Jollibee's Industry Analysis
Financial
Since its inception as a corporation in the late 70s, Jollibee has seen strong financial growth. Asseen in the financial data provided, Jollibee’s sales and revenue has been on the rise in the recentyears. As shown in their revenues, an amount of $12.9 billion pesos in 1998 was graduallyincreased to $26.2 billion pesos in 2004, and indicating strong growth and ability to compete inthe already dense fast food market locally and internationally. The organization going public onthe Philippine Stock Exchange in 1993 acts as a foundation for the rapid expansion of its storeslocally and internationally
Organizational Design
The decentralization of its operations in 2000 enables the organization to manage their business on a manageable scale. Four autonomous regional business units dealing with human resources,administration, finance and network development enabled the company to focus their operationson a corporate level and allowing the RBUs to achieve greater efficiency.
Physical
As of June 2005, Jollibee has a total of 1200 stores locally and internationally. A diversificationof food products enabled the organization to reach out to a variety of customers and making themas a market leader in the Philippines. Due to the geographical structure of the country, they are theonly fast food chain that operated nationwide, and in some locations face no other competitions.
Risk Management
The acquisition of several new brands such as Greenwich, Chowking and Delifrance allow thediversification of its products into different market niches. It proved to be a hedge againstdownturns and competition and as seen in the case study, most of the acquisitions are the leader intheir respective market segment.
Product Development
The main draw for customers into Jollibee’s restaurants is the appeal for local styled food cateredto Filipinos’ preferences. This is evident as they are constantly adding its product range on top of their already popular favorites menu, in order to allow its local customers to experience thetraditional Filipino way of having local flavored taste in a comfortable setting.
Marketing
Jollibee projects itself as being closer to Filipino families as compared to its competitors. There isalready widespread awareness locally that Jollibee is a local Filipino establishment, which in turnappealed to the mass population whom felt more comfortable in a familiar setting. Tailoring itsmenu towards the Filipino taste, it positioned itself as the favorite destination for family outings as compared to its similar competitors.
Value Chain Analysis
Primary Activities
Outbound Logistics
Individual RBUs are able to achieve greater efficiency in the delivery of products and services,quicker coordination, and more timely decision making due to this decentralizing.
Marketing and Sales
Portraying itself as a fast-food outlet of high-quality at an affordable price specifically tailored for the Filipinos, the chain has appealed to patriotic locals. With its introduction of in-store playactivities for children and a cast of brand mascots, it reaches and appeals to the children and isevidently more popular than its nearest competitors. Recognizing that a normal Filipino family’s weekends are normally reserved for children, the previously mentioned activities add value to Jollibee's position as the prime destinations for family outings.
Service
The Filipino speaking crew appeals to the locals more than its competitors where their crew spokein English. It is also in Jollibee’s commitment that this service component of their business to their customers must be fast and at the same time being courteous.
Support Activities
Procurement
Being a major player in the Fast-food industry in Philippines, they constantly enjoyed economiesof scale in terms of retail site selection, procurement, manufacturing, distribution, and marketinglevels unavailable to most industry players.
Human Resource Management
To attract the right talent and retaining of valuable staffs, the compensation and benefits packageat Jollibee is the highest in the Philippine fast-food industry. Employees are to undergocomprehensive training programs based on underlying standards. Managers also received ongoingtraining in the latest operations systems and people-management skills. Opportunities areavailable for crew members to advance into a management role in the organization.
Firm Infrastructure
Decentralizing its organization into 4 autonomous business units, that corresponded to thecountry’s major geographical markets. This enables the Head Office to focus its operations on thekey marketing, finance, restaurant systems and engineering functions and act as a support andadvice to the RBUs.
Business Fundamentals Analysis
Economics
The uncertainties of competition from foreign players as well as downturns in specific marketniches are omnipresent in our current economic nature. Other uncertainties also come in the formof financial crisis in the region as well as in the country it is operating in.
Stakeholders
Three groups of stakeholders of Jollibee are identified whom are affected by the strategicoutcomes and discussed below
Capital Market Stakeholders
Jollibee’s capital market stakeholders include its shareholders whom have a direct interest in thecompany. Since going public on the Philippine Stock Exchange, Jollibee had been able to tap onthis key resource to expand its horizon within and beyond the local Philippine’s market. The importance of the capital market stakeholders is also evident in the growing operations of Jollibeeover the years.
Product Market Stakeholders
Jollibee’s product market stakeholders include its customers locally and globally, as well assuppliers of its food sources.Jollibee has been able to capture the market share of the fast food going customers due to itsunderstanding of locals’ preferences and it quality and competitive pricing of its food. Anapproximate 1 million customers ate at Jollibee’s stores daily, making them an importantstakeholder in this category.
The large daily requirement of food resources had enabled Jollibee to enjoy better prices through economies of scale from its suppliers.
Organizational Stakeholders
Jollibee’s organizational stakeholders include its large number of employees under its corporation(26,500 employees as of 2004), its managers and its franchisees.In maintaining its high standards, Jollibee’s compensation, benefits and comprehensive training programs ensure they have the best employees that are available.
Since its inception as a corporation in the late 70s, Jollibee has seen strong financial growth. Asseen in the financial data provided, Jollibee’s sales and revenue has been on the rise in the recentyears. As shown in their revenues, an amount of $12.9 billion pesos in 1998 was graduallyincreased to $26.2 billion pesos in 2004, and indicating strong growth and ability to compete inthe already dense fast food market locally and internationally. The organization going public onthe Philippine Stock Exchange in 1993 acts as a foundation for the rapid expansion of its storeslocally and internationally
Organizational Design
The decentralization of its operations in 2000 enables the organization to manage their business on a manageable scale. Four autonomous regional business units dealing with human resources,administration, finance and network development enabled the company to focus their operationson a corporate level and allowing the RBUs to achieve greater efficiency.
Physical
As of June 2005, Jollibee has a total of 1200 stores locally and internationally. A diversificationof food products enabled the organization to reach out to a variety of customers and making themas a market leader in the Philippines. Due to the geographical structure of the country, they are theonly fast food chain that operated nationwide, and in some locations face no other competitions.
Risk Management
The acquisition of several new brands such as Greenwich, Chowking and Delifrance allow thediversification of its products into different market niches. It proved to be a hedge againstdownturns and competition and as seen in the case study, most of the acquisitions are the leader intheir respective market segment.
Product Development
The main draw for customers into Jollibee’s restaurants is the appeal for local styled food cateredto Filipinos’ preferences. This is evident as they are constantly adding its product range on top of their already popular favorites menu, in order to allow its local customers to experience thetraditional Filipino way of having local flavored taste in a comfortable setting.
Marketing
Jollibee projects itself as being closer to Filipino families as compared to its competitors. There isalready widespread awareness locally that Jollibee is a local Filipino establishment, which in turnappealed to the mass population whom felt more comfortable in a familiar setting. Tailoring itsmenu towards the Filipino taste, it positioned itself as the favorite destination for family outings as compared to its similar competitors.
Value Chain Analysis
Primary Activities
Outbound Logistics
Individual RBUs are able to achieve greater efficiency in the delivery of products and services,quicker coordination, and more timely decision making due to this decentralizing.
Marketing and Sales
Portraying itself as a fast-food outlet of high-quality at an affordable price specifically tailored for the Filipinos, the chain has appealed to patriotic locals. With its introduction of in-store playactivities for children and a cast of brand mascots, it reaches and appeals to the children and isevidently more popular than its nearest competitors. Recognizing that a normal Filipino family’s weekends are normally reserved for children, the previously mentioned activities add value to Jollibee's position as the prime destinations for family outings.
Service
The Filipino speaking crew appeals to the locals more than its competitors where their crew spokein English. It is also in Jollibee’s commitment that this service component of their business to their customers must be fast and at the same time being courteous.
Support Activities
Procurement
Being a major player in the Fast-food industry in Philippines, they constantly enjoyed economiesof scale in terms of retail site selection, procurement, manufacturing, distribution, and marketinglevels unavailable to most industry players.
Human Resource Management
To attract the right talent and retaining of valuable staffs, the compensation and benefits packageat Jollibee is the highest in the Philippine fast-food industry. Employees are to undergocomprehensive training programs based on underlying standards. Managers also received ongoingtraining in the latest operations systems and people-management skills. Opportunities areavailable for crew members to advance into a management role in the organization.
Firm Infrastructure
Decentralizing its organization into 4 autonomous business units, that corresponded to thecountry’s major geographical markets. This enables the Head Office to focus its operations on thekey marketing, finance, restaurant systems and engineering functions and act as a support andadvice to the RBUs.
Business Fundamentals Analysis
Economics
The uncertainties of competition from foreign players as well as downturns in specific marketniches are omnipresent in our current economic nature. Other uncertainties also come in the formof financial crisis in the region as well as in the country it is operating in.
Stakeholders
Three groups of stakeholders of Jollibee are identified whom are affected by the strategicoutcomes and discussed below
Capital Market Stakeholders
Jollibee’s capital market stakeholders include its shareholders whom have a direct interest in thecompany. Since going public on the Philippine Stock Exchange, Jollibee had been able to tap onthis key resource to expand its horizon within and beyond the local Philippine’s market. The importance of the capital market stakeholders is also evident in the growing operations of Jollibeeover the years.
Product Market Stakeholders
Jollibee’s product market stakeholders include its customers locally and globally, as well assuppliers of its food sources.Jollibee has been able to capture the market share of the fast food going customers due to itsunderstanding of locals’ preferences and it quality and competitive pricing of its food. Anapproximate 1 million customers ate at Jollibee’s stores daily, making them an importantstakeholder in this category.
The large daily requirement of food resources had enabled Jollibee to enjoy better prices through economies of scale from its suppliers.
Organizational Stakeholders
Jollibee’s organizational stakeholders include its large number of employees under its corporation(26,500 employees as of 2004), its managers and its franchisees.In maintaining its high standards, Jollibee’s compensation, benefits and comprehensive training programs ensure they have the best employees that are available.
General Environment Analysis (PESTL)
The general environment consisting of 6 segments and the analysis of its effects on Jollibee is as shown below.
Demographic
In the local Philippines context, the million consumers walking into Jollibee’s stores dailyrepresent strong demand for its products. The uniqueness of the geographical landscape of Philippines has also made it a challenge for fast-food companies. Globally, there are manyFilipinos workers situated in the overseas market, especially in the United States where there areestimated to be around 2 million Filipino immigrants. Besides the US, many Filipinos are alsosituated in parts of Asia such as Hong Kong, Brunei and Indonesia. Not limiting to Filipinos, their stores have also attracted other Asians to eat at their restaurants.
Economic
The growing economic capabilities of developing countries have attracted major players in thefast food industry to establish their stores there. Likewise for Jollibee, the growing market possibilities in Indonesia for Chinese food enabled Jollibee to venture into the market byintroduction of Chowking Brand. The potential China market for fast food also led Jollibee to acquire 85 percent ownership in Yong he King Chain.
Sociocultural
The social and cultural of each country differs from one another. For example, a Chinese might prefer to have noodles instead of rice in Japan. In our case of Jollibee, the “langhap-sara” concept adopted by them may be hugely popular to Filipinos consumers, but this concept may not do sowell in global markets. Foreign consumers might not like the traditional taste of Jollibee’s food,as compared to bigger global players such as McDonald.
Global
The ever changing global landscape is one of the critical factors Jollibee has to consider. Asillustrated in the case study, Philippines have seen major global players entering the fast-foodmarket having a take on this pie. Although Jollibee have always been the dominant in thissegment, competing in foreign markets seems to be in a different story. Not only they have to penetrate the foreign market with their proven and successful local recipe, they would also have tocompete against already established players such as McDonald, Wendy’s and KFC.
Industrial Environment Analysis ( Porter 5 forces)
The general environment consisting of 6 segments and the analysis of its effects on Jollibee is as shown below.
Demographic
In the local Philippines context, the million consumers walking into Jollibee’s stores dailyrepresent strong demand for its products. The uniqueness of the geographical landscape of Philippines has also made it a challenge for fast-food companies. Globally, there are manyFilipinos workers situated in the overseas market, especially in the United States where there areestimated to be around 2 million Filipino immigrants. Besides the US, many Filipinos are alsosituated in parts of Asia such as Hong Kong, Brunei and Indonesia. Not limiting to Filipinos, their stores have also attracted other Asians to eat at their restaurants.
Economic
The growing economic capabilities of developing countries have attracted major players in thefast food industry to establish their stores there. Likewise for Jollibee, the growing market possibilities in Indonesia for Chinese food enabled Jollibee to venture into the market byintroduction of Chowking Brand. The potential China market for fast food also led Jollibee to acquire 85 percent ownership in Yong he King Chain.
Sociocultural
The social and cultural of each country differs from one another. For example, a Chinese might prefer to have noodles instead of rice in Japan. In our case of Jollibee, the “langhap-sara” concept adopted by them may be hugely popular to Filipinos consumers, but this concept may not do sowell in global markets. Foreign consumers might not like the traditional taste of Jollibee’s food,as compared to bigger global players such as McDonald.
Global
The ever changing global landscape is one of the critical factors Jollibee has to consider. Asillustrated in the case study, Philippines have seen major global players entering the fast-foodmarket having a take on this pie. Although Jollibee have always been the dominant in thissegment, competing in foreign markets seems to be in a different story. Not only they have to penetrate the foreign market with their proven and successful local recipe, they would also have tocompete against already established players such as McDonald, Wendy’s and KFC.
Industrial Environment Analysis ( Porter 5 forces)