Jollibee Foods Corporation

"An important source of growth for our corporation is the expansion of our international business."

-Tony Tan Caktiong Chairman, Jollibee Foods Corporation

HISTORYJollibee is a phenomenal success story: what

began as a two-branch ice cream parlor in 1975

offering hot meals and sandwiches became

incorporated in 1978 with seven outlets to

explore the possibilities of a hamburger concept.

Thus was born the company that revolutionized fast

food in the Philippines.

In 1984, Jollibee hit the P500 million sales mark, landing in the Top 500 Philippine Corporations.

In 1987, barely 10 years in the business, Jollibee landed into the country’s Top 100 Corporations. It became the first Philippine fast food chain to break the P1 billion sales mark in 1989.

In 1993, Jollibee became the first food service company to be listed in the Philippine Stock Exchange; thus broadening its capitalization and laying the groundwork for sustained expansion locally and beyond the Philippines.

Task 1: ENVIRONMENTAL SCANNING

STRENGTHS

1. Market leader: The leading fast food chain in the Philippine Market, with a Net income of US$ 52.2 million as of 2008 and generated revenue of US$ 1.32 billion in the same year

STRENGTHS

2. Jollibee has grown exponentially on all aspects on operation. From a handful of stores 36 years ago, Jollibee now boasts of more than 1,287 stores in the Philippines and over 161 outlets in the international front.

Breakdown of Operations:

Domestic • 540 Jollibee• 334 Chowking• 23 Greenwich• 139 Red Ribbon• 36 Delifrance

International

• 23 Jollibee in US• 17 Chowking in US and

Dubai• 17 Red Ribbon in US• 104 Yonghe King in

People’s Republic of China

STRENGTHS

3. Implements various TQM practices to meet and exceed customer expectations and has strong ethical values built upon products and services with appropriate quality.

STRENGTHS

4. Better product quality - Offers a wide variety of product lines and excellent services which includes: Distinctive flavor, texture, juiciness and aroma of familiar food products; the liveliness, colorfulness, cleanliness and atmosphere of fun and customer delight in the dining place; the ready smile, warmth and courtesy of the store crew.

STRENGTHS

5. Undisputed leadership: Optimism - despite of their failure in testing the Chinese market, that experience will not hinder Jollibee to try again in the hope of competitive results.

WEAKNESSES

1. Although Jollibee has maintained a niche in the domestic arena, it cannot wholly penetrate the International market. Hence, McDonalds is deemed the number one fast food chain internationally.

WEAKNESSES2. Has standardized the taste of their food products however,

they failed to adopt the flavors of the world. In the contrary, McDonalds has incorporated the taste of their products with the preference of people in a certain country where they operate.

OPPORTUNITIES

1. Business Acquisition in the domestic market allows Jollibee to grow its presence in various market segments. It obtained various restaurant networks such as Chow king, Red Ribbon, Greenwich and Delifrance.

• 2005 – Acquired Red Ribbon, with 150 outlets mostly in the Philippines, for Php 1.8B

OPPORTUNITIES

2. The franchising agreement between Jollibee International Ltd. And Ice Tea International with opening of the Chun Sun Tang Tea House in Shanghai

OPPORTUNITIES

3. The company has the opportunity to expand more its global operations. New markets in diverse nations are beginning to emerge.

• March 2004 – for US, acquired Yonghe King $11.5M

THREATS1. Potential New Entrants – The success of Jollibee led to increasing number

of competitors and copy cat brands that pose potential threats 2. Raw materials and other supplies – Jollibee is exposed to rises in the cost

of their supplies and raw materials

3. The Emergence of Substitute products – the increasing number of substitute’s products or services which prospective buyers can buy whose utility and function is similar to a desired product.

4. The impact of Globalization - increasing unification of the world's economic order through reduction of such barriers to international trade as tariffs, export fees, and import quotas.

Task 2: SETTING MISSION AND VISION STATEMENT

Values

• Customer Focus• Excellence• Respect for the Individual• Teamwork• Spirit of Family and Fun• Humility to Listen and Learn• Honesty and Integrity• Frugality

Task 2: SETTING MISSION AND VISION STATEMENT

Mission statement

To serve great tasting food, bringing the joy of eating to everyone

Vision statement

We are the best tasting QSR...The most endearing brand...

that has ever been...We will lead in product taste at all

times...We will provide FSC excellence

in every encounter...Happiness in every moment...By year 2020, with over 4,000

stores worldwide,Jollibee is truly a GLOBAL BRAND. (And the Filipino will be admired

worldwide)

Task 3: SETTING STRATEGIC OBJECTIVES

Generally, Jollibee Foods Corporation aims:

To be the leading fast food chain beyond the Philippine shores and to pursue the idea of expanding in the foreign market continuously.

Task 3: SETTING STRATEGIC OBJECTIVES

Specifically, it aspires:

To open a Jollibee store in China somewhere in southern part and a Red Ribbon branch in the US East Coast by 2006 and will continue expanding

To try again the Chinese market by reopening a flagship restaurant in the big city in southern China

To go into tea house business with opening of the Chun Sun Tang Tea House in Shanghai

To break in to the Indian Market by looking at CHOWKING as its local Chinese Fast Food unit and acquire new brands in the same market.

To open 100 new restaurants each costing Php 10 – 15M wherein 40 of them are to be franchised

Triggering Events

INTERNAL1. Performance Gap – it exists when performance

does not meet expectations• The company opened up Jollibee Food

Restaurant to test the Chinese Market but it did not do so well.

• The company aimed to acquire market share in India but it failed to find an entry point in the said market.

Triggering Events

2. New products or services – change in products or services offered by the firm

New Company Acquired

New Products or Services

Yonghe King Chain soybean milk, fried bread sticks and beef noodles,etc.

Chun Sun Tang Tea House

Ice and hot tea concoction, pastries and rice meals

Triggering Events

3. Change in Ownership – either by way of acquisition, merger, sell out or changes in majority of ownership of stockholdings.

In case of Jollibee, it is by ACQUISITION that triggers the company to formulate new sustainable competitive STRATEGY.

Triggering Events3. Corporate

Reorganization/Restructuring – requires new schemes or strategies to achieve new vision-mission statement or desired goals.

In relation to their vision of being the leading fast food chain in the foreign market, the management is prompted to do some corporate reorganization and restructuring.

Triggering Events

5. Management Team Shake up – creation of new management teams and functional group

The situation of expanding globally requires Jollibee to form new sets of management teams that will facilitate the international operation.

Triggering EventsEXTERNAL

1. Market Factors• Offered products VS

Customer’s Taste• COMPETITORS

2. Global Environment• The idea of expanding the

business in the International front and its implication in the entire operation is deemed as an external triggering factor.

Task 4: CRAFTING STRATEGIESINTERNAL TRIGGERING EVENTS CRAFTED STRATEGY

Performance Gap Business Acquisition

New Products or Services Business Start Up

Change in Ownership Business Acquisition

Corporate Reorganization & Restructuring Business Reorganization

Management Team Shake Up Business Reorganization

EXTERNAL TRIGERING EVENTS CRAFTED STRATEGY

Market Factors Horizontal Diversification

Global Environment Business Acquisition, Start Up and Reorganization

Task 4: CRAFTING STRATEGIES

BUSINESS ACQUISITION

This meant to expand their size and make their presence felt in whatever area they want to do business. The idea is to scout for existing firms that the company can buy out as a whole or it may also take the form of acquiring substantial share in ownership or stockholding of the firm, thus, gaining control of its operations and making it a force to reckon with as part of the conglomerate.

The direction of Jollibee Food Corporation is Growth strategy. Under of this is acquisition wherein there is a synergistic benefit if the company acquires a firm with strong complementary product lines and a good distribution network.

Task 4: CRAFTING STRATEGIES

BUSINESS START-UPThis meant purposely organizing another business concern instead of simply

acquiring an existing business organization or investing in it. The idea is to create a fresh and liability-free as well as employ a dynamic team of managers to pursue certain strategic business options to support vision and mission of the mother unit.

In relation to Jollibee, this strategy will enable to attain the mission vision of the firm to serve great tasting food, bringing the joy of eating to everyone and to expand in the global market.

Task 4: CRAFTING STRATEGIES

BUSINESS REORGANIZATIONThis meant restructuring, reorganizing and consolidating to make the entire

organization more responsive to the needs of time. It is more of an internal shake-up. It can take the form of consolidation, and retrenchment (downsizing) or reorganization that ma even lead to expanding organizational structure and manpower complement.

Jollibee leads to hiring competent employees and firing incompetent ones to be more receptive to the idea of continuous expansion internationally.

Task 5: IMPLEMENTING AND EXECUTING STRATEGIES

It is an action oriented “make it happen” process involving people management, developing competencies and capabilities, budgeting, policymaking, motivating, culture-building, and leadership.

Task 5: IMPLEMENTING AND EXECUTING STRATEGIES

BUSINESS ACQUISITIONImplementation Procedures: 1. Conduct a Research about the companies they are planning to acquire.2. Define the type of business that would make a good acquisition. Generally businesses

within the same segment or a highly complementary market segment are targeted.3. Once defined the target business is approached and if interest is shown due diligence

is performed to ascertain the financial condition of the business.4.When the financial terms are agreed upon, and the contract is signed the merger

portion of the acquisition begins. 5. Overlapping processes, personnel and products are evaluated and the better-

performing pieces are retained, while the less desirable are cut. Difficulty often arises when management teams are combined and responsibilities distributed between the acquiring business and the acquired.

Task 5: IMPLEMENTING AND EXECUTING STRATEGIES

BUSINESS REORGANIZATION

1. The process begins by revising the current organizational chart and identifying the position essential to support the operation.

2. Secondly, after acquisition the management will start selecting competent and qualified leaders who will facilitate the operation of newly acquired business.

3. If existing manpower is insufficient to meet the demand of international operation the company can hire potential employees.

4. Some unproductive employees maybe remove from the organization and replace by dynamic members.

5. Formal appointments are necessary so that they will be recognized by the entire organization.

6. Consistent evaluation of employee’s performance to ensure human resource development.

Task 5: IMPLEMENTING AND EXECUTING STRATEGIES

BUSINESS START-UP1. Organize another business matter to create new business

units in order to cater market opportunities instead of acquiring an existing organization.

• The new business unit may be wholly owned by the firm or in partnership with other firms

2. After the organizing process, the top management of this new unit will come form the officers of the mother unit and also form strategic partner/s.

Task 6: PERFORMANCE EVALUATION AND REVISIONS

• Monitoring• Charts and Milestones Indicators• Strategy Audit• Balanced Scorecard• Evaluation of Top Management• Some Key Indicators• Financial Ratios• Taking Corrective Actions

Task 6: PERFORMANCE EVALUATION AND REVISIONS

Balanced Scorecard

Combines financial measures that indicate results of actions already taken with operational units on customer satisfaction, internal processes, innovations and improvement activities – the drivers of future financial performance

CORPORATE VISIONTo lead and expand in the

international market by acquiring more firms

CORPORATE STRATEGYContinuously acquire various firms in

domestic and foreign market

Internal GrowthCustomerFinancial

•Improved Profitability •Service

Improvement•Implement TQM •Develop new

geographic areas•Product enhancementsPERFORMANCE

MEASURES: Moment of truth

PERFORMANCE MEASURES: Improved services to

customers by providing what they need and

want

PERFORMANCE MEASURES: 7% Growth in Net

Income and 10.3% Increase in

Revenue

PERFORMACE MEASURES:

Increase in no. Of stores: 1, 287

domestic and 161 international

CORPORATE STRATEGYContinuously provide the best

customer service

Thank You.

Presented By:Bontia, Mary JoyceCasil, Nile Jordan

Danganan, CzarinaImatong, Ma. Frenzy

Pablico, VinceQuillao, ReymonRodrin, Erika Joy(BSBA-OM 402)

Presented To:Ms. Perla San Juan

OPMNO7B