NAME OF STUDENT LE LAN PHUONGREGISTRATION NO. 1013103156UNIT TITLE Unit 7: Business StrategyASSIGNMENT TITLE Jollibee “Langhap Sarap” VN Market InvasionASSIGNMENT NO 1 of 2SUBMISSION DEADLINE 4th May, 2009

I, ____________________________, hereby confirm that this assignment is my own work and not copied or plagiarized from any source. I have referenced the sources from which information is obtained by me for this assignment.

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ASSIGNMENT GRADE

Common Skills Grade

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NATIONAL ECONOMICS UNIVERSITYBTEC HND IN BUSINESS (MANAGEMENT)

Assignment Cover Sheet

Unit outcomes

Outcome Evidence for the criteria

Feedback Assessor’s decision

Internal Verificat

ion

Analyze how the Business

Environment is considered in

Strategy Formulation

(1)

Define the context of business strategy

a

Explain the significance of

stakeholder analysis

b

Conduct an environmental

and organizational

audit of a given

organization

c

Apply strategic positioning

techniques to the analysis of

a given organization

d

Understanding the process of

Strategic Planning

(2)

Demonstrate an ability to

think strategically

a

Prepare strategic plan

for a given organization,

based on previous analysis

b

Merit grades awarded M1 M2 M3

Distinction grades awarded D1 D2 D3

2

Overall Comments By AssessorAssignment( ) Well-structuredReference is done properly / should be done (if any)

Overall, you’ve

Areas for improvement:

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COMMON SKILLS & COMPETENCIES ASSESSED (indicated by X)A. MANAGING & DEVELOPING SELF D. MANAGING TASKS & SOLVING PROBLEMS1. Managing own roles & responsibilities 12. Use information sources X2. Manage own time in achieving objectives x 13. Deal with a combination of routine & non-routine tasks X3. Undertakes personal and career development 14. Identify & solve routine & non-routine problems

4. Transfer skills gained to new/changing situations & contexts E. APPLYING NUMERACYB. WORKING WITH & RELATING TO OTHERS 15. Applying numerical skills and techniques x5. Treat others beliefs and opinions with respect F. APPLYING TECHNOLOGY6. Relate & interact effectively with individuals & groups 16. Use a range of technological equipment and systems

7. Work effectively as a team member G. APPLYING DESIGN AND CREATIVITYC. COMMUNICATING 17. Applying a range of skills and techniques to develop a

variety of ideas in the creation of new / modified products, services or situations

x8. Receive and respond to a variety of information x9. Present information in a variety of visual forms x 18. Use a range of thought processes x10. Communicate in writing X11. Participate in oral & no-verbal communication

I. Introduction.

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Jollibee Food Corporation (JFC) is a phenomenal Groups developing, operating and

franchising fast food store under the trade name Jollibee. The Group also operates fast

food stores under the Chowking, Greenwich, Delifrance and Manong Pepe's brands and a

bakeshop under the Red Ribbon brands. The Group owns 619 stores nationwide, of these,

321 are franchised and 298 are company-owned. There are also 33 stores operating

overseas, including Vietnam, Hong Kong, Brunei, Dubai, Guam, Saipan and Jeddah. The

Group's products are Super Meal, Jolly Chezzy Fries, Creamy Macaroni Soup,

Yumburger Doubles, Jolly Zerts, Fish Fillet, Fresh Green Salad, Chicken Torpedo, Jolly

Beef Rice, Burger Steak Bistek Pinoy Style and Jolly Chicken Tocino.

In this report, we will discuss about the business strategy of JFC, then suggesting a

business plan for the Groups.

II. Jollibee Foods Corporation (JFC) business strategy

JFC is a large company, thus, to have a clear business strategy is significant. This part

of the report will mention about the mission, vision, values of the corporation, which are

involved in the business strategy and the importance of the Group’s stakeholders.

However, before talking about the mission, vision, and values of JFC, we will look

through the Vietnamese Fastfood Market context.

1. Global fastfood market context

Increased concerns over obesity and intense competition failed to prevent the global

fastfood market from delivering a sound performance over the period 1999 – 2003. The

sector achieved almost 20% growth, outpacing full-service restaurants, cafes, bars,

kiosks, self-service cafeterias and home delivery, according to research from Euromonitor

International.

There were 1.9 billion fast-food outlets in 2003, with annuals sales worth $282bn

(158bn [pounds sterling]) and more than 96 billion meals consumed worldwide. Brands

made concerted efforts to diversify their menus and redefine their core concepts and weak

US dollar aided value growth of 8% in countries using the Euro.

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In the develop regions of Western Europe, North America and Australia, the

disintegration of the traditional family meal and longer working patterns have helped

fastfood companies sustain growth. In emerging markets such as Eastern Europe,

Africa/Middle-East and Asia-Pacific, there was continued demand for Western-style food

in spite of the average price of international fastfood brands often being higher than local

equivalents.

Burger outlets such as McDonald’s and Burger King continued to account for the

largest share of fast food, representing 40% of all global fast food sales, worth $113bn

(63bn [pounds sterling]) in 2003. This sector witnessed a return to form over 2003 for all

regions--except Latin America, hard hit by economic crisis and currency devaluation--

with 6% value growth worldwide, following moderate growth since 1999. Europe,

Africa/Middle-East and Australasia witnessed a downturn at the beginning of the review

period but sales recovered following a major reversal of focus by chains concentrating on

building profitability from existing outlets and upgrading their formats for a wider appeal.

Asian-style fast food, such as noodles and sushi, was the most dynamic sector over

1999-2003, especially in the Asian strongholds of China, Japan and South Korea.

Consumers in mature, Western markets also showed interest in Asian and Middle-Eastern

food, which is considered to be healthier and lower in fat.

In the Middle-Eastern sector, the Saudi Arabian brands Kudu (17%) and Al-Tazaj

(10.5%) were in first and third place respectively, with Habib's of Brazil in second

position with an 11% share of the sector in 2003. Yoshinoya of Japan held almost 11% of

the Asian sector, with Panada Express a distant second, but representing a dominant force

in its US home market with over 60% in 2003.

Chicken-based fast food works well in emerging markets, often for religious and

cultural reasons. Yum! Brands experienced success in China, opening its 1,000th KFC

outlet at the beginning of 2004, despite the Asian flu crisis. Both KFC and McDonald's

have adapted their menus to suit Chinese tastes. For the moment, McDonald's is

overshadowed by KFC's strength in the Chinese region but it is committed to reaching its

target of 1,000 outlets by 2006. In Africa and the Middle-East, chicken also remains a key

growth driver, with strong local brands present, namely Nando's (South Africa), and

Herfy and Al-Baik (Saudi Arabia).

(Information get on : Goliath Business News)

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To develop in Asia and Vietnam fastfood market, Jollibee Foods Corporation has

applied the business strategy which has clear mission, vision and values mentioned in the

below part of the report.

2. Mission, vision, values

Defining the company’s mission and vision is the first step of the first function of

management which is planning.

As mentioning in the main website of JFC, the Group’s mission is to serve great

tasting food, bringing the joy of eating to everyone. Its mission is realistic in a way that it

is attainable, it also considers the feelings of the customers rather than just earning large

profits wherein it also benefited their customers, it is also based on coy distinctive

competencies or it is based on where the company s good at, which is serving the best fast

food.

To affirm that their mission is on the right way, JFC has show the vision to be the best

tasting QSR; the most endearing brand that has ever been; the leader in product taste at all

times; FSC excellence in every encounter; and the happiness in every moment. Moreover,

the Group also takes a vision to be a GLOBAL BRAND with over 4,000 stores

worldwide by year 2020 and the Filipino will be admired worldwide. JFC’s vision

describes the company’s bright future and they are achievable and realistic. The visions

are in aligning with the company’s values wherein they support each other.

All in all, the Jollibee’s mission and vision are SMART (specific, measurable,

attainable, relevant and time bound)

Hence, to be able to implement the mission and vision, JFC has set the values on

customer focus, the excellence, the respect for the individual. The Group also focuses on

teamwork, spirit of family and fun, humility to listen and learn, the honesty and ntegrity,

and the frugality.

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3. Jollibee stakeholder map

All information about the stakeholder of JFC was based on the “Jollibee annual

report 2007” of Jollibee Foods Corporation.

As many other companies, JFC also has 3 types of stakeholders that are: internal

stakeholders, connected stakeholders, and external stakeholder.

The internal stakeholders include management and employees. In the company,

besides CEO (Chief Executive Officer), there are directors managing different fields and

they are supported by vice directors in each field (For example: directors of Chowking

business, managers of commissary, managers of share services, etc). In addition, there are

also other directors such as: human resources director, admin director, director of sale and

marketing, director of logistic, etc. However, in the internal stakeholder, the most

important positions are employees. Since Jollibee has incessantly developed the

distribution network, the number of employees will be grown up in the future.

Shareholders, customers, suppliers and financiers are considered in connected

stakeholders. Jollibee is a corporation, so there are some shareholders. Most of the time,

shareholders take interest in increasing in shareholder wealth, measured by profitability

and some other criteria; but they also face the risk of selling share or replace

management. Customers and suppliers are also connected stakeholders. At present,

Jollibee boast of more than 600 stores nationwide and over 30 international stores which

could be found in Ameriaca, US territories, Hongkong, Brunei, Macau, and Vietnam.

Therefore, there are a various and big number of customers. Although there are different

types of consumers, Jollibee Groups and stores still use the professional style in operating

and satisfying the requirement of the customers. This also helps the company to increase

the number of consumers. Moreover, Jollibee has joined into the international market, so

the company has to concern with the national government of those international countries

as well as the community, which are considered as external stakeholders.

We will find out more about JFC stakeholder through the JFC organization chart and

map below; then discuss about its significance.

Stakeholder map is the one of the step in stakeholder analysis, which is important for

the development of knowledge and understanding about other organizations in the firm’s

environment. Stakeholder map indicates the main relationships and patterns of

interdependence between stakeholders. Here is the Power/Interest grid of JFC that we

discuss about.

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Figure 1 – JFC stakeholder map

The first step is to identify and list all the stakeholders, which can be: boss – CEO

(Tony Tan Caktiong); coworkers (eg. Benigno M.Dizon – corporate engineering);

customers (eg. The Vietnamese); director (eg. Jonh Victor - HR director); shareholders

(eg. Gisela – Jollibee Foundation); government (eg. Vietnamese government); the

community (eg. Asian institute of management); employees; competitors (eg. KFC).

From figure 1, we can easily know how important of the stakeholders. There are 4

groups in the stakeholder power/interest grid.

The first group, which is high power/high interest, tells about the people you must

fully engage with, and make the greatest efforts to satisfy. In this group, JFC may concern

about Gisela – an example of shareholders, and at lower power – Vietnamese customers

in particular and international customers in general.

The second group – high power/less interest – is a group which put enough work with

these people to keep them satisfied, but not so much that they become bored with your

message. John Victor – a HR director of JFC – is one example.

However, Tony T.C – JFC CEO and the government in general is in the middle of two

groups mentioned above. Because they both have high power and they also need to be

satisfied but not too much that they may become bored.

The third group is low power/high interest group. We can take Bengino as an

example. Bengino is considered as a coworker of JFC, thus, the company has to keep

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High

Power

Low

Low Interest High

KeepSatisfied

ManageClosely

Monitor(Minimum

Effort)Keep

Informed

*VNese customers

*Tony TC

*Benigo

*Employeess

*KFC

*John

*Gisela

*VNese gov

adequately informed, and talk to him to ensure that no major issues are arising.

Coworkers can often be very helpful with the detail of JFC’s project.

The final group is low power/low interest group. When place someone in this group,

JFC has to think about how to monitor these people, but do not bore them with excessive

communication. Hence, the employees or staff may be laid at this group.

There is one case, which known as KFC – a competitor of Jollibee, placed between

the 3rd and 4th group. It shows that the company should take notice about KFC. Normally,

taking notice of the competitor may help JFC to develop or improve the strategy or

projects. However, JFC cannot monitor or force KFC to do things in their way.

About the highlight colors, the colors show the type of people. In figure 1, people who

are in the red color (for eg, KFC), are blockers or critics ones, people in green color are

advocates or supporters (for eg, Tony TC); and people in yellow are neutral (for eg, the

government). Positioning those people help JFC to know more about the key stakeholders

and easily see which stakeholders are expected to be.

9

10

To have a more clearly view about JFC’s business strategy, we not only investigate

about the vision, mission, values, and the stakeholder map of the Group, but also have a

general view about internal and external of Jollibee Foods Corporation.

III. External environment and internal organization audit of Jollibee corporation

III.1. PESTEL

When discussing about the external environment of one company, we have to think

about the PESTEL (political, economic, socio-cultural, technological,

environment/ecological, and legal) and the Porter’s five forces. In this part of the report,

we will analyze the 3 criteria in the PESTEL which are political, economic, and socio-

cultural; then move to the Porter’s five forces

III.1.1.Political

Politics affects organization in several ways: changes in political control can influence

public priorities and funding arrangements. Moreover, organizations operate within a

broad framework of law; therefore, the law affects how an organization does its business.

Return to JFC situation, JFC is a large company and has broaden to many countries in

the world, so the Group follow directly to the business law of those countries. Take the

employment law and trade union law, common laws in almost all the countries, as

examples. Those laws affect human resources and how an organization treats its

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employees. JFC not only treat the employees based on the national law about the salary

and the work time, but also create more opportunity for its staff to improve themselves.

The company has focus on the FSC standard (food – service – cleanliness) to service and

human resources. Jollibee is proud of its employees who carry out their jobs.

Jollibee recognize the employees by providing the highest compensation and benefits

packages in the fastfood industry, and modern and comprehensive training programs.

Managers are regularly updated on the latest store operations systems, people-oriented

management skills, among others. Service crews are trained on various store stations and

food-service innovations, quality customer service and the like. Jollibee also offers career

opportunities for qualified and exceptional crew members to further their food-service

careers as managers through its unique career path and furder schooling.

Economic

Doing in any field of the business, the companies have to pay attention of the

economic environment, involve in local, national and international economic influences.

The economic environment influences the employment trend of the companies; thus, it

change things in competition, purchase, and market stratification.

Jollibee is now broadening in many countries, from Asia to the US, such as Vietnam,

Brunei, Hongkong, the USA, Saudi Arabia, and so on. Hence, the Group has to think

about the economic environment in each country. We can take Vietnam economy as an

example. As mention in the first part about Vietnam market context; Vietnam is a

developing country and so is the economy. Within it, fastfood market is an attractive

market for the international companies to join in. Therefore, JFC should predict or

forecast the state of economy to know if the economy influences the planning process for

organizations which operate within it like FKC, Lotteria or even JFC.

III.1.2.Socio-cultural

Doing in the fastfood business, JFC always pay attention to their customers, it means

that the Group takes notice about the socio-cultural of the countries where JFC has

broadened in. To satisfied the consumers, the company know that the first thing they have

to do is to identify the prospective customers. Because of doing in the fastfood business,

JFC pays attention to the under 35 consumers. As a corporate citizen, Jollibee is also

committed to give back to its host communities through meaningful and lasting socio-

civic projects. Therefore, the company often investigates about the change of socio-

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cultural of the countries by finding the standard of living in those countries, or finding the

social changes or the trends to change the workforce itself. In addition, JFC has follow

directly to the national law in each country that it broadened in.

III.2. Porter’s five forces

“Porter's 5 forces analysis is a framework for the industry analysis and business

strategy development developed by Michael E. Porter of Harvard Business School in

1979”. Michael Porter provided a framework that models an industry as being influenced

by five forces. The strategic business manager seeking to develop an edge over rival firms

can use this model to better understand the industry context in which the firm operates.

Figure 3 - The Porter’s five forces

(Sources: http://www.12manage.com/methods_porter_five_forces.html)

a. Threat of new entrants

Profitable markets that yield high returns will draw firms. This results in many new

entrants, which will effectively decrease profitability. Unless the entry of new firms can

be blocked by incumbents, the profit rate will fall towards a competitive level (perfect

competition).

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Doing in fastfood business, JFC must think about the competitor, especially the big

ones, and think about the new competitors who are going to join in the same business in

the same market. The company has to concern about some problems that may happen.

The first one is the economies of scales (eg. the benefits associated with bulk

purchasing of not only the company but also of the new competitors). The high or low

cost of entry (how much will it cost for the latest technology) is also concerned. The

Groups had better think about the latest version of technology for communication with

consumers, suppliers; or technology for each fields (bus, rail and aviation). If the

competitors use the same technologies, Go-Ahead have to think of the solution to

improve the company’s technologies. The ease of access to distribution channels is also

important. The company should take notice of the distribution or network of the

competitors.

b. Threats of substitute products/services

Another threat that the company may meet is the threat of substitute services. “The

existence of close substitute products increases the propensity of customers to switch to

alternatives in response to price increases (high elasticity of demand)”. To deal with

threat of substitute services or products, JFC should know the buyer propensity to

substitute, the relative price performance of substitute, the buyer switching costs and the

perceived level of product differentiation.

c. The power of buyers

“The power of buyers also described as the market of outputs. The ability of

customers to put the firm under pressure and it also affects the customer’s sensitivity to

price changes. When thinking of the power of buyers, the company should take notice of:

buyer concentration to firm concentration ratio, buyer volume, buyer switching costs

relative to firm switching costs, buyer information availability, ability to backward

integrate, availability of existing substitute products, buyer price sensitivity and

differential advantage (uniqueness) of industry products”.

The bargaining power of customer also depends on how much the customers can

cooperate. Let’s considering about the situation that the company has a lot of small

customers, their bargaining power could nevertheless be very high if they can negotiate

with the company speaking as one, and they could impose their views if they could

credibly threaten you of a unified action like going to the direct competitor and so on.

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We can take the fastfood industry as the example. It would be typically a consumer

association that could theoretically force a fast-food chain to undertake certain actions,

like publishing the list of ingredients in their hamburgers, etc., where an individual

customer could not obtain such a result. In that case, you should analyze them as a group

of customers. On the other hand, if the customers are numerous, none of them being big,

and they have a limited ability to cooperate, their bargaining power will automatically be

very low, and you should analyze them as individual customers.

d. The power of suppliers

“The power of suppliers is also described as market of inputs. Suppliers of raw

materials, components, and services (such as expertise) to the firm can be a source of

power over the firm. Suppliers may refuse to work with the firm, or charge excessively

high prices for unique resources.”

The Groups when think about the power of supplier should know that the supplier

bargaining power is likely to be high when: the market is dominated by a few large

suppliers rather than a fragmented source of supply; there are no substitutes for the

particular input; the suppliers customers are fragmented, so their bargaining power is low;

the switching costs from one supplier to another are high; there is the possibility of the

supplier integrating forwards in order to obtain higher prices and margins. Moreover, this

threat is especially high when: the buying industry has a higher profitability than the

supplying industry; forward integration provides economies of scale for the supplier; the

buying industry hinders the supplying industry in their development (e.g. reluctance to

accept new releases of products); and the buying industry has low barriers to entry.

In such situation, the buying industry often faces a high pressure on margins from

their suppliers. The relationship to powerful suppliers can potentially reduce strategic

options for the organization.”

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III.3. Value chain

Figure: VALUE CHAIN

Central control of operation and credit control

Recruitment of Client care Staff for Staff

young staff training packing deliver

Consumer

feedback

Quality Adverts in

Product quality magazine

TV, poster…

Dedicated Modern store Collect by Discount by Delivering to

Refrigerated design. car service date, coupon. customer’s home

Transport Open more

stores.

Inbound Operation Outbound Marketing Service

Logistic Logistic & Sales

FAST-FOOD VALUE CHAIN

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Apply XMG IT system

The Headquarter of Jollibee is in Philippine, its subsidiaries and stores in America,

US territories, Hong Kong, Brunei, Macau and Vietnam.

Inbound Logistics: Jollibee’s Commissary has Refrigerator system to store meat to

use in product frozen patty lines and other products.

Operation: Jollibee Commissary System operates 24/7, and is located in three sites:

Santolan, Pasig City, Mandeau City, Cebu, and Canlubang, Laguna.Jollibee Pasig City

Commissary is a distribution center and provides breads and sauces for North Manila and

North Luzon. Vismin Foods Corporation (VFC) was opened in Mandaue City, Cebu in

1996. This commissary provides bread, pie, sauce, and frozen patty lines to Visayas and

Mindanao areas, the Middle and the South sites of Philippin. The Laguna Commissary

was operated by Zenith Foods Corporation (ZFC), is located in 6-hectare property in the

Calmeray Industrial Park. This commissary has a high capability in providing various

product lines. By using custom mechanized equipment, this commissary doesn’t only

create different product like marinated Chicken Joy, frozen patties and pies, breads,

sauces, hot dogs, and other meat products and dry blended goods. This creates JFC’s

differentiation. This biggest and newest and full subsidiary of Jollibee can provide 20

tons of Chicken Joy (the main dish of Jollibee), 40 tons patching of hamburger, 56 tons

various sauce, 200,000 cakes, and 23 tons of sausage to all the stores of Jollibee in

Philippines. In Vietnam, to protect the quality of food, Jollibee has the manufacturer

provides a processed food, then delivery to each store of Jollibee in HCMC to service the

customers. This manufacturer called Food Storage of Jollibee in Vietnam.

Outbound Logistics: Jollibee has its own wide distribution network with more than

600 stores nationwide and over 30 international stores located in America, US territories,

Hong Kong, Brunei, Macau and Vietnam (based on scenario). But now, Jollibee’s

distribution network is expanded over 1,700 stores, in that, 1,466 stores in Philippine and

the rest in other countries. This is considered as a “success in dream” of any business,

and Jollibee has done it through 32 years.In addition, Jollibee do benchmarking which

purpose is typically intended to improve the financial efficiency (cost optimization) of

business operations. Engaging with XMG and doing benchmarking exercise, Jollibee is

assured that whatever insights, the company will be getting from the XMG report and will

gain focused advisories enabling Jollibee to clearly create informed decisions for the firm.

Marketing and Sales: One of recipes for success of Jollibee is the creative marketing

programs. Besides, JFC’s the socio-civic arm; Jollibee Foundation has a program in

becoming partnership with Gawad Kalinga in building homes for indigent Filipino

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families in Las Pinas, Metro Manila, and Bontoc Southern Leyte. In addition, this

foundation is a partnership with the Don Bosco Technical College and other community

program partnership in giving scholarship program for disadvantage youth. These

activities don’t only help JFC improve and develop moral values of business, but also

expand advertisements to the public.

Services: The XMG report will determine the efficiency and effectiveness of the food

chain's IT services. By developing a baseline for Jollibee, XMG will help them

understand better the competitive value of its IT areas and provide advisories for

improvements. Simply put, by doing this exercise, the leading food chain company will

gain valuable insight on areas for costs reduction and doing more within the existing

budget conditions.

Marketing and Sales, R&D/Information System: Jollibee has engaged XMG, one of

the leading vendor-neutral Information and Communications Technology research and

advisory companies, to conduct an IT value benchmarking project.

H.R Management, Inbound Logistics Jollibee recognizes the employees by

providing the highest compensation and benefits packages in the fast food industry, and

modern and comprehensive training programs. Besides, the managers are regularly

updated on the latest store operations systems, people-oriented management skills, among

others. Moreover, service crews have a chance to train on various store stations and food-

service innovations, quality customer service and the like. Jollibee’s employees are also

offered high opportunities for career advancement.

H.R Management, Operation: Jollibee’s rapid growth has a distribution of well-

trained teams who made superior menu line-up, creative marketing programs, and

efficient manufacturing and logistics facilities.

H.R Management, Outbound Logistics: JFC has high caliber teams from

Engineering, Human Resources, Information Management, Finance and Accounting

likewise provide support to the Manufacturing and Logistics operations of its three

commissaries.

H.R Management, Services: Jollibee has well-trained teams that work in a culture of

integrity and humility, fun and family-like.

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IV. The strategic positioning applied for JFC

IV.1. Ansoff’s matrix

At the moment, Jollibee is doing in the fastfood business, and the company has been

operating successfully in Philippines market. However, Vietnam fastfood market is

different from that of Philippines. Jollibee when investing into Vietnam fastfood market

has to concern much about the business plan to develop their products in the new market;

which mean the company has to plan carefully when grow up their existing products in

the new market, and it is market development in Ansoff Matrix – Business point of view.

While implementing the business plan, Jollibee can conduct survey about the new

market to find the best place for building stores. When having the defined places, the

company can broaden the distribution channels or new sales channels like online trading

to attract more consumers. Finally, they can target different groups of people generating

by age, geography, likes or dislikes, etc.

At this time, Hanoi and Ho Chi Minh city is two places that Jollibee develops and

invests, because this is the two biggest cities in Vietnam with the higher population than

other areas, which means that demands for fast-food are also higher than that in other

cities. However, Jollibee’s marketing department seems to be weak, so that the company

should take more notice to broaden the image of the company to the consumers.

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IV.2. Generic strategies.

Figure: Porter, Michael E. Competitive Advantage: Creating and sustaining

superior performance, The Free Press, New York, NY, 1985

It is difficult for Jollibee for choosing an accurate generic strategy. However, we can

analyze some factors of JFC by using Porter’s generic strategy to bring out the most

suitable strategy for the company.

Different from the global market, Vietnam fast-food market is a narrow market but

less competitive than that of global market. JFC understand that they cannot target a wide

market when globalizing because there are a lot of bigger international competitors.

However, Vietnam fast-food market is different from global market because there are

fewer competitors, and the biggest competitors have not invested in Vietnam market yet.

Thus, Jollibee still has chance to develop strongly in this market, it means that the

company has broad competitive scope when developing in Vietnam fastfood industry.

Moreover, fast-food industry is considered as a low cost industry. Therefore, the low cost

leadership strategy is suitable for JFC at this time.

There are some advantages when JFC apply this strategy. For example: economies of

scale raise entry barriers, firm is not so vulnerable as its less cost-effective competitors to

the threat of substitute, or customers cannot drive down prices further than the next most

efficient competitors, and so on.

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V. Strategic plan of JFC

V.1. The ability to think strategically

After analyzing about the vision, mission, values and the stakeholder map as well as

the internal, external environment of Jollibee Foods Corporation, we will discuss about

the ability to think strategically based on the current global business.

Tony Tan Caktion, the Chairman of JFC, said “An important source of growth for our

corporation is the expansion of our international business/market”. To broaden the

Jollibee brand throughout the world, the company has passed many period of time base

on the global business changes.

At the beginning, JFC set the key for their brand “Simple, Cheap, but Great Tasting”.

Moreover, the Group knew who were the main customers; they are the lower income

Filipinos, especially the young who easily adapted the new products of the company. JFC

set the price around 2USD instead of 10USD/ fastfood meal of the others fastfood

restaurant from domestic and intenational. This price at that time was suitable for all the

consumers at all age. From the beginning, the company focused on the quality, quantity

(or the differentiation) of the food. Besides hamburgers, sandwiches, the company also

produced pizza – pasta in Italian style. Then when the Jollibee fastfood was getting

success, JFC decided to broaden the distribution network throughout Philippines market

then international market.

At present, JFC has more than 600 stores and around 30,000 employees. The

company also takes notice of the employees and employees’ standard, because it knows

that employees are very important for the development of the Groups. Thus, JFC respects

the employees as truthful coworkers instead of hired labors. Moreover, the Group usually

opens the training course for its employees to improve their skills.

According to the information from internet about Jollibee Foods Corporation, China

fastfood market is the first international market that Jollibee joined in. JFC invested

millions dollars to buy 90% of shares of Yonghe King fastfood restaurant chain, which

then widen the brand name Jollibee to the Chinese people. It also showed that Jollibee

formally become the competitors of the other famous fastfood brand such as Mc Donal,

or KFC. Then from the start of China market, JFC expanded in many other countries like

the USA, Vietnam, Brunei and so on.

The figure below will show the summary all the previous part of the report

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MISSION

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

everyone.

OBJECTIVE

Customer focus, excellence, respect of the individual,

teamwork, spirit of family and fun, and so on

THE INTERNAL ENVIRONMENT THE EXTERNAL ENVIRONMENT

- material inputs, human resources, management, fixed assets, working capital, finance, intangible assets, organization, and knowledge

- product portfolio: various types of products, best quality of fastfood meal

- flat organization, applying XMG system, skill and manners employees

- PESTEL: follow the national law of different countries broaden in, pay attention to the socio-cultural, forecast the economy of scale

- FIVE FORCES: taking notice of new entrant companies to the current market, substitute products/service (i.e. Vnese fastfood – noodles), power of buyers by bargaining

CORPORATE ANALYSIS

- Strength: Production expertise and

appropriate marketing skill, etc.

- Weaknesses: Small marketing

organization. Fewer distribution

networks than competitors.

- Opportunities: More consumers,

more demand in the market.

- Threats: New competitors tend to

enter the market with cheaper

prices and more marketing

operations.

strengthen the marketing

operation, widen the distribution

network, and apply the new

technology in doing business

It seemed that it is easy for JFC to be successful in the international fastfood market.

However, what difficulties that global market brings to JFC?

Operating in the international market, JFC has co pay attention to the international

business, because the international business may affects several aspect of the company

such as the nature of the industry, the positions of different countries (size, wealth), and

the management of the framework in which business is done (in this situation is fastfood

market)

What the company has to do is to follow the law or the legislation of the international

business. The company should take notice of the protectionist measures to restrict

competition from overseas such as quotas, import bans, restrictions, tariffs and abuse of

quality control and technical standards. Besides, the Group has to predict the changes that

may happened in the world market place. When understanding all these criteria, the

Group can build a suitable business strategy in those countries. 1

Based on the understanding about Jollibee Foods Corporation, the next part will show

the suggested JFC’s business plan in Vietnam.

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V.2. Suggested JFC strategic plan for Vietnam fastfood market.

JFC STRATEGIC PLAN

for Vietnam fast-food market

A. Vision, mission, values

Vision: Best fast-food restaurant chains in Vietnam, the leader in fast-food

industry in Vietnam

Mission: to serve great food, bringing the joy of eating to everyone

Values: customer focus, humility to listen and learn, honesty and integrity, respect

for individual.

B. SWOT analysis, competitive strategy

a. SWOT analysis

STRENGTHS

One of the first fast-food restaurant chains

in Vietnam experience in the fast-food

market. Change in manner and attitude of

employees to customers

WEAKNESSES

Small marketing activities. Fewer

distribution network than competitors

THREATS

KFC and Lotteria – 2 biggest competitors

are expanding the distribution network in

Vietnam.

OPPORTUNITIES

More consumers, more demand in the

market.

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b. Competitive strategy

Central control of operation and credit control

Recruitment of Client care Staff for Staff

young staff training packing deliver

Consumer

feedback

Quality Adverts in

Product quality magazine

TV, poster…

Dedicated Modern store Collect by Discount by Delivering to

Refrigerated design. car service date, coupon. customer’s home

Transport Open more

stores.

Inbound Operation Outbound Marketing Service

Logistic Logistic & Sales

FAST-FOOD VALUE CHAIN

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Apply XMG IT system

C. Situation analysis

Vietnam with more than 80 million people, which include 65% people under

35 years old and the GDP2008 is around 7 – 8%, is an attractive market for the

international corporations, especially fastfood corporations.

According to the research of AC Nielsen, about 10% of the Vietnamese get

used to eating fastfood. This is not a large number; however, with the developing

of Vietnamese economic and the growth in demand of consumers at present,

Vietnamese fastfood market is proving to be a potential market for all the

companies from domestic as well as international.

At the moment, KFC, Lotteria and Jollibee is three international brand which

is operating successfully in Vietnam. The main dishes are: fried chicken,

humburger, chips, and soft drinks. These stores often attract around 400 to 1000

customers/day/store and this is a positive number for the fastfood companies.

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According to the managers of almost fastfood stores in Vietnam, there is one

surprise reason which delays the growth of Vietnam fastfood market in particular

and the Asia fastfood market in general. That reason is the traffic. Asian people

are used to using motorbike as the daily transport; so they cannot eating fast food

during driving motorbike. Hence, fastfood businessmen hope that with the speed

of industrialization in Asia, the traffic will be improved, which creates the impetus

for fastfood market to develop.

D. Action plan

Applying the three-year goal: expanding the distribution network from 10 to

20 stores in Vietnam, expanding the brand image of Jollibee throughout Vietnam.

(Start: 05.2009 – finish: 05.2012)

In order to achieve the three-year goal, the following annual goals must be

achieved.

a. Three-year goal 1: Expanding the distribution network from 10 to 20

stores in Vietnam.

Annual goals:

- Two stores in the North (Hanoi), two stores in the South (HCM city).

Deadline: 05.2010

Resources: hired labors – young labor for purchasing, constructing labor,

managers, hired places.

- Two store in the middle of Vietnam (Hue)

Deadline: 05.2011

Resources: hired labors – young labor for purchasing, constructing labor,

managers, hired places.

- Two stores in the North (Hanoi), two stores in the South (HCM city).

Deadline: 05.2012

Resources: hired labors – young labor for purchasing, constructing labor,

managers, hired places.

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b. Three-year goal 2: expanding the brand image of Jollibee throughout

Vietnam.

Annual goals:

- Street banners, posters, human Jollibee effigies in each store

Deadline: 12.2009

Resources: hired labors, effigy

- Jollibee advertisement on TV, newspapers

Deadline: 08.2009

ACTIVITIES

- Start finding and hiring places for the new stores in three cities: Hanoi –

Hue – Sai Gon.

- Reach the agreements of local authorities

- Design the stores, hiring staff.

- Develop the marketing and sales department

- …

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VI. Conclusion

In this report, we analyze the business strategy of Jollibee Foods Corporation by

investigating the market context of fast-food, discussing Jollibee’s internal and external

environment, using the positioning techniques to evaluate JFC franchising expansion

possibilities. Moreover, this report also brings out a JFC’s strategy plan for Jollibee to

develop in Vietnam fast-food market.

To sum up, this report hopefully brings about the best foundation and overview of the

factors for the Group – Jollibee Foods Corporation.

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REFERENCE

1. Edexcel HNC & HND business, (2004) Business Strategy – first edition

2. Source: http://en.wikipedia.org/wiki/Porter_5_forces_analysis. Assessed on: 28.04.09

3. Source: http://www.tinthuongmai.vn/Trangchu/VN/tabid/66/CatID/139/

Assessed on: 28.04.09

4. Source: http://vietbao.vn/Kinh-te/Thi-truong-thuc-an-nhanh-Nguoi-dep-dang-ngu/

Assessed on: 30.04.09

5. Source: http://www.12manage.com/methods_stakeholder_mapping.html

Assessed on: 30.04.09

6. Source: http://www.jollibee.com.ph/index.php?/menu/noodles

Assessed on: 1.05.09

7. Source: http://management.about.com/cs/benchmarking/a/Benchmarking.htm

Assessed on: 3.05.09

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