Cacho Hermanos Inc.
CASE STUDY 5
CACHO HERMANOS, INC
Background
Cacho Hermanos, Inc. (CHI) is a Philippine-printing firm established in 1880. CHI and its subsidiaries, Carmelo & Bauermann Printing Corporation (1887) and Capitol Publishing House, Inc. represent over a century of experience in quality printing work for a wide range clients both here and abroad. In the year 2000, Cacho Hermanos, Inc. was considered the lagest book printer in the country. In the early 1970s the Lopez family, owners of the Universal Printers group of companies, acquired Cacho Hermanos, Inc. In 2000, it began the process of setting up new printing plant for export printing in one of the most exciting projects in Southeast Asia. The plant is located is located in Subic Bay Freeport Zone in Olongapo City, Zambales, Philippines, the former site of one of the biggest US military bases outside the American continent.
I. Statement of the Problem
How to increase market share and reduce dependence on sister companies?
II. Statement of Objectives
Maintain its status as a top twenty corporation in the printing industry
III. Areas of Consideration
A. Dependence on sister companies
B. Reaching out to new customers
C. Maintaining customers’ loyalty
D. Convincing management to be more receptive to change in policies and practices
IV. Alternative Courses of Action
A. Strict Implementation of Receivables
B. Fold some sister companies into CHI
C. Remove bidding to sister companies
D. Advertise in newspapers and radio
V. Analysis of Alternatives
A. Strict Implementation of receivables
Having a common owner makes the sister companies complacent in paying CHI. The top management should order strict payment to CHI from other subsidiaries in order to maintain a healthy cash flow within CHI. A corresponding penalty, put in place as part of its company rules, could make observance of this rule effective.
B. Fold some sister companies into CHI
CACHO HERMANOS, INC
Background
Cacho Hermanos, Inc. (CHI) is a Philippine-printing firm established in 1880. CHI and its subsidiaries, Carmelo & Bauermann Printing Corporation (1887) and Capitol Publishing House, Inc. represent over a century of experience in quality printing work for a wide range clients both here and abroad. In the year 2000, Cacho Hermanos, Inc. was considered the lagest book printer in the country. In the early 1970s the Lopez family, owners of the Universal Printers group of companies, acquired Cacho Hermanos, Inc. In 2000, it began the process of setting up new printing plant for export printing in one of the most exciting projects in Southeast Asia. The plant is located is located in Subic Bay Freeport Zone in Olongapo City, Zambales, Philippines, the former site of one of the biggest US military bases outside the American continent.
I. Statement of the Problem
How to increase market share and reduce dependence on sister companies?
II. Statement of Objectives
Maintain its status as a top twenty corporation in the printing industry
III. Areas of Consideration
A. Dependence on sister companies
B. Reaching out to new customers
C. Maintaining customers’ loyalty
D. Convincing management to be more receptive to change in policies and practices
IV. Alternative Courses of Action
A. Strict Implementation of Receivables
B. Fold some sister companies into CHI
C. Remove bidding to sister companies
D. Advertise in newspapers and radio
V. Analysis of Alternatives
A. Strict Implementation of receivables
Having a common owner makes the sister companies complacent in paying CHI. The top management should order strict payment to CHI from other subsidiaries in order to maintain a healthy cash flow within CHI. A corresponding penalty, put in place as part of its company rules, could make observance of this rule effective.
B. Fold some sister companies into CHI