Rapid Market Growth

Quadrant II Quadrant I

• Market Development • Market Development -S1

• Market Penetration
• Product Development
• Horizontal Integration
• Divestiture
• Liquidation
• Market Penetration
• Product Development -S2
• Forward Integration
• Backward Integration
• Horizontal Integration
• Related Diversification -S3

Weak Strong

Competitive Competitive

Position Quadrant III Quadrant IV Position

• Retrenchment • Related Diversification

• Related • Unrelated
Diversification Diversification
• Unrelated • Joint Ventures
Diversification
• Divestiture
• Liquidation

Slow Market Growth

GRAND STRATEGY MATRIX

The researchers came up with a Grand Strategy Matrix which will help in
determining FLI’s strategy to use throughout its life. They placed Filinvest Land Inc. in
Quadrant I which indicates a strong market position and a rapid market growth.
Evidence is showing that FLI belongs to the Top 10 real estate developers in the
Philippines based on their CapEx or Capital Expenditures and in terms of Market
Capitalization. In terms of financial aspect, FLI showed on their website an increase in
their total revenue resulting on a higher net income for the year 2017. “On the
residential side, FLI continues to launch projects that address the needs of the
affordable and middle income markets, which remain to be underserved.” (FLI, 2017) In
relation to this, the researchers determined the appropriate strategies that are placed in
Quadrant I which is the market development, product development and related
diversification.

The first strategy is Market Development. According to businessdictionary.com

(2018), Market Development is the expansion of the total market for a product or
company by (1) entering new segments of the market, (2) converting nonusers into
users, and/or (3) increasing usage per user. In an article by inquirer.net, Filinvest Land,
Inc. (FLI) is said to invest an additional P5 billion in the next three (3) years in Mindanao
for the expansion of its Futura Homes economic housing, its Spatial Medium-Rise
Building (MRB) portfolio with new projects in South Cotabato and Davao City. This is on
top of the P4.7 billion-worth of ongoing land development including the One Oasis
project in Cagayan de Oro, thus granting FiIinvest a 17 project-strong foothold spread
over 7 towns and cities. This means that even though FLI owns a lot of housing and real
estate properties around the country, they are still open for new projects that will cater
the strong demand for affordable condo units especially in Mindanao Region.

Another strategy is Product Development. Tech Target (2016) defines Product

Development, also called new product management, as a series of steps that includes
the conceptualization, design, development and marketing of newly created or newly
rebranded goods or services. Filinvest Land Inc. caters middle income markets and now
they also wanted to introduce to the millennial their services. Talavera (2017) stated in
her article that Filinvest is now working on a hotel brand targeting the millennial market.
Francis Gotianun, Assistant Vice President at Filinvest Hospitality, said they felt that
“there’s a hole in the market for something younger, more upscale for the millennial
travellers”. This strategy may help in revitalizing the business and offering something
new to its target market and audiences. In addition to that, it may minimize the
possibilities of obsolescence to its product and present innovation in the company.
 The last strategy is Related Diversification. Related diversification, according to
Business Dictionary, means a process that takes place when a business expands its
activities into product lines that are similar to those it currently offers. In an article, FLI
president and CEO Lourdes Josephine Gotianun-Yap said “Our diversification strategy
of having three main lines of business: residential sales, office rental and retail rental
has put us in the best position to achieve synergies brought by integrated
developments, as we develop townships where all three businesses can complement
each other in one location. We are looking forward to FLI’s continued growth”.

Besides having real estate and housing, FLI is also growing its retail rental-space
portfolio by opening its doors to shopper to the newly built malls and commercial
buildings. Its rental income is now accounted for 40% of FLI’s net income. Also on 2016,
one of the largest sources of revenue growth was achieved by rental revenues with 15%
higher than last year’s. Diversification will be of great help because the company will not
only be focusing in providing housing and condominiums but they can also offer
alternative products that may allow FLI to expand their horizons and create new
opportunities.

With these strategies, the company may take advantage of the rapid market
growth in the industry and in maximizing its competitive position in the market.
References:

https://businessmirror.com.ph/filinvest-lands-2016-net-income-hits-record-p5-35-billion/
http://business.inquirer.net/228182/fli-sets-17-capex-p20b-expansion#ixzz56Itc07OA
http://business.inquirer.net/215300/filinvest-land-allots-over-p10-billion-for-mindanao-
expansion#ixzz56Fa3T6aQ
http://www.businessdictionary.com/definition/market-development.html
http://www.lamudi.com.ph/journal/2015-income-of-the-philippines-top-real-estate-
developers/

https://www.zipmatch.com/blog/the-philippines-top-real-estate-developers/

http://www.philstar.com/business/2017/05/01/1695488/filinvest-working-millennial-hotel-
brand

https://yourbusiness.azcentral.com/benefits-risks-product-development-strategy-
21011.html