Jolli Bee Case study Essay

In 1975 Jollibee Food Corporation began as an churl flail parlor and was run by the Chinese-Filipino convert family. laterwards the oil crisis in 1977 Tony Tan Caktiong (TTC) expected the ice cream equipment casualtys to soar. The consequence of this incident was, that the family diversified into a home-style Filipino hamburger, which was quickly desired by the clients. As a seetlement of the big success the family opened phoebe bird stores in Manila, where the family incorporated as Jollibee Foods Corporation. When McDonalds entered the Filipino mart in 1981 Jollibee had to front his go forthing serious challenge.With already 11 in their back Jollibee was fear little and confident. pull aheadmore Philippine customers optred the spicy judgement of their hamburgers. further McDonalds, who spent a down of money in announce, quickly exceeded Jollibees sales per store. The fellowship was named after TTCs vision where employees work efficiently and cheerfully, same bees.Through a well(p)-developed operations counseling Jollibee was able to offer a reconciled and efficient service and quality pabulum. then the family expanded rapidly throughout the Philippines fiscal support all growth internally until 1993. At the end of 1993 the Jollibee Foods Corporation had a make sense of 124 stores with a total sales slew of 3.386 millions of pesos (see expose 1). twelvemonthTotal gross sales(millions of pesos)Total Stores at the End of the YearComp each-Owned StoresFranchises1975NA2201980NA743198517428101819901,22965125419911,74499218019922,644112258919933,386124309619944,0441484410619955,1181665511319966,588205841241997(projected)7,77822396134NA = not visible(prenominal)Exzhibit Jollibee Philippines Growth 1975 1997 (Bartlett and Beamish, 2011, p. 35). Although Jollibee went public in 1993 the Tan family retained the majority ownership and kept on controlling Jollibee. BACKGROUNDAfter the big success against McDonalds hoi polloi started approaching TTC for franchise rights. Thats why Jollibee slowly began to enter the unusual markets with investments in Singapore. With the help of friends Jollibee started a partnership with a local anaesthetic anaesthetic bus and five Philippine-Chinese investors. in short the congenericship between Jollibee and the local manager started to worsen. Therefore the franchise agreement was revoked and exclude down in 1986.Jollibee kept on moving offshore and started joystick ventures in Taiwan and Brunei as well as an own store in Indonesia in the late 1980s. Because of some(prenominal) mistakes Jollibee was unsuccessful in e precise market besides Brunei. Nevertheless Jollibee decided to continue entering foreign countries. For that reason in 1994 an International variability was created with Tony Kitchner selected as Vice-president.He started expanding quickly firearm he was differentiating the International Division from the Philippine part. unless Kitchner tried to create a more formal culture for the incision with a strategy, which had two main themes guideing expats and lay the flag. Soon he remarked that the midst East, Hong Kong, Guam and some another(prenominal) Asian Territories would provide a good market for Jollibee since many Filipinos come through at that place.The other strategy said, that a companionship always has a first proposer advantage. So Jollibee started to plant the flag in countries where there was no or piddling argument. Jollibee expanded quickly by 1997 Jollibee had 223 stores (see Exhibit 1). But this rapid growth withal had the consequences that there was not enough advertising budget. With the growth of the international assembly line the relation between the International Division and the Philippine organization started to struggle.Thats why in 1996 TTC realized that the Kitchners strategy was cost heavily and decided not to oblige on supporting Kitchner. Because of that Kitchner left Jollibee in 1997 duration TTC shrank the International Divisions staff from 32 to 14 (Bartlett and Beamish, 2011, p. 48). internecine ANALYSIS1 Current concomitantToday Jollibee is the largest turbulent nutrient train in the Philippines, operating more than 750 stores (Jollibee, 2013). It is in general operating on its domestic home-market where it is a dominant market packer. Moreover the company currently has more than 80 stores international the Philippines USA (26), Vietnam (32), Brunei (11), Jeddah (7), Qatar, Hong Kong, and Kuwait (1 each). Jollibee obviously need to grow fast and become international.For further investments Jollibee has to find out what went wrong during their first years, where foreign markets couldnt be reached successful. to boot Jollibee has to uncertainty if Jollibee electrostatic stomach be mainly family-run as their company grows precise fast.2 StrengthFinancial business office and leadership in local marketAs already mentioned, Jollibee is the bi ggest fast food chain in the Philippines and owns the leadership in their local market. With over 750 stores worldwide Jollibee has safe financial resources with an operating margin of approximately 7% (net income).Although competitors deal McDonalds put up two-digit margins (Google finance McDonalds Corporation, 2013) Jollibee shows a unmoving growth. Their net income nearly tripled between 1992 and 1996. Moreover Jollibee Foods Corp. spliffed the ranks of Forbes Magazines wind 50 Asian companies this year establish on financial track records (GMANETWORK, 2013). what is more Jollibees assets seem to be articled long-term in property and inventory. trading operations management capabilityJollibee is a family-run business. Although there was an IPO in 1993 the Tan family still controls the business. Nevertheless they postulated external managers in argonas where they werent familiar with and local association was needed, e.g. the international business. other aspect is, that the parting of own stores is relatively steep with about 40% while competitors like McDonalds and own 20% of their stores (McDonalds, 2013). ordinarily own stores demand a more higher investment than franchise stores while having a much higher financial essay of failure. Besides that the company is fitting of serving good, fresh and hefty food for low determines. Key to this presentable price is a well-developed operations management.Diversity in intersection offeringAnother colossal strength of Jollibee Foods Corp. is its diversity in products which is large than most of their competitors. Moreover, the acquisition of Greenwich Pizza and the joint venture with Deli France even change magnitude their product margin.Company philosophyThe next big strength of Jollibee Foods Corp. is their company philosophy, which was set after TTCs vision. The questionable basketball team Fs contain flavorful food, friendliness, fun family and tractableness.Flavorful food A s already mentioned, Jollibee places special emphasis on good, healthy and flavorful food. The other four Fs aim to give the customer a nice hitch and a nice atmosphere with their family where they can join their meal. 34 WeaknessesExpansion of business in international marketsAs already mentioned the first moves to foreign markets failed. Due to several mistakes Jollibee had to close their stores after a distich of years. The management made commodious errors when they cooperated with local manager, which didnt follow the companys philosophy.Jollibee should have controlled the manager from the beginning and maybe they had to show them their working(a) management skills to fulfill their requirements, e.g. with a training or instruction. additionally the communication indoors the organization has to sanction so that line of works between the two divisions can be minimized.Dependence on FilipinosAnother weakness of Jollibee is their dependence on Filipinos. kinda of addressi ng to flock from all walks they interpret to military force themselves to just take to heart Filipinos. With a well managed marketing addressed to other citizens the demand after Jollibee products could increase and maybe lead to a expansion towards Europe. Moreover they could start promotional courses where Jollibee is presented as a globose brand.Bias towards friendsJollibee Foods Corp. has a strong twist towards friend and relatives while selecting local franchise partners. This often led to problems. They should select their partners after their attitude to work and capability sooner of friendship.EXTERNAL ANALYSIS5 Opportunities discover product rangeAs antecedently mentioned the product range and taste of Jollibee differs from competitors like Burger King and McDonalds due to its Philippine origin. This is not only a chance, notwithstanding also a risk at the same time. The special taste gives Jollibee the chance, that customers prefer their food. Also Jollibee sh ould show that they only serve quality food while the price is still affordable.With a well-planned marketing campaign they could reach a competitive advantage. differently Jollibee runs danger to lose the competition because of the off the beaten track(predicate) bigger marketing budgets and brand fruition of the established burger chains, as they face this problem in Hong Kong and atomic number 20.Furthermore they could widen their product range to address people from other countries. Another option would be to allow in more local food items to target more mainstream American people. But as Tony Kitchner already failed with the Jollimeal, which is modifier for each pastoral this has to be planned exactly. If something like that ordain be used again, a go against communication to the customers is necessary.Untapped locationsLocation management is a mainstay to success in the fast-food attention, as the number of customers increase with a well-located restaurant. Thats why another chance is, that the plant the flag strategy should be reused, but in a slightly smaller scale. Jollibee should watch out for untapped locations with fewer or negligible competition to save the first movers advantage or just to break new customers. Another option is to hire local people to get local knowledge.But in order to stay successful in foreign countries, Jollibee has to at least run 60 restaurants with a turnover of minimum 800.000 US-Dollars each. 67 ThreatsCompetitionOne of the biggest threats and problems of Jollibee Foods Corp. is the huge list of competitors. Moreover, these competitors, e.g. Burger King or McDonalds, have a established brand and are well known OtherAt move there are several other little threats that could get problematic for Jollibee. Since the downswing in economy many people have to eat at home, because they cannot afford the costs of going out with the strong family.Another aspects are the rising operational costs, e.g. power or labor. With static change magnitude operational costs the profit reduced so that Jollibee will be constrained to raise the food prices. Since people try to live healthier their dining habits could change, so that people could prefer dining than fast food.RECOMMENDATIONSThis analysis makes one thing blow over Opening over 150 stores within 10 years is beyond the organisational and financial capabilities of Jollibee. It should grow slower and focus on e really store interruption so that it is able to generate income very quick and be able to suffer back debts. Another big question is, if Jollibee is able to address to non-Philippine expats without or with less modifications. The suggestions for this three selected markets are as next Hong Kong and the United States (California) both are huge but highly managed markets.The advantage of California is that there is a big fraternity of immigrants as well as a big community of Philippine expats, who are the main group addressed by Jollibe e. Moreover the Americans like fast food and probably like the regular Jollibee menu. heretofore the Chinese market needs high entry costs since the demanded modifications are very high, although the customer acceptance is not guaranteed. As mentioned before, Jollibee should concentrate on few stores. Thats why it would not make any sense to enter both markets, as the financial situation is too bad.Because of a wider range of communities as well as fewer modification costs, Jollibee should try to deal on the U.S. market. Though the market in Papua rising Guinea may be entered on a basis as a test, since there are only few fast food companies to compete with. Additionally, the entry costs are low. Although it is not guaranteed that the fast food will be accepted on this virgin market, the risk for a fast expansion is too high. As Bartlett and Beamish state, the so-called Global mentality is a key factor for the fast food industry to get successful (Bartlett and Beamish, 2011, p. 1 2).REFERENCESBartlett, Christpher A., Beamish, Paul W. transnational Management Text, Cases, and Readings in Cross-Border Management. 6th ed. New York McGraw-Hill Irwin, 2011. Print.McDonalds. Our company. Retrieved family line fourteenth, 2013, from http//www.aboutmcdonalds.com/mcd/our_company.htmlGoogle Finance McDonalds Corportion (2013, family line 13). Retrieved September 14th, 2013, from http//www.google.com/finance?cid=22568Jollibee About us. Retrieved September 14thFrom http//www.jollibee.com.ph/about-usGMANETWORK Jollibee, Ayala Corp., Alliance Global among Forbes mythical 50 Asian firms . Retrieved September 14thFrom http//www.gmanetwork.com/news/story/324133/economy/companies/jollibee-ayala-corp-alliance-global-among-forbes-fab-50-asian-firms