Industry Characteristics and Performance of Philippine Coffee Manufacturing Firms: MSMEs Perspective

This paper builds upon Porter's five forces industrial paradigm and investigated the influence of the industry characteristics on the financial performance of Philippine coffee manufacturing Micro, Small and Medium Enterprises (MSMEs). Specifically, this paper aimed to (1) determine the degree of competitive rivalry, bargaining power of buyers, bargaining power of suppliers, threat of new entrants, and threat of substitutes in the Philippine coffee manufacturing industry, (2) assess the performance of the firms, and (3) determine if the industry characteristics influence the firms' performance in terms of return on assets (ROA), profit margin, sales growth, and market share. Using a quantitative survey administered personally and online to 106 managers of coffee manufacturing firms in the Philippines, this paper made use of descriptive statistics, bootstrap method and regression analysis to answer the objectives. Findings of the study revealed that competitive rivalry was perceived to be very high while threat of potential entrants, threat of substitutes, bargaining power of suppliers, and bargaining power of buyers were high. Perceived performance of firms indicated that coffee manufacturing firms were performing better than the target or standards.Perceived industry characteristics by the firms, in general, were found to influence the firms' performance.