Splash Corporation
“Splash Corporation (A): Competing with the Big Brands”
Problem:
Splash Corporation (Splash) is a leading producer of skin care and hair care products in the Philippines. Founded in 1985, Splash was now the country’s leading domestic producer of personal care products and was billed as “the next Unilever” by BizNews Asia magazine (page 5). However, competing with the top corporations in the world was no easy task, especially when these companies were producing low-cost alternative products. Splash knew that there was no way they could compete in a price war with their much larger competitors, so they had to compete on value if they wanted to remain a top company in the industry. At this point in 2006, the company is considering what brands and products the company should focus on, how to brand and market these products, and generally what strategy they should follow for the rest of the year.
Situation Analysis:
Economic:
The Philippines is a country in Southeast Asia comprised of 7,107 islands in the western Pacific Ocean. With 88 million people, the Philippines was the world’s 12th most populous country at the time. However, 40% of Filipinos lived below the poverty line of US $1, and more than 55% lived on less than US$2 per day (page 2). Surprisingly though, the cosmetics and toiletries industry in the Philippines generated P83 billion in 2004, and was projected to grow at a rate of 5 percent per year to reach P107 billion by 2009. Hair care, the industry’s largest category, contributed P19 billion in sales in 2004, and was projected to grow at a rate of 4% per year to reach P24 billion in 2009. With P17 billion in sales in 2004, and a projected growth rate of 9% per year, skin care was a quickly growing category despite the economic hardships that the people of the country were facing.
Social:
In spite of its relatively low per capita GDP, the Philippines was ranked number five on the “vanity index”, which was determined by measuring the
Problem:
Splash Corporation (Splash) is a leading producer of skin care and hair care products in the Philippines. Founded in 1985, Splash was now the country’s leading domestic producer of personal care products and was billed as “the next Unilever” by BizNews Asia magazine (page 5). However, competing with the top corporations in the world was no easy task, especially when these companies were producing low-cost alternative products. Splash knew that there was no way they could compete in a price war with their much larger competitors, so they had to compete on value if they wanted to remain a top company in the industry. At this point in 2006, the company is considering what brands and products the company should focus on, how to brand and market these products, and generally what strategy they should follow for the rest of the year.
Situation Analysis:
Economic:
The Philippines is a country in Southeast Asia comprised of 7,107 islands in the western Pacific Ocean. With 88 million people, the Philippines was the world’s 12th most populous country at the time. However, 40% of Filipinos lived below the poverty line of US $1, and more than 55% lived on less than US$2 per day (page 2). Surprisingly though, the cosmetics and toiletries industry in the Philippines generated P83 billion in 2004, and was projected to grow at a rate of 5 percent per year to reach P107 billion by 2009. Hair care, the industry’s largest category, contributed P19 billion in sales in 2004, and was projected to grow at a rate of 4% per year to reach P24 billion in 2009. With P17 billion in sales in 2004, and a projected growth rate of 9% per year, skin care was a quickly growing category despite the economic hardships that the people of the country were facing.
Social:
In spite of its relatively low per capita GDP, the Philippines was ranked number five on the “vanity index”, which was determined by measuring the