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Jollibee Case Analysis

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Course

Law on Corporations (BLAW001)

35 Documents
Students shared 35 documents in this course
Academic year: 2019/2020
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Universal College of Parañaque

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Case Narrative

Jollibee food Corporation (JFC) is a food empire with interest in American fast food chain (burgers, fries, fried chicken, etc.) including pizza chain (Greenwich), grilled chicken (Mary’s Chicken), and Chinese fast food (Chow King). Jollibee is slowly acquiring these companies.

After two decades, Jollibee Food Corporation’s market share was 57% while McDonalds (its main competitor) garnered only 36%, two decades later. By the end of 1998, Jollibee had 302 company owned and franchise stores in the Philippines and 27 franchise stores overseas while McDonalds had almost 200 stores. Around 43% of Jollibee’s stores were franchised-owned. Jollibee used franchising to rapidly expand its business and achieve market penetration. Jollibee is facing a dilemma in their franchising on to whom they will reward the franchise between two applicants. This may be a sign of Jollibee that the company is booming like mushrooms, closing the gap between one Jollibee fast food from the other in terms of location and distance. Despite of this, its growth is incomparable to McDonald’s global power in the international market.

Situational Analysis

A. Internal Analysis Jollibee used franchising to rapidly expand its business and achieve market penetration. Franchising is the force which provides the strength to the Jollibee Food Empire. Jollibee’s management faced a dilemma of choosing a franchisee or selects individuals with a successful track record in business, of good standing in the community that leads them through their weaknesses because they have so many franchisee which is targeting at the same spot. Jollibee continue dominate the hamburger market despite the influx of new foreign players. B. External Analysis Jollibee always select individuals with successful track record in business, with good standing in the community, and providing total customer value and satisfaction

who have excellent people handling skills. And in order to attract more customer by increasing business income. They also develop high technology in the operation system to improve products and services they offer to their customers. They innovate so that it will gain an advantage against its competitors especially McDonalds. It can provide an organization with means to improve its performance and competitive advantage in a competitive market. And some opportunities can be foreseen, such as being able to expand a franchise into a new city. The threat of Jollibee is the high competition against McDonalds. Just like the Jollibee was 57 percent and 302 company owned and franchised stores in the Philippines, while McDonalds only 36 percent and had almost 200 stores. And outside environment that can adversely affects its performance or achievement of its goals. Due to economic crisis in the Philippines, people have less money to spend on their meals.

C. S.W.O. Analysis

Strength  Jollibee dominates the hamburger market despite the foreign competitors  Jollibee offers famous burger influence from United States to keep up with changing taste and lifestyle of the customer  Jollibee captured the palate of every Filipino with its uniquely flavored burgers, chicken and sweet spaghetti  Jollibee use franchising to rapidly expand its business and market penetration Weakness  Dilemma in choosing franchisee eyeing for the same location  The criteria in choosing a franchisee is vague. Opportunities  Jollibee Food Corp. provide BOTP ( business operational training program) for new applicants franchisee which provide seminars and hand- on exposure to all level of store operation

36 percent. Jollibee had 302 company-owned and franchised stores in the Philippines, and 27 franchised stores overseas. Its closest competitor, McDonald’s, had almost 200 stores.

Threat of Substitute Products

With so many firms in the quick service/burger industry, low switching cost, similar products, and healthier options, the threat of substitutes is very high.

E. P.E.S. AnalysisPolitical - political factors have a great impact in fast food operations. Government controls the license given the open of the fast food restaurant and other business regulation that need to follow as for a franchise business. Since Jollibee franchised to expand their business and achieve market penetration, it affects the political issues based on the policies governing tax, licenses, regulation and employment.  Economic - Based on the case study, Mr. Artiaga wants to invest a Jollibee franchise in order to attract more customers to his gas station which will increase his business income or profit. The economic condition (supply and demand) and growth of his business will certainly expand as it has a corresponding fast food restaurant which is supposed to be Jollibee that capture more customers to dine while purchasing a full tank of gas or the other way around. Therefore it will increase the profit of his business.  Social - If Jollibee franchise will incorporate with the gas station business it will expand the range of customers. From targeting customers that have only cars or motorcycles it will expand to targeting the customers who eat the Jollibee products, thus referring to the impact of lifestyle of the customer that includes religion, age, family, career, class and etc.  Technological - Jollibee is looking forward to innovation and improve itself in terms of integrating technology in managing its operation. For example in inventory system, supply chain management system to manage its supplies, easy payments and ordering system for customers and other technological that can make the management more effective and cost-saving. This will also make customer happy if cost-savings result in price reduction or promotional campaign discount which will benefit them from time to time.

Primary Problem

What is the mean to achieve company globalization of Jollibee Foods Corporation?

Alternative Solution

A. Diversification – Jollibee could use diversification to expand its business by acquiring internationally known companies. B. Market Development – Being geographic set-up as the main focus of the company, Jollibee Foods Corporation could develop franchise partners toward countries with existing Filipino minorities. C. Co-Branding of Existing Company – Jollibee Foods Corporation could use co-branding by using JFC’s existing business such as Red Ribbons, Chow King, Burger King Philippines, to partner up. A JFC owned business will create products that will give Jollibee brand recognition.

Evaluation Alternative

Diversification Pros The intent of the franchisee is `a great indicator on the direction of the company. Tells what the franchisee is aiming. Jollibee Foods Corporatation can take advantage of existing expertise, knowledge and resources in the company when expanding into new activities. This may result in transfer of skills, such a research and development knowledge and sharing of resources Cons Diversification is considered the riskiest and the most expensive form of strategy in the Ansoff Matrix since it involves new products and new market bundled into one. Market Development Pros The spreading of risks by multiplying the number of locations through other people’s investment means faster network expansion and a better opportunity to focus on changing market needs. Marketing on existing

who can acquire better features for the franchise. We prefer an intention rather than a higher income because the priority is growth. We want a business partner that knows the next step for the business. Jollibee will provide Basic Operations Training Program (BOTP) The BOTP provides franchisees hands-on exposure to ALL levels of store operations. They will also provide supplemental seminars that are deemed helpful for the business.

Action Plan

What : Proposing that the main priority of a franchisee should be his intent of the business.

When : It should be implemented as early as possible, regularly during the initial screening prior to site evaluation.

Who : This action is done between the franchisor to the franchisee. How : The Company should rigorous screening and debate by focusing on the intent albeit the net worth and the expertise should also be considered.

Secondary Problem

Who should Jollibee Food Corporation in granting a franchise, Mrs. Ng or Mr. Artiaga?

Alternative Solution

A. Mr. Artiaga – The Company could choose Mr. Artiaga, a married man with a net worth of Php 30 M. He is managing a gasoline station for five years. He wanted to be a franchisee of Jollibee to attract more customers to his gas station. The building is located right beside the gasoline station. B. Mrs. Ng – The Company could choose Mrs Ng, who is a 50 year old widow with Chinese lineage, BS Hotel and Restaurant Administration graduate with a net worth of Php 40 M. She owned a Pawnshop that lasted only for five years (1992-1997). She wanted to start a career in the restaurant business. The building is located across AZA Gasoline Station.

Evaluation of Alternative

A. Mr. Artiaga Pros He has a specific intent for the company. He has a sufficient net worth to start a franchise. He is well-experienced with managing since he is handling a gasoline station for five years. He keeps up with the demand of the customer - customers are seeking a restaurant, he provides one. He is benefitting is gasoline station all at the same time. Cons His net worth is not as great as Mrs. Ng’s. B. Ms. Ng Pros She has more than an adequate amount of income to start a business. She handled a pawnshop for five years. Chinese lineage may be a big plus to the Chinese entrepreneur of Jollibee Foods Corporation. Cons Her Pawnshop business was not able to sustain and compete the market. She is vague in her intent to start a franchise.

Recommendation

We recommend solution because Mr. Artiaga has a specific intent for the company. He is very familiar in managing and sustaining a business for five years. He is focusing on benefitting his gasoline station by using Jollibee franchise as a medium to get there. This is a strategy called co-branding, the unifying of two products in synergy. One product or service benefits from the other and vice versa. Mrs. Ng may have greater income with Php 40 M, but it is not enough if her aim towards Jollibee Foods

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Jollibee Case Analysis

Course: Law on Corporations (BLAW001)

35 Documents
Students shared 35 documents in this course

University: Universal College of Parañaque

Was this document helpful?
Case Narrative
Jollibee food Corporation (JFC) is a food empire with interest in American fast
food chain (burgers, fries, fried chicken, etc.) including pizza chain (Greenwich), grilled
chicken (Mary’s Chicken), and Chinese fast food (Chow King). Jollibee is slowly
acquiring these companies.
After two decades, Jollibee Food Corporation’s market share was 57% while
McDonalds (its main competitor) garnered only 36%, two decades later. By the end of
1998, Jollibee had 302 company owned and franchise stores in the Philippines and 27
franchise stores overseas while McDonalds had almost 200 stores. Around 43% of
Jollibee’s stores were franchised-owned. Jollibee used franchising to rapidly expand its
business and achieve market penetration. Jollibee is facing a dilemma in their
franchising on to whom they will reward the franchise between two applicants. This may
be a sign of Jollibee that the company is booming like mushrooms, closing the gap
between one Jollibee fast food from the other in terms of location and distance. Despite
of this, its growth is incomparable to McDonald’s global power in the international
market.
Situational Analysis
A. Internal Analysis
Jollibee used franchising to rapidly expand its business and achieve market
penetration. Franchising is the force which provides the strength to the Jollibee Food
Empire. Jollibee’s management faced a dilemma of choosing a franchisee or selects
individuals with a successful track record in business, of good standing in the
community that leads them through their weaknesses because they have so many
franchisee which is targeting at the same spot. Jollibee continue dominate the
hamburger market despite the influx of new foreign players.
B. External Analysis
Jollibee always select individuals with successful track record in business, with
good standing in the community, and providing total customer value and satisfaction

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