations,
● Despite access to capital, high impacting operations and
levels of debt incurred for profitability.
large-scale projects could ● Despite investment in
strain financial resources and recruitment and training,
increase interest expenses, challenges in retaining
potentially affecting skilled employees or
profitability and liquidity. adapting to changing
● Ayala Land's financial market demands may
performance is closely tied to hinder operational
overall economic conditions, efficiency and
making it susceptible to innovation within the
downturns or recessions that value chain.
may dampen demand for real ● Dependency on IT
estate properties and affect infrastructure exposes
revenue growth. Ayala Land to risks such
as cyber threats or
system failures,
necessitating robust
contingency plans to
mitigate disruptions and
safeguard value chain
activities.
5. Personal Values of Key Implementers

Jaime Augusto Zobel de Ayala, as a key implementer of Ayala Land, embodies a set of

personal values that deeply influence his leadership approach and decision-making within the

company. Central to his ethos is a commitment to integrity and ethical conduct. Zobel de Ayala's

unwavering dedication to upholding the highest standards of integrity not only fosters trust and

credibility within Ayala Land but also sets a benchmark for ethical business practices in the

industry.

Additionally, Zobel de Ayala's personal values emphasize sustainability and corporate

social responsibility. He recognizes the importance of sustainable development in creating long-

term value for stakeholders and the community. Under his leadership, Ayala Land has prioritized

environmental sustainability, social inclusion, and community development initiatives, reflecting

Zobel de Ayala's belief in the company's role as a responsible corporate citizen.

Moreover, Zobel de Ayala's personal values underscore a commitment to innovation and

excellence. He embraces a culture of continuous improvement and innovation within Ayala

Land, driving the company to pursue excellence in all aspects of its operations. By fostering a

culture of innovation, Zobel de Ayala ensures that Ayala Land remains at the forefront of the real

estate industry, constantly adapting to evolving market dynamics and delivering innovative

solutions to meet customer needs.

Overall, Jaime Augusto Zobel de Ayala's personal values, including integrity,

sustainability, and innovation, serve as guiding principles that shape Ayala Land's corporate
culture and strategic direction. His leadership underscores the importance of ethical conduct,

sustainable practices, and continuous innovation in driving the company's success and

contributing to the broader socio-economic development of the Philippines.

Module IV: Strategic Plan

1. Mission and Vision

“Our vision is to enhance land and enrich the

lives of more Filipinos.

By developing integrated, master-planned,

Vision-Mission of Ayala Land and sustainable mixed-use communities in
vibrant growth centers all over the country,
we strive to continually elevate the quality of
life for all of our customers.

We empower our employees to deliver quality

products and services that build long-term
value for our shareholders.”

Analysis

Ayala Land's vision and mission articulate a clear commitment to enhancing the lives of

Filipinos through sustainable development and community-building initiatives. The vision to

enhance land and enrich lives underscores the company's holistic approach to real estate, aiming

to create integrated, master-planned communities that not only provide quality housing but also
foster vibrant and sustainable environments. By focusing on vibrant growth centers across the

Philippines, Ayala Land aims to uplift the quality of life for its customers, emphasizing the

importance of social responsibility and community development in its operations. Furthermore,

the mission statement highlights Ayala Land's dedication to empowering its employees to deliver

quality products and services, underscoring the company's focus on excellence and long-term

value creation for shareholders. Overall, Ayala Land's vision and mission reflect its commitment

to responsible and sustainable development, driven by a desire to create positive impact and

value for all stakeholders.

Proposed Vision and Mission

Vision: To be the premier developer of sustainable, innovative, and inclusive communities that

enrich the lives of Filipinos and inspire global benchmarks in urban development.

Mission: At Ayala Land, we are dedicated to creating integrated, master-planned, and

sustainable mixed-use communities that redefine urban living. Through relentless innovation,

environmental stewardship, and a commitment to social responsibility, we aim to elevate the

quality of life for all stakeholders, empower our employees to deliver excellence, and generate

long-term value for our shareholders.

2. Financial, Social, and Strategic Objectives

Financial ● Achieve consistent revenue growth year-over-year

through diversified real estate projects and
investments.
● Maintain healthy profit margins by optimizing
operational efficiency and cost management.
● Strengthen financial stability by reducing debt levels
and increasing liquidity ratios.
 Social ● Enhance community development by providing
affordable housing options and sustainable
infrastructure.
● Foster inclusive growth by promoting education,
healthcare, and livelihood programs in local
communities.
● Cultivate a culture of diversity and inclusion within the
organization, ensuring equal opportunities for all
employees.

Strategic ● Expand market presence and geographic reach by

developing integrated, master-planned communities in
emerging growth centers.
● Drive innovation in real estate development through
the adoption of sustainable practices and cutting-edge
technologies.
● Strengthen strategic partnerships and collaborations
with government agencies, NGOs, and other
stakeholders to address societal challenges and create
shared value.

3. Evaluation of Present Corporate Strategies

Dimensions of Competitive Strategies

Ayala Land strategically positions itself in the real estate market by adopting a

combination of differentiation and focus strategies. The company differentiates itself from

competitors through its emphasis on developing integrated, master-planned communities that

prioritize sustainability, innovation, and customer-centricity. By offering a diverse range of real

estate products and services tailored to various market segments, Ayala Land effectively caters to

the evolving needs and preferences of its customers. Moreover, the company focuses on specific

market niches, such as high-end residential, middle-income housing, and commercial

developments, allowing it to concentrate its resources and efforts on segments where it can

achieve a competitive advantage more effectively.

Evaluation of Actual Strategies

Strategy Evaluation

Ayala Land has been committed to ● This strategy has been highly effective
sustainability and innovation in its real estate in enhancing Ayala Land's brand
developments. The company integrates green reputation, attracting environmentally-
building practices, renewable energy conscious buyers, and complying with
solutions, and eco-friendly design principles regulatory requirements. By
into its projects to minimize environmental prioritizing sustainability and
impact and enhance energy efficiency. innovation, the company has created
Additionally, Ayala Land invests in research distinctive and desirable properties
and development to explore innovative that command premium pricing and
technologies and design concepts that enjoy strong demand from customers.
differentiate its properties in the market.

Ayala Land focuses on specific market ● This strategy has enabled Ayala Land
segments, such as high-end residential, to dominate key market segments and
middle-income housing, and commercial mitigate risks associated with market
developments. The company tailors its concentration. By focusing on
product offerings and marketing strategies to segments with high growth potential
meet the distinct needs and preferences of and strong demand fundamentals, the
each segment, allowing it to capture market company has achieved sustainable
share more effectively and maintain revenue growth and maintained
profitability. healthy profit margins even amidst
economic fluctuations.

Ayala Land invests in technology and talent ● This strategy has been instrumental in
development to drive operational efficiency, strengthening Ayala Land's
innovation, and organizational excellence. competitive position and future-
The company leverages digital technologies, proofing its business operations. By
data analytics, and automation tools to embracing technology and talent
streamline processes, improve decision- development, the company has
making, and enhance customer experiences. achieved greater operational agility,
Moreover, Ayala Land prioritizes employee cost efficiency, and customer
training and development initiatives to nurture satisfaction. Additionally, investing in
a culture of excellence, creativity, and employee skills and capabilities has
continuous improvement within the fostered a culture of innovation and
organization. collaboration, enabling Ayala Land to
adapt to changing market dynamics
and sustain long-term growth.

4. Proposed Corporate Strategies

Strategy 1: Expansion into Emerging Markets
Description: Ayala Land can leverage its expertise in real estate development to expand its
footprint into emerging markets beyond metro areas. This strategy involves identifying
strategic locations with favorable demographics, infrastructure development, and economic
growth prospects for the establishment of integrated, master-planned communities.
Objective: To capitalize on untapped market opportunities, broaden revenue streams, and
reduce dependency on metro-centric markets, thereby enhancing the company's resilience to
market fluctuations and economic uncertainties.
Basis: Opportunities - Growing demand for quality housing and commercial spaces in
emerging markets; Strengths - Ayala Land's proven track record in developing integrated
communities and strong brand reputation.

Strategy 2: Diversification into Real Estate Asset Management

Description: Ayala Land can establish a dedicated arm or division focused on providing
comprehensive asset management solutions for its real estate portfolio and third-party clients.
This strategy involves leveraging Ayala Land's extensive experience in property development
to optimize asset performance, maximize rental yields, and enhance property values over the
long term.
Objective: To create a recurring revenue stream, unlock additional value from existing real
estate assets, and broaden Ayala Land's service offerings beyond development, thereby
increasing revenue diversification and profitability.
Basis: Strengths - Extensive portfolio of developed properties suitable for asset management;
Opportunities - Growing demand for professional property management services in the
Philippines.

Strategy 2: Digital Transformation and E-commerce Ventures

Description: Ayala Land can invest in digital technologies, online platforms, and e-commerce
ventures to create seamless and immersive digital experiences for customers. This strategy
involves launching digital platforms for property sales, rentals, and services, as well as
leveraging data analytics and AI-driven solutions to optimize business processes and enhance
decision-making.
Objective: To stay ahead of industry trends, cater to tech-savvy consumers, and drive
 operational efficiency and innovation across Ayala Land's business units.
Basis: Opportunities - Rapid growth of the digital economy, increasing consumer preference
for online transactions; Strengths - Ayala Land's reputation for innovation and commitment to
customer-centricity.

5. Competitive Advantage

The VRIO framework evaluates a firm's competitive advantage by assessing the Value,

Rarity, Imitability, and Organization of its resources and capabilities. It determines whether these

resources and capabilities are valuable for exploiting market opportunities, rare compared to

competitors, difficult to imitate or substitute, and well-organized to create and capture value.

Through this analysis, the VRIO framework helps firms identify their strengths and weaknesses

and develop strategies to sustain or enhance their competitive edge in the marketplace.
VRIO Analysis for Current Situation

Component Current State Position

Valuable ● Ayala Land possesses valuable Competitive

resources and capabilities that Advantage
contribute to its competitive advantage.
These include its extensive land bank
in prime locations, strong brand
reputation, established network of
strategic partnerships, and expertise in
sustainable real estate development.
● The company's focus on customer-
centricity, innovation, and
sustainability adds value to its real
estate offerings, attracting discerning
buyers and investors who prioritize
quality, convenience, and
environmental responsibility.

Rare ● Ayala Land's resources and capabilities Competitive

are relatively rare within the real estate Advantage
industry in the Philippines. Its
extensive land bank in prime locations,
particularly in metro areas and
emerging growth centers, is not easily
replicable.
● The company's focus on sustainable
development practices and its
commitment to social responsibility set
it apart from competitors, as not all real
estate developers prioritize
environmental stewardship and
community engagement to the same
extent.
 Inimitable ● Ayala Land's resources and capabilities Competitive
are difficult to imitate or replicate by Advantage
competitors. Its strong brand
reputation, established network of
strategic partnerships, and expertise in
sustainable real estate development
have been built over decades and are
deeply embedded within the company's
culture and operations.
● Ayala Land's extensive land bank in
prime locations is a result of long-term
strategic planning and investment,
making it challenging for competitors
to acquire similar assets without
significant time and resources.

Organized ● Ayala Land is organized to effectively Competitive

capture value from its valuable, rare, Advantage
and inimitable resources and
capabilities. The company's
organizational structure, processes, and
culture are aligned with its strategic
objectives, ensuring efficient
utilization of resources and effective
execution of business strategies.

VRIO Analysis for Proposed Situation

Component Current State Position

Valuable ● All proposed corporate strategies for Competitive

Ayala Land, including expansion into Advantage
emerging markets, diversification into
real estate asset management, and
digital transformation ventures,
contribute value to the company. These
strategies leverage Ayala Land's
existing resources, capabilities, and
market opportunities to enhance its
competitive position, create new
revenue streams, and drive long-term
growth.

Rare ● Ayala Land's strategies exhibit Competitive

 elements of rarity, as they capitalize on Advantage
the company's unique strengths, such
as its proven track record in real estate
development, strong brand reputation,
extensive portfolio of developed
properties, and commitment to
innovation. While some aspects of
these strategies may be more common
within the industry, Ayala Land's
specific combination of resources and
capabilities make its execution
relatively rare and difficult for
competitors to replicate.

Inimitable ● Ayala Land's proposed strategies are Competitive

characterized by elements of Advantage
inimitability, as they leverage the
company's core competencies,
proprietary knowledge, and
organizational culture to create
sustainable competitive advantages.
The company's expertise in real estate
development, strategic foresight in
identifying market opportunities, and
agility in adapting to technological
advancements are difficult for
competitors to imitate without similar
resources, capabilities, and
organizational alignment.

Organized Competitive
● Ayala Land is well-organized to Advantage
capture value from its proposed
strategies, with its organizational
structure, processes, and culture
aligned with its strategic objectives.
The company demonstrates a clear
commitment to execution excellence,
with the necessary structures and
systems in place to effectively leverage
its resources and capabilities, optimize
operational efficiency, and drive value
creation for its stakeholders.
Module V: Functional Area Strategies

Marketing ● Segmentation and Targeting: Develop

tailored marketing campaigns focusing
on the unique needs and preferences of
emerging market demographics,
showcasing Ayala Land's integrated
community offerings.
● Brand Localization: Adapt branding
strategies to resonate with local
cultures and values in emerging
markets, emphasizing Ayala Land's
commitment to sustainable
development and community
engagement.

Operations ● Localized Supply Chain Management:

Establish efficient supply chain
networks within emerging markets to
ensure timely delivery of materials and
resources for development projects,
reducing operational costs and risks.
● Agile Project Management: Implement
agile project management
methodologies to quickly adapt to
market dynamics and regulatory
changes in emerging markets, ensuring
timely project delivery and quality
assurance.

Finance ● Risk Management Strategies: Develop

robust risk management frameworks to
assess and mitigate risks associated
with expansion into emerging markets,
ensuring financial stability and
protecting investment returns.
 ● Investment Diversification: Diversify
investment portfolios to include real
estate asset management ventures,
optimizing returns and reducing
dependency on property development
revenues.

Information Technology ● Digital Marketing Platforms: Build

user-friendly digital platforms for
property sales and rentals, integrating
AI-driven recommendations and
virtual property tours to enhance
customer experience and drive online
conversions.
● Data Analytics for Market Insights:
Utilize advanced data analytics tools
to gather market insights and forecast
demand trends in emerging markets,
facilitating informed decision-making
for strategic investments and
development projects.

Human Resources ● Cross-Cultural Training: Implement

cross-cultural training programs to
equip employees with the necessary
skills and cultural awareness to
effectively engage with diverse
stakeholders in emerging markets.
● Talent Acquisition and Development:
Recruit and develop local talent pools
in emerging markets, fostering a
diverse workforce and promoting
inclusive growth while leveraging
Ayala Land's expertise and best
practices in real estate development.
Module VI: Strategy Execution

1. McKinsey 7-S Framework

Strategy Ayala Land's strategy revolves around

expansion into emerging markets,
diversification into real estate asset
management, and digital transformation
ventures. These strategies are aimed at
leveraging its expertise in real estate
development, enhancing its competitive
position, and driving long-term growth.

Structure Ayala Land's organizational structure is

designed to support its strategic objectives,
with clear divisions and departments
dedicated to property development, asset
management, finance, marketing, operations,
IT, and HR. This structure facilitates
coordination and alignment across different
business units and functions.

System Ayala Land has established systems and

processes to support its operations, including
project management systems, financial
reporting systems, customer relationship
management (CRM) systems, and digital
platforms for property sales and rentals. These
systems enable efficient execution of projects,
decision-making, and customer engagement.

Style Ayala Land's leadership style is characterized

by collaboration, innovation, and a long-term
perspective. The company fosters a culture of
open communication, empowerment, and
accountability, encouraging employees to
contribute ideas, take initiative, and adapt to
change.
 Staff Ayala Land places a strong emphasis on
attracting, retaining, and developing top
talent. The company recruits employees who
align with its values and strategic objectives,
invests in training and development programs,
and provides opportunities for career
advancement and growth.

Skills Ayala Land employs a diverse workforce with

a range of skills and expertise in real estate
development, finance, marketing, technology,
and other relevant areas. The company invests
in talent development programs to enhance
employee skills and capabilities, ensuring
alignment with its strategic priorities.

Shared Values Ayala Land is guided by a set of shared values

that emphasize integrity, innovation,
sustainability, and customer-centricity. These
values are embedded in the company's culture
and reflected in its business practices,
stakeholder relationships, and corporate social
responsibility initiatives.

2. Managing Internal Organization for Strategic Execution

(A) Establish Clear Strategic Objectives

● Define specific, measurable, achievable, relevant, and time-bound (SMART)

strategic objectives aligned with Ayala Land's expansion into emerging markets,

diversification into real estate asset management, and digital transformation

ventures.

● Communicate these objectives effectively across all levels of the organization to

ensure alignment and understanding of strategic priorities.

(B) Develop Cross-Functional Task Forces

 ● Form cross-functional task forces comprising representatives from different

departments and business units to execute key initiatives related to expansion,

diversification, and digital transformation.

● Ensure diverse perspectives and expertise are represented within these task forces

to foster collaboration, creativity, and effective problem-solving.

(C) Implement Agile Project Management Practices

● Adopt agile project management methodologies to facilitate rapid iteration,

flexibility, and responsiveness in executing strategic initiatives.

● Break down larger strategic objectives into smaller, manageable tasks or sprints,

allowing for continuous progress tracking, feedback, and adaptation to changing

market conditions.

(D) Leverage Technology and Data Analytics

● Invest in technology infrastructure and data analytics capabilities to support

strategic execution efforts, including digital platforms for property sales, rental

management systems, and advanced analytics tools for market insights.

● Harness data-driven insights to inform decision-making, optimize resource

allocation, and identify opportunities for innovation and operational improvement.

Module VII: Financial Projection

(A) Total Revenue

TOTAL REVENUE

2021 2022 2023 2024 2025

Php96,273,000,0 Php106,143,000, Php126,556,000, Php151,220,000, Php174,910,000,

00.00 000.00 000.00 000.00 000.00

Ayala Land's financial performance over the period from 2021 to 2023 demonstrates a

robust upward trajectory, with consistent revenue growth year over year. Starting at Php96.27

billion in 2021, the company's total revenue climbed steadily to Php126.56 billion by 2023,

marking a significant increase. This growth is particularly notable when considering the 19.24%

surge from 2022 to 2023, indicating a period of accelerated expansion. To forecast Ayala Land's

revenue for 2024 and 2025, the researchers analyzed the observed growth rates and projected

them forward. Applying the average growth rate between 2022 and 2023 to the 2023 revenue

yields an estimated revenue of approximately Php151.22 billion for 2024. Furthermore,

projecting forward with the same methodology suggests a total revenue of approximately

Php174.91 billion for 2025.

 (B) Financial Ratios

FINANCIAL RATIOS

Ratios 2021 2022 2023 2024 2025

Current 1.62 1.58 1.78 1.81 1.85

Debt-to- 0.81 0.82 0.80 0.76 0.72

Equity

Return on 4.0% 5.4% 7.0% 7.6% 8.3%

Equity

Return on 1.5% 2.1% 2.9% 3.5% 4.1%

Assets

Ayala Land's financial ratios for the period spanning from 2021 to 2023 depict a trend of

strengthening financial performance across multiple metrics. The current ratio, reflecting the

company's short-term liquidity position, improved steadily from 1.62 in 2021 to 1.78 in 2023.

This indicates an increasing ability to cover its short-term liabilities with its current assets.

Similarly, the debt-to-equity ratio, which measures the extent of leverage used by the company,

declined from 0.81 in 2021 to 0.80 in 2023, suggesting a reduction in financial risk and a

healthier balance sheet structure.

Furthermore, Ayala Land's return on equity (ROE) and return on assets (ROA) both

exhibited positive trends, indicating improved profitability and efficiency in asset utilization. The

ROE increased from 4.0% in 2021 to 7.0% in 2023, while the ROA climbed from 1.5% to 2.9%

over the same period. These increments signify enhanced returns generated from shareholders'

equity and total assets, respectively, reflecting effective management and operational

performance.
 To project the financial ratios for 2024 and 2025, we can extrapolate the observed trends.

Assuming the continuation of this positive trajectory, it's reasonable to anticipate further

improvements in Ayala Land's financial position. The current ratio is projected to rise to 1.81 in

2024 and 1.85 in 2025, indicating sustained liquidity strength. Similarly, the debt-to-equity ratio

is expected to continue its decline, reaching 0.76 in 2024 and 0.72 in 2025, reflecting a

decreasing reliance on debt financing.

Moreover, the return metrics are forecasted to maintain their upward momentum. The

ROE is projected to reach 7.6% in 2024 and 8.3% in 2025, while the ROA is expected to rise to

3.5% in 2024 and 4.1% in 2025. These projections suggest a continued enhancement in

profitability and efficiency, underpinned by effective utilization of resources and strategic

decision-making.