The Context of Management
Name of Organization: Puregold Price Club Inc.
EXTERNAL ENVIRONMENT
DESCRIPTION
1. Political
Tax Reform for
Acceleration and Inclusion
(TRAIN) Law posed risk to
the sales growth of
Puregold Price Club Inc.
This law impacted a higher
inflation and increased
excise taxes in sugary
drinks, cigarettes, oils ,etc.
2. Environmental
(nature)
3. Social
The Total Plastic Bag Ban
aims to prohibit the use of
plastic bags in
establishments, including
grocery stores. This put
Puregold Price Club Inc.
stores in a tight position for
they use plastic bags to
package cutomers’
purchases which affects
our environment.
Filipinos are venturing
greatly into healthy living
lifestyles and is spending
more on organic produce.
EFFECTS AND CHALLENGES
Effects: PGOLD increased the
prices of their sugary drinks and
cigarettes resulting to a slower
sales growth. Volume-wise their
sales declined, however the
increase in price was 20%
above average making a
counterbalance in the
decreased in volume.
Challenges: Being known to
selling goods at a relatively
lower price, PGOLD was
challenged on how they will
continuously gravitate
costumers towards their stores
amidst the increase in prices.
Effects: A decrease to a total
ban of plastics is currently in
practice of all PGOLD stores.
They are now leaning to using
paper bags or ecobags to
promote sustainability and to
lessen environmental harm.
Challenges: The company is
now faced with the challenge
of how to dispose their unused
plastic bags as they transition
to paper bags or ecobags.
Effects: An increase in Filipino’s
organic food demands forced
them to purchase at organic
groceries. This factor is a threat
to PGOLD for most of the
company’s products are
processed and canned, which
is on the not-so-healthy
options. Some of their products
are substituted by other
organic stores for those
customers opting to healthier
options.
4. Technological
Nowadays, grocery
shopping is on the trend of
using advantage and
loyalty cards to spend less
while buying more
products.
Challenge: The company
faces the challenge of
incorporating organic produce
into their sales to secure and
gravitate Filipino customers
continuously.
Effects: PGOLD launched their
PureGold Perks advantage
cards where customers collect
points by accumulating
minimum product spends.
These points can be used to
purchase products at any of
their stores. This also served as
an electronic wallet (e-wallet)
for these points can be
converted to cash once the
desired minimum points are
reached.
Challenges: The company
faces card fraud in using these
advantage cards, especially
since they are not identitysecured.
5. Economic
Due to the pandemic and
quarantine protocols,
PGOLD stores’ operations
and sales were affected.
Effects: There was an increase
in supply demands for food,
hygiene necessities (alcohol
and face masks), and other
home needs because of these
supplies' hoarding. They were
low in supplies, but their
income drastically increased.
Challenges: The company was
faced with the challenge of
balancing the supply and
demand of the community,
especially that their products
6. Legal
The company was faced
with policies against
dubious transactions
because of partial
compliance to the Manual
of Corporate Governance
of the SEC, particularly in
audit-related regulations.
are on the majority of the
necessities.
Effect: This anomaly posed a
risk on their stock investors. To
ease this and ensure clear
transactions, the company put
up three new board
committees in compliance
with the Manual of Corporate
Governance of the SEC,
namely an Audit Committee,
Nomination Committee, and
Compensation Committee.
Challenge: As a company with
national reach with their
branches, issues of
transparency and financial
auditing is a challenge for
them.
Resources
Ben. (2018, May). High inflation, TRAIN Law pose risks to Puregold sales growth in 2018.
INQUIRER.net. https://business.inquirer.net/250454/high-inflation-train-law-poserisks-puregold-sales-growth-2018
Research-Analysis-Report-Puregold-Price-Club-Inc. 2021. Retrieved 26 March 2021, from
https://www.cfainstitute.org/-/media/regional/arx/post-pdf/2016/06/05/researchanalysis-report-puregold-price-club-inc.ashx
Santos. (2020). STRATEGIC MANAGEMENT PAPER On PUREGOLD. Academia.edu.
https://www.academia.edu/14211651/STRATEGIC_MANAGEMENT_PAPER_On_PU
REGOLD