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Jollibee Foods Corporation - Group 1-6 finaldoc

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Jollibee Foods Corporation - Group 1-6 final

    Academic Honesty Policy Group Assignment Cover Page Group Member 1 Phone Number - Home 305-877-7853 Phone Number - Home 954-812-1550 Phone Number - Home NA Phone Number - Home 786-468-9223 Phone Number - Home 786-942-7310 Title of Assignment

JOLLIBEE FOODS CORPORATION (A): INTERNATIONAL EXPANSION

Phone Number Work NA Phone Number Work NA Phone Number Work 305-987-2218

    Phone Number Work NA Phone Number Work NA

Buniol, Arnaud

Group Member 2

Garcia, Christian

Group Member 3

Wang Qingrui

Group Member 4

Sanin, Felipe

Group Member 5

Guo Yawen

Date of Submission September 06, 2012

    CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledged and disclosed in the paper. I have also cited any sources from which I used data, ideas or words; either quoted directly or paraphrased I also certify that this paper was prepared by me specifically for this course.

    Signature Member 1 : ________________________ Signature Member 2 : ________________________ Signature Member 3 : ________________________ Signature Member 4 : ________________________ Signature Member 5 : ________________________

JOLLIBEE FOODS CORPORATION (A): INTERNATIONAL EXPANSION Group 1

Table of Contents

INTRODUCTION Case

    Overview ............................................................................................................ 3

    1. How was Jollibee able to build its dominant position in fast food in the Philippines? What sources of competitive advantage was it able to develop against McDonalds in

    its home market? ............................. 5 1.1. Building its dominant position .......................................................................................................... 5 1.2. Sources of competitive advantage against McDonalds ................................................................... 6

2. How would you evaluate Tony Kitchners effectiveness as the first head of Jollibee

    s international division? Does his broad strategic thrust make sense? How effectively did he develop the organization to implement his

    priorities?............................................................................................................................... 7

    3. As Noli Tingzon, how would you deal with the three options described at the end of the case? How would you implement your

    decision? ........................................................................................................... 9

    CONCLUSIONS......................................................................................................................................... 11

International Business Policy MAN 6635

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INTRODUCTION Case Overview

    Company History: Started in 1975 by the Chinese-Filippino Tan family. Shifted the ice cream into sandwiches .It expanded quickly in the Philippine .It defended the McDonalds in the Philippines hamburgers markets. (Question 1)

    Industry Background: Fast food industry developed a value proposition. Store: Profitability depends on the traffic and management. Chain: chain-wide consistency and reliability is a key driver of success.

Moving Offshore: Its success brought opportunities in other Asian counties. Singapore

    Taiwan and Indonesia: It failed and closed down. Brunei: It achieved success. TTC summarized that the key of success entering the international markets is selecting the partners and location. Building an organization: TTC hired the Kitchner. He created the International Division and separated from the Jollibees Philippine side.

    He recruited experienced internationalists for him. Strategic Thrust: To increase the pace of international expansion ?they put forward the “targeting expats” and

    “planting the flag” strategies. (Question 2) Operational Management Market Entry: FSM and International Division work together. Oversight and Continuing Support: monitor financial and operational performance; support and develop the store manager; International Division concerned the quality; International vs. Domestic Practice: International team thought business model needed to be modified overseas. They also redesigned the Jollibee logo and made a lot changes.

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JOLLIBEE FOODS CORPORATION (A): INTERNATIONAL EXPANSION Group 1

    Customizing and Local Taste: The International Division adjusted the menu. It expanded beyond quickly. Strained Internationl-Domestic Relations: The relation between Philippine and International Division destroyed the cooperation. Due to the financial problem, TTC no long supported Kitchner . And he left Jollibee in February 1997.

A New International Era

: NoliTingzon joined the company

    A Fresh Look at Strategy: Different opinions on the next strategy. Strategy in Action:Tingzon faced three opportunities. (Question 3) Papua New GuineaHongKong

    California

Company SWOT analysis (by 1997)

    STRENGHTS Jollibee is a leader in the fast food industry. It has long history. It has abundant experiences in some aspects, such as selecting position and partner. It can make some attempts and adjust strategy flexibly. OPPORTUNITIES It has a potential international market. WEAKNESSES It lacks some research work before entering a new market. It lacks the control ability in international market. The relation between local and international division is worse. THREATS The competition in the international markets becomes more and more fierce. The relation between local and international division may bring some disadvantages to the company.

It has a powerful national market.

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    1. How was Jollibee able to build its dominant position in fast food in the Philippines? What sources of competitive advantagewas it able to develop against McDonald’s in its home market?

    1.1. Building its dominant position In our opinion, Jollibee was able to build its dominant position in fast food in the Philippines through eight majors axes: a. The first one concerns the menu, which is culturally well adapted to Philippines

    citizens as the Tan family is Filipino-Chinese. b. As Jollibee started in 1975 they had the “First mover” competitive advantage and where able to secure suppliers, employment and more important a good brand recognition. c. The third one concerns the company itself through the CEOs vision. E: Dominance Jollibees position stands

    on five Fs: Flavor, Fun, Flexibility, Family atmosphere, Friendliness. The CEO

    s vision, thanks to a good marketing makes Jollibee looking like an happy and friendly working world. d. They chose key store locations which provides them geographic advantage and close contact with the consumers. e. The company had a well developed operations management capability and an ability to manage volume and quality to offer an affordable price for customers. f. The headquarter of the company is occupied by members of the family except for the position they knew they were not able to handle (ex : finance; marketing).

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    g. Their economic growth is increasing every year and they projected 96 owned stores and 134 franchises in 1997. That proves how franchising investment where rentable for Jollibee as more than 58% of its stores are franchises. h. They reinforced their capital by acquiring Greenwich pizza Corporation in 1994 and they created a joint venture with Deli France to diversify their food offering.

1.2. Sources of competitive advantage against McDonald’s

    We think that Jollibee had four advantages against McDonalds: a. One was cultural because Filipinos prefer the taste of the champ than the Big Mac one. They

customized their hamburgers to Filipino market instead of McDonalds Big Mac

    standardization. b. They broadened the menu to optimize their sales. c. One is political/historical/economical, in 1983, when the political opposition leader was assassinated. The crisis due to this event made McDonalds slowing their investment

    and Jollibee took advantage of its position as a country made company” to ensure

    its position thank to a very well adapted menu (“taste-tested”). They had a “local

    pride” and nationalism advantage. d. The last one was in 1986 when McDonalds wanted

    to come back to Philippines because Jollibee had already set up 31 stores which means they weretotaly dominating the market and McDonalds had to invest much more than

    the previous time to try (with a possiblity of unsuccess) to enter the market.

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    2. How would you evaluate Tony Kitchner’s effectiveness as the first head of Jollibee’s international division? Does his broad strategic thrust make sense? How effectively did he develop the organization to implement his priorities? We can summarize Kitchner effectiveness with two phrases. “What is hardest is not the getting there, but the staying there”. This is a well-recognized phrase in Latin

    American countries that would fit to Kitchners performance. Tony Kitchner developed

    a good start when he assumed the International Head Position, however, later, his blurred vision did not let him identify the actions to be taken at the right moment. At the beginning, he tried to “wash the face” of Jolibee with simple things like

    new office designs and formal dress code. These actions together with focus on attracting partners with excellent connections glimpsed a bright future. His objective of “Making Jolibee one of the world’s top ten fast food” which stood on two main topics “targeting expats”and “planting the flag” was terrific at the early stage. The first one was the initial step to support the expansion of the company, focusing on a niche market. The second part of his strategy (planting the flag) reflected his ambitious desire to be the first mover. He believed that the first mover has tremendous advantages difficult to get when you are not the first one.Even though, there were some problems related to potential market (not all overseas Filipinos were potential customers) and the costs related to promotion and advertising (the franchises, first need to reach certain level of sales to afford them) at the end of 1996, he demonstrated with results that his strategy had success. Two years, 8 new national markets and 18 new stores. He designed a model to growth with efficiency. For instance, he enabled local partners customize the store (counter and dining areas) to the local preferences. The model also was

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