|
Making
a Splash
By Michael Alan Hamlin
March 4, 2003
Splash Corporation, founded with
just P12,000 and "six dedicated employees" 18 years ago
has grown itself into a P3.4 billion company that dominates a key
niche in the highly competitive beauty products segment in the Philippines.
The company, founded by a husband
and wife team that are both medical doctors, enjoys up to 80 percent
market share in its principal segments, exfoliates (80% share) and
skin whiteners (40%). The company developed and manufacturers Extraderm
and Maxi-Peel, both exfoliates, and Skin White, a skin whitener,
and other niche beauty and cosmetic care products. These products
are available nationally through a network of 23 distributors and
an affiliate retail chain of 82 stores according to chairman &
CEO Rolando B. Hortaleza.
Rosalina Ang-Hortaleza, who is married
to Hortaleza and serves the company as vice chairman & CFO,
also manages the company's affiliated retail store network, HBC.
Both spouses are medical doctors who ultimately found their calling
in business, rather than medical practice. As another doctor turned
entrepreneur told me recently, "If you want to make money,
don't practice. Go into business."
Hortaleza attributes the company's
success in the multinational-dominated beauty care segment to the
company's business strategy of concentrating on non-commodity consumer
products. "Our core competitive factor is our niche market
strategy," he said. "We don't compete as a commodity,
and so we don't have to go up against the scale, resources, and
technology of the multinationals."
However, the company has attracted
the interest of multinationals. "We haven't for the most part
seen a real effort to compete with us directly, but there have been
offers to buy the company," Hortaleza said. "That's not
something I'm ready to do personally. But more importantly, I can't
do that to the loyal, dedicated employees who are really responsible
for our success."
In fact, Hortaleza says dedicated
employees have been instrumental in growing the company. "We
have leveraged Filipino culture to get where we are. By Filipino
culture, I mean dedication, honesty, and pride in our work and our
products."
Like many Japanese companies, Splash
commissioned a company song that employees seemed to belt out by
memory with considerable enthusiasm at a recent kickoff ceremony
held at the company's headquarters. The anthem overtly celebrates
Filipino character and values. "We fortunately learned early
on there is a compelling need to involve our people completely in
the organization. They need to know where we're going, why, and
how we'll get there," Hortaleza said.
The kick-off ceremony, in fact, appeared
to be undertaken in significant part to demonstrate a very high
level of employee involvement in the implementation of a sophisticated
enterprise software solution provided by SAP (Full Disclosure: SAP
is a client of mine.). Hortaleza explained that "employees
need to own our business processes, and understand how developing
and refining those processes will affect them." SAP is being
implemented to improve business efficiency and productivity, with
the ultimate aim of increasing profitability, according to Hortaleza.
The SAP implementation involves multidisciplinary
project teams whose members are taken from all levels of the company,
including the very top. "In many respects this implementation
will take us out of our comfort zones," Hortaleza said, "and
so it's critical that we involve the entire organization in the
implementation process itself so that employees are not just bystanders
and assistants. They will drive this process." Hortaleza will
oversee the implementation and project teams.
The company's penchant for continually
enhancing business process efficiency and organizational productivity
is probably a third reason for its success. Many of Splash's multinational
competitors use SAP's enterprise solution to achieve very high levels
of efficiency, productivity, and responsiveness to quickly shifting
marketing realities. The solution is also valuable in alleviating
pressure on resources by doing such things as helping companies
reduce inventory and improve collaboration with both suppliers and
direct customers, including distributors and retailers.
"We are implementing SAP's core
solutions after successfully implementing its business warehouse
solution," Hortaleza said. "That demonstrated the value
of this technology, and so now we're going to the next step."
The company expects the implementation to be completed in six months.
San Miguel Corporation's IT consulting arm, SMITS, Inc., is assisting
in the implementation.
The company is doing two other things
to assure continued growth as well. It is already exporting its
products to Malaysia and Indonesia, and expects to penetrate other
Asia Pacific markets this year. It is also investing heavily in
research and development. "We will be implementing a P150 million
R&D facility located in Valenzuela next month," Hortaleza
said.
"This is no longer about material
gains," Hortaleza said in explaining his vision for the company.
"It's about our employees, and the Filipino."
(Michael Alan Hamlin is the managing
director of consultancy TeamAsia and the author of three books on
Asian economies and companies. His latest book is Marketing Asian
Places, of which he is a co-author (Wiley, 2001), and he is currently
at work on High Visibility: The Making and Marketing of Asian Professionals
into Celebrities. Write him at mahamlin@teamasia.com.).
Copyright © 2003 Michael Alan
Hamlin. All Rights Reserved.
(###)
|
