Why 1994? The first five years are said to be the most crucial in the life of a new enterprise. It creates the foundation for long-term viability and a corporate image on which it will be judged – positively or negatively. On completion of the company’s business papers, I went around North America to meet with selected multinational research companies that had no representation in the Philippines. I knew them from the past as business associates. I got only one message from all of them. Come back after five years.
Three business concepts define the first five years of Acre, Inc. These are market and social research, information technology and data conversion.
Market Research
At the onset, in 1989 until the early part of the 90s, Acre, Inc. established itself as the leading consulting company for travel and tourism. This was at a time when other consulting companies did little to cover this industry and focused more on the growing personal care industry and fast moving consumer goods (FMCG). It was also at that time when the Philippines was at the waning point of an era when it claimed to be the convention center in Asia.
Acre, Inc. was the preferred consulting company of the Department of Tourism, Philippine Convention and Visitors Bureau and other institutions involved in travel and tourism not only for research but also for other consulting engagements. That opportunity provided enough energy to fuel the company well into its initial five years. It was also a company of choice among several other clients in four industries – banking and finance, pharmaceutical marketing, and science and technology – when these four industries were not a popular target for research and account executives.
This defined how the company positioned itself in comparison with other established and newly established research companies. It focused on five industries (including media) but extended its service to include research and consulting. Examples of its consulting engagements were economic studies, financial studies and marketing campaign studies. Management insights, conclusions and recommendations were part of a standard report to clients, and the company actively participated in management brainstorming sessions.
Towards the latter part of this period, the company must have completed close to 50 economic studies ranging from tourism to heart valve to forestry products to herbal medications underscoring its competence and facilities for consulting and marketing research. Many of these products had been commercialized and some are still in the process of commercialization based on the original economic and marketing studies. The company was also heavily involved in product launch, re-launch and branding.
As we ended the first five years, it was no longer necessary to partner with the more established multinational research companies. As a matter fact, we started to establish an association of marketing research companies based in Asia with a similar positioning and facilities. While this became a convenient arrangement for some time, it did not provide the corporate stability to sustain the partnership. This remains in the vision and future of Acre, Inc.
Information Technology
As a technology-driven research company, Acre, Inc. had opportunities to venture into related advocacies and businesses. Two investments come to mind. The first was predictive analytics through SPSS. SPSS is an important component of acre, Inc.’s corporate journey and will be the subject of another chapter.
The second is an efficiency tool that the company introduced to companies in the Philippines. Acre, Inc. partnered with a scientist to introduce computer-aided design/computer-aided manufacturing (CAD/CAM) to manufacturers of personal care products in the Philippines at a time when this tool was not yet well known and product development was dependent on foreign specialists.
First client was Johnson & Johnson. First product was the J & J alcohol which to this day uses the same packaging that Acre, Inc. helped develop and design. The protocol for developing a product at that time started with an artist’s sketch of the desired package. The first sketch led to several others until the final design was approved. The approved design was sent to Australia and converted into a computer file and later into a machining file. Once approved, a positive prototype was chiseled using a numerically controlled machine and a material that was either hard plastic or wood.
A prototype enabled decision makers to hold the product and see the design at various angles. On approval, the machining file was then converted into a negative setup that was used to cut up a mold needed to mass-produce the packaging. This part of the product development process usually took 12 months to complete. Much of the development was done in Australia. It took Acre, Inc. two weeks to complete the process. It took J & J management another two months to complete the process and to introduce the product to the market. First-to-market depends so much on the speed to production. CAD/CAM, at that time, provided a platform for competitive advantage.
Unfortunately, the venture ended with that engagement. Other multinational companies based in the Philippines did not want to alter their development process even if their counterparts in North America and Europe were actively using CAD/CAM. J & J product managers attempted to use the same development process but were not armed with a budget to pay for the development cost.
This advocacy of introducing new efficiency and development tools continued well into the late 1990s and into the 21st century. These included efficiency tools to optimize efficiency in the production of heat-generated power, to define system loses in the transmission of generated power to consumers and industrial users, and to manage bad debt in competitive industries with tens of thousands of unpaid accounts.
Data Conversion
As a technology-driven research company, Acre, Inc. had programmers, computers and facilities for managing data and using the data to generate reports. This was a facility that was needed to encode data and convert the data into time-sensitive reports.
A rare opportunity came when the Department of Tourism and Bureau of Immigration sponsored a project to electronically encode arrival/departure cards. Acre, Inc. won the bid and was the contractor for these two agencies for five years. It involved encoding of around 600,000 A/D cards per month or around 7.2 million cards per year.
To this day, data conversion or data encoding remains one of Acre, Inc.’s core competencies. However, the company uses a variety of technologies including the optical character recognition (OCR) and other tools for data capture.
(This is Part 2 of a series of articles on the history of acreinc@20. Part 2 talks about the start-up years from1989 to 1994. What is the main purpose of the business? What are the secondary purposes of the business? What markets and customers will the enterprise aim to serve? In what processes should it excel in a business where systems, methods and technology are victims of obsolescence? In what way should the enterprise position itself in an industry dominated by multinational companies or companies that have been operating for many years? This part discusses the important decision-making days and documents the impact of these decisions on the future of the enterprise. Some are book-line strategies and decisions. Some are blue ocean scenarios.
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