C. Cellzone: Your One Stop Cellphone Shop

C. Cellzone: Your One Stop Cellphone Shop

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I. Executive Summary
C. Cellzone is a big mobile phone, gadgets, and accessories retailing company that is spread
out in 90 branches nationwide. Its value propositions include offering varieties of products in
affordable and wide-ranged prices. Their products include mobile phones, telecommunication
products such as prepaid cards, accessories, other gadgets, and quality services to customers. Their
target market includes all socioeconomic classes with no preference on gender and age.
The means by which they make their profit is primarily through sales although they also have
partnerships and sponsorships with other major companies such as Puregold, SM Supermalls,
Jollibee, etc. In general, they have a lot of different suppliers from which they get their merchandise
and stock inventories and they make sure that they constantly communicate and reach the quotas set
with these suppliers.
Finally, the company has a positive profitability, in light with the industry of
telecommunication and wireless communication growing and shifting to smart phones. As for their
net profit and gross profit ratios, they have increasing trends, meaning they are able to utilize well
their capital to get good income, and it is expected that they can thrive in the competitive industry
they are in as of the moment but it is recommended that they manage their merchandise and stocks
better since the cost of goods sold deducted from the sales are also big.
As with any other companies, C. Cellzone also has some limitations in terms of technology
and quality of their people’s skills so for recommendations, trainings and investments in terms of
process technologies were provided. Cutting down on other operational expenses might also be a
good opportunity for them to better handle their finances and result to a larger net profit.
In general, the company’s operations right now is in accordance with their mission and
vision of serving the Filipino people by offering them diverse products and quality service, as well as
providing employment for them within the company.
II. Introduction
The General Manager, Charles V. Tomas, used to work in a Singaporean firm distributing
cellular phones in the Philippines and saw the potential of this rising technology during the 1980’s.
From then on, he worked hard and legally established in the country’s Department of Trade and
Industry his own company he called Supernova Telecommunications in 1995, now named C. Cellzone.
Their mission, as a company, is to improve the lifestyle of the Filipino people by providing
them with quality products and services in the most affordable way, to fulfill its responsibility to its
partners and people, and to help the country and the government by helping uplift Filipino citizens

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through the provision of jobs as well as fulfilling its tax obligations. This mission is a direct
response to their vision of being the country’s pride and leading store chain of wireless
communication and wide variety of telecom supplementary products.
C. Cellzone grew from being just a retail distributor of mobile phones and accessories in
cheap prices in the telecommunication industry. It expanded into two other companies: Eclipse
Telecom (established in 1999 for high quality telecom products also in retail) and Voyage 21 (centers
that can accommodate the repair of mobile phones and other services); both are handled also by the
founder and his siblings. Altogether, the three companies are grouped as Supernova Telecommunications,
Inc.
The company structure is divided into three levels: the Chief Executive Officer, Vice-
President for Operations, and Administrative Offices and Branches. Its administrative office is
divided into four departments for its internal operations, while the branches are divided into three
kinds of people varying in superiority and responsibilities.
C. Cellzone: Your One Stop Cellphone Shop 3
Figure 1. Company organizational structure.
The Chief Executive Officer is similar to a project manager, overseeing and strategizing all
the operations in the said company. Similarly, the Vice-President for Operations is involved in the
overall administrative works of the company, including directly supervising the offices and their
branches. Their office is divided into four departments, namely: Finance and Accounting (both for
auditing, and for tracking down the inflows of the company), Human Resources (for employment
and performance evaluations), and Warehouse (to house their stocks, properly inventory them, and
distribute them when the branches require their additional products). They have at least 87 branches
that are grouped by region and headed by regional directors and corresponding branch managers
and staff, including on-site technicians for their branches of Voyage 21. Right now, the company is
composed of 474 individuals and still counting.
III. Product/Service
Its two retail enterprises, C. Cellzone and Eclipse Telecom are focused in selling mobile
phones, mp3/mp4 players, cameras and other cool gadgets. Also, they sell supplementary products
such as accessories, prepaid cards, and electronic loads.
To be more specific, some brands that are tied up with them include Nokia, Samsung, Apple
for mobile phones, as well as androids and tablets. Also, they are tied up with telecommunication
networks such as Globe, Smart, and Sun, which are the suppliers for their prepaid and sim cards.
In addition to customer satisfaction by retailing, Voyage 21 couples their products with its
available services in repairs such as LCD or light replacements, phone improvements such as phone
setups or model upgrading, as well as retail of phone operational parts. In addition, they offer
mobile phone maintenance manuals, repair kits, and supplies for those technical consumers.
Table 1. Summary of products and services, with corresponding price ranges.
Product Brands/Description of service Price Range
Gadgets
Mobile phones Samsung, Nokia, Apple, MyPhone, etc. P 700.00 – P 40,000.00
Tablets Samsung, Apple, Polaroid, etc. P 2000.00 – P 21,000.00
Cameras Polaroid, Canon, etc. P 3,000.00 – P 7,000.00
MP3 Players C. Cellzone (own brand), Apple P 1,000.00 – P 7,000.00
C. Cellzone: Your One Stop Cellphone Shop 4
Accessories
Prepaid Cards Globe, Smart, Sun, Digikard, etc. P 20.00 – P 500.00
Sim cards Globe, Smart, Sun, Touch mobile, etc. P 20.00 – P 100.00
Earphones Apple, Panasonic, Class A, etc. P 100.00 – P 500.00
Phone cases C. Cellzone (own brand) P 30.00 – P 250.00
Housings Originals (from makers), Class A, etc. P 50.00 – P 450.00
Services
Repairs Includes replacement of parts and labor P 200.00 – P 700.00
Upgrades Includes labor P 200.00 – P 700.00
Downloads (games, etc.) Apple, Android, etc. P 40.00 – P 200.00
The demand for their products and services is actually high, being in a very technological
generation. Unfortunately, they have entered the era of extreme competition in the cellular phone
industry, but they are making their mark and continuing to survive in this said era. One can see in
the financial outlook and promotional efforts of the company the direct correlations to the demands
and supplies of their products and services.
To ensure that their products are sellable and in demand, they personally scout their
products from various suppliers, and they survey the market, including competitors, and get
customer feedback on the products they offer (C. Tomas, 2014). Also, they make sure to hold sales,
and other promos for their customers. Recently also, they launched their VIP card to make sure
that their customers can start being loyal to their company and continuously buy their products.
IV. Target Market
C. Cellzone offers a variety of products and is found in several locations nationwide and
these products are sold in reasonable, usually affordable prices. From this observation then, it can be
concluded that their target customers are also diverse. We can say that C. Cellzone caters to
customers belonging to any socioeconomic class depending on which product they need or want to
buy, considering that their price ranges are actually wide, and the cheapest ones are really affordable.
But the usual customers that are reached by the said company are those in provinces, since they are
strategically located in provincial malls and shopping centers. Please see Attachment 1 for list of branches.
More specifically, their target customers are really those belonging to the lower and middle-class,
with countable upper-class consumers with no preference for age and gender, as long as they have
paying capacity. Recently, they’ve also targeted on-the-go customers by establishing on-the-go
counters for them in places that are high in foot traffic.
V. Business Model
Primarily, they make money through their sales as indicated in their financial statement. As a
secondary means, they ask for sponsorships or utilize promotional avenues in collaboration with
other major companies such as Jollibee, myPhone, Cherry Mobile, etc. As a big company, they
make sure to have a lot of marketing strategies and one of this was having an exclusive tie-up as the
only mobile retailer within Puregold Supermarkets (hence most of their branches are located inside
Puregold). This includes utilizing social media such as FaceBook, Instagram, and having their own
website. (Please see attachment 2 for facebook snapshot)
Of course, when it comes to their supplies, they come up with terms and agreements with
their suppliers and they always try their best to reach the quotas set so that the suppliers give them
discounts or freebies and continue to tie up with them as the suppliers’ product distributor. Most
often, C. Cellzone utilizes its advantage of having at least 90 stores nationwide to gain the interest
C. Cellzone: Your One Stop Cellphone Shop 5
and trust of their suppliers and of course, they maintain good communication and terms with these
suppliers.
Figure 2. Business Model for CCZ.
As for their customer relations, they have value propositions, which is to offer their
customers their diverse and affordable products, as you can see in the table earlier as well as quality
customer service. To get rid of excess stocks, they also take advantage of the opportunities they
have such as holding seasonal promotional efforts as part of their marketing strategy. Please see
attachment for sample promos.
VI. Financial Outlook
1. General Financial Overview
We can say that the company really grew over the years and their 89 branches and its
growing number support this claim considering that the company used to be only just a booth in the
founder’s initial family business. In a span of two decades, the company had expanded into two
other companies, with branches strategically located in Luzon, as far as Ilocos Norte and Bicol.
Because of their quality products and services, the company was awarded as the Philippines’s
No. 1 Cellphone Shop in the 2004 National Shoppers’ Choice Annual Awards, as a Product Quality
Excellence Awardee and Best Cellphone Shop in the 2005 National Product Quality Excellence
Awards. Both awards contributed to better promotion and gaining the trust of consumers in the
company. Besides the sustainable growth in income and in addition to the company’s established
partnerships with its sponsors and continuous reaching of local and international supplier quotas,
the company had also opened itself to franchising.
2. Assets and Liabilities
In detail, most of their current assets fall under merchandise inventory since they are a
retailing company with more than 86 branches nationwide and offering a variety of products. Also,
their profits come mainly from the sales of the said merchandise. Their non current assets include
properties bought, i.e. for their warehouse and main office, as well as vans and trucks for their
deliveries. The bulk of their liabilities include their accounts payable, consisting mainly of salaries
C. Cellzone: Your One Stop Cellphone Shop 6
and wages, as well as rental fees, and other operational expenses. These liabilities are consistent
considering how many stores they need to maintain and people they need to pay to handle these
stores.
Table 2. Table of assets, liabilities and owner’s equity for CCZ (2011-2012).
BALANCE SHEETS AS OF DECEMBER 31,
2012 2011
ASSETS
Current Assets 35,615,157.00 50,739,969.00
Non Current Assets 3,667,358.00 4,277,196.00
TOTAL ASSETS 39,282,515.00 55,017,165.00
LIABILITIES AND OWNER’S EQUITY
Current Liabilities 20,312,208.00 39,583,415.00
Non Current Liabilities 431,275.00 431,275.00
Owner’s Equity 18,539,031.00 15,002,475.00
TOTAL LIABILITIES AND OWNER’S EQUITY 39,282,515.00 55,017,165.00
Their assets and liabilities decreased in 2012 compared to 2011 (unfortunately, the 2013
assets and liabilities were not provided), this is because most of their merchandise inventory and
properties were purchased or accounted for in their 2011 statement. In addition to this, 2012 was
also the year when they started their franchises, so these franchises might have affected their
noncurrent assets since new owners start to take over some branches.
3. Profitability Ratio
For its profitability ratio, it can be seen that the trend decreased from 2011 to 2013 at 18.17
% and 12.17% return on capital equity employed. But since the trend is not consistent, since 2012
increased from 2011 and it was projected that volume sales, at least of mobile phones, will grow at
1% but the consumers are shifting from feature phones to smart phones, and CCZ sales are shifting
as well.
Figure 3. Profitability ratio for CCZ 2011-2013.
Also, it is important to note that since net income is a factor in this type of profitability ratio,
it needs to be considered that most phones and accessories this year became more affordable due to
high competition, thus resulting to the low net income and the low profitability ratios provided
above.
C. Cellzone: Your One Stop Cellphone Shop 7
4. Gross Profit Percentage
Their gross profit coming mostly from their merchandise sales, increased by 93.91% and
71.48% in 2013 in comparison to 2012 and 2011, respectively. Considering that the profit ratio is
only 34.09% for 2013, it is important to note that although their profits are increasing, this ratio
does not take into consideration the cash outflows or their operational expenses that are yet to be
deducted from the gross profit. Still, this is a good indicator that their profit based on sales
increased from 2011 to 2013.
Figure 4. Profit ratio (Gross Profit Percentage) for CCZ 2011-2013.
5. Net Profit Percentage
Figure 5. Profit Ratio (Net Profit Percentage) for CCZ 2011-2013.
In accordance to the gross profit percentage, the net profit percentage also increased by
97.78% in 2013 compared to 2011. Here on the other hand, the remaining profit after the costs of
production, operational expenses, and taxes deducted was considered. The net profit percentage
increased from 2011 but decreased from 2012 because a lot of purchases were made by the company
in 2012, resulting to a higher cost of goods under the inventory/stock, and resulting to a bigger
denominator for the sales turnover and hence, a smaller net profit percentage. The net profit
percentage in 2013 was also affected by an increase in operational expenses deducted from the net
income considered.
C. Cellzone: Your One Stop Cellphone Shop 8
VII. Recommendations
If we were the owner of the company, we would cut down on my provincial branches; this
will lead to a decrease in operational expenses and in general, my liabilities and try to invest in quality
products. Internally, I could define better what my target market should be and continue holding
onto my vision.
I’d also continue holding more promotions and invest in the company’s people to ensure
quality service either through trainings, or leisure activities for them since their employees usually get
burn out throughout the year. Also, I’d source out part-time employees who I can pay smaller
salaries for during peak seasons so that I can save on salaries, which are taking up the bulk of the
company’s operational expenses, instead of paying overtime employees at a higher rate.
More importantly, I would invest in better technologies since I noticed that they require too
much people to do manual labor since they don’t have as much technologies to utilize such as in
their operations involving packaging and the distribution of their products.
Bibliography
C. Cellzone. Company portfolio. Retrieved on 17 May 2014 from the C. Cellzone VP for
Operations.
C. Cellzone. Financial Statement. Retrieved on 17 May 2014 from the C.Cellzone Accounting and
Finance Department.
Lee, Jacqueline T. (CCZ Vice-President for Operations). "C. Cellzone Operations." Personal
interview. 17 May 2014.
Mobile Phones in the Philippines. Dec 2013. Online source. From www.euromonitor.com, retrieved
on 18 May 2014.
Net Profit. Online source. From www.accountingtools.com, retrieved on 17 May 2014.
Profitability and Profit Ratios. Giselle Pacot. MSE 161 Lecture slides.
Tomas, Charles V. (Chief Executive Officer and Owner). “C. Cellzone Overview.” Personal
interview. 17 May 2014.
C. Cellzone: Your One Stop Cellphone Shop 9
ATTACHMENT 1: LIST OF BRANCHES
1. Puregold Valenzuela 2. Puregold Agora 3. Puregold Las Pinas
4. South Supermarket, Malinta 5. Puregold Sta. Mesa 6. Super 8 Masinag
7. Puregold Makati 8. Puregold Caloocan 9. Super 8 Ortigas
10. Puregold Paco 11. Puregold Zabarte 12. Super Antipolo
13. Puregold San Andres 14. Puregold Sucat 15. Super 8 Guadalupe
16. Puregold Blumentritt 17. Puregold Taguig 18. Puregold Shaw
19. Puregold Tayuman 20. Puregold BF Homes 21. Puregold Cubao
22. Puregold Q.I. Central 23. Puregold North Commonwealth 24. Puregold Mindanao Ave.
25. Puregold Balintawak 26. Puregold Pasig 27. Puregold C. Raymundo
28. Puregold Montalban 29. Puregold Bacoor 30. Puregold Molino
31. Puregold GMA 32. Puregold San Pablo 33. Puregold Calamba
34. Puregold Canlubang 35. Puregold Candelaria 36. Puregold San Juan
37. Puregold Binan 38. Puregold Sta. Rosa 39. Puregold San Pedro
40. Puregold Pacita 41. Puregold Batangas City 42. Puregold Malolos
43. Super 8 Malolos 44. Puregold Meycauayan 45. Super 8 Baliuag
46. Puregold Baliuag 47. Puregold Sta. Maria 48. Puregold San Jose Del Monte
49. Puregold Cabanatuan 50. Puregold Magalang 51. Puregold Arayat
52. Puregold Naga 53. Super 8 Urdaneta 54. Magic Annex Pozorrubio
55. Puregold Capas 56. Puregold Benguet 57. Magic Mall Urdaneta
58. Puregold Vigan 59. Puregold Kanlaon 60. Puregold Bataan
61. Puregold Jr. Meycauayan 62. Puregold San Fernando 63. Puregold Tarlac
64. Puregold Santiago 65. Puregold Tagum 66. Puregold Tanauan
67. SM Center Valenzuela 68. SM City Dasmarinas 69. SM City Marilao
70. SM City Fairview 71. SM City Lucena 72. SM City Rosales
73. Puregold Tanza 74. Puregold Cubao 2 75. Victory Antipolo
76. Sunstar Mall, Sta. Cruz 77. Nepo Mall Angeles 78. Marquee Mall Angeles
79. Poblacion, Balanga, Bataan 80. Puregold Guiguinto 81. Galeria Mall Bataan
82. Magic Mall Urdaneta 2 83. Nepo Mall Dagupan 1 84. Nepo Mall Dagupan 2
85. Nepo Mart Alaminos 86. Puregold Laoag 87. CSI Mall La Union
88. CSI San Fernando 89. Puregold Anabu 90. Puregold Cauayan
ATTACHMENT 2: DOCUMENTATION (SAMPLE PRODUCTS, SAMPLE PROMOS)
Figure 6. Photo of CCZ VIP Card.
Figure 7. Snapshot of CCZ FaceBook Page.
C. Cellzone: Your One Stop Cellphone Shop 10
Figure 8. Sample christmas promo banner.
Figure 9. Sample promo with products and prices.
C. Cellzone: Your One Stop Cellphone Shop 11
ATTACHMENT 3: SAMPLE CALCULATIONS
Profitability Ratio
= Net Income*100/Shareholder’s Funds
= 2,447,922.00*100/13,475,822.00
= 18.17 % (2011)
Gross Profit Percentage
= Gross Profit/Sales turnover
= 22,536,318.00*100/113,492,526.00
= 19.88% (2011)
Net Profit Ratio
= Net Profit/Sales turnover
= 1,526,653.00*100/113,492,526.00
= 1.35% (2011)
% Increase in Gross Profit Ratio
= GPR (2013)- GPR (2011)*100/ GPR (2011)
= (34.09-19.88)*100/19.88
= 93.91%


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