Ayala Case Study (1)
Uploaded by
Janelli CalderonAyala Case Study (1)
Uploaded by
Janelli CalderonNATIONAL COLLEGE OF BUSINESS AND ARTS
San Juan Ilog Pugad Rizal Ave, Taytay, Rizal
SY 2024-2025
SUBJECT : Economic Development (2:30 PM - 4:00 PM)
PROFESSOR : Ms. Hustianei G. Hilao
STUDENT : Calderon, Janelli A.
Cruz, Pauleene Shaine S.A.
Domasian, Ma. Alyssa B.
Eden, Lawrence Franco B.
Habla, Trisha Mae
Julian, Nicole Kaye P.
Kingco, Delle Florence P.
Lozada, Shella Jean M.
Muhi, Ariel Jhon Luis C.
Punzal, Erica T.
TOPIC : Ayala Corporation
CASE STUDY
Name of the Company : Ayala Corporation
Time Context : 1834 to Present (2025)
Point of View : Domingo Róxas and Antonio de Ayala
I. Short Historical Background
Ayala Corporation is the oldest business house in the Philippines, tracing its
origins back to 1834 when it was established as Casa Róxas by Domingo Róxas and
Antonio de Ayala. It began as a distillery and trading business during the Spanish
colonial era, later expanding into infrastructure and finance.
By the late 19th century, Ayala was already involved in progressive ventures
such as tramcar services and water systems. The company was instrumental in building
modern Manila and later played a major role in developing Makati into the country’s
premier business district after World War II.
In 1968, the partnership was transformed into Ayala Corporation. Under the
leadership of Col. Joseph R. McMicking and successive generations, Ayala diversified
into real estate (Ayala Land), banking (Bank of the Philippine Islands), telecom (Globe
Telecom), and more recently, renewable energy, healthcare, logistics, and education.
Despite its long-standing success, Ayala Corporation has faced several
significant challenges over the years. One notable issue was the 2019 water concession
controversy involving its subsidiary, Manila Water. The company came under fire for
water shortages and price hikes in Metro Manila, which strained its relationship with
both the government and the public. Furthermore, Ayala’s continued expansion into
various industries has occasionally led to conflicts with regulatory and political
pressures, particularly in the utilities sector.
As one of the oldest and most respected corporations in the Philippines, Ayala
also grapples with the ongoing challenge of balancing its legacy with the need for
innovation. While it remains a cornerstone of Philippine business, the company has had
to adapt its strategies to remain competitive in an era of rapid digital transformation.
In 2024, Ayala reported a robust core net income, driven by some of its key
subsidiaries, although significant challenges arose with AC Health and AC Mobility,
which both recorded notable losses.
Today, Ayala continues to drive innovation and inclusive development, guided by
its legacy and long-term vision for nation-building.
II. Statement of the Problem
Ayala Corporation posted a record core net income of ₱45 billion in 2024, driven
by strong performance from its key businesses like BPI, Ayala Land, and Globe
Telecom. However, its emerging business units (particularly AC Health and AC Mobility)
continue to face financial struggles. AC Health reported a ₱610 million net loss, while
AC Mobility’s losses grew to ₱465 million.
Given these ongoing losses from its new ventures, how can Ayala Corporation
ensure that its diversification efforts will contribute positively to its long-term profitability
and help achieve its ₱65 billion core net income target by 2026?
III. SWOT Analysis
Strengths Weaknesses Opportunities Threats
Successful brand Losses from With rising health Prolonged losses
recognition emerging awareness, AC could shake
businesses Health can tap into investor confidence
increased demand and affect Ayala’s
for affordable and market valuation
accessible and stock
healthcare. performance.
Diversified Pressure from AC Health can If the emerging
business portfolio regulation and leverage businesses
politics telemedicine, continue
electronic health underperforming,
records, and AI to Ayala risks falling
enhance service short of its income
delivery and reduce target, affecting
costs. strategic credibility.
Long-term vision for Public controversy Potential to create Persistent financial
innovation and and trust issues value by integrating underperformance
inclusive services across from AC Health and
development
Ayala’s ecosystem AC Mobility may
drag down overall
profitability.
IV. Alternative Course of Action:
ACA No. 1: Synergy Utilization Reduces Costs and Boosts Reach
● Pro: Cross-platform integration (using BPI for health financing, Globe for
telemedicine) enhances visibility, reduces customer acquisition costs (CAC), and
improves return on investment (ROI).
● Con: The complexity of aligning strategies across different subsidiaries may slow
down execution and increase operational hurdles.
ACA No. 2: Focused Capital Allocation Ensures Sustainable Growth
● Pro: By reinvesting in high-performing or high-potential segments, Ayala can
minimize resource wastage, ensure sustainable growth, and scale ventures
aligned with profitability goals.
● Con: A selective approach may limit aggressive expansion, potentially missing
out on high-demand markets and rapid growth opportunities.
ACA No. 3: Strategic Alignment Builds Investor Confidence
● Pro: A structured, results-based diversification strategy builds trust with
investors, demonstrating financial discipline and long-term vision, which can
attract investment despite short-term losses.
● Con: Over-reliance on a disciplined, performance-based model may dampen
innovation and create internal resistance to risk-taking in emerging sectors.
V. Recommendation and Conclusion
Among the three alternative courses of action, ACA No. 1: Synergy Utilization
stands out as the most effective strategy for Ayala Corporation. By using the strengths
of its different subsidiaries, such as BPI for health financing and Globe for online
healthcare services, Ayala can reach more people and reduce marketing and
operational costs. This integrated approach allows the company to tap into existing
customer bases and infrastructures, making growth more efficient and sustainable.
Though it may take extra effort to align different business units, the long term benefits of
increased visibility, lower customer acquisition costs, and improved return on investment
outweigh the complexity.
In simple terms, Ayala Corporation already has great tools—it just needs to use
them together in a smart way. This strategy helps save money, grow faster, and make
the most out of what the company already owns. It's a practical and powerful way for
Ayala to grow without needing to start from scratch or take big risks.
VI. References
Ayala Corporation. (n.d.). Our history.
https://www.ayala.com.ph/about-us/our-history
